Rewarding Virtue

by on January 30, 2012 at 3:16 pm in Books, Economics, History | Permalink

In the Elizabethan period, business was sneered upon. In Shakespeare’s plays, the only major bourgeois character, Antonio, is a fool because of his affection for Bassanio. There is no need to dwell on how the other bourgeois character in “The Merchant of Venice,” Shylock, is characterized.

She contrasts this with attitudes 200 years later. When James Watt died in 1819, a statue of him was erected in Westminster Abbey and later moved to St. Paul’s cathedral. This would have been unthinkable two centuries earlier. In Ms. McCloskey’s view, this shift in perceptions was central to the economic take-off of the West.

From a profile of Deirdre McCloskey in the WSJ.

1 enrique January 30, 2012 at 3:25 pm

McCloskey argues that a change in ideas led to a change in economic growth, but how do we know that the causation is not the other way around, that is, perhaps economic growth (caused by some event not related to ideas) is what led to a change in ideas?

2 The Original D January 30, 2012 at 3:41 pm

Well, she points to the higher trade levels in India and China as counterexamples. And wasn’t England at one point a backwater of trade relative to the Islamic world?

3 GiT January 30, 2012 at 7:15 pm

England was a backwater of everything up until the mid 16th century. And all of Europe was a backwater of the Ottoman empire until about the same time.

4 IVV January 31, 2012 at 9:00 am

That was mainly due to the technology that led to the discovery of the Americas, was it not?

When there were no Americas, a far western position in Europe was an existence as a peripheral power. Britain was even worse off because they didn’t have Mediterranean access to the Middle East and ease of reaching those markets. Once sailing technology advanced to the point that both travel to the Americas and around Africa were possible, then suddenly the west coast of Europe became the central part of the continent, and it became easier to reach far away lands by sea from the west than overland from the east.

Of course, the technology advanced because the Ottomans decided to choke off trade to Christian Europe, which in turn spurred new ways to reach Asian markets.

5 GiT January 31, 2012 at 5:59 pm

I’d agree with that. There’s also the Black Death and the Magnus Intercursus (both leading to increased English influence in the Baltic trade), the accumulation of land by landlords in the 15th century and the related enclosure movement of the Tudor period (Robert Brenner’s argument), and changes in king/parliament relations due to the fiscal situation of the state inherited by Elizabeth thanks to Henry VIII (Hume’s argument). But apparently for McCloskey it’s changes in rhetoric in the late 16th century?

6 GiT January 31, 2012 at 6:00 pm

I should say part of Hume’s argument. His History of England is long and varied.

7 R. Richard Schweitzer January 31, 2012 at 11:25 pm

Hey fellas get out Quigley”s “the Evolution of Civilizations” and read the section on Westrn Civilization and the “Bullion Effects” form the Americas.

8 CBBB January 30, 2012 at 3:28 pm

And now instead of honouring inventors and entrepreneurs the west honours MBA graduates and corporate technicians and calls them heros of capitalism.

9 msgkings January 30, 2012 at 3:32 pm

Yeah, look how little honor Steve Jobs has been getting. Logic fail.

10 CBBB January 30, 2012 at 5:42 pm

I knew someone would bring him up. But he’s really the exception – for the most part it’s guys like Jack Welch or Donald Trump or Lloyd Blankfein.

11 msgkings January 30, 2012 at 6:03 pm

Where is Blankfein being called a hero?

Other entrepreneurial heroes: Bill Gates, Warren Buffett, Trump (not an MBA or corporate technician so not useful in your latest empty snark), Page & Brin, Sam Walton, Steve Wynn, Oprah Winfrey, etc.

And just on this list alone only 1 was born into any real privilege.

So, wrong again my Canadian malcontent.

12 CBBB January 30, 2012 at 6:32 pm

Well I never claimed by opinions were fact-based so how can I be wrong?

13 msgkings January 30, 2012 at 6:36 pm


In other words, everything you type here is total bullshit. Just so we’re clear…

14 CBBB January 30, 2012 at 6:46 pm

Not everything – I’ve said this before though, I don’t believe everything I write here

15 maguro January 30, 2012 at 7:13 pm

So you admit you’re a troll, then?

16 CBBB January 30, 2012 at 7:18 pm

That’s far too broad a term – Even if I’m being a bit over the top I think there’s more then a grain of truth in all my comments

17 Todd January 30, 2012 at 8:27 pm


Yeah, I guess we all can agree that inheriting from our father’s several hundred million dollar real estate empire, and learning the business while working in his firm for many years, is an excellent start to an “entrepreneurial” career.

Trump also got a degree, albeit merely an undergraduate one, at Wharton.

18 msgkings January 30, 2012 at 9:27 pm

@ CBBB – No there isn’t even much of a grain in most of what you post. As a narcissist you have trouble understanding how you’re perceived. But you can be sure it’s with less esteem than you hold yourself.

19 ezra abrams January 30, 2012 at 10:23 pm

I don’t know about the others, but At least two were born into real priviledge:
Trumps’ dad was a millionaire real estate developer in NYC (my grandmother, by co incidence, was Donalds secretary when the kid graduate college)

Gate’s dad was General Counsel to Boeing – not a Rockefeller, but surely a member of the upper middle class ?

20 msgkings January 30, 2012 at 10:52 pm

I meant Trump of course. Gates was upper middle class for sure but unlike Trump he didn’t basically just build on whatever his father gave him.

And I don’t intend to get into the class mobility stuff re: Gates could take the chances he did because he had a reasonably well to do family, etc. I get it but that wasn’t my point.

21 Slocum January 30, 2012 at 6:18 pm

Larry Page? Sergei Brin? Mark Zuckerberg? Bill Gates? Jeff Bezos? All much better known than Blankfein (whose household name recognition must be in the single digits). And while Trump is certainly known, he’s not much admired.

22 ziel January 30, 2012 at 9:06 pm

If you look at the Gallup Most Admired for 2011, out of the 10 women there are only two people not politicians or First Ladies – Oprah Winfrey and Ellen DeGeneres. Oprah’s a brilliant entrepreneur – but not exactly contributing to the advancement of humanity. Among the men, aside from the usual gallery of politicians and religious leaders, the only businessmen are Buffet (5th), Trump (7th), and Gates (9th). And among these only Gates is a true entrepreneur – Buffet’s a money guy and Trump is …well, Trump.

23 CBBB January 30, 2012 at 9:25 pm

Those polls are complete garbage though because it’s mostly name recognition not true admiration.

24 CBBB January 30, 2012 at 9:26 pm

I mean look at it Barack Obama is the most admired man with 17% of respondents giving him and George W. Bush gets to 2nd with a mere 3%. These polls are nonsense.

25 msgkings January 30, 2012 at 9:29 pm

@ Todd:

Hey Trump’s no hero of mine (or yours apparently) but he is to many. And he’s not the corporate MBA type CBBB was wrongly citing as the most common business hero.

26 The Original D January 30, 2012 at 3:41 pm

Better an entrepreneur than a conquering general.

27 CBBB January 30, 2012 at 5:46 pm

No way

28 mrpinto February 1, 2012 at 11:58 am

How do you figure? Entrepreneurs build things for others. Generals destroy things for others.

29 Alan K January 30, 2012 at 3:57 pm

Disclaimer: I haven’t read Ms. McCloskey’s book.

Funny how they don’t mention the bourgeois characters in the comedies. They never get any cred.

30 H. Lud January 31, 2012 at 1:31 am

Agreed. All the city comedies. Shoemakers Holiday comes to mind. Merchant of Venice is cherry picked. The Elizabethan’s loved their business men.

31 Eric Rasmusen January 31, 2012 at 4:24 pm

Which comedy characters?

Antonio is not so bad. Shylock isn’t that bad either– he’s no Iago or Edmund. In any case, choosing one play is a small sample. What would be more significant is if those are indeed the only two bourgeois characters, showing that the bourgeois are simply unimportant or boring compared to aristocrats, government employees, and craftsmen.

32 Willitts January 31, 2012 at 3:05 am

I’m not an expert on the Shakespearian Era, but who was his audience? If his plays were written for the enjoyment of nobility or hood polloi, both were likely to have disdain for the merchant class. Nothing sells tickets like a common enemy.

Recall that it was the rise of the merchant class that ushered in liberal democracy and the equal rights of men.

33 Daniel Dostal January 31, 2012 at 6:56 pm

Ushered in is such a strong phrase. Accompanied is more accurate. Merchant classes have risen to dominance in many societies, few of which ushered in liberal democracy or the equal rights of men.

34 mark January 30, 2012 at 4:46 pm

I would call it “rewarding value creation” or “rewarding making lots of people better off”. Not sure I would call it virtue. Or that it needs to be virtuous to be worthy of reward.

35 Wonks Anonymous January 30, 2012 at 5:29 pm

McCloskey’s theory sounds like the common shamanistic belief in “sympathetic magic”. Henry Harpending wrote a bit about his observations of that sort of thing here:

36 Cliff January 30, 2012 at 6:07 pm

I fail to see any relation

37 Wonks Anonymous January 30, 2012 at 7:27 pm

The idea that people will prosper if others hold positive attitudes toward them.

38 Cliff January 30, 2012 at 10:41 pm

I think that’s an idea that everyone has and that is correct. Sympathetic magic is the idea that someone can inadvertently curse you- for example making you fall and be injured- from hundreds of miles away by having negative feelings towards you.

39 TGGP February 1, 2012 at 10:14 pm

Yes, Harpending knows that’s what sympathetic magic is like. But he is saying that many modern people in the west have similar theories dressed up in a manner we consider more respectable. Hence politics focusing on raising/lowering the status of certain groups.

40 Paul January 30, 2012 at 5:44 pm

Comparing inventors like Watt to usurers and traders is stupid.

41 CBBB January 30, 2012 at 5:48 pm


42 Nick January 30, 2012 at 6:55 pm

Why is that? Watt made a fortune off his engines and spent many efforts keeping his technology out of the hands of his competitors…sounds like a pretty astute trader to me.

43 Dan January 30, 2012 at 7:26 pm

From Innate Social Aptitudes of Man by W.D. Hamilton:

“Often, however, the cost in fitness of such altruism and sublimated pugnacity to the individuals concerned is by no means metaphorical, and the benefits to fitness, such as they are, go to a mass of individuals whose genetic correlation with the innovator must be slight indeed. Thus civilization probably slowly reduces its altruism of all kinds, including the kinds needed for cultural creativity (see also Eshel 1972).”

44 The Original D January 31, 2012 at 10:53 am

Usury was critical to financing the industrial revolution (not to mention imperial adventures). Prior to the Renaissance it was banned by the Church.

45 Daniel Dostal January 31, 2012 at 7:03 pm

Yes, except that confusing entrepreneurs and bankers is just another confusion the modern world could cast away. Even if laymen couldn’t describe the difference, it would be massively helpful if everyone at least understood that a difference exists.

46 byomtov January 30, 2012 at 6:47 pm

I don’t know if she’s right as a historical matter, but I’m sure I buy the argument. She’s comparing fictional characters with attitudes towards real people. Even today, business types, if that’s what she means by bourgeois, aren’t seen as particularly heroic in the movies, for example. More often, they’re villains, or sometimes crime victims, aren’t they?

47 NAME REDACTED January 30, 2012 at 8:09 pm

Correct… but that is relatively new.

48 Thomas Esmond Knox January 31, 2012 at 12:48 am

William Shakespeare was a businessman. But is he admired?

49 Matt January 31, 2012 at 3:52 am

Did poets and playwrights ever really stop sneering at the bourgeois (probably rightly to keep them honest)? Pull the other one McCloskey, it’s got bells on it.

If there is any discernable a change in attitudes about bourgeois wealth and “values” in media (plays or whatnot), it is probably because they are more interested in appearing cultured and buttressing their values to mass society – the more propaganda a group produces, generally the more they need to produce propaganda because the more without society at large would reject them.

James Watt is hardly bourgeois in any case – he was a engineer and a hero of mechanical production, something the England of Shakespeare was frankly not too strong on, but in no ways a mercantile townsman.

I hope this is not typical of the quality of her argument!

50 Daniel Dostal January 31, 2012 at 7:47 pm

They stopped sneering at the bourgeois the same as they never sneered at the aristocracy before that.

51 R. Richard Schweitzer January 31, 2012 at 11:35 pm

James Watt, was of typical Scots Bourgeois origins of his day. What he became from his intellect did not change what he was in convictions, drives and attitudes in his relations with humans, including those of an economic nature. He was not baptized an “Engineer.” The same is true of his partner Boulton, and of Wedgewood (a family of dissenters) and most other members of the Lunar Society.

52 Matt February 1, 2012 at 4:20 pm

They didn’t make a status of him because he was of Scots Bourgeois origins, and they would have made a statue of him had he not been, is my point. And this statue is the context in which the above quote conjures him up.

The fact that Newton is celebrated in art does not, in truth, make a statement about the farming class background from which he sprung. The fact that Maxwell was celebrated does not particularly say much about what society thought about the peerage background from which he came. That Faraday was celebrated does little, not to belabor much the point, about his society’s view of the poor and self made.

When the bourgeois wanted to improve their image, which indeed they did in a way proportionate to the acrimony in which they were held by society, they paid a lot of money for the privilege as philanthropists, and even then were laughed at half the time. The same is true of aristocrats. It’s true of just about anyone who wasn’t a genuinely prestigious creative genius or humanitarian and wanted to be “celebrated”. This continues to be the case. I don’t think this is a particularly bad thing, frankly.

53 R. Richard Schweitzer January 31, 2012 at 11:01 pm

It’s asking a lot to suggest reading McCloskey’s “Bourgeois” series – and there is a lot to read. But:

She is moving from the more current (othodox?) approaches in the studies of what is called “Economics,” such as Econometrics, AD/AS, etc., to an examination of what we regard as economic systems as a part of, or resultant of, our forms of social organizations, which in turn are shaped by factors other than “Maximum Utility” and other catch phrases issuing from the past 200 years.
She has focused on the fact- it is a fact- that our societies are organized on the format of urbanization, the Bourgeoise. The way in which the Bourgeoise interact to generate political and economic systems changes and evolves as “virtues” and “desires” to constrain and drive human behavior in all its expressions including the “economic.” But, this goes beyond Behavioral Economics..

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