Monday, December 27, 2010

Bourgeois Dignity as a Source of Growth

Deidre McCloskey argues that what changed around 1700 to produce consistent growth was sociological: we stopped thinking of people making money as a bad thing, and not surprisingly people went off and made a lot of it.

Here’s an interview.

… What people like about the Weber hypothesis [i.e., the Protestant work ethic] is that it combines a spiritual change inside the souls of businesspeople (Geist was the German word) with a focus on routine investment (savings rates were supposed to be higher among Calvinists). It combined idealism with Marxism. No wonder everybody likes it. But alas, it’s wrong.

What changed was the sociology. That is, what changed was the attitude of the rest of the society toward businesspeople, and with that new attitude came a change in government policy. …

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