Economic liberty and social honor — we are all the 1%

We are the 1% of history that are rich, all of us are rich by comparison to all (excepting only kings and queens) of those who lived in 99% of history that occurred before the beginning of the Industrial Revolution. Deirdre McCloskey explained what happened and why it was allowed to happen in her book, Bourgeois Dignity, Why Economics Can’t Explain the Modern World.

This is a 450-word book followed by 83 pages of notes and a 37-page index. It’s thesis is that rather than a thundering new economic theory having been discovered, it was social upheaval that enabled human beings to crawl out of poverty and into the land of milk and honey. Mainly, industry and trade became social acceptable whereas before and throughout history those who made their living making, buying and selling goods in pursuit of profit were looked down upon by the arbiters of polite society.

But when the profit motive became socially honorable, a sea change occurred. Before this sudden shift in Bourgeois thinking, the average income of all Western Civilization came to $3 a day (constant dollars). Then, in about 1800 that average shot up to about $130 a day. The number of people living in Europe at that time still living on $3 a day dropped by half.

The factual history of this phenomenon confirms for anyone with an open mind the absolute truth that free market capitalism, more than anything else, has lifted people out of historic poverty.

In this video Deirdre McCloskey explains what happened so you can get the gist of her book, and then perhaps be stimulated to read the whole thing:

Obama likes to claim the loss of 625,000 manufacturing jobs as “bad luck.” It’s not bad luck it’s bad thinking, it’s Obama’s pre-industrial revolution Bourgeois thinking. Robert Heinlein foretold it:

Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

This is known as “bad luck.”

— Excerpts from the notebooks of Lazarus Long in Time Enough For Love, page 244 (Ace Books, 1973), by Robert Heinlein.

  • rich davis

    I have difficulty believing that the per capita earning “jumped to $130 a day at around 1800” unless that figure is quoted in 2014 dollars.

    • TeeJaw

      I believe both are 1800 dollars adjusted for inflation to 2014. I’m not sure either equates to per capita income. Even after 1800 half to the people who were formally earning $3 per day were still at that level. But the other half saw a dramatic increase.