Deirdre McCloskey on liberalism (in the classical sense)

Eric Wallach interviews economist Deirdre McClosky in The Politic, February 2019.

The Yale Politic: According to Bourgeois Equality, the average U.S. resident’s real income per head increased from $3/day in 1800 to $132/day in 2010– an increase of 44x. You attribute this ‘betterment’ to the ideas of dignity and liberty. What do you mean more concretely?

Deirdre McCloskey: It’s not exactly “according to [that excellent volume of 2016] Bourgeois Equality.” It’s rather “according to the solid scientific consensus of economic historians.” Concretely I mean that the bizarre 18th-century idea of liberalism—which is the theory of a society composed entirely of free people, liberi, and no slaves—gave ordinary people the notion that they could have a go. And go they did. In the earliest if hesitatingly liberal societies such as Britain and France, and among the liberi in societies still fully dominated by traditional hierarchies such as Russia and much of Italy, or the slave states of the United States, the turn of the 19th century saw a sharp rise of innovation. “Innovation” means new ideas in technology and organization and location, ranging from the electric motor to shipping containers to opening a new hairdressing salon in town, or to moving to Chicago away from Jim Crow and sharecropping. Since 1800, with no believable signs of letting up, it has improved the material lives of the poorest among us by startling percentages—4,300 percent in some places (that factor of 44), or 10,000 percent including improvements in quality, or at worst 1,000 percent worldwide by conventional measures including stagnant places, in a world in which rises of 100 percent had been rare and on Malthusian grounds temporary.

This reminded me of a passage from Health of Nations (Basic Books 1987, p. 184), by Leonard Sagan:

The history of rapid health gains in the United States is not unique; the rate at which death rates have fallen is even more rapid in more recently modernizing countries. The usual explanations for this dramatic improvement—better medical care, nutrition, or clean water—provide only partial answers. More important in explaining the decline in death worldwide is the rise of hope ... [through] the introduction of the transistor radio and television, bringing into the huts and shanties of the world the message that progress is possible, that each individual is unique and of value, and that science and technology can provide the opportunity for fulfillment of these hopes.

I note as well "the bizarre 18th-century idea of liberalism" is a Rank 3 idea, to invoke the account of cultural ranks that David Hays and I have developed.

Continuing with the interview:

In Bourgeois Equality, you caution: “But in any event the safety net, with or without holes, is not the main lifter of the poor in the United States, the Netherlands, Switzerland, Japan, Sweden, or the others. The way to lift is the Great Enrichment.” To what extent is the social safety net instrumentally valuable for ‘betterment?’ What might the U.S. look like with no safety net whatsoever, and what might it look like with a perfect safety net?

It’s unwise to turn the issue of helping the poor into an on/off, none/perfect, exist/not question. We need to be seriously quantitative about such matters. On/off doesn’t answer the important question, which is always more/less. People think they are making a clever remark against liberalism by saying, “Well, we need some government.” Yes, certainly. But how much? (Will Rogers in the 1920s used to say, “Just be glad you don’t get the government you pay for.”) And the liberals think they are making a clever remark in reply when they say, “But look at such-and-such an example of governmental failure.” Neither makes a lot of sense. We need to know How Much, how much the market fails, how much the government fails, what number between zero and 100 percent should be run by experts in Washington as against you in your neighborhood and business and home. I have an essay a few years ago making the point in technical economics, “The Two Movements in Economic Thought, 1700-2000: Empty Economic Boxes Revisited.”

But from the non-technical point of view one can assemble the ethical justification for liberalism by honoring both versions of the Golden Rules (and not Trump’s version: “Those who have the gold, rule”). The late first-century BCE Jewish sage Hillel of Babylon put it negatively yet reflexively: “Do not do unto other what you would not want done unto yourself.” It’s masculine, a guy-liberalism, a gospel of justice, roughly the so-called Non-Aggression Axiom as articulated by libertarians 1.0 since the word “libertarian” was coined in the 1950s. [...]

On the other hand, the early first-century CE Jewish sage Jesus of Nazareth put it positively: “Do unto others as you would have them do unto you.” It’s gal-liberalism, a gospel of love, placing upon us an ethical responsibility to do more than pass by on the other side. Be a good Samaritan. Be nice. It is “positive” liberty, which Berlin and I think is a misuse of “liberty,” yet agree that some amount of it is anyway an ethical responsibility. No woman is an island, entire of herself.

In treating others, a humane libertarianism 2.0 attends to both Golden Rules. The one corrects a busybody pushing around. The other corrects an inhumane selfishness

So here’s what a Liberalism 2.0 favors. It favors a social safety net, which is to say a clean transfer of money from you and me to the very poor in distress, a hand up so they can take care of their families. It favors financing pre- and post-natal care and nursery schools for poor kids, which would do more to raise health and educational standards than almost anything we can do later. It favors compulsory measles vaccination, to prevent the big spillover of contagion that is happening now in Clark County, Washington. It favors compulsory school attendance, financed by you and me, though not the socialized provision of public schools. The Swedes have since the 1990s had a national voucher system, liberal-style. It favors a small army/coast-guard to protect as against the imminent threat of invasion by Canada and Mexico, and a pile of nuclear weapons and delivery systems to prevent the Russians or Chinese or North Koreans from extorting us. All this is good, and would result in the government at all levels taking and regulating perhaps 10 percent of the nation’s production. Put me down for 10 percent slavery to government. Not the 30 to 55 percent at present that rich countries enslave.

On the Nordic Model: 

People who dote on the Nordic Model need to realize that such folk are, well, Nordic, with astonishingly high standards of integrity in public administration by world standards. It’s not genetic, but may be Lutheran, and is certainly historical. I have a professor friend in Gothenburg who served on an ad hoc committee to look into a terrible case of corruption in the city. The corruption? A company had bought a city councilor a luncheon.

Transparency International in Berlin ranks annually the 190 or so countries in the world in perceived integrity from the top (New Zealand, Denmark) to the bottom (North Korea, Zimbabwe). Suppose we take the top 30 of the 190 in 2016 as capable of running an efficient safety net without horrible malfeasance, in the net and elsewhere. Portugal is on the margin. Italy, sadly, is ranked 79th. The U.S. makes it into the top 30, but many individual states—my own Illinois, for example—would rank lower. All right, what is the percentage of the world’s population wretchedly governed in what everyone agrees is a horribly incompetent and corrupt fashion? Ninety percent. Such are the governments to which you wish to give more money and power. Gothenburg, sure. Des Moines, OK. Chicago, not. Palermo and Moscow–are you nuts?

On inequality:

Yes, I know, we do lament inequality, by confusing it with poverty, which poverty all should in liberal justice lament. The Liberal Lady Glencora Palliser (charmingly, née M’Cluskie) in Anthony Trollope’s political novel Phineas Finn (1867–1868) declares, “Making men and women all equal. That I take to be the gist of our political theory,” as against the Conservative delight in rank and privilege. But Joshua Monk, one of the novel’s radicals in the Cobden-Bright-Mill mold, sees the ethical point more clearly, and replies to her: “Equality is an ugly word, and frightens,” as indeed it had long frightened the political class in Britain, traumatized by wild French declarations for égalité, and by the example of American egalitarianism (well . . . egalitarianism for male, straight, white, Anglo, middle-aged, educated, high-income, nonimmigrant, Republican, New-England mainline Protestants). The motive of the true liberal, Monk continues, should not be equality but “the wish of every honest man . . . to assist in lifting up those below him.” (“Honest” at the time also meant “honorable.”) That’s right. Lifting up the poor, following the philosopher John Rawls, is what we should focus on, and that is achieved chiefly by 4,300% increases in average income, out of innovation, which might well earn a Steve Jobs a bundle, too. That we pay to see Wilt Chamberlain make jump shots, as the philosopher Robert Nozick pointed out, and Wilt therefore ends up richer than we are, is not an ethical problem.

H/t Tyler Cowen.