WHAT CAUSED THE GREAT ENRICHMENT?

Will Wilkinson posts HERE 

He is vice president for policy at the Niskanen Center, overseeing the Center’s research and publications. He was the founding editor of Cato Unbound and has been a program director at the Mercatus Center and the Institute for Humane Studies. Twitter: @willwilkinson

Will Wilkinson: "Rethinking Libertarianism: Social Justice and The Great Enrichment”

"The great strange fact of human history is how it came to be that a good chunk of our species, after more than 100,000 years of scraping by, suddenly got rather wildly rich. Deirdre McCloskey, the eminent economic historian and social theorist, calls it the “Great Enrichment.”

The suddenness of the Great Enrichment is nuts. Graphs like this one actually conceal how nuts it is. Imagine a linear horizontal axis that is nothing but a flat line hovering above zero for, like, a mile. And then, about a second ago in geological time, wham! And here you are, probably wearing pants, reading about it on a glowing screen. Nuts is what it is.

Accounting for the Great Enrichment is the deepest puzzle of the social sciences. Some think it was all just a matter of figuring out how to exploit natural resources, or some combination of enslavement, exploitation, and colonial plunder, or maybe it was just geographic and genetic good luck. None of that really explains it.

Joel Mokyr says it was the development of science and technology. Douglass North and his followers, such as Daron Acemoglu and James Robinson, say it was a matter of stumbling into the right political and economic “institutions”—of getting the “rules of the game” right. Acemoglu and Robinson say institutions need to be “inclusive” rather than “extractive.” They become more inclusive when ruling elites take a little pressure off the boot they’ve got on people’s backs (which they do mainly when cornered by effective collective action from below) and allow economic and political rights to expand. Deirdre McCloskey says the Great Enrichment came about from a shift in beliefs and moral norms that finally lent dignity and esteem to the commercial classes, their “bourgeois” virtues, and the tasks of trade and betterment. This revaluation of values was the advent of what has come to be known as “liberalism.”

Each of these views is part of the truth. The debate is mainly a matter of how beliefs and norms, institutions and incentives, scientific knowledge and technical innovation all fit together. Which are the causes and which are the effects? There’s no way to adequately summarize the involuted nuance of the debate. But it’s not wrong to sum it up bluntly like this: humans rather suddenly got immensely better at cooperating and now a lot of us are really rich.”

Comment

Thus the opening of an interesting essay that wrestles with the clash of ideas prevalent in modern societies and remain unresolved.

I urge readers to consult it, knowing that many will be tempted to turn away from continuing when they encounter views with which they disagree profoundly, from whichever political perspective to which they adhere. Keep reading and note that readers with a different perspective to your stances will likewise be made uncomfortable by Will Wilkinson’s stances on your particular shibboleths.

I was pleased to see that Wilkinson’s reference to early bargaining among humans was an important humanising force at the root of the conscious discovery of both benefits and disbenefits to the distribution of natures resouces. I consider that the significance of Adam Smith’s reference in Wealth of Nations (WN I.ii.pp.25-2) to the discovery of the human propensity to exchange, presented as ‘truck, bartering and exchange’, has been understated by many readers - and erroneously lampooned by some recent critics, among them some unthinking modern ‘anarchists’ (Dr David Graeber for example).