Virginia Postrel explains why President Obama’s “you didn’t build that” gaffe has lasted so long when usually politicians’ gaffes barely last a single news cycle, by outlining the arguments of a recent book by Dierdre N. McCloskey:
The president’s sermon struck a nerve in part because it marked a sharp departure from the traditional Democratic criticism of financiers and big corporations, instead hectoring the people who own dry cleaners and nail salons, car repair shops and restaurants — Main Street, not Wall Street. (Obama did work in a swipe at Internet businesses.) The president didn’t simply argue for higher taxes as a measure of fiscal responsibility or egalitarian fairness. He went after bourgeois dignity.
“Bourgeois Dignity” is both the title of a recent book by the economic historian Deirdre N. McCloskey and, she argues, the attitude that accounts for the biggest story in economic history: the explosion of growth that took northern Europeans and eventually the world from living on about $3 a day, give or take a dollar or two (in today’s buying power), to the current global average of $30 — and much higher in developed nations. (McCloskey’s touchstone is Norway’s $137 a day, second only to tiny Luxembourg’s.)
That change, she argues, is way too big to be explained by normal economic behavior, however rational, disciplined or efficient. Hence the book’s subtitle: “Why Economics Can’t Explain the Modern World.”
[. . .]
McCloskey’s explanation is that people changed the way they thought, wrote and spoke about economic activity. “In the eighteenth and nineteenth centuries,” she writes, “a great shift occurred in what Alexis de Tocqueville called ‘habits of the mind’ — or more exactly, habits of the lip. People stopped sneering at market innovativeness and other bourgeois virtues.” As attitudes changed, so did behavior, leading to more than two centuries of constant innovation and rising living standards.
I’ve read McCloskey’s book and plan on reading the next one too. Earlier mentions of Bourgeois Dignity are here and here.
