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How Freedom Made Us Rich

Economist Deirdre McCloskey explains the roots of "The Great Enrichment" of the last 200 years.

"In [1492], if you were going to bet on who was going to have a 'Great Enrichment,'" says University of Illinois at Chicago economist Deirdre McCloskey, "you would have been crazy not to bet on China because China had the most advanced commercial institutions, the most advanced ship building technology, [and] the most advanced machinery all together." But it didn't work out that way.

"My claim," McCloskey says, "is that liberty was the key to modern economic growth."

In her new book, Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World, the third volume in a trilogy, McCloskey argues that our vast accumulation of wealth over the past two hundred years— which she's dubbed "The Great Enrichment"—was the result of "massively better ideas in technology and institutions." Where did they arise from? &tag=reasonmagazineA"A new liberty and dignity for commoners," she argues, "expressed as the ideology of European liberalism."

McCloskey sat down with Nick Gillespie at Freedom Fest, the annual convention for libertarians in Las Vegas, for a wide-ranging conversation on topics including the roots of "The Great Enrichment," why her gender reassignment surgery was an "expression of [her] libertarianism", and the importance of advocating policies that "actually help the poor" instead of just "making people feel good about helping the poor.

McCloskey is also a Reason columnist. Her archive is here.

Edited by Todd Krainin. Cameras by Meredith Bragg and Justin Monticello.

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This is a rush transcript—check all quotes against the audio for accuracy.

Nick Gillespie: Hi, I'm Nick Gillespie with Reason and today we are sitting down with Deirdre McCloskey. She's an Emeritus Professor of Economics, History, English, and Communication at the University of Illinois at Chicago and the author most recently of Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World. She's also a columnist for Reason Magazine. Deirdre, thanks so much for talking with us. Long time contributing editor to Reason as well.

McCloskey: I'm extremely pleased to be here and ...

Gillespie: Well, your latest column, because I think this puts us right into a lot of current discussions, is titled The Myth of Technological Unemployment.

McCloskey: Yeah.

Gillespie: The subhead is, if the nightmare of technological unemployment were true, it would have already happened repeatedly and massively. In it, you take issue with a lot of libertarian or free-market economists who are talking about how we've reached the end of technological innovation or productivity growth and yeah, we're going to have to find something to do for people who are replaced by robots.

McCloskey: Yeah.

Gillespie: What's wrong with that?

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  • loveconstitution1789||

    Life, Liberty, and the pursuit of happiness....

  • Jerryskids||

    That's the answer to the precedential question of "What makes us rich?" If I can sit out on the back porch of an evening, sipping a beer and watch the grandkids playing, knowing as I look around that "this is mine", I'm as rich as any king. YMMV, and that's okay - you pursue happiness in your way, me in mine.

  • ChipToBeSquare||

    A lot of leftists try going out of their way to explain why some people are poor without realizing the absurdity of that question. Poverty is the natural state of human existence and a thing we battled for thousands of years. What needs to be explained is wealth. They'll usually throw out some crap about exploitation, but that's easy to destroy: you're telling me there was no exploitation anywhere prior to the 17th century?

  • mtrueman||

    "Poverty is the natural state of human existence and a thing we battled for thousands of years. "

    Same with freedom. People have been subjugating themselves to all sorts of authority figures in return for a measure of security and material comfort.

  • mtrueman||

    I doubt you're as happy as the average Nigerian, happiest people on the planet.

  • Philadelphia Collins||

    unPlanned Parenthood disagrees.

  • SQRLSY One||

    ... and now, next upcoming, how OTHER new ideas made it all come crashing down! Communism, socialism, political correctness, and over-sized Government Almighty that promises to be ALL things to ALL people!

  • Jerryskids||

    The concept of sanitation and modern medicine created a vast over-supply in the labor market and somehow we dealt with that. Not to mention women entering the workforce. To people who croaked left and right from getting a drink of water or cutting themselves on a broken piece of glass or popping out a baby, modern human beings must seem like miraculous self-healing robots impervious to death and disease. How the heck can you expect to keep this many people employed when a substantial part of your workforce isn't dropping dead and creating a job opening every winter?

  • Scarecrow Repair & Chippering||

    Not sure how you prioritize your first and last sentences, if my sarcasmometer is busted ...

    The answer is quite simple, whether it is immigrants "stealing jobs" or newborns doing the same: all those new people are also new consumers and gladly create demand for all the new jobs.

  • Jerryskids||

    Maybe that last sentence should have been in quotes - I'm saying that to somebody from few hundred years ago, it might have been a puzzle as to how you could possibly expect to keep this many people employed for their whole long, healthy lives. Somehow no matter how cheaply and easily you produce everything anybody could possibly want, they find yet more things to add to the list of things they want and create new demands for new jobs. Look at agriculture for example. A mere few generations ago, everybody and their brother worked on farms and now it's all done by machinery. Where did all those millions of unemployed farm workers go? Among other things, they're making apps for iPhones that can remotely check to see how much milk you have in the fridge - and who could have imagined a hundred years ago that there'd ever be a market for such nonsense?

  • Scarecrow Repair & Chippering||

    Thanks for clarifying that. It was what I hoped you were saying, that yes the last sentence was a quote question, not a statement in conflict with the first one.

  • Bra Ket||

    I think we have seen a real problem when these life-supporting benefits of western development trickle down to parts of the world that still restrict the liberty part of the equation. We end up with the fastest population growth in the places least able or willing to absorb the new population.

    Nature on its own had handled the "life extension problem" reasonably well, with minimal reproductive rates for highly-skilled workers, and shrinking populations in developed countries.

  • mtrueman||

    "How the heck can you expect to keep this many people employed when a substantial part of your workforce isn't dropping dead and creating a job opening every winter?"

    If you're an employer, you can lay off employees. You don't need to keep them employed. That's why they're employees and not slaves.

  • Bgoptmst||

    Maybe I am being stereotypical ... but I bet she doesn't fit in well with the majority of the Chicago crowd.

  • mtrueman||

    She works at the University of Illinois, at Chicago. A truly second rate institution along the lines of George Mason University.

  • Sevo||

    As judged by a third-rate intellect.

  • OM Nullum gratuitum prandium||

    Excellent interview, Nick. I was fascinated by it. I didn't know Ms. McCloskey but now that I know I'm going to search for her book.

  • Stephen Mintz||

    Nice article pure informative and knowledgeable thank you for sharing it. visit here

  • SorinGhinescu||

    Very interesting point of view, that ideas, not something else, fuel the enrichment.
    There should be further research available through to demonstrate a strict causality between freedom empowerment and economic development. I will gladly read her book looking for such connections

  • SorinGhinescu||

    ... and it's a bit like the egg - hen problem

  • Johnandrews||

    Bourgeois Equality - nice title. I'm sure that this will be my next book to read. It seems to be a complex topic that contains a lot of facts from economics, history, sociology and other spheres. As for me, as for the freelancer who provides college essay writing service, this could be extremely helpful to make the papers for students. And some historical books even inspired me for writing the blog, and I'm looking forward to reading this one.

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