Economist Deirdre McCloskey uses “Chapter 32: It Was Not Allocation, But Language” in her report Why Economics Can’t Explain the Modern World to explain how new cultural ideas expressed through language led to the Industrial Revolution in England at the time and place it did. McCloskey proves that conventional economics cannot explain the Industrial Revolution and instead shows the Industrial Revolution was possible because of the change in attitude towards the bourgeoisie. The “Bourgeois Revaluation” happened because being bourgeois in England started to become ideal and attainable innovators in lower classes. This theory is important for McCloskey to prove because the series of cultural events could help us explain how business and innovation happens today as well as how class systems are approached differently in different cultures. This chapter is a subsection of her book on why economics cannot explain the post-industrial-revolution world.

 

McCloskey proves her theory by reasoning the theories rooted in classical economics are wrong because they are either contradictory or do not fully explain the Industrial Revolution. In response to those who believe that the timing occurred because all of the appropriate variables were in place, McCloskey reasons that these variables have occurred simultaneously before, but always within a period of bourgeois disdain. McCloskey shuns theories that the industrialization came from the Northwestern Europeans out of racial superiority because cultures incorporating all races adapted the new system of ideas quickly. The theory that peace in England allowed for such an increase in productivity is considered, but opposed because episodes of peace had never allowed for such an increase in growth before.

 

Classical economics is “shuffling around available resources in order to secure the most efficient utilization of known inputs in terms of a given hierarchy of ends”. No classical economic theory can be appropriate to explain the Industrial Revolution because completely new ways of thinking in technology, business and political sectors caused new and additional inputs. To prove this further, McCloskey looks at economists Adam Smith and John Stuart Mill. Smith was wrong because his ideas of scarcity were abolished in the long term during the Industrial Revolution to make room for new innovation. Meanwhile, Mill was wrong because the population in England doubled and the income tripled in a time when Mill argued that an explanation lies within the slowdown of population growth. Thus the only theory left must rely less on economic theory and more on something immaterial.

 

McCloskey’s last piece of evidence proves her theory correct. The attitude towards the bourgeoisie in France and Spain prevented innovation and commerce while the attitude in England changed. The timing and place of the Industrial Revolution happened in England because lower class people were able to respectably aspire to reach bourgeois status and the bourgeois were able to participate more in commercial activities. This new attitude supported and motivated innovation, production and commerce. McCloskey terms this the “Bourgeois Revaluation”. Classical economics cannot explain the Industrial Revolution because it does not recognize the Bourgeois Revaluation.

 

 

Work Cited

McCloskey, Deirdre. "Chapter 32: It Was Not Allocation, But Language." Bourgeois Dignity and Liberty: Why Economics Can’t Explain the Modern World (2009). Web. 24 Oct. 2013. .