A Behavioral Approach to the Political and Economic Inquiry into the Nature and Causes of the Wealth of Nations

The Journal of Socio-Economics 41 (2012) 753– 756

GMU Working Paper in Economics No. 12-07

4 Pages Posted: 23 Jul 2011 Last revised: 21 Apr 2013

Peter J. Boettke

George Mason University - Department of Economics

Date Written: February 7, 2012

Abstract

Deirdre McCloskey’s Bourgeois Dignity (2010) represents another breakthrough work in her career, and the second volume in a multi-volume work on the economic and intellectual history of western civilization. In a sense, the subtitle of the book explains well what this volume is all about – why economics can’t explain the modern world. An important modifier would be – modern economics can’t explain the modern world – because much of what McCloskey argues is the resurrection of an older argument that was associated with classical liberal political economists from Smith, Bastiat, Mises, Hayek and Friedman. Fundamentally, she reasserts the power of ideas to shape the world. McCloskey’s narrative is simple and compelling – materialist stories (whether technological, genetic, or institutional) do not work; incentive based stories do not provide a complete picture of why some countries grew rich while others remained poor, let alone for the exact timing for the divergence in the wealth and poverty of nations with the Industrial Revolution in the 18th and 19th century. McCloskey proposes that incentive based explanations must reside within a broader narrative that addresses values and beliefs, as well as institutions, technologies, and material conditions. In doing so, McCloskey paves the way for a true behavioral approach to a political and economic inquiry into the nature and causes of the wealth of nations.

Keywords: Economic History, Economic Development, Industrial Revolution, Bourgeois virtues, McCloskey

JEL Classification: N00, O10, P10

Suggested Citation

Boettke, Peter J., A Behavioral Approach to the Political and Economic Inquiry into the Nature and Causes of the Wealth of Nations (February 7, 2012). The Journal of Socio-Economics 41 (2012) 753– 756; GMU Working Paper in Economics No. 12-07. Available at SSRN: https://ssrn.com/abstract=1893144 or http://dx.doi.org/10.2139/ssrn.1893144

Peter J. Boettke (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States
703-993-1149 (Phone)
703-993-1133 (Fax)

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