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A behavioral approach to the political and economic inquiry into the nature and causes of the wealth of nations

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  • Boettke, Peter

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.

Suggested Citation

  • Boettke, Peter, 2011. "A behavioral approach to the political and economic inquiry into the nature and causes of the wealth of nations," MPRA Paper 32376, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:32376
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    References listed on IDEAS

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    1. Kenneth E. Boulding, 1971. "After Samuelson, Who Needs Adam Smith?," History of Political Economy, Duke University Press, vol. 3(2), pages 225-237, Fall.
    2. Peter J. Boettke, 2007. "DEIRDRE McCLOSKEY'S " THE BOURGEOIS VIRTUES: ETHICS FOR AN AGE OF COMMERCE"," Economic Affairs, Wiley Blackwell, vol. 27(1), pages 83-85, March.
    3. Boettke, Peter J. & Coyne, Christopher J., 2005. "Methodological individualism, spontaneous order and the research program of the Workshop in Political Theory and Policy Analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 57(2), pages 145-158, June.
    4. McCloskey, Deirdre N., 2006. "The Bourgeois Virtues," University of Chicago Press Economics Books, University of Chicago Press, number 9780226556635.
    5. Douglass C. North, 2005. "Introduction to Understanding the Process of Economic Change," Introductory Chapters,in: Understanding the Process of Economic Change Princeton University Press.
    6. Deirdre McCloskey, 2004. "The Bourgeois Virtues," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 5(3), pages 1-16, July.
    7. McCloskey, Deirdre N., 2010. "Bourgeois Dignity," University of Chicago Press Economics Books, University of Chicago Press, number 9780226556659.
    8. Vernon L. Smith, 2003. "Constructivist and Ecological Rationality in Economics," American Economic Review, American Economic Association, vol. 93(3), pages 465-508, June.
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    Cited by:

    1. Boettke, Peter & Coyne, Christopher, 2011. "The debt-inflation cycle and the global financial crisis," MPRA Paper 32091, University Library of Munich, Germany.

    More about this item

    Keywords

    Economic History; Economic Development; Industrial Revolution;

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • N00 - Economic History - - General - - - General
    • P10 - Economic Systems - - Capitalist Systems - - - General

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