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

Peter Boettke ()

MPRA Paper from University Library of Munich, Germany

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 (search for similar items in EconPapers)
JEL-codes: N00 O10 P10 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-cbe, nep-his, nep-hme, nep-hpe and nep-pke
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Journal Article: A behavioral approach to the political and economic inquiry into the nature and causes of the wealth of nations (2012) Downloads
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