Last Wednesday, Stellenbosch University bestowed an honorary commerce doctorate on Professor Deirdre McCloskey, one of the most important classical liberal thinkers of our time. What a surprising breath of fresh air!
I had to confirm that this was true when I first heard about it.
Nowadays South African universities tend to give doctorates to the enemies of freedom and those who concern themselves with other things. So this was a very welcome development, and I take great pleasure in dedicating my final column of 2024 to Professor McCloskey.
On Tuesday, David Ansara and I from the Free Market Foundation (FMF) were invited to deliver remarks at an economic history workshop where McCloskey participated, and interview the professor for an upcoming FMF podcast. The workshop was arranged by Professor Johan Fourie, author of Our Long Walk to Economic Freedom.
It was a great honour to spend most of the day with Professor McCloskey discussing the ingredients of prosperity.
McCloskey joins various other rockstars for liberty who have had relationships with our premier universities, including Ludwig Maurits Lachmann and William Harold Hutt. She also previously taught at the University of the Free State.
Deirdre Nansen McCloskey is currently the Isaiah Berlin Chair in Liberal Thought at the Cato Institute and has taught (among many other things) economics at (among many other places) the University of Chicago.
She describes herself as a “literary, quantitative, postmodern, free-market, progressive-Episcopalian, ex-Marxist, Midwestern woman from Boston who was once a man. Not ‘conservative’! I’m a Christian classical liberal, practicing humanomics.”
Some of these descriptors might seem scary to many and cause those not familiar with her work to regard her as a “leftist.” But rest assured: McCloskey regards (classical) liberty as the foremost principle of human society and the great enabler of progress.
She has written 25 books, with many more likely on the way. Her most recent book is titled Why Liberalism Works: How True Liberal Values Produce a Freer, More Equal, Prosperous World for All (2019).
At the workshop last Tuesday, McCloskey shared insights around some of her most important areas of interest: the Great Enrichment, venture, and equality of permission.
The Great Enrichment
Today most people around the world – even the poorest of the poor – take for granted a level of comfort (sometimes only a small level of comfort in the most deprived regions) that even our wealthiest ancestors over thousands of years could only dream of.
It was perfectly normal for a tiny elite to live a relative life of luxury, and everyone else to be destitute.
Even though many on the left today claim that this has not changed, and that the world’s moustache-twirling billionaires still monopolise most wealth at the expense of the majority, the reality is that humanity as a whole is far better off today than even in recent history. This great change, argues McCloskey, began taking form around 1800, and evidently reached a high worth celebrating at the turn of this century.
Since that time, McCloskey argues, real incomes per capita have increased by 3,000%.
Venture and innovism
She attributes this Great Enrichment to “innovism” or what she also called “venture.”
Ordinary people, businesses, and communities suddenly were allowed to innovate and try things out. Sometimes they fail, sometimes they succeed.
It is not merely institutions like free markets and property rights that make innovism possible, but the culture and ideas of free markets, property rights, and the rule of law themselves. As such, McCloskey is a big believer in the battle of ideas. Ideas – one might say, ideology – is what informs great success and flourishing, but when those are bad ideas, might also cause immense suffering.
The idea underlying the Great Enrichment comes down, ultimately, to the notion that individuals inherently possess a liberty to be free from coercion and interference with their ventures. Liberalism, in other words.
And while this “Western” idea first developed in Europe and North America, the entire world has since begun reaping the benefits.
Equal permission
McCloskey calls this liberty “equality of permission” – the right of all individuals to venture, to engage in the economic, social, and cultural activities of their choice without having to obtain permission beforehand.
Both so-called “equality of outcome” and even “equality of opportunity,” on the other hand, shift the locus of control from the individual to others who must grant permission.
When people do not need to ask for permission to innovate, the circumstances leading to a 3,000% increase in human welfare fall into place. Within their own domains and their own areas of knowledge, individuals, businesses, and communities know what is required, and can respond quickly, efficiently, and relevantly, without outsourcing responsibility to those who do not know or do not have the necessary incentives to respond.
None of this was possible, McCloskey argues, without a cultural shift among the bourgeois to allow ordinary people to “have a go” – to venture, to try, to fail, and to succeed. Sans this culture of tolerance, liberty and prosperity are difficult to achieve.
Ramaphosa’s predictably bad advisors
McCloskey directs criticism against people like Mariana Mazzucato who, it should not surprise us, was recently named by Cyril Ramaphosa to serve on his Presidential Economic Advisory Council.
Mazzucato believes in innovation and venture, too, but for the state, not for society. She believes in The Entrepreneurial State, to take the title of her 2011 book. Appropriately, McCloskey and co-author Alberto Mingardi wrote The Myth of the Entrepreneurial State in response in 2020.
The state, as the monopoly on coercion in society, is not the primary driver or source of innovation, they point out – that it needs pointing out is regrettable. In fact, real innovation is a spontaneous characteristic of the freedom to come up with ideas and then to try those ideas in practice.
Some ideas will work, and others will not, but above all they will not be tainted by the state’s rent-seeking industrial policies whereby winners and losers are politically ordained.
Mazzucato and others of her ilk note the joint “venture” between the British and French governments, the Concorde jetliner, as an example of state “innovation” that would not have occurred within a free market.
Concorde’s time had not yet come, but politicians insisted and wasted billions on a doomed project. This “innovation” that the likes of Mazzucato praise is the same “innovation” that leads China to build empty cities and governments everywhere to build highways to nowhere.
Bittersweet
True innovation occurs in the midst of liberty in an open market free from interference from the political class, whereby ordinary people and businesses can “have a go” without needing permission.
Mazzucato’s ideas are obviously very exciting to politicians, which means it is no wonder that she rather than McCloskey was appointed by the “reformist” Government of National Unity to serve as an economic advisor.
But this bitterness is sweetened by the fact that Stellenbosch University, another organ of state, deemed it appropriate to recognise McCloskey for a lifetime of innovation in the battle of ideas.
It falls to ordinary South Africans to choose to walk down the charted course to prosperity. Thankfully, the Free Market Foundation and its Liberty First initiative have pointed out how this can be done.
[Image: https://www.flickr.com/photos/gageskidmore/16556560275
The views of the writer are not necessarily the views of the Daily Friend or the IRR.
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