Deirdre McCloskey on Capitalism and the Bourgeois Virtues
Mar 31 2008

Deirdre McCloskey of the University of Illinois at Chicago and the author of The Bourgeois Virtues talks with EconTalk host Russ Roberts about capitalism and whether markets make people more ethical or less. They also discuss Adam Smith's world view, whether people were nicer in the Middle Ages, and the role of prudence and love.

[Note: We apologize for the poor sound quality of the phone connection in this podcast.]

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Explore audio transcript, further reading that will help you delve deeper into this week’s episode, and vigorous conversations in the form of our comments section below.


Mar 31 2008 at 6:55pm

Unfortunately this was a very poor recording. Sorry.

Russ Roberts
Mar 31 2008 at 9:39pm


Sorry about that. It is a poor recording. But I was so happy with the content that we decided to release it anyway.

Mar 31 2008 at 10:56pm

One problem with Samuelsonian economics, Max U, and the math models, etc… is that they lead one to believe that change is easy and can be easily implemented from the top. A second problem, as Deirdre McCloskey says in her book, is that it makes one forget about important virtues such as love, courage, etc…

Politicians on the other hand focus entirely on love, courage etc…their facade is of super-virtuous world saviors. Critics of top-down government solutions are often depicted as hopeless cynics and it’s easy to fall for this joyless plot. However, what I take from McCloskey’s thesis is that yearning to improve the world and our existence doesn’t have to go the policy route, it can be and should be pursued vigorously within the capitalist system, the bottom-up (it’s not an easy thesis to formulate).

I finish with a conundrum. McCloskey distinguishes between peasants, bourgeois, and aristocrats. Where should I put politicians? It seems to me the bourgeois virtues, unfortunately, are finding their expression only in the political realm. Any chance the bourgeoisie is disappearing and we are all becoming politicians?

Apr 1 2008 at 12:47am

Regardless of sound quality, content quality was superb.

Forgive the observation but I must say I was surprised to hear such enthusiasm for divinity. I state the following in the interest of clarity and not for inflammatory purposes, I only wish the conversationalists might elucidate my observation.

I feel it a contradiction to hold such high regard for free market thinking; including a firm understanding that central planning or top down design is severely flawed, meanwhile attaching, what I see as explained in an earlier podcast as “the peoples romance”, to flawed religious idealism. I refer to it as flawed idealism because the Jewish history of religion is based on ultimate nationalism, closer to resembling the protectionist state, and submission to the top down design theory, which, to use one example, Darwin showed not correct. Darwin showed a “free market” of life will spawn the natural order of “wealth” (using wealth as an analogy for ultimate survival and dominance of the environment)

Using the Christian example I believe we can see the earliest model for communism. To humble yourself and give way from possession and property sounds like an ideal made famous in the nineteenth century, and instituted in a few nations,to there ill begotten dysfunctional ends. Some of the seven deadly sins are pertinent tools used through the development of capitalist society, not for malfeasant purposes but for the innovation of what we consider good; envy, to use as an example, was a tool our neighbors used to compete and create better products. I consider these things(sins) facts of nature and static, and when used properly can yield positive outcomes. I recognize the value of ethics taught by religious institutions, I believe my values were the result of a Judeo-Christian upbringing,(I subscribe to the idea of the Lockean tabula rasa, and ethics are not intuitive) but there is the obvious result of friction between cultures who share different values and believe in the supreme authority of those ethics. With this clash, globalization is sure to fail.

I say these things as a person very familiar with religion, having spent all my years of schooling in parochial institutions and worshiping every week for close to twenty years. I now favor the idea of pantheism or deism, but rightly announce that no one can ever know. Perhaps my view can be describes in the words of Albert Einstein

“I believe in Spinoza’s God, who reveals Himself in the lawful harmony of the world, not in a God Who concerns Himself with the fate and the doings of mankind.”

In the “fate and doings of mankind”, hmmm, if only the government followed the same approach as Spinoza’s God.

Aside from the ecclesiastic aspect of the conversation I really enjoyed the argument for a better life than agriculture. I favor anything and everything that is efficient and minimizes the burdens of stress and labor. The only thing I wish you would consider when the conversation goes this way is that some of the anti industrialism attitudes stem from the environment the wage earner exists in. I point out that a farmer will not get cancer from asbestos exposure, or any number of the new hazards the wage earner faces. I will concede to the fact that it is a trade off from hazards in agriculture, but is one slow death better than another, or are the hazards nominal in comparison to agricultural hazards? I do not know the answer, but I do not argue against technology and industrialization, I argue against irrational beliefs and contradiction, and I vouch for clarity.

a kibbutznik
Apr 1 2008 at 6:05am

Regarding argricultural labor on kibbutzim – don’t forget that these days we can listen to EconTalk on our MP3 players while maintaining the irrigation lines. Modern technology has turned much of what is left of the the drudge work into an opportunity for intellectual exploration, at least for those willing to make the minimal effort.

Apr 1 2008 at 10:11am

Wow you hit on one of pet peeves. IMO in schooling the function grading humans often squeezes out educating students especially in practical areas. You will need to know this for SAT is a very poor reason to take class time from teaching things that will help the students live a better life. In order to make a class testable and rigorous useful information is often put out of the reach of below average students. Physics can be taught without much math and all the useful stuff for the average person can be covered but to make it testable and rigorous it is loaded with math.

Deirdre McCloskey
Apr 1 2008 at 10:22am

Dear “Unit” and “Brian-NJ”:

Yes, Unit, politicians are wanna-be aristocrats, which is why the clerisy gets weak in its legs (as Chris Matthews put it about Obama) when in their presence. The task, as you say, is not better aristocrats but bottom-up change in rhetoric. It has to come from artists, especially popular ones: country music, rock music, movies, blogs, and, yes, podcasts! You bet there’s a chance of the bourgeoisie disappearing and us all becoming politicians. It’s called fascism and state socialism. Gotta resist!

And yes, Brian-NJ, Christianity has a socialist potential. It’s a cliche of the history of European socialism, but accurate, to link socialism to a fading Christianity among the clerisy. I don’t think envy or greed are good for the economy, not at all, and have said so at length in The Bourgeois Virtues (an early version of one of the points is available at the Wall Street Journal site). Envy and greed are mortal sins, not keeping-up-employment virtues. I think you’ll find some serious books about Christianity interesting. Mine for example, but also on the matter of science and Christianity the works of John Polkinghorne. Please, I implore you, don’t get your ideas about how Christianity fits into modern life from the New Atheists who have made such a great noise recently! They literally do not know what they are talking about—they never crack a book on theology!


Deirdre McCloskey

Apr 1 2008 at 10:41am


How do you record these conversations, if I might be so curious? Do you simply have a microphone set up next to your phone on speaker? Or is there a more sophisticated arrangement using an iPod or some other such device?

I only ask because I’d like to do a few of these on behalf of my students, but am technically spastic.


Apr 1 2008 at 5:34pm

Could you please post a complete transcript of the talk.


Marshall Jevons
Apr 1 2008 at 5:36pm

I like the style of Blogging Heads-
May be Econtalk could do some talks in that format, what do you think Russ.

Some related posts;

Apr 2 2008 at 2:26am

If you are going to contrast the present with a mythic prelapsarian past, the relevant comparison is not to agricultural life but to the hunter-gatherer era that constitutes the vast majority of human history. Hunting, fishing and plant-gathering cannot so easily be written off as drudgery. We evolved to meet the challenges of these activities both physically and cognitively. It’s no accident that they are popular leisure activities today.

The downside of the period is brutal mortality rates, greater vulnerability to the whims of nature and much higher rates of violent death. However, there is archeological evidence that our ancestors were taller than agricultural or industrial moderns up until quite recently, a powerful index of diet and general health.

I would argue that the ratchet effect of culture has finally made life, at least for an educated middle-class person living in the information economy, generally “better” than hunter-gatherer life. We enjoy the medical fruits of our culture and sublimate our urges for combat and quest into intellectual pursuits. Still, I sometimes wonder if I wouldn’t be happier chasing deer, munching berries and stalking neighboring tribesmen with a slingshot and a spear.

Great poddie so far (I listened to the first 20 minutes will walking to work); I am on board with the bourgeois virtues and look forward to exploring Dr McCloskey’s work.

Apr 2 2008 at 9:19am

The axiom which stresses correlation does not prove causality is applicable here. The idea that all the benefits of modern society are a result solely of capitalism is over simplified. The Renaissance and The Age of Enlightenment were not just about capitalism. Capitalism is a significant factor in the advancement of the human condition but by no means was the sole factor nor could it be. This internet, this computer are not the sole result of capitalism.

In the excellent interview Professor McCloskey states, ” When people have the choice people they choose a capitalist life.” No I say, in fact when “People” are given a choice they choose well regulated capitalism and democracy. It is a false argument to assume this is simply a choice between unregulated capitalism and communism. Why do we always pretend these are our only options? The world is so obviously grey why do we only talk of black and white? Why is the choice assumed to be between only unbridled capitalism or communism. Neither succeeds or arguably even exists in its pure state in the real world. The fact that people choose grey every time is shown by every degree of social pluralistic democratic nations that exist and succeeds in the modern real world. None are purely capitalistic and none are communistic.

Apr 2 2008 at 2:51pm

Russ, I’ve just discovered your site and I’m enjoying it very much. Do you have much for the beginning economist? I’m taking my first econ class (macroeconomics) as part of my MBA program. (Blogging my classnotes at My background is in math, computer science and project management and I need to catch up with the basics that the business majors learned in undergrad.

Thanks again for providing this site!

David Johnson
Apr 2 2008 at 3:30pm

No Muirgeo, when people are given a choice, they choose to be free. They may occasionally choose to plunder and impose rules on others, which results in managed economies, but for themselves they always choose to be free.

Apr 2 2008 at 7:51pm

And David were do these free people you speak of live? What country are they found in?

All I see is people who want a common defense, roads, a court system, reliable water sources, national parks, police and fireman…. are these people I see the same ones you see?

They want these things and they are free with the oft exceptions from errant people in power, mostly those with money who want to undermine their democracy.

Daniel Klein
Apr 2 2008 at 8:09pm

Great podcast. Like Russ, I consider myself a McCloskey pupil. In graduate school I avidly absorbed her work and I immediately identified with her way of seeing things, still do.

Something in the podcast and in the book BV that I am not satisfied with is calling whatever Jill is into Jill’s “God” or “religion.”

Saying that golf is Tiger Woods’ God or religion just doesn’t work for me. Why use the terms “God” or “religion” in this very loose way? Isn’t religion some kind of belief in some kind of higher being?

Deirdre seems to use “religion” to mean “whatever it is that one finds meaning in”. Why not call it one’s passion, devotion, interest, calling, mission, pursuit, vocation, obsession?

I understand that Deirdre wants a term that carries the deep virtues of identity and commitment: faith, hope, and love. I’m OK with calling them the “sacred” virtues, as she does in the book. But I still don’t feel comfortable going with “religion.” “Calling” and “devotion” connote faith, hope, and love.

I don’t think it’s just me and my non-religious upbringing and sensibilties . . . I think that even religious people will object to saying that golf is Tiger Woods’ religion.

Apr 2 2008 at 8:27pm

This is unrelated, but I would really like to hear a podcast with Michael Abramowicz, author of Predictocracy.

Apr 3 2008 at 11:39am


I’m not Russ, but if I may answer, I’ve found that collectively, the various podcasts with Mike Munger are a better introduction to economic reasoning than any textbook I’ve ever come across.

Apr 4 2008 at 3:35pm

Why do people still perpetuate the fallacy that “utility” doesn’t include things like friendship, love, spirituality, etc? Bentham had great replies to this criticism of utilitarianism. If capitalism makes people unhappy because it “crushes the soul”, then it probably isn’t maximizing utility. Utility should be interpreted as happiness, not as something narrower like pleasure or material wealth. Those are just potential causes of happiness. I’m not an economist, so I don’t know exactly how economists interpret it, but in utilitarian philosophy utility is interpreted as broadly as possible.

For example, if you are a hip minimalist who is anti-consumerism, you aren’t saying that you don’t care about utility, you are just saying that consumer goods hold little utility for you.

Scott Anderson
Apr 7 2008 at 10:46am

Another great podcast! I was able to desnsitize myself to the quality of the recording and believe that I understood most of it.

One comment. This topic of economics does or does not properly incorporate the whole of ones life – community, love spirituality may have some validity given that many of the models of economics are abstractions that attempt to reduce the infinite number of considerations and the individual nature of values into more easily workable concepts like utility. That being said, I think that there is a large body of theory called rational choice theory that incorporates some of these concepts. Some of the other broadcasts have mentioned social exchanges and the application of rational choice theory.

I think many modern products and services incorporate an aspect that is really a social exchange with others. Many people attend concerts to be part of a crowd of like minded individuals and socialize with freinds. Many attend classes (exercise, language, other) to improve themslves but also to connect. Many buy products like perfume or fashion or cars to not only take pleasure of the experience of use but also to make a statement that connects themselves with other people. Many support private organizations to connect and grow a membership of like minded individuals as well as achieve a good outcome that improves society (spirituality, political, charitable, etc.).

Another aspect of markets and individual choice, which economics studies is the improvement of standards of living that result from productivity. The productivity frees time to pursue and enhance freindships, love, and spirituality.

Apr 7 2008 at 8:37pm

Seems to me one of the great contributions of Gary Becker was to show that Max U encompassed far more than conventional economics had recognized. If you define Max U broadly enough, it becomes tautological: I expect my every action to maximize my utility–as I perceive my utility at this moment. Maybe I insist my wife see a doctor because I think God would approve of my putting her interests ahead of mine, or maybe I can’t stand the possibility of living without her. Either way I’ve maxed U, no?

Scott Anderson
Apr 8 2008 at 10:28am


Please elaborate. I am not fully understanding the point. Its not you, I am not a trained economist. Are you saying that Gary Becker believes that the concept of utility can be taken so far that decisons are not based on any rational foundation? I think that there is a very interesting point in your comment for me but I don’t fully understand.

Scott Anderson
Apr 8 2008 at 5:10pm


I did a little reading/research regarding Gary Becker including his podcast here at econlib. I understand your comment much better with the exception of the tautology reference that initially confused me.

Thank you, please ignore my last commentary of inquiry.

Comments are closed.


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Podcast Episode Highlights
0:36Intro. Often hear it said: "Sure, capitalism delivers the goods, but it deadens the soul." Standard defense is that it delivers the goods: we get air conditioners, cars, etc. But to really answer it we really need to look into whether participation in the market is corrupting. Sweet commerce; you can make the argument that we are improved by capitalism--commerce. Wordsworth: "Getting and spending we lay waste our powers." Adam Smith: The Theory of Moral Sentiments, context of ethics, virtues for The Wealth of Nations, which is not a recommendation to get and spend. Obsession is dangerous; there are other obsessions besides monetary obsession. Prudence: rational economic man, Max U (Maximum Utility), is not a very satisfying life, and most people do not behave only that way.
6:46Implications, given that people do not always behave that way even though as economists we often treat them as if they behave that way? As economists we are specialists in prudence only; but we have to be careful about over-specializing, assuming that psychologists, lawyers, etc. will each take care of their own specializations. But that was not what Adam Smith suggested for economics. Economics of religion, Gary Becker type argument, what is religion about? Iannaccone podcast. Economic approach has many insights but leaves some things out. Question of balance. Marglin podcast, Dennis Robertson, our economic system lets us economize on love: meant that by dealing with strangers for our monthly "needs" and desires (McCloskey drums into to grad students to not use the word "needs") we can save our love for those who matter. These richer views have simply not been in the textbooks. Danger in this talk of corrupting community. If we keep saying to each other that greed is good and we should take love off the table so far as our economic life is concerned has the danger that if we talk that way we may start to act that way. It can be corrupting of our spiritual lives and love. Marglin is persuaded by the notion that markets are arm's length, far away, green eyeshade transactions, don't need to be concerned. But markets are more embedded. Max U, Paul Samuelson; people live in communities and like communities, so they make the office into their communities. They make economic transactions into exchanges of love.
14:47Quote, p. 24: "I claim that actually-existing capitalism, not the collectivism of the left and the right,...". Historical perspective: the past versus today. Agriculture in 13th and 14th century England had very high rates of violent crime. Sweet commerce has made us rich enough that we do not have to steal or be as violent. Marxists say that on the contrary things have gotten worse; but Marx and Engels themselves pointed out that even up to the 18th century there had been improvement. Discussions of Shakespeare in coffee shops weren't possible before. Tyler Cowen. News is not perfect but on the whole good. Romanticized notion of the past. In the Middle Ages people didn't think that's what the Middle Ages was like. Market places were available for sale, trade and commerce of a very thorough-going sort. Prostitution. In the 19th century there developed this romantic idea that somehow there was this world we have lost that was wonderful. Main nasty features was that though there was commerce, people were not encouraged to be inventive. Man as a cog in a machine, on an assembly line. But harvesting the grain was a lot like that, swinging a scythe all day long. We have machines now to do that for us. Even the nostalgic don't want to go work on those farms. There are pleasures from exercising one's body, but it's hot, unsatisfying toil. Charlie Chaplin himself is an excellent example of the opportunities capitalism provided. Cruel remark that Groucho Marx made to a communist friend who asked him for a job, "No, I don't want to give you a job; I don't want to make you a wage slave." Threshing involves hundreds and hundreds of hours of work, stick attached to another stick which you flail at the grain to shake off the part you could eat. We've escaped from that routine; but also, having responsibility for yourself, being allowed to go from job to job, improves you ethically. We're all self-respecting capitalists, owning our own human capital. "Every man is a merchant." Russ's agricultural experience, kibbutz in the Negev, volunteers had choice of only working from 4 a.m. to 11; picked peaches; cleaning dust out of drain pipe with a pin.
29:01People are seen to move voluntarily from agriculture to mills because they preferred them. Marxists call it false consciousness. China: state of partial employment in poor villages versus working 11 months of the year for 6 days of the week in Shanghai. Freedom point: When people have the choice, they choose a capitalist life. The capitalist life is a life of free choice. Marxist claim is that it enslaves other people, but problem with that argument is that it depends on the notion of unequal exchange. We can reject foreign and domestic free trade and go back to working 12 hours a day in agriculture. Some people want to live that life. Amish choose a hard life on spiritual grounds, some carefully regulated modern amenities. We all make this kind of choice--some people do not have cable to self-restrict temptations. Ethical choice. Mistake to think of ethics as only about how you treat other people; it is also about how you treat yourself and your God. Those other things, the transcendent God and oneself are not necessarily damaged by capitalism.
34:39Kibbutz loss of population, people tire of it; pin, making the desert bloom. What about capitalism makes us more ethical? Converging causes: longer life expectancy, which comes along with modern prosperity. Your investment in yourself becomes more important. If you are going to die at 35 it matters less to invest in spiritual matters. High income allows you to read more. Start work age later, retire earlier, more time for spiritual improvement. A life in capitalism values the individual. The individual is encouraged to think of herself as mattering. Decisions aren't being made by the central planner, by tradition, by neighbors. Anthropologists make this point: material consumption is not about material things but about self-definition. Not just about entertainment and how much ice cream you can eat but about meaning. Modern young person can think of having many types of jobs. In the 1950s you could be a normal teenager or a rocker, rebel, James Dean. Now there are 30 possibilities, conforming nonformist, non-conforming conformist. John Adams, choose what kind of person you are going to be. Castes in India, Europe, had to work only one job whole life. Not just our wealth but the way capitalism works. Making deals. Person who takes responsibility is a novel idea. The great chain of being from the king down to the dog put you in your position from birth, much less social mobility historically. Centrally planned socialism doesn't come with choice; even worker ownership has an unsatisfactory element of compulsion. Before the early 19th century, responsibility instead meant answering, having a response. Invention, not merely invention.
43:52Counterpoint: romanticize that freedom in the modern world. But maybe university professors have this freedom; but so many people can't do that and lead the equivalent of a 16th century life but with much less security, no village safety net, can't rely on government. Weren't many safety nets in the Middle Ages; people were obsessed with security. Can see it in fairy tales, Grimm's fairy tales read as historical documents. No scene of being helped by your community. Even when as in Sweden and Holland safety nets work well, mainly what they turn out to be is a way of employing people. Great danger of people saying "I gave at the office," I don't need to have real concern for my neighbor because he can go down to the government office and be saved. Katrina--government forces worked extremely poorly; Wal-mart, church groups, sheer individuals worked better. Celebration of capitalism balances celebration of socialism.
48:34Discipline of economics, McCloskey was Russ's teacher of micro, style of economic teaching that is puzzle-solving, intuition based. Profession has become more Samuelsonian, more mathematical. Where would you like economics to go if you had your druthers? Teaching 18-year olds. Adam Smith, more Smithian economics, economics where maximizing is in a context of ethics where the economic actor is thought of as being a human instead of a maximizing machine. The Economic Conversation, elementary book, students and faculty are urged to talk about economics. It's not the math itself that's the problem; it's the thinking that mathematical thought is the same thing as economic thought. Math is a tool. If all we do is run models over and over again, what is point of scholarships? Chess problems, econometrics. Hayekian direction as Russ's personal revolt against Max U. Either the use of emergent market based thinking or the conversational exploration of concepts are hard to write exams for. Compulsion to grade. Time-consuming to give a grade. When we have to give a grade we fall back on the Max U kind of problem. Language is how an economy operates and it's how a science operates. An emergent market is a talk shop. Austrian approach: These conversations are creative and that's why they can't be formulated as exam problems. Information. Talk about the role of language in the economy. Best economic education tragically takes place outside the classroom. "Aim high in steering."

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