The second element, universal dignity—the social honoring of all people—was necessary in the long run, to encourage people to enter new trades and to protect their economic liberty to do so. The testing counter-case is European Jewry down to 1945, gradually liberated to have a go in Holland in the seventeenth century and Britain in the eighteenth century and Germany and the rest later. Legally speaking, from Ireland to the Austrian Empire by 1900 any Jew could enter any profession, take up any innovative idea. But in many parts of Europe he was never granted the other, sociological half of the encouragement to betterment, the dignity that protects the liberty.
Read the whole essay. Pointer from Don Boudreaux.
Another excerpt, from earlier in the piece:
North, Wallis, and Weingast treat only England, France, and the USA, which obscures the ubiquity of what they call “doorstep conditions”—the rule of law applied even to elites, perpetually lived institutions, and consolidation of the state’s monopoly of violence. Such conditions characterize scores of societies, from ancient Israel to the Roman Republic, Song China, and Tokugawa Japan, none of which experienced a Great Enrichment.
And much later in the piece:
The important “institutions” were ideas, words, rhetoric, ideology. And these did change on the eve of the Great Enrichment. What changed circa 1700 was a climate of persuasion, which led promptly to the amazing reflection, entrepreneurship, and pluralism called the modern world.
McCloskey as usual ignores Clark and anything to do with biology. Among other things this deprives McCloskey of a good explanation for the aristocratic disdain for achievement, as when discussing the Medicis at some length. The explanation is genetic reversion toward the mean– founders of fortunes are anxious to advantage their offspring but cannot count on those offspring displaying the founders’ talents. Naturally they wish to spare their offspring the trouble of competing with upstarts from other lineages, so they affect a disdain for such competition (“the taint of trade”) and promote the notion of inherited nobility.
I don’t find McCloskeyan framework incompatible with Norhean.
The former: “Ideas, not capital or institutions, made the modern world”.
The latter, in the “modestly subtitled” book: “We summarize the characteristics of an open access order as follows….1. A widely held set of beliefs about the inclusion of and equality for all citizens. 2. Entry into economic, political, religious, and educational activities without restraint. 3. Support for organizational forms in each activity that is open to all (for example, contract enforcement). 4. Rule of law enforced impartially for all citizens. 5. Impersonal exchange. ”
These all are institutions but they all are ideas as well. It is a belief that you can’t beat your servant and it is a belief that a prime minister is not above the law. Institutions are rules and constraints because they are beliefs, rules — which as Wittgenstein contends, we follow blindly.