The third innovation, after science and institutions, was a change in values: an endorsement of what the economic historian Deirdre McCloskey calls bourgeois virtue.12 Aristocratic, religious, and martial cultures have always looked down on commerce as tawdry and venal. But in 18th-century England and the Netherlands, commerce came to be seen as moral and uplifting. Voltaire and other Enlightenment
Take a view of the
Commenting on this passage, the historian Roy Porter noted that “by depicting men content, and content to be content—differing, but agreeing to differ—the
The Great Escape in Britain and the Netherlands was quickly followed by escapes in the Germanic states, the Nordic countries, and Britain’s colonial offshoots in Australia, New Zealand, Canada, and the United States. In a theory that could only have been thought up by an assimilated German Jew, the sociologist Max Weber proposed in 1905 that capitalism depended on a “Protestant ethic.” But the Catholic countries of Europe soon zoomed out of poverty too, and a succession of other escapes shown in figure 8-2 have put the lie to various theories explaining why Buddhism, Confucianism, Hinduism, or generic “Asian” or “Latin” values were incompatible with dynamic market economies.
Figure 8-2: GDP per capita, 1600–2015
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The non-British curves in figure 8-2 tell of a second astonishing chapter in the story of prosperity: starting in the late 20th century, poor countries have been escaping from poverty in their turn. The Great Escape is becoming the Great Convergence.16 Countries that until recently were miserably poor have become comfortably rich, such as South Korea, Taiwan, and Singapore. (My Singaporean former mother-in-law recalls a childhood dinner at which her family split an egg four ways.) Since 1995, 30 of the world’s 109 developing countries, including countries as diverse as Bangladesh, El Salvador, Ethiopia, Georgia, Mongolia, Mozambique, Panama, Rwanda, Uzbekistan, and Vietnam, have enjoyed economic growth rates that amount to a doubling of income every eighteen years. Another 40 countries have had rates that would double income every thirty-five years, which is comparable to the historical growth rate of the United States.17 It’s remarkable enough to see that by 2008 China and India had the same per capita income that Sweden had in 1950 and 1920, respectively, but more remarkable still when we remember how many capitas this income was per: 1.3 and 1.2 billion people. By 2008 the world’s population, all 6.7 billion of them, had an average income equivalent to that of Western Europe in 1964. And no, it’s not just because the rich are getting even richer (though of course they are, a topic we will examine in the next chapter). Extreme poverty is being eradicated, and the world is becoming middle class.18
Figure 8-3: World income distribution, 1800, 1975, and 2015
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