A fascinating passage:
THE BOURGEOIS ERA
There have been lots of reasons offered by economic historians for this transformation, but these have all been called into question by economic historian Dierdre McCloskey, who began working on this issue as Donald McCloskey three decades ago. In a proposed six-volume set, The Bourgeois Era, McCloskey is exploring this question in detail. Two volumes are available. They have presented the problem. In volume 2, Bourgeois Dignity. McCloskey refutes the prevailing explanations one by one.
Then what did it? McCloskey's theory, not yet proven: a change in attitude toward the legitimacy of wealth. This began in the 17th century in the Netherlands. (McCloskey speaks Dutch.) This spread to Scotland and England.
I am partial to the thesis. I have believed it for at least 25 years. But there is a problem. What motivated people to change their views after – basically – the history of mankind? These were Calvinist societies in the 17th century. What changed in Calvinist theology in the century after Calvin? The 17th-century creeds did not change the theology. The Synod of Dort (1619) and the Westminster Assembly (1643-47) did not alter the old Calvinism. So, what was the crucial factor?
I have a suggestion: their concept of the nature of God's kingdom on earth. The shift was to what is today called postmillennialism: the belief that the final judgment only comes after Christ's kingdom has filled the earth. This transformation involves compound blessings (Deut. 28:1-15) including economics. This was not held by Lutherans and 16th-century Calvinists.
In both the Netherlands and Scotland, there were postmillennial theologians. But McCloskey's research challenge will be to see if the supposed shift in attitude toward business wealth was associated with this shift in eschatology. If there was no connection, then what was the source?
Adam Smith's Wealth of Nations (1776) favored economic wealth. He was a Scot. He was a liberal Presbyterian. But McCloskey thinks the change in attitude preceded Smith by 150 years.
Proof is scheduled for Volume 3. I await it with great anticipation.
McCloskey became co-editor of the American academic journal, The Journal of Economic History, in the spring of 1982. Beginning 15 years earlier, the editor had been my professor, Hugh Aitken. I recall the evening in a graduate seminar, probably in 1966, when Aitken had posed the #1 question. How did the transformation happen? He said the scholars did not know.
As far as I can see, they still do not know.
THE GREAT DIVERGENCE
Harvard historian Niall Ferguson has called the great transformation of the West the great divergence. Asian nations had about the same wealth per capita as Western nations in 1800. By 1900, the two societies diverged greatly. This continued until 1970, he argues.
In a TED video, Ferguson attributes this to six factors:
Competition (both political and economic)
The scientific revolution
Property rights (not democracy)
The consumer society
The West's work ethic
I don't believe any of this. That is because I have read McCloskey's two volumes (twice). McCloskey refutes them all, plus a dozen more.