For anyone who hasn’t read Deirdre McCloskey’s voluminous Bourgeois trilogy, I invite you to look at it and seriously consider her arguments. To summarize her account (I promise I’m not giving away too much), a kind of rhetorical exchange between people nurtured the ideas and culture that would drive economic growth first in northwestern Europe in the 17th century, followed by the rest of Europe in the 18th century. In particular, she addresses what I call interpersonal rhetoric, or the way in which we talk to each other on a more informal and concrete basis.
McCloskey summarizes: “What changed with accelerating mass from 1600 and 1800 was how people talked about each other, yielding a change in how they thought about technical and then social problems… the Revaluation, in short, came out of a rhetoric that would, and will, enrich the world.” Interpersonal rhetoric within a liberal and tolerant society praises entrepreneurs and risk-takers, and treats them as the engines that power social and economic progress.
However, there exists a version of rhetoric that embodies more abstract concepts and meanings. This is what I call higher-order rhetoric, which I define as the way in which people talk about institutions—either formal or informal. For example, whenever we discuss law or the ideal functions of society, we are contributing to a higher-order rhetoric that seeps deeper into our larger cultural membrane. A liberal society encourages higher-order rhetoric that favors peace, free markets, open inquiry, and an impartial rule of law.
In 1477, Mary of Burgundy signed The Great Privilege following a swell of discontent among several Dutch states. The document contained a list of provisions that each state found favorable by asserting control over governmental affairs. McCloskey uses this example to show how a changing ethical rhetoric spilled over into important political discussions that eschewed centralized authority and asserted equal dignity to all.
This example also encapsulates a higher-order rhetoric, where a certain language about ideals and institutions, like individual and states’ rights, became a powerful device for changing the culture into one that supported progress over stagnation.
In a forthcoming paper, Michael Douma draws on the Bill of Rights as an example of how its use in the lexicon began to take on new meaning. He writes that “as Americans recognized the value of the first ten amendments, the term ‘the Bill of Rights’ became a useful phrase to wield in resisting the expansion of government authority.” In other words, the document transformed from a mere list of constitutional guarantees into a cultural artifact that serves to elevate higher-order rhetoric to a common discourse.
The differences separating interpersonal and higher-order rhetoric are not always clear. For example, take the common yet indignant expression “corporate fat cats.” In this case, a “fat cat” can be an insult hurled at specific executives believed to be greedy and corrupt. This use of the term would qualify under the heading of interpersonal rhetoric since it’s used to describe a concrete and specific object in conversation.
On the other hand, the barb can be used to highlight a perceived institution of greed, i.e., a perverse incentive structure designed to fill the pockets of some at the expense of others. This form of communication fits under the banner of higher-order rhetoric, regardless of how accurate the expression is. What matters most is how the rhetoric is used. Societies flourish when they are rich in conversations that celebrate entrepreneurs and treat institutions as constant works in progress.
In standard economic growth theory, technology is treated as a coefficient that can either raise or lower a country’s total economic output, also called total factor productivity, or TFP. Wealthy countries have a high TFP, and poor countries have a relatively low TFP. Higher-order rhetoric counts under the TFP parameter, but for obvious reasons, it’s much harder to measure the quality of words than the number of patents granted or some other proxy for a variable that remains vexingly ambiguous among economists.
Similarly, higher-order rhetoric must overcome network effects. This simply means that the (marginal) cost of using rhetoric falls as more people join the network and contribute to the conversation. This could explain why some European countries began to develop first—they benefited from a wide network of participants who were already engaged in discussions that embraced ideals like individual rights and the rule of law.
To complicate matters further, there doesn’t appear to be any discernible standard by which you can rate the degrees of higher-order rhetoric. Sometimes higher-order rhetoric contains specific reference to institutions; at other times, it suits a more philosophical purpose. In classifying rhetoric, we must take into consideration how abstract the words are and what they represent.
These ambiguities become apparent when we invoke the US Constitution or cite the wisdom of the Founding Fathers. For example, it’s more common to cite the overarching philosophy of the Constitution than it is to cite the individual articles, sections, and amendments that make it up. Here, higher-order rhetoric is used to legitimize the institutions that Americans value. We’re not just exchanging words with one another; we’re enriching our culture and economy by unconsciously testing the limits of progress.
The architects behind the American Founding offer a similar purpose. When we invoke their words and actions, we reappraise the meaning of our institutions. In this way, we’re building a social foundation on which to promote innovation by experimenting with ideas.
Finally, interpersonal and higher-order rhetoric can only function effectively if they’re permitted unbridled access in society. If governments attempt to snuff out either form of rhetoric, institutions weaken under the weight of complacency. This is one of the reasons why countries like Russia, Venezuela, and North Korea, among other authoritarian regimes, are so feeble. In these settings, individuals can’t contribute to a shared rhetoric that expands the economic and cultural frontier through the fearless exchange of ideas.
Johan Norberg has recently argued that “the reason that the Enlightenment and the Industrial Revolution started in Western Europe was that this region of the world happened to be the most open, partly just out of luck.” I argue that it was openness in the kinds of words used that unleashed the economic potential first witnessed in northwestern Europe and leading into the Enlightenment.
As McCloskey notes, the combination of political fragmentation in Europe following the Black Death and the emergence of the printing press that spread the written word set the stage for cultivating the ideas that would launch an economic revolution.
Once governments finally let people make their own decisions, innovation and economic growth were viewed to be in the interest of everyone. In the process, rhetoric of all degrees began to shift in favor of a liberal world. People respected one another not because of their social rank or status, but because they were individuals in pursuit of something greater and were willing to work to achieve a higher economic station.
McCloskey rightly points out that “political argument shifted away from disputes between popes and emperors and toward disputes between governments and individual consciences.” Talk about each other and the institutions that supported them was what made the modern world rich, driven by the ideas that captivated the minds of our forebears.
This article, Ideas Shaped the Words That Made the Modern World, was originally published by the American Institute for Economic Research and appears here with permission. Please support their efforts.