The Applied Theory of the Bourgeois Era: A Price-Theoretic Perspective
17 Pages Posted: 22 Jan 2021
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The Applied Theory of the Bourgeois Era: A Price-Theoretic Perspective
Date Written: November 12, 2020
Abstract
What can we learn about applied price theory from the Bourgeois Era? In this paper, we contend there are three important lessons that can be extracted from McCloskey’s work on the Great Enrichment. First, transaction costs are not constraints, but objects of choice. Second, property rights are not merely a “bundle of sticks,” in that private property rights make exchange possible, but a culture of liberal ideas makes exchange viable. Third, ideas conducive to liberalism give rise to generalized increasing returns to the scope, rather than scale, of market exchange, which generated the Great Enrichment.
Keywords: Culture; Deirdre McCloskey; Price Theory; Liberalism
JEL Classification: A23; B53; O43; P16
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