Our lives differ radically from our ancestors’ because of what McCloskey calls the Bourgeois Deal, which embraces Adam Smith’s “liberal plan of equality, liberty, and justice.” The Deal means our descendants’ lives will differ radically from ours, and the differences will be even more pronounced if we extend the Deal now to areas it does not reach. One such place is Danish land use planning, which restricts productivity growth in Danish retail and, therefore, economic growth in Denmark. Deregulating land use planning and allowing for larger stores would translate into lower prices and more output for modern Danes and their descendants.
Imagine one of our illiterate peasant ancestors arrived on your doorstep, freshly arrived from the fourteenth or fifteenth century or from sometime before the birth of Christ. If you wanted him to understand just how radically different things are now compared to then, where would you take him?
I think the answer is pretty simple: you would take him to a grocery store like Netto (which we do not have in the United States) or Aldi (which we do).
Why? Stores tell the most important story of the last two and a half centuries: the Great Enrichment. Life went from being “solitary, poor, nasty, brutish, and short,” as Thomas Hobbes described it in Leviathan (Hobbes 1651), to being connected, wealthy, clean, peaceful, and long. It happened because people adopted a humane liberalism that embraced cooperation and innovation, “allowing every man to pursue his own interest his own way, upon the liberal plan of equality, liberty and justice” (Smith 1776). Deirdre McCloskey called it the Bourgeois Deal: “leave me alone, and I’ll make you rich” (McCloskey 2006, 2010, 2016; see also McCloskey and Carden 2020). The world’s poor have been the big winners, and the results have been dramatic even in the last few decades: the share of the world’s population living in extreme poverty fell from 42.6% in 1981 to 8.7% in 2018.
Except we don’t really leave one another alone. At least not yet, and this is to our detriment and our descendants’. A trip to a Danish grocery store would blow your ancestor’s mind, but it would be even better—and the Danish economy would grow more rapidly, and poverty would disappear even more quickly—without planning restrictions that keep stores smaller and goods more expensive than they would otherwise be. There is room for improvement, specifically by relaxing land use planning rules that reduce Danish retail productivity.
Oversat til dansk af Elisabeth Overgaard.