Deirdre N. McCloskey

The Consequences of Economic Rhetoric

The field of economics proves to be a matter of metaphor and storytelling - its mathematics is metaphoric and its policy-making is narrative. Economists have begun to realize this and to rethink how they speak. This volume is the result of a conference held at Wellesley College, involving both theoretical and applied economists, that explored the consequences of the rhetoric and the conversation of the field of economics.

Adam Smith, the Last of the Former Virtue Ethicists

Smith was mainly an ethical philosopher, though he practiced what was considered for a long time after Smith an obsolete sort of ethical philosophy, known nowadays as “virtue ethics.” Since 1790 most ethical theory as practiced in departments of philosophy has derived instead from Kant or Bentham, but virtue ethics has recently come back. From the Seven Primary Virtues, Smith chose five to admire especially. He chose all four of the pagan and stoic virtues of courage, temperance, justice, and prudence. To these he added, as virtue number five, a part of the Christian virtue of love, the part admired by his teacher Francis Hutcheson. Smith was not, as has often been claimed, a Stoic, because he was always a pluralist, and would not reduce the good life to, say, Stoic temperance alone. Smiths choice of the virtues makes sense of his writings and career. And it reveals a flaw, shared with Hume: the banishment of the monkish virtues of hope and faith, necessary for human flourishing.

Signifying nothing: reply to Hoover and Siegler

After William Gosset (1876–1937), the ‘Student’ of Students t, the best statisticians have distinguished economic (or agronomic or psychological or medical) significance from merely statistical ‘significance’ at conventional levels. A singular exception among the best was Ronald A. Fisher, who argued in the 1920s that statistical significance at the 0.05 level is a necessary and sufficient condition for establishing a scientific result. After Fisher many economists and some others – but rarely physicists, chemists, and geologists, who seldom use Fisher‐significance – have mixed up the two kinds of significance. We have been writing on the matter for some decades, with other critics in medicine, sociology, psychology, and the like. Hoover and Siegler, despite a disdainful rhetoric, agree with the logic of our case. Fisherian ‘significance,’ they agree, is neither necessary nor sufficient for scientific significance. But they claim that economists already know this and that Fisherian tests can still be used for specification searches. Neither claim seems to be true. Our massive evidence that economists get it wrong appears to hold up. And if rhetorical standards are needed to decide the importance of a coefficient in the scientific conversation, so are they needed when searching for an equation to fit. Fisherian ‘significance’ signifies nearly nothing, and empirical economics as actually practiced is in crisis.

Max U versus Humanomics: a critique of neo-institutionalism

‘Institutions’ do not mean the same thing to Samuelsonian economists as they mean to other people. Norths ‘rules of game’, like chess, dominates, even when it is claimed that ‘informal institutions’ are allowed into the tale. The tale is that institutions were once clotted, and then became unclotted, and the Great Enrichment occurred. But the enrichment was by a factor of upwards of a hundred, which cannot be explained by routine movements to an efficient equilibrium. And changes of institutions did not in fact happen much in England. Ethics changed, not laws and procedures. For presently poor countries, too, it will not suffice, as the World Bank and Acemoglu recommend, to add institutions and stir. Economies rely on ethics, which neo-institutionalists, being at heart Samuelsonian, have not wanted to admit. Ideas matter. Indeed, metaphors and stories matter, as in Searles account.

Not by P Alone: A Virtuous Economy

Abstract Samuelsonian (mainstream) economics cannot even think of stepping beyond its Max U, prudence-only model. But if we are going to have an economics that works and that matters, as economists like Sen and Akerlof and Hirschman have been saying, we need to admit that people do not live by prudence alone. They love and hope, they are just or unjust, they are temperate and courageous, faithless or faithful. Recognizing such virtues and vices is not a betrayal of economics. It is a fulfillment of the political economy of Adam Smith.

The great enrichment: a humanistic and social scientific account

ABSTRACT The scientific problem in explaining modern economic growth is its astonishing magnitude – anywhere from a 3000% to a 10,000% increase in real income, a ‘Great Enrichment.’ Investment, reallocation, property rights and exploitation cannot explain it. Only the bettering of betterment can, the stunning increase in new ideas, such as the screw propeller on ships or the ball bearing in machines, the modern university for the masses and careers open to talent. Why, then, the new and trade-tested ideas? Because liberty to have a go, as the English say, and a dignity to the wigmakers and telegraph operators having the go made the mass of people bold. Equal liberty and dignity for ordinary people is called ‘liberalism,’ and it was new to Europe in the eighteenth century, against old hierarchies. Why the liberalism? It was not deep European superiorities, but the accidents of the Four Rs of (German) Reformation, (Dutch) Revolt, (American and French) Revolution and (Scottish and Scandinavian) Reading. It could have gone the other way, leaving, say, China to have the Great Enrichment, much later. Europe, and then the world, was lucky after 1800. Now China and India have adopted liberalism (in the Chinese case only in the economy) and are catching up.

Politics in Scholarly Drag: Dreger’s Assault on the Critics of Bailey

Dreger defends Bailey at length and assaults those like me who disagreed with his book and his behavior. Why is the Clarke Institute theory of gender crossing so bad? For one thing, it has trivial scientific support. Dreger claims throughout her long essay that, on the contrary, it has a lot. But look at her citations, which again and again are to the same handful of papers. For another, most students of the matter don’t believe the Clarke Institute. Look at the immense literature, which neither Bailey nor Dreger have much studied, saying that gender crossing is a matter of free choice of identity, not sex, sex, sex. And the worst feature of the theory is the treatment it inspires at the Institute and elsewhere. As Bailey (2003) himself notes, ‘‘some psychiatrists refuse to recommend for sex reassignment any man who has had even one incident of erotic crossdressing’’ (p. 174). That is the problem. That, and the murders and lesser mistreatments which can be laid at the door of those who have wanted so very much and for so very long to define a free human choice as a sexual pathology. Dreger is correct that Bailey doesn’t really get going in his distaste for late-transitioning gender crossers until late in the book, where he describes them as liars (p. 146) who are best classified with ‘‘masochism, sadism, exhibitionism,...necrophilia, bestiality, and pedophilia’’ (p. 171), needing ‘‘curing’’ (p. 207). Admittedly, Bailey’s view of early transitioning gender crossers is little better, since they apparently are inclined to ‘‘shoplifting or prostitution or both’’ (p. 185) and to taking jobs as strippers (p. 142). How he would know any of this scientifically, considering that most MtF gender crossers early or late disappear without comment into the female population, is never made clear. Indeed, Bailey and his little group of followers claim that nothing can be learned about gender crossing from actually talking to the tens of thousands of people worldwide who have been through it. You see, unless gender crossers agree with the Clarke Institute theory based on a few sexualstimulation studies (which never have female controls, by the way), they are liars or self-deluded. So much for the bulk of the evidence available to serious students of the matter. It’s like doing astronomy without looking at the sky. That’s why Bailey feels no responsibility as a scientist to read anything or listen to anyone beyond a sample of convenience sized 7 gathered in the gay bars of Chicago. He claims for example to have read my own book, Crossing: A Memoir (McCloskey, 1999). But you can tell immediately from his brief description of it in his own book that he’s fibbing. He writes that McCloskey ‘‘focuses on the standard transsexual story (‘I was always a female’).’’ No I don’t. He said in an interview with the Chicago Reader in 2003: ‘‘Deirdre says he [get it? ‘he’] was really a woman inside. What does that mean really? What does it mean to say you were a man but you ‘felt like a woman’?’’ But I said nothing of the kind. To be sure, the ten-second journalistic take on gender crossers is that they are ‘‘women trapped in a man’s body.’’ But that’s not how I felt, nor is it how anything like all gender crossers have felt. When I was a man, I felt like one. Why do Bailey and Dreger have such difficulty understanding human choice and change? I suppose it’s because they are enamored of a behaviorist meta-theory that says that people just are this or that, from birth, despite all the anthropological and psychological and literary evidence to the contrary. Born a man, always a man, even if a queer man who gets off on gender change. ‘‘Bailey and Blanchard aren’t interested in whether people’s narratives fit Blanchard’s theory,’’ Dreger writes D. McCloskey (&) Department of Economics, University of Illinois at Chicago, UH 2100, Harrison and Morgan, Chicago, IL 60605, USA e-mail: deirdre2@uic.edu

The poverty of Boldizzoni: Resurrecting the German Historical School ☆

Boldizzonis attack on cliometrics is unpersuasive, in part because he does not grasp economics and its uses, in part because he admires uncritically the German Historical School and their modern descendants, the French Annalistes. Much is to be learned from the earlier schools, but not by throwing away the insights that economics gives into how an economy holds together.

What Economics Should We Teach before College, if Any?.

Economics can be taught much earlier than we usually imagine, as a life skill, with direct experience, from kindergarten on. An experiential, early-grades economics of budgets, buying, and giving-up-to-get may be better than the politically inspired insistence that students get an allegedly healthy dose of free-market ideology just before they are old enough to vote.

Neo-institutionalism is not yet a scientific success: a reply to Barry Weingast

ABSTRACT Barry Weingast agrees that the idea of liberalism was crucial for the making of the modern world, though in most of his comment he turns to his own writings making institutional change the crux. Yet institutions in Britain did not in fact change much, the changes had little economic oomph, and underlying property rights were good in numerous economies worldwide since ancient times. An ideational economic history works better: liberty caused our riches.