Deirdre McCloskey at Cato Unbound

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Jason Kuznicki

Jason Kuznicki is a research fellow at the Cato Institute and contributor of Cato Unbound. He's on twitter as JasonKuznicki. His interests include political theory and history.

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12 Responses

  1. Avatar Rufus says:

    Sure this is is right- well, the Old Regime economic theories were really dominated by the physiocrats who had little use for anybody but land owners or farmers. All the other economic activities were sort of unnatural or base in their opinion. They did have a few ideas that have survived, about self-interest as an economic motivator, private property and individualism; there’s a reason that French also gave us the term ‘laissez faire’. But, on the whole, I’m fairly glad that there aren’t many physiocrats around after the Revolution.Report

    • Avatar Jason Kuznicki says:

      @Rufus,

      Oh, it’s even worse than you imagine. The physiocrats were in relative terms the good guys.

      The old-time laws of derogation forbade working the soil, too. That’s for your peasants and tenants, not for your lordship.Report

  2. Avatar gregiank says:

    I read that this morning and had a really harsh reaction to it so i didn’t respond. Maybe I’m still missing something. But accounting for deeply held personal and societal values as significant inputs into economics sounds…..ummmmm….. really really incredibly obvious. In fact i thought of a few other examples where some people have done this. It was a common criticism from the Left of the Reagan year up through today that the Greed is Good culture of Wall Street has led to a devaluing of ordinary work, acceptance of screwing regular people over as long as it made piles of cash and ripped away any pretense of morality or conscience that existed in Wall Street/high finance. Making big money justified all.Report

    • Avatar Simon K says:

      @gregiank, At one level its a no-brainer that values impact economics – economics is about the accumulated affects of decisions, and values obviously impact decisions. But the Big Question in this area has always been how we got from one kind of economy and one set of values, where guys in tin cans on horses got lots of kudos for hacking one another into little bits and other guys got no kudos for actually growing food, to another where hacking one another into little bits is generally frowned upon and people who grow food (or program computers or trade stocks or whatever) well are generally thought highly of. McCloskey’s most important point is that all previous attempts to answer this question have failed – they’re ideologically motivated and don’t fit with the empirical facts. Whether her answer is better or not I’m not sure yet. I’m not sure what anything she says has to do with the Left’s view of Reagan – you’ll have to explain that one to me.Report

      • Avatar gregiank says:

        @Simon K, The left critique of Reagan and the Greed is Good age suggested that a change in values led to vastly different economic behavior. That seems to be what she is saying. In the 80’s unrestrained avarice became a positive good, consequences to communities were irrelevant, fiscally responsibility was a joke, Greed was the solution. One of the worlds worst business men, donny trump, became a hero and icon, and for some reason is to this day. (as a side note, up until the recent great crash i knew a conservative i work with say Greed is Good repeatedly as a policy prescription and rationale for many things)Report

  3. Avatar Simon K says:

    I’m struck by the parallel with Nadezhda’s reply to Rufus – She emphasized the importance of bourgeois values, and expanding the scope of those values to give more people bourgeois freedoms in countries where the bourgeoisie has basically already won. The McCloskey quote above emphasizes creating enough respect for bourgeois pursuits to give the bourgeoisie enough space to start generating wealth. It seems to me there’s a very strong connection between wealth and freedom here, where freedom is necessary to generate wealth but some level of wealth already needs to exist to allow enough freedom.

    “Bourgeois” doesn’t really seem quite accurate though – The bourgeoisie were the people who owned and ran fairly large businesses that employed the proletariat. Aren’t the values of artisans, small businessmen, traders and even wage labourers themselves actually more central to development than the values of factory owners? The latter tend to be able to buy status because they have wealth – its protecting the status of those who aren’t already rich that seems to be the more important thing.Report

  4. Avatar Will says:

    Cato Unbound is on a roll. Props for putting together two great issues.Report

  5. Avatar trizzlor says:

    Am I the only one struck by the unapologetic dodge implicit in this passage: Failure to predict recessions is not what is wrong with economics, whether free-market economics or not. Such prediction is anyway impossible: if economists were so smart as to be able to predict recessions they would be rich. They’re not. No science can predict its own future, which is what predicting business cycles entails.

    Much of the serious post-recession criticism of economists (and, particularly, economic advisors) has not been for their failure to predict the recession but for their insistent, nearly evangelical, claim that a recession was impossible. It’s certainly an ordinary thing to not predict the overall movement of your research field, but it’s entirely different to make such a prediction and be dreadfully mistaken. It’s especially odd of McCloskey to sweep this under the rug especially as she goes on to call for economists to … abandon the materialist premise that reshuffling and efficiency, or an exploitation of the poor, made the modern world.

    Perhaps I’m being too aggressive, but this is eerily similar to the post Iraq War justification of “who could have predicted?” when the very same people were making confident positive predictions during the run-up.Report

    • Avatar Simon K says:

      @trizzlor, What economist claimed recession was impossible in 2007? Certainly not McCloskey.Report

    • Avatar Ken says:

      @trizzlor, I was also struck by it, chiefly because I couldn’t imagine any other field of science trying to get away with such a claim. Take any parallel, for example “Chemists cannot predict how molecules will react, because they are made of molecules,” to illustrate how odd this is. No science can predict its own future, which is what predicting business cycles entails also seems to indicate some confusion between the subject of a science and the science itself. Again by analogy, chemists can’t predict what areas will be the hot topics of chemistry in ten years, but they can certainly tell you what a mixture of chemicals will do.

      Perhaps McCloskey is simply that economics has not developed enough power to be a predictive science. She may even be going further, and saying that it will never (and can never) be able to predict future economic activity. If that’s the case, she should just come out and say that. Of course this might raise further questions for discussion, such as “So why are we paying economists to evaluate the effects of business and government policies, if they can’t make such predictions?”Report

  6. Avatar Becknerized says:

    I’m all for looking at ideas and their power to influence history, but McCloskey may be putting the cart before the horse. The idea of an elevated middle class – what became known as the bourgeoisie – probably just emerged as the mercantile class grew under expanding economies.

    It should not be overlooked that today, in France at least, “bourgeoisie” has derogatory implications. It is almost interchangeable with “petite bourgeoisie”, small minded social climbers eager to display their upwardly mobile status in an effort to sublimate their workhorse role in the economic machine.Report