Deirdre McCloskey

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Gordon, McCloskey and Growing Pains

I try to take my own advice: when you have nothing to say, don’t say anything. Thus, for the best part of a month I have busied myself doing other things and staying away from here. It’s been a nice break, and here I am still convinced that there’s not much to say.

The economy is where it was. Economics is where it was. Politics is where it was. The three intermingle, mix, merge, separate and go their different ways in the same manner as before. The same complaints and criticisms are made. The same critics say the same things. Nothing it seems changes.

I think this is what equilibrium must feel like.

Now all I need is some exogenous event to come along and shake things up. You know, like someone being human and changing their mind.

This doesn’t mean that I haven’t been busy. Far from it. I dived deeply into growth. Or, as it turns out, the undergrowth, since the entire topic seems infested with weeds and a tangle of interwoven branches that can easily ensnare the unwary.

It began with Robert Gordon’s massive “The Rise and Fall of American Growth”; it expanded to include Deirdre McCloskey’s epic “Bourgeois Equality”; and finally forced me to retrieve from my dusty shelves Elhanen’ Helpman’s far more accessible “The Mystery of Economic Growth”. Oh, and in the midst of this I added in Richard Heinberg’s “The End of Growth” just to keep a nice ideological balance.

No wonder I have a headache and have nothing to say.

You would think that such an obvious phenomenon as the surge in prosperity experienced in most corners of the globe over the past two hundred or so years would be the centerpiece of economics, but it is not. Growth remains inscrutable to the technology we know as economics. This is mainly because economics reduced itself successively through the years, ending up as a form of applied mathematics mixed with dubious psychology, and a relentless disdain for reality. Since growth is evidently real – like it or not – it gets to be very difficult to explain it from within the confines of such a toxic brew.  You end up with absurdities such as the infamous “Total Factor Productivity” which is a complicated name for the bit of growth that economics cannot explain without recourse to magic. It turns out to be a big bit too: well over half, so the magic is really important.

Maybe economics danced around growth in the early years simply because the rates of growth back then weren’t terribly excessive. Economists clearly knew change was afoot, but they seem to have been obsessed with mechanics and primitive physics rather than movements through time. They wanted to know why and how the economy fitted together rather than what made it change. So they fell foul of a version of the Heisenberg principle: they foreswore trajectory in order to pin down the here-and-now. Eventually this obsession drove them into a strange other-wordly embrace of equilibrium, and various attempts to make the metaphorical invisible hand a tangible, albeit abstract, centerpiece of social interaction.

From within its own redoubt economics is largely successful. Economists actually do think they know something about economics. Whether they know much about economies is the open question. This is because the relationship between economics and real life economies is somewhat vague. Okay, let me go further: it is very vague.

Think about growth.

How do we measure it? Well, in terms that fit nicely within economics. But is what we measure a true picture of the real-life economy? What do we even mean by ‘real-life economy’?

This is something Gordon tries to tackle. He devotes hundreds of pages to detailed descriptions of how the typical person’s way of life has been transformed by the upwelling of technology since the beginnings of industrialization. There can be no doubt that we are massively better off than our ancestors. This, too, is McCloskey’s central point: even the poorest amongst us is better off than our wealthiest ancestors. Growth is a wondrous thing. Yes it is, despite its tarnished reputation of late.

The problem is that much of this leap forward in prosperity isn’t measured by any of our major economic statistics. Gross National Product (GDP) is an approximation at best. It was devised to help western governments manage World War II military manufacturing. It was never devised to measure our living standards, let alone to allow us to compare back in time with the relative lifestyles of our ancestors. GDP is intensely manufacturing oriented. It has huge gaps, not least in its ignorance of home production, and its ability to capture the changes in technology and the increased importance of service sector activity is, how shall we say, primitive.

And economics is stuck with this, and other, poor measurements of real-life economies. Bad or insufficient data is the common grist for the economic mill.

No wonder that economics has such a hard time with growth. If we can’t even measure an economy well, how can we describe one? Or explain it? Or predict it? Let alone discuss its trajectory through time.

This doesn’t mean that economists haven’t tried, but economics-as-history is vastly different from economics-as-machine. And, as I mentioned earlier, the pioneers of economics were a lot more fascinated by machines, mechanics, and the interconnected parts thereof, than they were about narrative or longitudinal comparisons. It was obvious that things were changing, so they wanted to understand what was making the system hum. Why it existed in the first place was irrelevant to them, and how it compared with what came before was much less interesting than how it all came together and appeared to balance so well.

I imagine growth must have seemed inexorable to them. The age of invention and innovation was at hand. The excitement was about understanding systems, not of pondering the consequences of growth, nor of the possibility that the pace of innovation might stall.

This is why it is that economics, when viewed from within itself, has an aura of success. It has answered most of its original questions. That it has done this often by discarding uncomfortable questions is, of course, a blot against its reputation and serves as a reminder that it is actually a very specialized and diminished discipline when set against its puffed up self-regard.

Gordon and McCloskey both do us a great favor in this regard.

Gordon through his unrelenting critique of our understanding of what comparative values in prosperity mean in everyday lives. And McCloskey through her equally unrelenting evaluation of the role of ideas in the acceleration of growth. Her emphasis on the values – her ‘bourgeois’ values – that undergird the entire transformation in society since industrialization is a bold contradiction to the sterility of economics. It is simply not possible to explain growth without reference to its context: the cultural, institutional, political, social, and geographic factors that enabled it to take root.

An economics that fails to accommodate those factors is doomed to prattle on about Total Factor Productivity rather than real things that made a difference in our lives. It is doomed, in other words, to fail to explain growth.

Growing pains indeed.

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Economics as Storytelling: McCloskey Again

This is not new to most of you of course. You are already steeped in McCloskey’s Rhetoric. Or you ought to be. After all economists are simply telling stories about the economy. Sometimes we are taken in. Sometimes we are not.

Unfortunately McCloskey herself gets a little too caught up in her stories. As in her explanation as to how she can be both a feminist and a free market economist:

“The market is the great liberator of women; it has not been the state, which is after all an instrument of patriarchy … The market is the way out of enslavement from your dad, your husband, or your sons. … The enrichment that has come through allowing markets to operate has been a tremendous part of the learned freedom of the modern women.” — Quoted in “The Changing Face of Economics – Conversations With Cutting Edge Economists” by Colander, Holt, and Rosser

Notice the binary nature of the world in this story. There are only the market (yea!) and the state (boo!). There are no other institutions. Whole swathes of society vanish or are flattened into insignificance. The state is viewed as a villain that the market heroically battles against to advance us all.

It is a ripping tale.

It is shallow and utterly misleading.

The problem McCloskey has is that she constantly battles her own Chicago roots and those roots sometimes – not often – surface in this same way. Markets good. State bad. Nothing else matters.

This binary and overly simple view of the world is common throughout economics. We are constantly being asked to set the market alongside the state and leave other things aside. The word ‘society’ is such an anathema to economists that they seem to have forgotten its existence. And thinking of institutions as playing a role in our everyday affairs is definitely déclassé. Except, of course that both the state and the market are institutions, but let’s not dwell on that.

Somewhere in the tale told by McCloskey the market rode in on her white horse, struck down the nasty masculine dragon we know as the state, and women were happy ever after. Why were they happy? Because they could become independently prosperous and could, therefore, flourish away from their prior enslavement.

Presumably markets didn’t exist throughout those aeons of prior enslavement. Presumably only states did.

Which implies that McCloskey’s vision of what a market is must be extremely historically contingent. At some point they must have morphed into the dragon slaying kind. At some point they too must have been set free to accomplish their magic. Quite how we have to ponder another time. After all with a binary vision of the world and with the state perpetually the villain markets had to self-liberate. Which, I suppose, implies that the entire history of modernization, liberation, advance, enlightenment, and such can be reduced to market forces.

So markets are epicenters of learning, philosophy, the arts, politics, and all other good stuff.

Except they are impersonal.

At least according to Brian Arthur’s summary of the structural foundations of general equilibrium analysis. I take this quote from the introduction he wrote with Durlauf and Lane to their edited volume “The Economy as an Evolving Complex System II”:

“In general equilibrium analysis, agents do not interact with one another directly, but only through impersonal markets. By contrast, in game theory all players interact with all other players with outcomes specified by the game’s payoff matrix.”

I choose this text not for its unique insight but for its brevity and ease of use.

Neither of these alternative forms of analysis seem, to me, to be very plausible. Game theory has its specified payoff matrices and has all agents interacting with all other agents. How anything ever gets done given all this interacting I shudder to think. But that’s beside the point for now. What I want to give more attention to is the nice summary of how most mainstream economists view a market. The key word being impersonal.

What does impersonal mean?

Meaning number one is ‘the lack of personal feeling’. Synonyms being objective, neutral, unbiased, dispassionate, unattached and so on.

Meaning number two is ‘not existing as a person’ or ‘having no personality’.

So the market, according to economists, is a place devoid of feeling. Bereft of emotion. It is a cold landscape where calculation and self-advancement dominate over other less worthy sentiments like cooperation and altruism. And where enslavement over aeons is likely to have been established only because it fulfilled some utterly rational and  utilitarian role. Markets, in this narrative, don’t care. They are places of cold rationality, not places of heated debate.

I happen to think markets are never impersonal. They involve people: always and everywhere. So the notion of an impersonal market is nonsense from the very beginning. As a rhetorical device or as a starting point for analytical purposes I can tolerate them for a nanosecond or less. But as a permanent feature of a theory about human behavior they are – how do I put this? – rubbish.

Now it is quite possible that in her departure from Chicago McCloskey also rid herself of the impersonal market notion. But I am not so sure. From my point of view a market full of human beings is also a market situated in a lush and diverse social setting. This is by definition since humans are surrounded by all sorts of institutional manifestations of their creativity and search for structure.

Which gets us back to the binary problem we started with.

It is only in a society rich with alternative networks and channels of development, of outlets for expression and argument, and of institutional ways for accepting or enforcing progress, that the riddance of enslavement can take place. A binary split between an evil state and a virtuous market will not do. Such a split is a device created by economists to make their lives easy and merely suffices as an ideological crutch in their libertarian adventure.

As part of a narrative about the steady rise of freedom in our modern world it just doesn’t work.

Markets don’t care. But McCloskey does. Yet she persists in calling herself a free market economist.

Why?

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Superior Economists

Actually the paper I just read is called “The Superiority of Economists”. It’s another analysis of thee economics profession by Marion Fourcade, this time in association with Etienne Ollion and Yann Algan. It is well worth reading and fits neatly in the same analytical tradition as Fourcade’s 2009 book “Economists and Societies”.

The problem is that none of it is particularly surprising. The point being that economists, by asserting their superiority vis other social sciences have exposed themselves to greater scrutiny and criticism than their peers. This has, apparently, induced more soul-searching within economics than in those other social sciences. Along with the air of superiority that economists exude due to their self-proclaimed intellectualism, comes a big dollop of insecurity.

Which is a point worth making: economists, for all their arrogant assertion of the truths of their ‘science’, are a little insecure about something. Hence, perhaps, their brashness and lack of interaction with their peers. One of Fourcade’s findings is that economists are more isolated as a profession than those around them. They quote fewer non-economics papers and books in their own work, and are almost haughty in the disregard of insights that other social sciences take very seriously.

Which we all know.

Another point worth drawing attention to in the paper is the impact of finance and business schools. Plenty of us have discussed the emergence of the pseudo science that is modern finance, and its constant reciprocity with neoclassical economics. They are both based on absurd assumptions about human behavior, yet because of their insular character are almost immune to empirical attack. On the contrary, as Fourcade et al spell out, finance in particular has been a performative activity over the last thirty years as it attempts to bend the real world to approximate the theoretical, rather than trying to reflect or explain that real world. A torrent of so-called financial innovations are the end result of this performativity. We know how stable they all turned out to be.

Now here’s my nit-picking with the paper.

Buried right at the end, in the concluding paragraph, is this statement:

“Most modern economists have a strong practical bent. They believe in the ideal of an expert-advised democracy, in which their competence would be utilized and on display in high profile, non-elective positions in government and other institutions.”

I don’t agree. Economists don’t want an “expert led democracy” at all. They want a society led by Platonic philosopher kings, with economists being those very folk. Economists, those on the right anyway, don’t have time for democracy.

As you know, I have been on quite a kick lately [here, here, here, and here] criticizing mainstream economics as being fundamentally anti-democratic. I base this assertion on the utopian thrust in economics to describe an apolitical method of resource distribution – one in which politics, as expressed through government action, can only make things worse. As I see it the the centrality of markets in economic theorizing is an attempt to eliminate politics. And, since the emergence of democracy as our standard way of expressing politics institutionally, this implies at least a disdain for said democracy, if not an outright contempt.

Of course I realize that other economists, good for them, openly acknowledge the many flaws in real world markets. Indeed, so many such flaws have now been identified that we might reasonably ask which is the exception: the flawed market or the supposed flawless version? My money would be on the flawed one, but that’s for elsewhere.

The problem is that, as recently evidenced in Deirdre McCloskey’s critique of Piketty, hard core right of center economists just can’t let go of the flawless market version their beloved theory describes. Such flawlessness is not the result of some deep analysis, but is, in truth, the desired end point established a priori by their ideological bent. A bent that desperately needs the result of their theorizing to result in the establishment of perfection in markets and nothing but imperfection in governments.

Which is to say that such economists want to preclude the possibility that democratically elected government could possibly dabble around in the economy to good effect. This is an expression of simultaneous distrust of democracy and idolization of markets. It can be thought of no other way.

But that’s just me griping again. I appreciate Fourcade’s continued forays into the sociology of the economics profession. They help me understand the extent of the isolation the profession wallows in, and how far we have to go before the collective social sciences offer us a deep and holistic look into civil society. Unfortunately economics is holding us back at present. I wish that were not the case.

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Economics And Civil Society

I have been subject to quite a bit of push back on my repeated critique of the anti-democratic nature of orthodox/classical/neoclassical economics.

So I am going to double down on the basis that when you’ve hit a nerve and produce a knee-jerk reaction it is wise to hammer away.

Allow me to restate my opinion in brief: economics in the general tradition of Smith’s invisible hand up to and including the notions of Hayek, Friedman, and their disciples is, at its core, an attempt to conceive of a society stripped of politics. By this I mean it is an attempt to argue that passivity in the face of overwhelming “forces” that are “objective”, “decentralized”, and “systemic” will allow for an optimal distribution of wealth, and the attainment of the maximum possible total wealth compatible with that optimum. All that is needed is a goodly dose of rational decision making, a hopelessly large level of cognitive ability, enormous foresight, and an unobstructed view of absolutely everything. Oh, and under no circumstances ought there be any active interference in the economy to adjust the perfect outcomes. It is a perfect-in-perfect-out wonderland in which no one need concern themselves as to the ethics of the outcome. It is, after all, perfect. It cannot be improved upon. Free markets rule!

This wonderland system, so constructed, will, we are assured, give back to everyone a return justified by their so-called marginal productivity. Mucking around in the system, no matter how well intentioned that activity might be, can only move society away from the optimum. It is, therefore, not possible for government action to improve the distribution of wealth. We all simply have to bow before the system and accept whatever it gives us. Hence the utter passivity of the vision.

And hence the elimination of politics, since it is through politics of various kinds that humans arbitrate life, with economic outcomes merely being one aspect of that life.

I attribute the desire to eliminate politics to an early age in modernity when the world was still cluttered with arbitrary forms of government. The rising bourgeois class needed theoretical justification for a change in the power structure of the economy, and, in particular, it needed a way of neutering the tendency of autocrats, monarchs, and their ilk to get in the way of the accumulation of private wealth.

Thus the success of Smith and his heirs.

To this day economists working in that tradition begin with a bias that all government is arbitrary at worst, or misguided at best. No matter what form of government. It is my contention such economists never took on board the arrival on the scene of democracy. Hayek et al are still fending off the evils of autocracy. They are living deeply entrenched in a past era. They have not adjusted to the reality of representative government when there is almost a one for one overlap between “we the people” as represented actively on the political system, and the so-called agents inhabiting the economic system.

We are asked, by economists in that tradition, to suspend our criticism of people when they acting self-interestedly in the act of exchange, but, at the same time, to be deeply skeptical of the activities of those same people when acting through the agency of representation in politics.

The contradiction is extraordinary.

On the one hand we are all perfectly functioning, almost robotic, rationally driven consumers when we are in the supermarket. On the other hand we are naive, limited, and incredulous when we are in the ballot box. The self-interest of government employees is bad. The self-interest of those self same people as consumers is good.

No wonder right wing economists work hard to isolate the economy as a self-contained entity for analysis. For to admit cross pollination with the political system would be to infect their pristine world with all the evils they attribute to that political system. It would bring their pretty utopia crashing down. It would open the door to the efficacy of active government.

In a democratic system the people who comprise the market are those who comprise the government. To criticize one ought to be to criticize the other. To idolize one ought to be to idolize the other. You cannot have it both ways.

Unless, of course, you disagree with the outcomes of one of the systems.

And since economists working in the Smith through to Hayek/Friedman tradition are unrelenting in their criticism of all things governmental, I can only deduce that they disrespect if not despise democracy. Which, perhaps it escaped their notice, is our current form of government.

Modern economics was born at a time when government was, indeed, too arbitrary for our collective good. It has failed to adapt as we-the-people sought to gain more control over our social outcomes. It is out of step with history. It has become an anachronism that does ever greater harm the more its origins recede from our current reality. It is a relic of an intellectual uprising two hundred years ago, and is content with re-litigating the events of the early 1800’s endlessly. Its relevance to the 2000’s is questionable because of its failure to update its core notions and concepts from those of its inception and early development. What we have now are simply highly polished and formalized versions. The core, with its inherently anti-governnmental bias, remains the same.

So it saddens me deeply to witness right wing attempts to explain modern economic facts such as our level of prosperity or contemporary inequality with, what is effectively, one arm tied behind their backs. By being so in the thrall of so-called invisible hands, so-called free markets, so-called equilibria, so-called marginal productivity and the other paraphernalia of the Smith-Hayek/Friedman tradition, they simply reveal themselves to be anti-democratic. They do not reveal an understanding of that part of modern civil society we recognize as the economy.

And they do not understand history. Which is odd because that’s what they purport to be doing when they deploy the Smith-Hayek/Friedman bag of tricks to debunk Piketty.

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McCloskey Disses Democracy

Actually it’s McCloskey dissing what she calls leftish economists generally, although poor Piketty and his notorious book provides the moment she seizes to attack us misguided folk. Riven through with fundamental error and hopelessly soft we have all, apparently, misunderstood the great sweep of history.

The lesson from which is that all is swell if we just leave it alone. We need to set aside our petty and foolish concerns about the environment, and a whole host of other nonsense about market imperfections – and, yes, government imperfections too – we need to acknowledge the great wealth that surrounds us, and gorge on the pile of goodies that capitalism has brought us.

Oh, and we all need to shut about poverty. It doesn’t exist. Not at all. You see we are all better off than our ancestors. That ought to be enough. We need not worry our little heads about anything else. The great economic system in the sky will provide all we want, need, or can imagine. Perhaps a few things we cannot imagine either. After all it was the innovative spirit in the sky that brought us all iPods well before we knew we absolutely, and desperately, needed them.

Yes: our current cornucopia is enough to quash and otherwise contradict all that silly talk about poverty. It is just that: silly talk. It is the kind of talk that polite leftish folk indulge in after a hard day of calculating their retirement portfolios, and teaching heresies to innocent young students whose minds are thus polluted with skepticism for that spirit in the sky.

A spirit that Deirdre has decided ought remain nameless because the word “capitalism” is so fraught with misguided and inappropriate taint that it no longer serves a useful pedagogical purpose. If it ever did.

Well now, I admit that I am better off than my grandmother. She began work at age thirteen as a scullery maid in a great house in the English countryside. Before her, I am sure, she was better off than her grandmother, although probably not by as much as the difference that separates me from her. You see that great surge in working class material wealth that McCloskey attributes – correctly in total – to an entire two century sweep, is actually more clustered at the latter end of that period. The first portion [half?] of our great leap forward in material wealth saw a decidedly more mixed history than the one McCloskey likes to purvey.

How can that be?

If the great spirit in the sky was working tirelessly throughout those two hundred years or so, then surely the benefits ought to have accrued more evenly. Why is the material leap more focused towards the end? At least for the ungrateful poor who don’t realize they are actually wealthy.

Perhaps it had something to do with democracy. Or, alternatively put, the push back by folk like my grandmother against the system that seemed to be permanently stacked against them. They voted repeatedly to distribute wealth more evenly, to limit the risks of living in the spirit’s system, and to otherwise guard against to excesses of the capitalists. They had a sense of balance. A sense that allowed the economic system to flourish but within more decently proscribed limits. Distribution was important because it allowed everyone to feel an equal participant. Excess undermines that feeling.

Yes, Deirdre, distribution does matter. It matter s a lot. In fact it matters so much that rightists – I resist the obvious impulse to use the word “wrongists” – wanting to defend the great spirit in the sky ought to pay very great attention.

Because maldistribution can, and I will stay polite here, mess things up. Big time. Really big time. It creates political problems in a democracy. And that then creates problems for the economy.

McCloskey styles herself as an economic historian, but she remains first and foremost rooted in a particular tradition. This is obvious from her references to rightish heroes that includes the likes of Smith, Say, Mises, Hayek, and Friedman. It is a spectacular and honorable tradition. It lauds the spirit in the sky. It applauds the great gift giver. It worships the system-we-cannot-name and which we must obey if we want to reap its rewards and steep ourselves in it endless goodies. Most of all that tradition teaches us, sternly I might add, to deny that any of us ought imagine we can interfere in the great spirit’s machinations and produce a better result. It is simply not possible.

And it is especially not possible if we use the agency of the state. McCloskey uses the word “state” in a pejorative tone throughout her work. It’s as if the phrase “we the people” was never uttered. Or, at least, were it uttered it was quickly taken back and hidden lest the great spirit in the sky takes fright.

Yes Deirdre I am better off than my grandmother. Much better off. She was denied an education. It was inappropriate back then for girls to get an education. It was unnecessary. After all they were going to dedicate their lives to the enrichment of their betters. And if they were lucky a few scraps would fall their way too. In contrast I have an education – although I realize in the rightish tradition what I call education is actually mis-education. I am steeped in the great spirit’s goodie giving largesse.

But, and this is why I am a leftish leaning softie so please forgive me Deirdre, I listened to my grandmother. Closely. She told me, in no uncertain terms, that I ought to be fearful of “them”. “They” she said, could “take it all away”. So I was not to take for granted that the spirit in the sky was benign. It isn’t. It cannot be. Because, as the rightish tradition says so clearly, the spirit’s motivation is entirely selfish. It is the selfishness of individuals that creates the conditions within which the spirit flourishes so abundantly. Smith said so. Say, Mises, Hayek, and Friedman confirmed it as being so.

The system-we-cannot-name is rooted in venal bourgeois values. You said so yourself Deirdre.

The difference between McCloskey’ rightish, and dare I say it misguided, folk and me and my proper thinking ilk, is that they believe that the great spirit, that system-we-cannot-name, is self organizing. That is to say it operates best without the interference of sullied human hands. Human institutions. Human culture. Human anything. It produces, and will produce, great goodies, as long as we leave it well alone. Most importantly, it has an enormous and unbeatable ability to cleanse itself of error. Not that it can err. But, for the sake of argument, were it to err – which it cannot – it would self-right itself. We, on the other hand, believe that their system needs a gentle nudge now and again to keep it on course.

And, this is my grandmother’s lesson, the system-we-cannot-name distributes not just wealth, but power too. So accumulations of wealth are simultaneously accumulations of power. And we know what a great historian once said about power and its corrupting influence. So the nudges we need to give the great spirit in the sky are designed to keep it within bounds and to offset its tendency to concentrate wealth. Which is to say its tendency to concentrate power.

It is ironic, I find, to be scolded albeit gently, for being profoundly wrong about economic history, for risking the ire of the great spirit in the sky, for being merely philosophical rather than scientific, and for ignoring our current massive wealth. Especially when the scold ignores the parallel political history. Or, rather, interprets that history as a succession of stupid efforts to intervene in the workings of the economic system. As if the two were separable.

I think, ultimately, I agree with McCloskey: economics, properly constructed, is a historical discipline. This, to me, implies that it is rooted in real world events and their interpretation. The problem with that interpretation is that ideological worldviews intrude. Inevitably. Inescapably. McCloskey has a particular worldview. It is a right of center view. It is a view that denies the rights of people to address what they perceive as social wrongs through modern democratic means. Those modern democratic means being the government. It denies that any wrongs can exist because the spirit in the sky is so all seeing and powerful it will right them before they appear.

The tradition in which McCloskey sits, denies forcibly and very loudly that the government can play any role whatever in the economy. It has constructed an entire intellectual edifice – Smith-Say-Mises-Hayek-Friedman et al – to enforce that denial. It has sought to interfere in the democratic process in order to neuter any influence that process might have.

And this surely cannot be lost on anyone: the triumph of that tradition post-1980 has wrought not a great surge in wealth, but a great stuttering that has now fallen into what many of McCloskey’s allies are calling a great stagnation. The very system-we-cannot-name and which is the giver of all gifts is, apparently, failing to give in the same degree of abundance that it once did. The leap forward, upon which McCloskey leans so much in her defense of rightish economics, appears to be in a somewhat halting mode.

A mode that cannot be attributed to leftish influence because that influence has faded radically since Reagan and Thatcher derided government and did away with society.

McCloskey’s engine of growth and all things good has a problem. It is a problem it developed after the rightish tradition and its policies rose to complete power. It has, as someone once said “magneto” problems.

Let us call this, then, the McCloskey dilemma: if, as the rightish folk think, distribution doesn’t matter and that all things democratically decided are maladroit if not outright evil, why is it the system is not chugging along at full speed?

Is it, perhaps, that the rightish assault on collective action, or as I prefer to call it democratically elected government, has undermined the delicate balance between capitalism [there, I said it] and democracy and has thus undone the balance of power needed to make the system-we-cannot-name work its magic benignly?

Economists, even clever economic historians, ignore politics at their peril.

But then they know that. Which is why they construct economic theories and histories that expunge politics. The purpose, you see, of rightish economics in the Smith-Say-Mises-Hayek-Freidman tradition is to create the illusion that civil society can remain civil only if we eliminate politics. Anyone, like poor Piketty, who dares to bring politics back inside the domain of economic thought, has to be derided and taught his error. Politics, whilst as deeply seated in human behavior as any economic is, must be denied if capitalism is to be set free.

And that is why McCloskey is so vexed with Piketty.

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