Rhetoric of Economics

I first read this book as an undergrad economist, well over 10 years ago now. I discovered the book, in the course of writing about the evolution of the Phillips curve. What the Phillips curve offered, initially at least, was the embodiment of empirically-based economic theory, yet it metamorphosed, into the New Classical 'expectations-augmented' model, and the New Business School model with each, in turn, becoming accepted 'truth' by mainstream economics. What could account for this shift? Clearly it was not based on anything related to 'positive' economics or empiricism, since the theory behind the 'curve' (which was no longer a curve)had long since been wrung dry of any meaningful empirical content. While I don't recall all of the details, this book, and McCloskey's other writings on the same theme, support the idea that, while Truth (to be differentiated from trivialities, things that are true 'by definition', for example), does exist, WE HAVE NO WAY OF COMING TO RECOGNISE IT - there are no objective criteria for doing so, that is distinguishing truth from falsity. It may come as a shock to some, but there is no dissenting from this point - if you know of any such criteria, let me know. The slightly controversial, but logical, point that follows is, therefore, to disregard Truth as a 'useful' concept, with any explanatory power. The key to the acceptance of theory (as if it were the Truth), not just in economics, lies ultimately in its 'persuasiveness', something that is engendered through the use of 'mere rhetoric'. McCloskey is not arguing that this is how things 'should' be, but how they are - in grubby, messy reality. If you doubt this to be so, try thinking about the recent Gulf War and arguments about WMD, as an illustration - it was Bush and Blair's ability to 'persuade' people, and politicians, that made the threat from Iraq real, or 'True'. That is, the threat might have existed independent of their pronouncements, but because we had no objective means of evaluating that, their pronouncements BECAME REALITY. This is a text about the philosophy of economics that is extremely thought-provoking. It succeeds in challenging preconceptions of what is True and how we come to know it as such, that has implications far beyond economics. For anyone with an interest in philosophy, or economics, this is well worth reading, a real eye-opener. Lord Chimp, the relativists will inherit the world, my friend. Like it or not, there is no black or white, only shades of grey, and neither is counterintuity synonymous with absurdity.

McCloskey's book deserves to be read because of the original material in her book dealing with the misuse,misapplication and misinterpretation of both statistical significance and economic significance(see pp.112-138,189)in the vast majority of articles published in economics journals, that used statistical and econometric analysis,in the time period from 1935-2005.She was the researcher who was the first to point out ,in a detailed manner ,the massive amount of errors that were being published in economics articles.Unfortunately,she makes the generalization,based on this particular body of work,that all economic analysis essentially involves researchers who base their policy analysis(the rhetoric of economics)on the misuse of mathematical,logical,and statistical procedures chosen,used,and interpreted specifically to support the a priori beliefs of the researcher.Thus,all economics is basically rhetoric,with particular techniques chosen with the aim being, not scientific discovery but, persuasion.She particularly dislikes the theoretical perspective of Paul Samuelson.It is easy to give a counter example.On p.262 of chapter 19 of the General Theory(1936),Keynes gives his major result-the absence of involuntary unemployment requires that the mpc(marginal propensity to consume)=1.If the capital stock is not at an optimal level,then this condition becomes mpc+mpi=1(where mpi equals the marginal propensity to invest).In the appendix to chapter 19,Keynes points out that this equation is missing from the macroscopic analysis provided by A C Pigou in his 1933 book,The Theory of Unemployment.Keynes then derives the following optimality condition for both the labor market and the output market in chapter 20 and again in chapter 21.That condition is that w/p=mpl/(mpc+mpi),where w is the money wage,p is the price level,and mpl is the marginal product of labor in the aggregate derived from an aggregate neoclassical production function(GT,P.283;footnotes 1 and 2).It is obvious that the classical and neoclassical theories can only hold in the special case of mpc+mpi=1.Keynes's GT thus generalizes the classical and neoclassical theories.Unless mpc+mpi=1,involuntary unemployment will exist and it will be impossible for labor,in the aggregate,to reduce the unemployment rate by cutting their money wages.There is no rhetoric and/or attempt at persuasion going on here.There is only the pure force of a logical and mathematical exposition that is based on the microeconomic foundations of purely competitive firms and industries.

Although the fame of the author has taken a probably undesirable sensationalistic turn as a result of Donald's becoming, in 1996, Deirdre, the ouevre of his real fame, genius, and erudition are on display in this, the first of his trilogy on the Rhetoric of Inquiry, economics style. The second two successively are "If You're So Smart..." and "Knowledge and Persuasion in Economics". Though the third is, in my opinion, one of the most amazing works ever penned on economic methodology, his magnum opus (all three were written pre "crossing" so the pronoun "him" will be used). Cliche alert: This book should be required reading for ALL graduate economics students (though, again, the third even much more so). 'S hackneyed but 's true, friends. Buy it, read it, and you will feel what it's like to be inside the mind of a scholarly genius. He focuses on the rhetorical tetrad in economic analysis as a way of storytelling (rather than apodictic dogma) and a quick glance at his glossary will show you two things: 1. McCloskey has read pretty much every book and scholarly paper in the library on his subject and 2. His postmodernist proclivities. Although despite this many will be suprised to find that McCloskey is a libertarian, laissez-faire economist, a rarity even at the Chicago School, where he was reared and studied under Alchian, Stiglitz, and Friedman, among others. McCloskey in fact inspired me to see through a lot of the dishonest and snide ideological incompetents who have used postmodernism as a genus from which they derive their incoherent leftist, socialist positions. For example the laughably UNintellectual Eric Alterman (who is actually a fine researcher) who cites approvingly Hans Georg Gadamer and Richard Rorty, fellow leftists, with embarrassing naif and lack of understanding of their works or any integrated understanding of where they derive their own leftism. When, in fact, as McCloskey and others have shown, it (postmodernism qua socialism/progressivism/liberalism) is a nonsequitur, and proves too much when it's not. I have always been VERY dissappointed in the paucity of libertarian and conservative attempts at reconciling with the last 50+ years of postmodernist philosophical contributions to the literature. It is NOT postmodernism qua socialism v. modernism qua classical and neoclassical economics; and it never could be, according to both systems. McCloskey is your savior if you too want to be in-step philosophically and maintain your laissez-faire; laissez-passer. He is an amazingly endowed writer, thinker, and economist, but is truly at his best when writing on methodology and philosophy as it pertains to the dismal science. The book critizies armchair theorizing much as Feyerabend and James did and positivism as much as the Austrians currently do, though both will probably be dissatisfied to the extent at which he takes this analysis and the value he grants that both may have, taken synchretistically. However, this ra

Even though this isn't the intent of the book (it's a persuasive work about the role of rhetoric in economics), I found this to be a really useful read when trying to write better economics papers of my own. It's ironically better in this regard than McCloskey's more explicitly instructional books, particular "Economical Writing," because of its emphasis on ideas rather than on rules; it advances a way of thinking about economics that makes economics easier to write about. For example, to McCloskey, economic models are metaphors, and I've found that writing about an economic model as a kind of metaphor rather than as some sort of idealized version of the truth is much easier. I don't pretend to have understood all of its insights (it's a challenging read), but the ones I understood were very helpful.

This book provides unique insight into the rehetoric of economics and the social sciences.