Assorted Links

by on June 18, 2012 at 11:11 am in Current Affairs, Economics | Permalink

1. Valve, the game company, hires Yanis Varoufakis, expert on the European situation, to help deal with balance of payment and currency issues between different worlds.

2. The great Deirdre McCloskey lets loose on the high liberals of political philosophy. Read the whole thing, it builds to gale force.

3. Aussie retailers charging more if you use an “old” browser.

4. The U.N. Internet Power Grab revealed by WCITLeaks a project of GMU economists Eli Dourado and Jerry Brito.

Andrew' June 18, 2012 at 11:19 am

2. Ha! PK just called to say he has more humility in his middle finger than you could ever possibly imagine.

Noah Smith June 18, 2012 at 11:37 am

The Great Deirdre McCloskey just served up a master class in “How, as a Pot, to Call a Kettle Black”…

Andrew' June 18, 2012 at 11:58 am

Not exactly. Thinking I know what is best for myself and what is right in front of me is a political humility that assuming you can manipulate people with things called “the money illusion” and the like is not.

Andrew' June 18, 2012 at 12:22 pm

I just have to say, the money illusion in particular trips me out. Get the damn money supply right, then move on to tricking people other than yourselves.

improbable June 18, 2012 at 12:21 pm

3 is a lot more tame than I was expecting. They’re just running a nag campaign to save on web design!

Clearly Australia needs to import businessmen with bazaar experience: Old clueless and slow with the credit card? Step this way sir…

Noah Smith June 18, 2012 at 12:29 pm

Hey Ms. McCloskey, observe as I debunk the master narrative of High Libertarianism:

http://en.wikipedia.org/wiki/Government_spending#International_government_spending_as_a_percentage_of_GDP

Rich countries in the top 20 low taxers: Kuwait, UAE, Oman, Bahrain, Qatar

Rich countries in the top 20 high taxers: Denmark, Sweden, Belgium, France, Finland, Italy, Austria, Norway, Germany, Hungary, Iceland, Netherlands, UK, Portugal

Rich countries in the top 20 low govt. spenders: Singapore, Taiwan

Rich countries in the top 20 high govt. spenders: Iceland, France, Sweden, Denmark, Belgium, Finland, Hungary, Austria, Italy

See also:

http://marginalrevolution.com/marginalrevolution/2012/06/taxes-and-the-onset-of-economic-growth.html

Wow, that was easy. Not as well written as Ms. McCloskey’s piece, though. Well, if “well-written” means “contains lots and lots of words”…

Noah Smith June 18, 2012 at 12:31 pm

(BTW for you serious folks out there, note that I am of course being facetious, my list doesn’t prove libertarianism is false any more than Deirdre McCloskey’s list of historical anecdotes proves it correct…)

Deirdre McCloskey June 18, 2012 at 7:21 pm

Dear Mr. Smith,

The list is not “historical anecdotes.” The items in it are detailed references to the many hundreds of studies by now (the literature against New-Deal pieties started up in the late 1950s and really got going in the 1970s) showing, sometime conclusively, sometimes not so conclusively, that, say, protective legislation “for” women was in fact against them (left feminist scholars often agree) or that the Interstate Commerce Commission was immediately captured by the railways (Gabriel Kolko, a New Left historian) or that lighthouses weren’t necessarily financed by governments (Coase) or that coal compnay towns were not slavery (Price Fishback) and on and on. I take it you don’t know much about the literature, because if you did you would not have written as you did. Behind much of them is my own work, and anyway my more thorough discussion of other people’s empirical research, in books such as Bourgeois Dignity (2010). You must not be familiar with the boor, because if you were you wouldn’t have written as you did. My advice is the professor’s usual one: do the homework.

Noah Smith June 18, 2012 at 10:51 pm

Ms. McCloskey,

With all due respect, I am not disputing the findings you listed. My point is, instead, a logical one; finding situations in which government failed does not imply that governments would always fail to solve a similar problem. The existence of externalities, coordination failures, etc. only implies that government theoretically can improve the outcome. It does not imply that it always will. There is obviously a huge heterogeneity between governments in terms of their effectiveness.

Second, a litany of government failures – even well-established ones – in no way establishes that “the master narrative of High Liberalism” – which you define as being the idea that governments can solve market failures – is “mistaken factually.” The reason is that such a list almost certainly suffers from an enormous selection bias – an author who is intent on showing that “government usually fails” will not seek out and list studies showing government successes.

Governments, during the 19th and 20th centuries, did many things that are not on the list you give in your piece. For example, governments built a great deal of infrastructure and funded a great deal of research over that period of time. Have you established that that activity represented a net social loss? How about the establishment of global security by militaries? Do you have evidence that public education has represented a social loss, relative to what would have obtained if schooling were entirely private? Have you demonstrated that product safety regulations and worker safety regulations generally impeded the functioning of the markets in which they were enacted? Have you explained the inferior health outcomes of the United States health system in comparison with those that are entirely nationalized? Can you convincingly show that the strong postwar performance of the economies of Europe and Japan happened purely in spite of the large government investments in infrastructure, education, and health undertaken by those countries? And can you explain the negative correlation between taxation/spending and per capita GDP observed not only cross-sectionally, but over time in many countries, as evidence in favor of persistent government failure?

Ms. McCloskey, your argument seems to me to commit the Fallacy of the Converse. No liberal worth her intellectual salt would ever seek to defend the idea that government intervention is always a good idea, or that government cannot fail. That is not the master narrative of High Liberalism. Instead, the master narrative is that there are situations in which government, if done right, can dramatically improve outcomes, and that therefore we should focus effort on making sure that government is done right. Demonstrating that government is not always done right in no way disproves that narrative.

Yours,
Noah Smith

Steve June 19, 2012 at 2:11 am

Shes an old lady blowing off some steam on a blog. I think most people besides Alex know its not a serious argument. Its for fun to beat on “those liberals.”

Noah Smith June 19, 2012 at 11:14 am
Saturos June 20, 2012 at 1:01 pm

Noah, when people who believed exactly that narrative time and time again wound up with disastrous results, isn’t it time to update on the evidence, rather than relive the intellectual life and mindset of generations past?

TallDave June 18, 2012 at 12:57 pm

Yes, listing countries is fun. The highest-spending non-tiny country is Zimbabwe. Cuba is next. North Korea would be there too, if they had economic statistics.

Here’s a fun “rich country” exercise: take all the richest high-tax/high-spend countries in this list that are not the U.S. (we’ll treat these last few years of profligacy as an aberration, or you could use 2008 numbers where the U.S. spend is closer to the historical average), and add them together until their populations reach our ~300M, then compare their aggregate PPP GDP per capita to ours. (For added fun, include Hong Kong and Singapore with the U.S.!)

It’s easy to miss the fact that all but a few tens of millions in non-resource-windfall “rich countries” outside the U.S. look up at us from PPP GDP per capitas that would require 20% to 50% boosts to reach the levels we enjoy. Few countries can seize-n-spend their way to our level of prosperity.

Marton June 19, 2012 at 3:51 am

Of course it is not self-evident that a PPP GDP 20% smaller than the US – in, say, Germany – creates less welfare. If the average worker works 35 hours in Germany with 6 weeks of vacation instead of 42 hours with 2-3 weeks off, he might not be able to afford a Canyonero and drive a VW Golf instead, but I dare say his quality of life is better.

The same argument can be made for the GDP-reducing (but not welfare-reducing) effects of stay-at-home mums instead of two-earner+part-time nanny households, which create a lot of GDP…

TallDave June 21, 2012 at 10:36 am

And the guy who sits on his couch getting high and playing video games might have higher quality of life than a Fortune 500 CEO who works 120 hours a week. He’s still going to be a lot poorer.

Adam June 19, 2012 at 12:08 pm

“last few years of profligacy?” Huh?

I mean, I know that’s the propaganda, but do you actual believe that? Because that’s just, factually, wrong.

TallDave June 21, 2012 at 10:33 am

No, it’s factually right.

http://www.usgovernmentspending.com/spending_chart_1960_2010USp_13s1li011mcn_F0t_US_Government_Spending_As_Percent_Of_GDP

This sort of thing is common knowledge, you clearly haven’t been following.

gab June 18, 2012 at 12:31 pm

“Malthusian theories hatched in the West were put into practice by India and especially China, resulting in millions of missing girls.”

a. Is she blaming liberals for this?
b. Is she blaming the West for this?
c. Is she really crazy?

Andrew' June 18, 2012 at 1:06 pm

I’m not one to put words in people’s mouths, but it sounds like she blames

“Malthusian theories hatched in the West…put into practice by India and especially China”

And it kind of makes perfect sense. If there is any tradeoff whatsoever in child-bearing, taxing child-bearing might disproportionately hit the child-bearing. I’m not sure if that consequence was listed in the fine print.

Rahul June 18, 2012 at 1:09 pm

Moral objections aside, wasn’t the Chinese version of draconian birth control effective economic policy?

8 June 18, 2012 at 1:41 pm

I thought most libertarians are pro-choice. If she doesn’t have a problem with 40 million missing Americans, what’s the big deal about 10 million missing Chinese girls?

Deirdre McCloskey June 18, 2012 at 7:47 pm

Dear 8 [Lord, I hate this custom of anonymity],

Yes, I am pro-choice. What I am against is governmental violence, which is the one-child policy. Yet in any case, even if I were anti-abortion, you would not trivialize missing girls in China, would you? So let’s go together and stop that one, of which we agree, right?

8 June 19, 2012 at 12:29 pm

I see the “missing girls” this way: China has probably aborted somewhere around 200 million girls and maybe 180 million boys since 1980. You wouldn’t be talking about missing girls if they had aborted another 20 million boys. Conversely, why should I care more for those 20 million girls over the 180 million other aborted girls?

Chinese forced abortions are of “extra” children and they are likely to be boys. The parents voluntarily do sex selected abortions of girls (which is illegal in China) in order to get a boy. So ending forced abortions could lead to more male births and make the imbalance greater. India has no one-child policy and it also has a sex imbalance, which is solid evidence in this direction. Also, America is now seeing these sex select abortions.

TallDave June 18, 2012 at 2:07 pm

Effective at what?

It might have been cheaper initially to have less unproductive children around to feed, but check back in a decade or so when they have more people in retirement age than working age.

Andrew' June 18, 2012 at 2:23 pm

http://www.time.com/time/world/article/0,8599,1912861,00.html

“Even if China’s population multiplies many times, she is fully capable of finding a solution; the solution is production,” Mao Zedong proclaimed in 1949. “Of all things in the world, people are the most precious.” The communist government condemned birth control and banned imports of contraceptives.

No, I’m sure they were right both times. Or, not both times. A scant 6 years later they pushed for birth control. Then 3 years after that Mao pushed for more people. Famines required more people. No famines mean we need fewer people.

Oh wait: “in an effort to slow the rapid graying of the workforce, couples in Shanghai — the country’s most populous city — would be encouraged to have two kids if the parents are themselves only children.”

This kind of reminds me of the sanity level of our monetary policy. I’m increasingly becoming convinced that there is nothing behind policy other than the need fuck with people.

Deirdre McCloskey June 18, 2012 at 7:25 pm

Dear Rahul,

I think we met on the other website.

Briefly, no, it was a terrible idea economically, and still is. I’d suggest that you read Julian Simon’s The Ultimate Resource. In modern conditions more people are a blessing. Since 1800 real income per head has increased by a factor of ten in the world (much higher in some countries). The number of people has increased by a factor of seven. Under Malthusian assumptions such a correlation is impossible.

Rahul June 19, 2012 at 2:00 am

In modern conditions more people are a blessing.

I don’t think that’s always true.

But defering to your expertise what’s your opinion about international birth control programs then that target third world nations? Would India be better off if we abolished all our birth control promotion drives and incentives?

MD June 18, 2012 at 2:55 pm

Look, it’s quite simple. If you believe that government may regulate workplace safety, then you must answer for all those forced abortions in China.

Ritwik June 18, 2012 at 3:46 pm

+1

Reading the essay again, and her certitude in the face of obvious and mischievious ignorance of, say, the history of the origin of colonialism is just infuriating. I’m getting the same feeling that I used to get while reading Ayn Rand – this is the intellectual equivalent of a kid sticking his fingers in his ear, sticking his tongue out and phbbting you.

Deirdre McCloskey June 18, 2012 at 7:44 pm

Dear Mr. (I take it) Ritwik,

I have studied the “origin of colonialism” for forty years. I take it your expertise comes from a left-slanting course in college, right? Consider, just consider, that what you were told might possibly not make a lot of sense. I am no enthusiast for colonialism: it was terrible. You and I can join in being indignant about imperialism and make each other feel morally good (that’s a nice feature of political discourse: one can get to feel good merely by expressing indignation; you don’t have to actually do anything good). But that does not imply that it was profitable for the imperialists. If I rob and kill you and take $34.75, that doesn’t mean that the damage to you is worth $34.75. (I make the argument at mor elength in Bourgeois Dignity.)

MD June 18, 2012 at 9:03 pm

“You and I can join in being indignant about imperialism and make each other feel morally good (that’s a nice feature of political discourse: one can get to feel good merely by expressing indignation; you don’t have to actually do anything good).”

I can’t tell if you are being sly, or if you lack self-awareness.

Ritwik June 19, 2012 at 6:37 am

‘Left slanting course in college’ – dear God no! I was trained as an engineer (and later in business management), in India, far removed from any developed world pretensions about the importance of having a broad based education and master narratives (high liberal or otherwise).

Deirdre McCloskey June 18, 2012 at 7:36 pm

Dear gab,

No, I’m not crazy. The history of population-limitation movements has been studied by many historians and others, and it has been discovered that the ideas for it came from the West (not from “liberals,” though they are among its most fervent advocates) and was closely associated with eugenics. The Chinese and the Indians (many educated in such mysteries in the West) took over with enthusiasm the idea that less people means higher average income. It is poor economics (based on misapplied arithmetic, ot economic logic or evidence). It didn’t work. What worked was giving people the right to innovate, after 1978 in China and after 1991 in India.

For example, the left-sainted Gunnar and Alva Myrdal in Sweden were relentless advocates of cutting down the number of people (not directly violently,though indirectly through government “program” of sterilization; though at the time, understand, Sweden had the second most prevalent system of compulsory sterilization of “undesirables” in the world [the first was Norway's]). For another example the left-and-right-sainted Garrett Hardin (he of the tragedy of the commons) wrote on intervening to stop peasant from misbehaving from the perspective of a population-limiter, as he says explicitly in his classical paper in Science.

So, I’m not crazy: they are.

Craig June 18, 2012 at 1:09 pm

McCloskey could not have misread Kant more comprehensively if she had tried. Kant’s project was to define knowledge, ethics and aesthetics for any conecivable thinking being–anything that could meaningfully use the pronoun “I.” Perhaps he succeeded and perhaps he failed, but McCloskey plainly doesn’t know what he was after. Every “factual experience” of every human being who has ever lived or ever will live must obviously be a _subset_ of the possible experiences of thinking beings, and not something outside of it.

The homo economicus models of the rational actor and the utility maximizer are abstractions and simplifications of human behavior–and often contradictory to the real actions we see in the world. Kant had zero interest in doing that kind of work. If we find a single example of a thinking human who operates outside of Kant’s framework–someone who does not structure experience in terms of space, time and the categories of thought, say–then whole edifice comes tumbling down, disproved by counterexample.

I have read very little by McCloskey, but if anyone would be so good as to show me a few essays in which she “think[s] it possible that [she] may be mistaken”–such good advice, she thinks, for soft-skulls like me!–I will be marginally more receptive to her brand of preachy condescension.

Matt June 18, 2012 at 1:55 pm

I think McCloskey is mainly using Kant as a proxy to take a shot at Rawls, who saw himself as a Kantian. In particular, her antagonism seems to be towards: (1) Rawls’ idealized, thought-experiment methodology for deriving the ‘good society’; (2) those on the Left who think that the ‘good society’ contracted into behind Rawls’ veil of ignorance would look a lot like the modern European welfare state (pre-debt crisis).

Craig June 18, 2012 at 2:18 pm

Yes, she is mainly “using” Kant, in some convenient way that has little to do with what he actually cared about. If she wants to argue Rawls, why doesn’t she? As she frames the whole essay in terms of a historian (and economist) correcting the errors of us poor, dumb liberals, her ideological mishandling of the second historical figure she cites (did she get the Cromwell bit right?) does little to impress me.

Deirdre McCloskey June 18, 2012 at 8:15 pm

Dears,

My, this is irritating! Matt good-naturedly tries to defend me by arguing (mistakenly) that I am “after” Rawls. Then Craig, in his preachy and condescending way, assaults me for not getting right a historical figure I do not mention, and is not impressed. I submit that Craig was not impressed with Christian libertarianism before he knew anything about it, and was not impressed with Deirdre McCloskey before be read anything of hers, and is quite generally unimpressed with positions he does not believe fit into his unthinking High Liberalism.

Do you realize how idiotic your discussion looks to someone with a little knowledge of the actual texts in question?

Yes, I got the Cromwell bit right. I check my sources.

Deirdre McCloskey June 18, 2012 at 8:10 pm

Dear Craig,

I do not have much hope that I can engage intellectually at a serious level with someone who writes with such intemperance, not to speak of preachy condescension, about someone he admits he has not read. (But such is the character of the blogosphere, to sound off about things one knows nothing about, encouraged I suppose by the cowardly custom of no one identifying themselves by name.)

But let me try, briefly. At greater length you’ll have to read The Bourgeois Virtues, the parts about Kant and a little more to see why I am saying such rude things about the Sage of Koningsberg, whom I admire in so many ways. I am referring to the Grundlegung. In its first few pages, which I invite you and I to read together, he says that he’s not going to trouble with anthropology in discussing ethics. I think (1.) that it’s impossible and (2.) grossly ill-advised. It is in matters, after all, of ethics. About metaphysics, fine, I suppose. But the virtue of the categorical imperative—that it applies to all rational beings whatever—is its vice, in that it is therefore too general to apply (as ethics) to humans, which is why we want ethics in the first place. I am not the only person to make this point, so it’s not “my” point . But it is a serious objection, and cannot be brushed off, especially not with preachy condescension.

Robert Gressis June 19, 2012 at 8:30 pm

Hi Dr. McCloskey,

You write, “In [the Grundlegung's] first few pages … [Kant] says that he’s not going to trouble with anthropology in discussing ethics”.

I take it the passage you have in mind is this: “all moral philosophy is based entirely on its pure part; and when it is applied to the human being it does not borrow the least thing from acquaintance with him (from anthropology) but gives to him, as a rational being, laws a priori” (GMM, 4:389)? Assuming I have the passage you mean right, I think your take on it — that it shows that Kant is “not going to trouble with anthropology in discussing ethics” is neither true of Kant in the Groundwork in general, nor (especially) of his thinking on ethics as a whole.

The first thing to note is that earlier in the Groundwork says that ethics has two parts: a pure part (morals) and an empirical part (“practical anthropology”) (4:388). Moreover, in the passage I quoted above, Kant goes on to write: “…but [moral philosophy] gives to him, as a rational being, laws a priori, which no doubt still require a judgment sharpened by experience, partly to distinguish in what cases they are applicable and partly to provide them with access to the will of the human being and efficacy for his fulfillment of them; for the human being is affected by so many inclinations that, though capable of the idea of a practical pure reason, he is not so easily able to make it effective *in concreto* in the conduct of his life.” (4:389). Similarly, Kant goes on to write that, though “moral laws are to hold for every rational being as such”, we “[need] anthropology for [morality's] *application* to human beings” (4:412). And this is to say nothing of what Kant wrote in Religion within the Boundaries of Mere Reason (where he held that all human beings have a propensity to evil that we must all take account of in our moral training of them), or the Metaphysics of Morals, or Anthropology from a Pragmatic Point of View, or the lectures on ethics, or on anthropology, etc.

That said, there is of course a question (to put it mildly!) about whether Kant shows that his categorical imperative actually applies to human beings, which he tries to show in section 3 of GMM, and which he simply seems to assume in the second Critique.

Rahul June 18, 2012 at 1:15 pm

Antitrust works. Businesses will exploit workers if government regulation and union contracts do not intervene.

Why does she mock these assertions? Unless Upton Sinclair was grossly lying, pre-safety-regulations, monopoly-rife America doesn’t sound like paradise.

Craig June 18, 2012 at 1:22 pm

Open any book by Dickens. Even the Sean Hannitys of the world will tell you that “unions had a role in the past” and did good in the world. I am always impressed when a professional thinker can out-hack a professional hack.

Deirdre McCloskey June 18, 2012 at 8:24 pm

Dear Craig,

So now you’re a Dickens scholar and an economic historian. Dickens knew nothing of the industrial North of England—he went their once only for a few weeks, out of which came Hard Times, which is a brilliant book aesthetically speaking, but is, any economic historian can tell you, silly in its portrayal of workers, unionists, managers, factories, even circus performers.

If you want to have an intellectual life you’ll need to stop believing every cliche of the New-Deal Consensus. Some of the cliches are profound truths (I belong to a union, for example; do you?). Others are factually or logically mistaken. I was trying in my piece to get people like you (I suppose) to think twice and read thrice. I dunno. It looks hopeless, which is depressing for me, and ought to be for you.

Adam June 19, 2012 at 12:14 pm

And Orwell? Was he ignorant of the industrial north too? After all Road to Wiggan Pier suggests he only went down into the coal mines once.

TallDave June 18, 2012 at 2:03 pm

Because Upton Sinclair did more than gov’t to fix those problems.

Dickensian lives were wretched because of low productivity, not the lack of gov’t and unions.

TallDave June 18, 2012 at 2:25 pm

Re antitrust, it’s one of those “sounds good in theory” problems. It turns out it’s nearly impossible to operate as a monopoly without coercion, because even the potential of competition tends to drive down prices to competitive levels. Historically, monopolies have typically used gov’t coercively to protect themselves.

Today, antitrust law is probably harmful to consumers on net, if you believe Milton Friedman, Greenspan, Bork, etc., as it tends to protect inefficient competitors and create deadweight losses in excess of the benefits.

I had some personal experience with this when a company I did work for was forced to divest a division by DOJ. This was a very good for the buyer (nothing like having a seller up against the gov’t wall!), but probably didn’t help anyone else much.

Deirdre McCloskey June 18, 2012 at 8:25 pm

Dear Tall David,

I agree.

Adam June 19, 2012 at 12:17 pm

Let’s be careful what we mean when we say “antitrust law.” There isn’t a whole lot of dispute that cartel enforcement is worthwhile, albeit somewhat difficult (amnesty programs have helped).

Presumably you mean merger enforcement is not effective. Personally, I think it could be in practice but that the forecasting that’s inherent in trying to predict what the future competitive landscape will be is so difficult that it’s quite hard to make it so. But very, very few transactions result in any enforcement action.

Deirdre McCloskey June 18, 2012 at 8:18 pm

Dear Mr. Rahul,

I do not “mock” these assertions. I say they are mistaken. Opton Sinclair was a novelist, and not a very good one. He did not understand markets. Most people don’t, which is why we have economists. He’s not lying. He’s mistaken.

Tim June 18, 2012 at 2:49 pm

It’s not so much that it’s an old browser as that it doesn’t work like an old browser or a new browser. It’s an entity of bugs all to itself. Which is why it’s such a pain to support.

Wimivo June 18, 2012 at 3:19 pm

Just last night I was thinking about how cool it would be to work as an economist for, yep, Valve. And now I see this…

Ritwik June 18, 2012 at 3:30 pm

The position that Deirdre McCloskey derides is almost more nuanced than her own. Which is saying a lot given that her basic argument about Nussbaum style high liberalism being fact free is quite correct, on the balance.

Especially astonishing is her claim that the average European did not benefit from some of the greatest wealth transfer in all of human history.

Deirdre McCloskey June 18, 2012 at 8:31 pm

Dear Ritwik,

What are you talking about? You are easily “astonished,” which makes my most basic point in the blog entry: that High Liberals are so self-satisfied, so sure that Everyone Agrees, that their reaction when challenged is to become nasty and to be astonished.

Ritwik June 19, 2012 at 6:18 am

Dear Ms. McCloskey

If you pause for a moment from reacting at the storm of indignant protest that your essay has raked up, you will realise that many of those who disagree with you are not ‘high liberals’, whatever that means. I am far removed personally and professionally from the political philosophy battles of American academia – my limited exposure to it comes from reading Pinker & Fergusson (and broadly agreeing with them), who I’d say are members of your ‘camp’, loosely defined. If you read my comment above, I’m saying that I basically agree with your position vs. say Nussbaum’s (who again, I know only by reading Amartya Sen, and broadly disagreeing with him).

My surprise then, is driven by the absolute certitude and non-nuanced way in which you critique your intellectual opponents. You have an excellent oeuvre of which I’ve read nothing, admitted. But you are not the first person to write on these issues, nor necessarily the primary source of historical accuracy on every political philosophy disagreement on this earth. If I’ve read Fergusson (and those who critique him as being a colonial revisionist) and Naoroji, then I’d say I can be reasonably confident about questioning your off-handed claim that European colonialism did not benefit the average European, or feeling peeved at your off-handed implication that colonialism as primarily or majorly a state driven initiative. Slightly irritating is also your failure to distinguish between ‘organic’ monarchies and the modern nation state that is the crux of modern political debate, but let’s let that be). Any honest examination of the modern history suggests that the truth is more nuanced (as it almost always is) and it becomes a bit ironical that you refuse to even nod at this nuance in an essay critiquing others for being ‘fact-free’.

You say that a Malthusian vision and Fabian socialism wrecked the Indian economy, which is basically true. And then go on to claim that it’s also responsible for millions of missing girls, which to someone whose knowledge of India arises not from reading NY Times but from having grown up there and being of that culture, is patently absurd. You paint the Green Revolution as being the product of capitalism (the seeds indeed were) but fail to recognise the enormous state initiative led by M S Swaminathan (who might be the greatest post-independence Indian), in his capacity as a state employee that went behind it. You request your audience to rise above believing everything that the NY Times tells them, but go on to make such claims that it would be wise to also advise them to rise above believing everything that Ms McCloskey tells them.

You take on the minimum wage, where again your position is basically true – almost trivially so in an Econ 101 sense. Yet anyone who is familiar with Card-Krueger (who I assume you’d consider one of ‘yours’ as opposed to one of ‘theirs’) will be somewhat uneasy at your absolute certitude. You take on German unemployment, which is particularly mistimed given that there is some non-trivial evidence that union-bargained job-sharing programs have kept the macroeconomic game in Germany in a better equilibrium than the vastly perplexing output-employment dynamics of Anglo-American model. Again, have labour unions caused more harm than good? Almost undeniably yes. But there is a vast literature, produced by ‘fact men and women’, in your mould, that western European style labour activism may have solved many important coordination issues (while creating many others, of course). Witness Glaeser, Alesina, Blanchard et al. Are these researchers also slaves of the master narrative of high liberalism?

Yours was an excellent essay, in the ‘building up to gale force’ sense. If your point was to widen the Overton window of those who blindly follow Nussbaum et al and do it in the least number of words, you were definitely successful. But as a plea for people to be more factual in their intellectual endeavours, it was deficient.

Ultimately, just as your audience could do with more facts, your narrative could do with an acknowledgement of the possibility that someone perusing the facts may reach a different and less radical conclusion than yours.

Yours, Ritwik

ThomasH June 18, 2012 at 3:42 pm

Ms McCoskey must have had enormous fun demolisning a straw man that no sensible (non-”High”) liberal believes. Government intervention in the economy along any given dimention will be optimized somewhere between the Tea Pary zero and the Maoist 100. Where, in large part, is a factual question and the correct answer will vary with time and circumstance.

Alex' June 18, 2012 at 7:54 pm

Quiet. Reasonable and nuanced positions aren’t allowed on this site.

Deirdre McCloskey June 18, 2012 at 8:34 pm

Dear ThomasH,

I never said zero government. Of course it should be somewhere between 0 and 100. You offer no reason why it should be 50 when I think it should be 10. I do offer reasons, and at great lnegth in my books, too. And there is nothing straw about these men, as you can see from the indignant reaction of others here.

UnlearningEcon June 19, 2012 at 12:42 pm

You summarise succinctly the problem with contemporary political discussion: the idea that government is a single entity whose size can be arbitrarily increased or decreased as if we are pulling a bunch of levers in a factory.

dearieme June 18, 2012 at 5:27 pm

“trained in the 1960s as a transportation economist”: how oddly backward looking – transportation ended when Western Australia said it wanted no more convicts, in the 1860s.

Deirdre McCloskey June 18, 2012 at 8:36 pm

Cute! I’m about to go to Australia, actually, one of my favorite countries, to give a speech to the economists assembled next month in Melbourne, of my favorite towns

Saturos June 20, 2012 at 12:35 pm

Dammit! Now I really wish I still lived there!

Ricardo June 19, 2012 at 2:22 am

On McCloskey, “Don’t believe everything you read in the papers” is great advice. However, the odd thing about her essay was its omission of one of the most important topics among High Liberals, especially among her economist colleagues: inequality.

If we want to talk about how great the market system is, shouldn’t there be some mention of the long-term trend in median real wages? Why did median real wages grow in the U.S. during the heavily statist years between WWII and the early 1980s? Why did they stagnate after? Tyler Cowen tries to address this topic and, ironically, whenever he does, there are inevitably commenters who show up here denying that inequality has increased because inflation is mismeasured, the statistics don’t include benefits, inflation is overstated (sometimes the same people insist official inflation numbers today are understated), the numbers are not adjusted for household size, what about mobility?, etc. etc. When someone else comes along and points out these have already been empirically addressed and the increase in inequality is a real phenomenon, there are fierce denials with no attempt to engage in the evidence.

There are blind spots on both sides and I think any libertarian who sincerely wants to engage in a conversation with contemporary liberal intellectuals needs to address the big issues like inequality right away and why is it that the poorer half in America actually wound up doing pretty well during the era of big government and big unions. Soviet Communism (or even French industrial policy) is not necessarily relevant to this discussion.

Samuel June 19, 2012 at 9:32 am

This is just me remarking on how bizarre it is to read Deirdre McCloskey, who I mainly know as a scholar, ferociously arguing with strangers in a lowly blog comment section.

k June 19, 2012 at 3:03 pm

True

EAFH June 19, 2012 at 3:57 pm

I know! I have a lot of admiration for McCloskey’s work (I did read her “Bourgeois” series and found that she has an encyclopedic knowledge of all this stuff – how do you have the time to read and digest all this!) , but now after seeing her in the wild, I begin to wonder… sounding “smart” makes you sometimes also sound “unhinged” and too concerned about being right – too much drama… well, everybody’s different I guess.

k June 20, 2012 at 1:14 pm

Persuasion can take many forms and in many places, even lowly blog comment sections.

So yes, it is bizarre. (Maybe it ought not to be).

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