William K. Black — McCloskey’s Plea for an Unethical Ethical Response to Corporate Bribery

Bill smacks Deirdre McCloskey down for her obtuse ideas about ethics and corruption.

New Economic Perspectives
McCloskey’s Plea for an Unethical Ethical Response to Corporate Bribery
William K. Black | Associate Professor of Economics and Law, UMKC

Peter Radford — McCloskey Disses Democracy

Peter Radford takes down Deirdre McCloskey's take down of Thomas Pikettythat Greg Mankiw opined was "compelling".

This is a good one. Here are a couple of excerpts for the flavor.

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.…

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.

The key point:

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.

Like I've been saying capitalism and democracy are antithetical.

The Radford Free Press
McCloskey Disses Democracy
Peter Radford

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

Merijn Knibbe — Dear Deirdre, Distributional Issues Do Matter. Always. And everywhere.

Deirdre McCloskey has written a lengthy Piketty criticism – and she totally agrees with Piketty. It’s Friedmanian in spirit: a self-concious, eloquent (even more eloquent than Friedman!) defense of the market based upon clever arguments and our experience with markets, though also more literate and less US centered than the typical Friedman piece. But it’s a somewhat weird piece. She states that she totally disagrees with Piketty. But she doesn’t. In fact she totally shares his vision: it’s all about g. She defines ‘g’ as ‘The great enrichment’. And states, just like Piketty, that g, or the high growth rate of our economy, saved us from becoming a rentier economy. And just like Piketty she does not seem to understand balance sheets. More on that below.

Real-World Economics Review Blog
Dear Deirdre, Distributional Issues Do Matter. Always. And everywhere.
Merijn Knibbe

Tyler Cowen — Deirdre McCloskey has a 55-page review essay on Piketty

Download link at his place.

Marginal Revolution
Deirdre McCloskey has a 55-page review essay on Piketty
Tyler Cowen | Holbert C. Harris Chair of Economics at George Mason University and serves as chairman and general director of the Mercatus Center

Diane Coyle — The education of an economist

In the Financial Times this morning Deirdre McCloskey has a tantalising curtain-raiser for her forthcoming book, Bourgeois Equality: How Betterment Became Ethical, 1600-1848, and Then Suspect. Her argument is that it isn’t the accumulation of capital but rather innovation that is the engine of wealth, collective and individual:

“Taxing the rich, or capital, does not help the poor. It can throw a spanner into the mightiest engine for lifting up those below us, arising from a new equality, not of material worth but of liberty and dignity. Gini coefficients are not what matter; the Great Enrichment is.”

The Enlightened Economist
The education of an economist
Diane Coyle | former advisor to the UK Treasury. She is a member of the UK Competition Commission and is acting Chairman of the BBC Trust, the governing body of the British Broadcasting Corporation

Deidre McCloskey (Chicago School) is held up as a paragon of "enlightened captialism" because of her attention to rights. Really? This is the best they can come up with? This op ed is paen to inequality and the capitalism that produces it as resulting in the greatest good for the greatest number based on the argument that "everyone" is better off than they would be under previous systems. Even Marx granted that.

My comment at FT, which reflects many of the others.

Supply side trickle down.

Ignores economic rent and privilege resulting from power based on social class and wealth. 

This is conservatism and economic liberalism, not social liberalism.
Even Marx admitted that capitalism made things better for everyone than under feudalism. 

That doesn't means we have to stop where we are or accept privilege and exploitation 

In addition, I don' know world the good professor is living in. The lives of the poor are still fraught and homelessness is on the rise in the developed world. She needs to get out more.

David F. Ruccio — Capital in the 18th, 19th, 20th, and 21st centuries

Reading list.

Once again, this coming fall, I’ll be teaching Karl Polanyi’s The Great Transformation in my Topics in Political Economy course.

It’s a course based entirely on books (plus a few political economy films, starting with Charlie Chaplin’s Modern Times). I teach four classic texts of political economy, starting with Adam Smith’s Wealth of Nations and then moving on to different responses to Smith’s theory of capitalism: by Karl Marx (volume 1 of Capital), Thorstein Veblen (The Theory of the Leisure Class), and finally Polanyi.

I match each classic text with a contemporary one: for example, Deirdre McCloskey’s Bourgeois Virtues with Smith, Stephen Resnick and Richard Wolff’s Knowledge and Class with Marx, and Joseph Stiglitz’s The Price of Inequality with Veblen. Next time, I’m planning to teach Thomas Piketty’s Capital in the Twenty-First Century as the follow-up to Polanyi.

Occasional Links & Commentary
Capital in the 18th, 19th, 20th, and 21st centuries
David F. Ruccio | Professor of Economics University of Notre Dame Notre Dame