Friday, August 23, 2013

Rhetorical Economist, Economics Rhetorician

English: Image of Deirdre McCloskey "for ...
English: Image of Deirdre McCloskey "for Public Use" as stated on her website (Photo credit: Wikipedia)
Deirdre McCloskey might be the "rhetorician" I've most enjoyed reading. She's decidedly libertarian, often addressing the supposed "moral failings" of the philosophy. Though her degrees are in economics (Harvard grad, but we forgive her), she understands rhetoric better than many elite professors in that discipline. Her dry wit alone makes her books worth the time to read.

If I could suggest some books, as I do for my students:
McCloskey has written fourteen books and more articles than I could count. Her attention to detail without getting lost in minutiae is a rare gift among academics.

She dares to critique the big names in rhetoric and philosophy, doing so deftly. She also pays homage to one of my favorite scholars, Wayne C. Booth, in many of her works. Booth's study of the "Rhetoric of Fiction" (and a book of the same name) is foundational for those of us interested in how narratives shape the audience experience. To apply Booth the economics? That thrills me.

While McCloskey is, first and most quantitatively, an economics wonder, I call her a rhetorician with the utmost respect. She is a rhetorical economist.

I am not an economist, though I do often wish I had the degree. Instead, I am a rhetorician deeply passionate about economics. I devour economics texts, histories, biographies, and even Federal Reserve white papers. The math is fascinating, the models wondrous… if deeply flawed. And that is why I don't mind being a rhetorician of economics. If I can help explain economics, especially "conservative" and "libertarian" economic theories, using any of my writing skills, that would be rewarding.

Ayn Rand
Ayn Rand (Photo credit: Wikipedia)
Fiction often promotes, critiques, or outright attacks economic theories. It is no secret that most of my colleagues in the humanities are politically and economically to the left. Their writings and the readings they select for courses are often unabashedly anti-capitalist. I wish to be the voice of the other side.

As I have written, libertarianism is often attacked and mocked without any concern for the actual philosophy. Shout "Ayn Rand!" and the debate is over. Libertarians are soulless creatures with faith only in the free market. McCloskey offers an alternate narrative. While she doesn't embrace the Austrian School in economics (she is decidedly Chicago), she does not mock (too often) the experiences and ideals of the great Austrian proponents.

McCloskey reveals a great many weaknesses in the Keynesian rhetoric (and models). She reminds us that quantitative analysis can be "right" and still miss a great many variables. Or, it can be "right" for no good reason. Good math doesn't always equate to good theory or good policy.
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Friday, August 9, 2013

Hating Capitalism… Because It's Easy to Hate?

The following was posted to the comments section of a very old blog post:
The Top Ten Reasons I Hate Capitalism:

10: Kim Kardashian
9: Vast economic inequality destroys democracy
8: Survival of the fittest (I'm definitely not among the fittest)
7: Donald Trump
6: The Attitude of the Fittest toward the Unfit
5: Reality TV
4: Walmart
3: Mark Zuckerberg
2: It appeals to the worst aspects of human nature
And the #1 reason I hate capitalism: I am not Bill Gates!


Perhaps that's what it comes down to. That's what the conservatives and defenders of Capitalism would have us believe.

Or perhaps there is just something inherently unfair and unjust about it.
Yes, it is easy to dislike some of the wealthy in our supposedly capitalist nation. And the easy response is that the United States is not a purely capitalist nation, certainly not as Adam Smith envisioned capitalism and not in the sense that the Austrian economists believed in and promoted either a minimally-regulated free market or pure laissez-faire model. But, trying yet again to explain why the U.S. is not a free market isn't an actual response to this list of complaints.

Celebrity: There are favored celebrities in all systems, because human nature seems to include treating "stars" differently. Whether it is China, the old Soviet Union, France, or Northern Europe, there are celebrities that seem to be indulged in various ways. In the U.S. we know that stardom does affect legal cases, medical care, and more. Sure, the random star is convicted of crimes from drug possession to murder (yep, it happens), but we also know that celebs get away with a lot. Having friends from China, Russia, and many other nations, I can report that there are indulged (spoiled) celebrities everywhere. The sense of entitlement knows no political or economic bounds. However, the U.S. equating wealth with celebrity is sad and leads to particular issues. (This is also a problem in Italy and Greece, I've learned from friends living in those nations, where the wealthy openly avoid taxes and commit crimes.)

Inequality "Destroys" Democracy: Economic inequality might be to blame for some problems in our nation, but other nations are suffering an even faster decline in respect for politicians and democracy. By definition, democracy is based on the "free market of ideas" and the ideal (often nothing more than an ideal) that the collective is wiser than one person. That's crowdsourcing at its most extreme, I suppose. Looking back through the presidents of the United States, we should admit that democracy leads to some odd choices. Porn stars and comics are winning elections in Europe, and nationalist parties are rising, too. Sadly, we have extreme racially biased nationalists winning parliamentary seats throughout Europe.
A good source on public views in Europe:
The French, in particular, have little faith in their leaders, democracy, socialism, capitalism, or anything else. Maybe that's realistic. Clearly, people just lose faith, period, in large governments to do the "right" things. Of course, we also all differ on what is "right" for governments.
French Lose Faith in Leaders
Europe's Socialists Suffering Even in Downturn
Survival of the Fittest: Again, not a capitalist problem. Nations like the old Soviet Union and Revolutionary China segregated the "fit" from the "unfit" in the worst of ways. Socialism and Progressivism in the United States have a history of embracing eugenics at their worst and "meritocratic" segregation at their best. Even today, the European and Asian nations segregate students based on tests. That's actual "survival of the fittest" by promoting the best in various fields, not based on desire or passion for something but instead based on quantitative metrics that might benefit the society. You might love engineering, but a mediocre math ability won't permit you to pursue that dream in many nations. In the United States, passion can lead to a career choice.

The Attitude of the Fittest toward the Unfit: Again, that's extreme in some nations and regions that are culturally dissimilar to the United States. Some cultures that are far from capitalist and even further from democracies have extreme views on what constitutes "fitness" in their communities. Every culture values some traits and discriminates against others. Sad, but true.

Reality TV: It was called the Coliseum. The Circus Maximus. What's changed? Nothing…

Walmart: Every nation seems to have at least one huge economic power/threat. In Norway, Denmark, and the Netherlands, the nationally owned (socialist) North Sea oil companies seem to get away with quite a bit. Wealth, or being the source of wealth, lets any organization (nationalized or not) get away with too much. In Russia and China, the power companies have ruined natural resources — with little or no ability of the public to fight horrific destruction of places and ways of life. In Venezuela, the nationalized oil industry is at least as bad as any capitalist corporations. And people forget that British Petroleum (BP), while privatized, remains a largely a pension-owned company. Companies with bad leadership and no morals are what they are. I believe that size leads to managers (corporate or civil service) not taking responsibility for the consequences of choices. The Three Gorges Dam? Chernobyl? Not good things, and not "capitalist" creations.

Capitalism Appeals to the Worst of Human Nature: No, humans stink in every system. Sorry, but history's tyrants have not been capitalists, they've been egomaniacal monsters. I don't blame communism, socialism, mercantilism, or any economic/political system for Hitler, Stalin, Lenin, Mussolini, Mao, the Kim dynasty, Pol Pot, Pinochet, or any other monsters in human history. Dictators rise to power in every system: Hitler rose in a social democracy; the French coup d'état of 1851 was a response to democracy not "succeeding" fast enough (Prince Louis-Napoléon Bonaparte appealed to "equality" of course).

Envy? I can't argue that the United States' crony-capitalism and its marketing-based demand system (which, again, is not the capitalism of Smith) works and thrives by encouraging envy. We are encouraged to want things and to envy those with more and better things. Consumerism is not capitalism, but it is a form of capitalism and does depend on a market economy. Curiously, China is trying to create consumerism to foster a less export-dependent economy. Buy, buy, buy, even if you do not need. That's a problem, and one the culture of the United States helped create and promote.

When any society forgets basic decency, it should collapse. But, we already know that some horrible nations have survived for decades, even centuries, by pillaging and plundering both the people and the resources of this planet.
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Friday, August 2, 2013

Econ Primer: Starting Soon with a Purpose

Late this spring, I mentioned that I was hoping to post articles on basic economic concepts. As it turns out, this idea will serve a purpose: I'll be teaching a writing course within the economics degree programs at a leading university business school. When invited to teach at a top university, one with a gallery dedicated to its Nobel Memorial Prize in Economic Sciences honorees, there's a fair amount of humility required. My doctoral research is in the field of how we communicate technical ideas, such as economic theories. Now, I have to demonstrate to some of the best students in the world that I know that on which I lecture.

Conveying economic ideas is fraught with challenges. Even when you present basic ideas as neutrally as possible, someone will find bias in your words. Of course there is "bias" involved even when deciding on which topics to write. Why is one topic, one issue, important within economics? Once you select a topic, choosing the experts to quote and the studies to cite might be shaped by biases — or even an attempt to counter your own biases. I'm far more likely to include some schools of thought simply because I don't want to overlook views with which I disagree. Efforts to strike balance still omit some lesser-known views, too.

On this blog, "The 90 Percent Tax Rate Myth" [] remains my most popular post, in terms of traffic and links. It is reviled by some, praised by others, but at best it represents only a sliver of my views and an analysis of only one concept (effective tax rates). When writing about economics, you cannot address everything in every paper, article, book, or blog posting. The result is, someone is going accuse you of bias, poor scholarship, ignorance, or worse.

Economics is a complex field and I reject simple, purely ideological perspectives. Being "almost" classical reflects this pragmatism.

Last week, I was called a "communist" by a reader. I've never rejected the label "capitalist pig" simply because I think it is an absurd, but funny, phrase. Yes, I like making money. I also believe over-zealous regulation is bad for the economy. I dislike public employee unions. Yet, I also believe that public universities should be free, that public works matter, and that our tax system favors the wealthy. I support private unionization, and employee ownership whenever possible.

Writing about economics is challenging. You have to explain complex mathematical models, behavioral economics, neurology, psychology, sociology, political theories, and much more. Add to this my specialty, rhetoric, and you can see that "economics" is more than money. It's more than the creation and distribution of goods. Economics is also the communication and debate about all these things… and more.