MC Closkey

American Economic Association
The Rhetoric of Economics

Author(s): Donald N. McCloskey
Source: Journal of Economic Literature, Vol. 21, No. 2 (Jun., 1983), pp. 481-517
Published by: American Economic Association
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Journal of Economic Literature
Vol. XXI (June 1983), pp. 481-517
The Rhetoric of Economics
By DONALD N. MCCLOSKEY
The Universityof Iowa
The length of the acknowledgments here testifies to an unexplored

feature of the rhetoric of economics, the role of the audience: like
oratory, scholarship depends for its virtues on the virtues of its
audience. I have been fortunate in mine. I must apologize for my
amateurish understanding of what is happening in philosophy,
mathematics, literary criticism, rhetorical studies, and other places
beyond my competence, and ask that practitioners in these fields
assist in my further education. For their early attempts I thank
Evan Fales, Paul Hernadi,John Lyne, Michael McGee,Allan Megill,
John Nelson, and Jay Semel of the Colloquium on Applied Rhetoric
at The University of Iowa; Wayne Booth, Ira Katznelson, and others
at the University of Chicago in the program in Politics, Rhetoric
and Law, before which the earliest version was delivered; Robert
Boynton, Bernard Cohn,John Comaroff;Otis Dudley Duncan, James
0. Freedman, Clifford Geertz, William Kruskal, Donald Levine,
Laura McCloskey,Richard Rorty, Renato Rosaldo; and the Humani-
ties Society at the University of Iowa. That the economists on whom
I have inflicted the argument have reacted with such intelligent
skepticism and generous encouragement suggests, as the paper does,
that we are better scholars than our methodology would allow. I
thank my colleagues in economics at Iowa, especially the Sanctuary
Seminar in Economic Argument; Seminars at the World Bank and
the National Science Foundation; my colleagues at the Institute of
Advanced Studies and the Faculty of Economics at the Australian
National University;seminars at the universities of Adelaide, Auck-
land, Melbourne, New South Wales, Tasmania and WesternAustra-
lia; at Monash, and Iowa State universities; Victoria University of
Wellington; and an assemblage of economists elsewhere: William
Breit, Ronald Coase,Arthur Diamond, Stanley Engerman, J. M. Fin-
ger, Milton Friedman, Allan Gibbard, Robert Goodin, Gary Hawke,
Robert Higgs, Albert Hirschman, Eric Jones, Arjo Klamer, Harvey
Leibenstein, David Levy, Peter Lindert, Neil de Marchi, Michael
McPherson,Amartya Sen, Robert Solow, Larry Westphal, Gordon
Winston, and Gavin Wright. Thomas Mayer's encouragement at
an early stage and his detailed comments as refereefor this Journal
at a later stage were exceptionally heartening and useful.
481
482 Journal of Economic Literature, Vol. XXI (June 1983)
ECONOMISTS DO NOT FOLLOW the laws ism labels such issues "meaningless" or
of enquiry their methodologies lay "nonscientific" or "just matters of opin-
down. A good thing, too. If they did they ion." Yet even positivists actually behave
would stand silent on human capital, the as though the matters are discussable. In
law of demand, random walks down Wall fact, most discussion in most sciences, and
Street, the elasticity of demand for gaso- especially in economics, arises from them.
line, and most other matters about which Nothing is gained from clinging to the Sci-
they commonly speak. In view of the volu- entific Method, or to any methodology ex-
bility of economists the many official cept honesty, clarity, and tolerance. Noth-
methodologies are apparently not the ing is gained because the methodology
grounds for their scientific conviction. does not describe the sciences it was once
Economists in fact argue on wider thought to describe, such as physics or
grounds, and should. Their genuine, mathematics; and because physics and
workaday rhetoric, the way they argue in- mathematics are not good models for eco-
side their heads or their seminar rooms, nomics anyway; and because the method-
diverges from the official rhetoric. Econo- ology is now seen by many philosophers
mists should become more self-conscious themselves to be uncompelling; and be-
about their rhetoric, because they will cause economic science would stop pro-
then better know why they agree or dis- gressing if the methodology were in fact
agree, and will find it less easy to dismiss used; and, most important, because eco-
contrary arguments on merely methodo- nomics, like any field, should get its stan-
logical grounds. Philosophy as a set of nar- dards of argument from itself, not from
rowing rules of evidence should be set the legislation of philosopher kings. The
aside in scientific argument, as even many real arguments would then be joined.
philosophers have been saying now for
fifty years. I. Rhetoric Is Disciplined Conversation
Economics will not change much in sub-
stance, of course, when economists recog- These points, elaborated below, amount
nize that the economic emperor has posi- to an appeal to examine the rhetoric of
tively no clothes. He is the same fellow economics. By "rhetoric" is not meant a
whether philosophically naked or clothed, verbal shell game, as in "empty rhetoric"
in reasonably good health aside from his or "mere rhetoric" (although form is not
sartorial delusion. But the temper of argu- trivial, either: disdain for the form of
ment among economists would improve words is evidence of a mind closed to the
if they recognized on what grounds they varieties of argument). In Modern Dogma
were arguing. They claim to be arguing and the Rhetoric of Assent Wayne Booth
on grounds of certain limited matters of gives many useful definitions. Rhetoric is
statistical inference, on grounds of posi- "the art of probing what men believe they
tive economics, operationalism, behavior- ought to believe, rather than proving
ism, and other positivistic enthusiasms of what is true according to abstract meth-
the 1930s and 1940s. They believe that ods"; it is "the art of discovering good rea-
these are the only grounds for science. But sons, finding what really warrants assent,
in their actual scientific work they argue because any reasonable person ought to
about the aptness of economic metaphors, be persuaded"; it is "careful weighing of
the relevance of historical precedents, more-or-less good reasons to arrive at
the persuasiveness of introspections, the more-or-less probable or plausible conclu-
power of authority, the charm of symme- sions-none too secure but better than
try, the claims of morality. Crude positiv- would be arrived at by chance or unthink-
McCloskey: The Rhetoric of Economics 483
ing impulse"; it is the "art of discovering century after Descartes rose from the
warrantable beliefs and improving those dead. The faith built on these miracles is
beliefs in shared discourse"; its purpose known in literary studies as the New Rhet-
must not be "to talk someone else into a oric, new in the 1930s and 1940s from
preconceived view; rather, it must be to the hands of I. A. Richards in Britain and
engage in mutual inquiry" (Booth, 1974, Kenneth Burke in America (Richards,
pp. xiii, xiv, 59, 137). It is what economists, 1936; Burke, 1950). In philosophy John
like other dealers in ideas, do anyway: as Dewey and Ludwig Wittgenstein had al-
Booth says elsewhere, "We believe in mu- ready begun to criticize Descartes' pro-
tual persuasion as a way of life; we live gram of erecting belief on a foundation
from conference to conference" (Booth, of skepticism. More recently Karl Popper,
1967, p. 13). Rhetoric is exploring thought Thomas Kuhn, and Imre Lakatos among
by conversation. others have undermined the positivist
The word "rhetoric"is doubtless an ob- supposition that scientific progress does in
stacle to understanding the point, so de- fact follow Descartes' doubting rules of
based has it become in common parlance. method. The literary, epistemological,
If "pragmatism"and "anarchism"had not and methodological strands have not yet
already suffered as much, unable to keep wound into one cord, but they belong to-
clear of irrelevant associations with the gether. On the eve of the Cartesian revo-
bottom line or the bomb, the title might lution the French philosopher and educa-
better have been "Pragmatism'sConcep- tional reformer, Peter Ramus (fi. 1550),
tion of Truth in Economics" or "Outline brought to completion a medieval ten-
of an Anarchistic Theory of Knowledge dency to relegate rhetoric to mere elo-
in Economics" (WilliamJames, 1907; Paul quence, leaving logic in charge of reason.
Feyerabend, 1975). But the enemies of so- In the textbooks that Descartes himself
phisticated pragmatism and gentle anar- read as a boy probable argument was
chism, as of honest rhetoric, have used the made thus for the first time wholly subser-
weapons at hand. The results discourage vient to indubitable argument. Hostile to
onlookers from satisfying the curiosity classical rhetoric, such a reorganization of
they might have had about alternatives the liberal arts was well suited for the
to coercion in philosophy, politics, or Cartesian program extending over the
method. A title such as "How Economists next three centuries to put knowledge on
Explain" (Mark Blaug, 1980; but see be- foundations built by philosophy and math-
low) or "Why Methodology Is a Bad" ematics. The program failed, and in the
would perhaps have been meeker and meantime probable argument languished.
more persuasive.1Still, "rhetoric"like the In Richard Rorty's words, following
others is a fine and ancient word, whose Dewey, the search for the foundations of
proper use ought to be more widely knowledge by Descartes, Locke, Hume,
known among economists and calculators. Kant, Russell, and Carnap was "the tri-
The rhetoric here is that of Aristotle, umph of the quest for certainty over the
Cicero, and Quintilian among the an- quest for wisdom" (Rorty, 1979, p. 61; cf.
cients, reincarnated in the Renaissance, John Dewey, 1929, pp. 33, 227). To rein-
crucified by the Cartesiandogma that only state rhetoric properly understood is to
the indubitable is true; which in the third reinstate wider and wiser reasoning.
The reaction to the narrowing of argu-
IAfter recognizing the intent, Colin Forster of ment by the Cartesian program is by now
Australian National University suggested the title
"The Last Paper on Methodology." But ambition broad. Its leading figures range from pro-
must have limits. fessional philosophers (Stephen Toulmin,
Paul Feyerabend, Richard Rorty) to a size its pervasiveness in modern thinking
miscellany of practitioners-turned-philos- well beyond scholarship it is best labeled
ophers in chemistry (MichaelPolanyi),law simply "modernism," that is, the notion
(Chaim Perelman), and literary criticism (as Booth puts it) that we know only what
(WayneBooth).The reach of the idea now- we cannot doubt and cannot really know
adays that argument is more than syllo- what we can merely assent to.
gism is illustrated well by the lucid treat- Among the precepts of modernism are:
ment of it in what would seem an unlikely
place, by Glenn Webster, Ada Jacox, and (1) Prediction (and control) is the- goal
Beverly Baldwin in "Nursing Theory and of science.
the Ghost of the Received View" (1981, (2) Only the observable implications (or
pp. 25-35). The reach, however, has not predictions) of a theory matter to its
extended to economics. Austrian, institu- truth.
tionalist, and Marxist economists, to be (3) Observability entails objective, re-
sure, have for a century been attacking producible experiments.
certain parts of positivism as the basis for (4) If (and only if) an experimental impli-
economic knowledge. But they have cation of a theory proves false is the
seized on other parts with redoubled fer- theory proved false.
vor, and have so expressed their remain- (5) Objectivity is to be treasured;subjec-
ing doubts as to make them unintelligible tive "observation" (introspection) is
to anyone but themselves. In their own not scientific knowledge.
way they have been as narrowing as thor- (6) Kelvin's Dictum: "When you cannot
oughgoing positivists-the rejection of express it in numbers, your knowl-
econometrics, for instance, would be rea- edge is of a meagre and unsatisfac-
sonable only if its more naive claims were tory kind."2
taken seriously. For the rest, economists (7) Introspection, metaphysical belief,
have let philosophical scribblers of a few aesthetics, and the like may well fig-
years back supply their official thinking ure in the discovery of an hypothesis
about what a good argument is. but cannot figure in its justification.
(8) It is the business of methodology to
demarcate scientific reasoning from
II. The Official Methodology of non-scientific, positive from norma-
Economics Is Modernist
tive.
Economists have two attitudes towards (9) A scientific explanation of an event
discourse, the official and unofficial, the brings the event under a covering
explicit and the implicit. The officialrheto- law.
ric, to which they subscribe in the abstract (10) Scientists, for instance economic sci-
and in methodological ruminations, de- entists, have nothing to say as scien-
clares them to be scientists in the modern tists about values, whether of moral-
mode. The credo of Scientific Method, ity or art.
known mockingly among its many critics
as the Received View, is an amalgam of 2From Sir WilliamThomson (Lord Kelvin), Popu-
logical positivism, behaviorism, operation- larAddresses,edition of 1888-1889, quoted in Kuhn,
alism, and the hypothetico-deductive 1977, p. 178n. An approximationto this version is
inscribed on the front of the Social Science Research
model of science. Its leading idea is that Building at the University of Chicago. FrankKnight,
all sure knowledge is modeled on the early the famous University of Iowa economist, is said to
20th century's understanding of certain have remarked on it one day: "Yes, and when you
can express it in numbers your knowledge is of a
pieces of 19th century physics. To empha- meagre and unsatisfactorykind."
(11) Hume's Fork: "When we run over li- say is part of the intellectual equipment
braries, persuaded of these princi- of most economists, and its arguments
ples, what havoc must we make? If come readily to their lips.
we take in our hand any volume- Premeditated writings on method, not
of divinity or school metaphysics, for excluding Chicago'sown, are more careful
instance-let us ask, Does it contain than the remark in the course of other
any abstract reasoning concerning business that reveals modernism in its
quantity or number? No. Does it con- rawer form. In precept one can be vague
tain any experimental reasoning con- enough to earn the assent of everyone;
cerning matter offact and existence? in practice one must make enemies. Kal-
No. Commit it then to the flames, for man Cohen and Richard Cyert, to take
it can contain nothing but sophistry one among many examples of first-chapter
and illusion" (italics his [1748], 1955, methodology in economics texts, present
p. 173). in their book an outline of modernism,
which they assert is the method "used in
Few in philosophy now believe as many
all scientific analyses" (1975, p. 17). The
as half of these propositions. A substantial,
"method" they then outline, with a bibli-
respectable, and growing minority be-
ography heavily weighted towards logical
lieves none of them. But a large majority
positivism and its allies, reduces to an ap-
in economics believes them all.
peal to be honest and thoughtful. Only
For instance, the leading methodolo-
when such a phrase as "at least in princi-
gists in economics do. It is odd but true
ple testable by experiment and observa-
that modernism in economic methodol-
tion" (p. 23) is given content by practice
ogy is associated with the Chicago School.3
do we know what is at stake. To be sure,
The main texts of economic modernism,
such as Milton Friedman's "The Method- vague precepts are not without their uses.
When Friedman wrote, for instance, the
ology of Positive Economics" (1953) or
practice of economics was split into theory
Gary Becker and George Stigler's "De
without fact and fact without theory. His
Gustibus Non Est Disputandum" (1977),
modernist incantations, supported by
bear a Chicago postmark; and the more
extreme interpretations of the texts flour- choruses of philosophers, were at the time
ish among economists bearing a Chicago probably good for the souls of all con-
cerned.
degree. What is odd about it is that a group
so annoying to other economists in most Friedman's essay was even then more
of its activities should have their assent post-modernist than one might suppose
in the matter of official method: Oddly, from slight acquaintance with its ideas. He
a watered down version of Friedman's es- did, for example, mention with approval
the aesthetic criteria of simplicity and
3Nothing in this essay is meant to give comfort
fruitfulness that an economist might use
to the enemies of Chicago. Having long been a vic- to select among a multiplicity of theories
tim of their anti-Chicagodogmatism, I am not im- with the same predictions, though in the
pressed by the assertion that Chicago economics is
peculiarlydogmatic. Chicagois merely a particularly
next sentence he attempted to reduce
clear and candid version of a dogmatic impulse com- them to objective matters of prediction
mon to all economics, expressing itself in methodo- (p. 10). He accepted that questionnaires,
logical imperatives. Economists appear to believe
that economics is too important to be left to the forbidden to the modernist in economics,
open-minded, and especially must never be left to are useful for suggesting hypotheses,
anyone lacking faith in some approved formula for though in the next sentence he asserted
achieving knowledge. Chicago is no worse than the
rest. Immo, civis Chicagonussum, subspecies TP (cf that they are "almost entirely useless as
Melvin Reder, 1982). a means of testing the validity of eco-
nomic hypotheses"(p. 31n). He empha- III. Modernism Is a Poor Method
sized the role of the rhetorical community
to which the scientist speaks in producing Modernism Is Obsolete in Philosophy
conviction-whether made up of sociolo-
There are a great many things wrong
gists, say, or of economists-though in the
next sentence he returned to an "objec- with modernism as a methodology for sci-
ence or for economic science.4 Even when
tive" theory of testing. Like Karl Popper,
philosophically 'inclined, economists ap-
Friedman appeared to be struggling to es-
pear to read about as much in professional
cape the grip of positivism and its intellec-
philosophy as philosophers do in profes-
tual traditions, though with only sporadic
sional economics. It is unsurprising, then,
success. Perhaps that the locus classicus
that the news of the decline of modernism
of economic modernism contains so much
has not reached all ears. From a philoso-
that is anti-modernist indicates that mod-
pher's point of view the worst flaw in the
ernism cannot survive intelligent discus-
hostility to the "metaphysics" that mod-
sion even by its best advocates.
ernism sees everywhere is that the hostil-
The unpremeditated remark in the heat
ity is itself metaphysical. If metaphysics
of economic argument, however, usually
is to be cast into the flames, then the meth-
has a crudely modernist content, often in
odological declarations of the modernist
Friedman's very words. An article by
family from Descartes through Hume and
RichardRoll and Stephen Ross on finance,
for instance, asserts that "the theory Comte to Russell and Hempel and Popper
should be tested by its conclusions, not will be the first to go. For this and other
good reasonsphilosophers agree that strict
by its assumptions" and that "similarly,
logical positivism is dead, raising the ques-
one should not reject the conclusions de-
tion whether economists are wise to carry
rived from firm profitmaximization on the
on with their necrophilia.5
basis of sample surveys in which managers
In the economic case the metaphysical
claim that they trade off profit for social
position akin to logical positivism is not
good" (1980, p. 1093 and footnote). The
well argued, probably because its roots lie
same can be found elsewhere, in nearly
more in the philosophizing of physicists
identical terms, all dating back to Fried-
from Mach to Bridgeman than in the par-
man's essay: William Sharpe (1970, p. 77),
allel thinking of professionalphilosophers.
for instance, writing on the same matter
It is at least obscure what might be the
as Roll and Ross, takes it as a rule of polite
appeal of "operationallymeaningful state-
scientific behavior that "the realism of the
ments" (Paul Samuelson, 1947, p. 3 and
assumptions matters little. If the implica-
tions are reasonably consistent with ob-
4 The overdiscussedquestion of whether there can
served phenomena, the theory can be said be a value-free social science will not be much dis-
to 'explain'reality" (1970, p. 77). Repeated cussed here, but it must be accounted one of the
often, and exhibiting modernism as well chief failingsof modernism that it places moral argu-
in their devotion to objective evidence, ment outside the pale of rational discussion.In this
connection it should be more widely known that
quantifiable tests, positive analysis, and MorrisSchlick, the founder of the Vienna Circle of
other articles of the faith, such phrases logical positivism and a vigorous lecturer on the
have the ring of incantation. Modernism theme that moral knowledge is no knowledge at all,
was murdered in 1936 by one of his students.
is influential in economics, but not be- 6See John Passmore, 1967. Karl Popper quotes
cause its premises have been examined Passmore with approval for the motto of a chapter
carefully and found good. It is a revealed, of his own entitled "WhoKilled Logical Positivism?"
(Popper, 1976, pp. 87-90), in which he confesses to
not a reasoned, religion. the murder.
throughout)or "validand meaningful pre- of failures of premises irrelevant to the
dictions about phenomena not yet ob- main hypothesis in question. The hypothe-
served" (Friedman, p. 7) as standards sis in question is insulated from crucial test
against which all but mathematical asser- by the ancillary hypotheses necessary to
tions are to be judged. Samuelson, Fried- bring it to a test. This is no mere possibility
man, or their followers do not present rea- but the substance of most scientific dis-
sons for adopting such metaphysical agreement: "Your experiment was not
positions, except for confident assertions, properly controlled"; "You have not
at the time correct, that they were the solved the identification problem"; "You
received views of philosophers on the have used an equilibrium (competitive,
method of science. The trust in philosophy single-equation) model when a disequi-
was a tactical error, for the philosophy it- librium (monopolistic, 500-equation)
self has since changed. Some philosophers model is relevant." And even if the one
now doubt the entire enterprise of epis- hypothesis in question could be isolated,
temology and its claim to provide founda- the probabilistic nature of hypotheses,
tions for knowledge (Richard Rorty, most especially in economics, makes cru-
1982b). A great many doubt the prescrip- cial experiments non-crucial:chance is the
tions of modernist methodology. ever present alternative, the Hn that
spoils falsificationism.
Falsification Is Not Cogent
Prediction Is Impossible in Economics
A prescription that economic methodol-
ogists have in common, for instance, is an The common claim that prediction is
emphasis on the crucial falsifying test, sup- the defining feature of a real science, and
posedly the hallmark of scientific reason- that economics possesses the feature, is
ing. But philosophers have recognized for equally open to doubt. It is a cliche among
many decades that falsification runs afoul philosophers and historians of science, for
of a criticism made by the physicist and instance, that one of the most successful
philosopher Pierre Duhem in 1906, evi- of all scientific theories, the theory of evo-
dent at once without philosophical read- lution, has no predictions in the normal
ing to an economist who has tried to use sense, and is therefore unfalsifiableby pre-
falsification for science. Suppose that the diction. It is at least suggestive of some-
hypothesis H ("British businessmen per- thing odd in prediction as a criterion for
formed very poorly relative to Americans useful economics that Darwin's theory
and Germans in the late 19th century") was inspired by classical economics, a sys-
implies a testing observation 0 ("Mea- tem as it happens erroneous in most of
sures of total factor productivity in iron the predictions it made. With no apparent
and steel show a large difference between awareness of the incongruity, Friedman
British and foreign steelmaking"); it im- quoted Alchian'srevival of the connection
plies it, that is, not by itself, but only with (Armen Alchian, 1950) in the midst of his
the addition of ancillary hypotheses H1, most famous piece of predictionist meta-
H2, and so forth that make the measure- physics ("the leaves are positioned as if
ment possible ("Marginal productivity each leaf deliberately sought to maximize
theory applies to Britain 1870-1913"; the amount of sunlight it receives").
"Britishsteel had no hidden inputs offset- In any event, predicting the economic
ting poor business leaderships"; and so future is, as Ludwig von Mises put it, "be-
forth). Then of course not-0 implies not- yond the power of any mortal man" (1949,
H-or not-H1 or not-H2 or any number p. 867). What puts it beyond his power
is the very economics he uses to make the corrosive a standard of belief for a real
prediction. When the economist for a big human. As the chemist and philosopher
bank predicts lower interest rates after Michael Polanyi put it, the methodology
Christmas,and has not before the predic- of modernism sets up "quixotic standards
tion placed his net worth in margin loans of valid meaning which, if rigorouslyprac-
on bonds, properly hedged and insured ticed, would reduce us all to voluntary
against variance, he is behaving either ir- imbecility" (1962, p. 88). Modernism
rationally or self-deceivingly. If he knows promises knowledge free from doubt,
the expected value of the future, he for metaphysics, morals, and personal convic-
some reason chooses not to take the unlim- tion; what it delivers merely renames as
ited wealth that such Faustian knowledge Scientific Method the scientist's and espe-
can surely bring, and is willing for some cially the economic scientist's metaphys-
reason instead to dissipate the opportunity ics, morals, and personal convictions. It
by the act of telling others about it. If he cannot, and should not, deliver what it
does not really know, then he faces no promises. Scientific knowledge is no dif-
such unexploited opportunity. But then ferent from other personal knowledge
he has perhaps no business talking as (Polanyi, 1962). Trying to make it differ-
though he does. Predictionism cannot be ent, instead of simply better, is the death
rescued by remarking that the big bank of science.
economist makes only conditional predic- In other words, the literal application
tions. Conditionalpredictions sell for their of modernist methodology cannot give a
value in a soft market: if the sea were to useful economics. The best proofs are his-
disappear, a rock would accelerate in fall- torical. In his Against Method (1975) Paul
ing from sea level to the sea floor at about Feyerabend uses an interpretation of Gal-
32.17 feet per second per second. But a ileo's career to attack the claims of pre-
serious prediction has serious boundary scriptive methodology in physics; the
conditions. If it does it must answer again same point can be made about economics.
the American Question: If you're so smart Had the modernist criterion of persuasion
why aren't you rich? At the margin (be- been adopted by Galileo's contemporar-
cause that is where economics works) and ies, he argues, the Galilean case would
on average (because some people are have failed. A grant proposal to use the
lucky) the industry of making economic strange premise that terrestrial optics ap-
predictions, which includes universities, plied also to the celestial sphere, to assert
earns only normal returns. that the tides were the sloshing of water
on a mobile earth, and to suppose that
ModernismItself Is Impossible, and Is Not
the fuzzy views of Jupiter's alleged moons
Followed
would prove, by a wild analogy, that the
The most damaging, however, of these planets, too, went around the sun as did
lesser criticisms of the modernist method- the moons around Jupiter would not have
ology is that if taken at its word it is narrow survived the first round of peer review
to absurdity. Consider again the steps to in a National Science Foundation of 1632,
modernist knowledge, from predictionism at any rate if that one (unlike ours) were
through Kelvin's Dictum to Hume's Fork. wedded to modernist ideology. The argu-
If economists (or physicists) confined ment applies widely to the history of phys-
themselves to economic (or physical) ics: observational anomalies in the experi-
propositions that literally conformed to ments testing Einstein's theories were
such steps they would have nothing to say. ignored for many years, to be revealed
Cartesian or Humean skepticism is too as errors of measurement long after the
theories had been embraced, embraced the castle. An important blow for mone-
on grounds of "the reason of the matter," tarism was Friedman and Schwartz' big
as Einstein was fond of saying (Feyera- book, A Monetary History of the United
bend, 1975, pp. 56-57). States, 1867-1960. It established a correla-
Historians of biology have uncovered tion, which Keynesians would not deny,
one after another case of cooking the sta- between money and money income. The
tistical results to fit modernist precepts of significance of the correlation, however,
what counts as evidence, from Pasteur and depended on the assumption that money
Mendel down to the present. The mea- caused prices and that money was deter-
surement of IQ has been a scandal of self- minable by the monetary authority (in
deception and bold fraud in the name of 1929-1933, for example) despite the open-
scientific method from its beginning (Ste- ness of the American economy to trade
phen Jay Gould, 1981). Perhaps modern- in both goods and money itself. Nonethe-
ism fits poorly the complexities of biology less, what was telling in the debate was
and psychology: straining after evidence the sheer bulk of the book-the richness
of a sort typically available only in the sim- and intelligence of its arguments, how-
plest experiments in physics may not suit ever irrelevant most of the arguments
their frontiers. It suits the frontiers of eco- were to the main point.
nomics poorly enough. For better or A modernist method thoroughly ap-
worse the Keynesian revolution in eco- plied, in other words, would probablystop
nomics would not have happened under advances in economics. What empirical
the modernist legislation recommended anomaly in the traditional tale inspired
for the method of science. The Keynesian the new labor economics or the new eco-
insights were not formulated as statistical nomic history? None: they were merely
propositions until the early 1950s, well af- realizations that the logic of economics
ter the bulk of younger economists had had not exhausted its applicability at con-
become persuaded they were true. By the ventional borders. What observable impli-
early 1960s liquidity traps and accelerator cations justify the investment of intellect
models of investment, despite failures in since 1950 in general equilibrium theory?
their statistical implementations, were For all the modernist talk common among
taught to first-yearstudents of economics its theorists, none; but so what? Could ap-
as matters of scientific routine. Modernist plications of economics to legal questions
methodology would have stopped all this rely entirely on objective evidence? No;
in 1936: where was the evidence of an but why would one wish to limit the play
objective, statistical, controlled kind? of understanding? And so forth. There is
Nor was the monetarist counterrevolu- nothing to be gained and a great deal to
tion a success for modernist methodology, be lost by adopting modernism in eco-
though so powerful had the methodology nomic methodology.
become by the 1960s in the minds of econ- The very point is economic. In order
omists and especially of monetarist econo- for an economic theory to be tested, Ron-
mists that most of the explicit debate took ald Coase points out, some economists
place in its terms. Yet in truth crude ex- must care enough about it to bother. They
periments and big books won the day, by care only when it is believed by some in-
their very crudeness and bigness. The vestigators-they and their allies or some
Kennedy tax cut boosted the Keynesians significantgroup of opponents. Only when
to their peak of prestige; the inflation of many believe is there a demand for tests.
the 1970s brought them down again, leav- Fortunately, "economists, or at any rate
ing the monetarists as temporary kings of enough of them, do not wait to discover
whether a theory's predictions are accu- make it fit a philosopher's idea of the ulti-
rate before making up their minds"; to mate good.
wait in proper modernist style "would re- It is hard to take such claims seriously.
sult in the paralysis of scientific activity" Einstein remarked that "Whoever under-
(Coase, 1982, p. 14) because no one would takes to set himself up as a judge in the
have an incentive to choose one out of field of Truth and Knowledge is ship-
the infinite number of hypotheses for test. wrecked by the laughter of the gods" (Ein-
Even quantitative studies, he argues, rely stein, 1953, p. 38). Modernism sets up a
heavily on pre-quantitative arguments court of the Red Queen ("Normativeargu-
founding belief, and he quotes with ap- ment," she says, "off with his head"), and
proval T. S. Kuhn's remark that "the road the gods laugh merrily. Any methodology
from scientific law to scientific measure- that is law-making and limiting will do so.
ment can rarely be traveled in the reverse It will do so with the noblest intentions,
direction" (Coase, p. 18, quoting Kuhn, but economists are fond of pointing out
1977, p. 219). The laws come from a rheto- in like cases that noble intentions can have
ric of tradition or introspection, and in bad consequences. The methodologist
physics as in economics "quantitative fancies himself the judge of the practi-
studies . . . are explorations with the aid tioner. His proper business, though, is an
of a theory" (Coase, p. 17), searches for anarchistic one, resisting the rigidity and
numbers with which to make specific a pretension of rules. I. A. Richardsapplied
theory already believed on other grounds the point to the theory of metaphor: "Its
(see Edward Leamer, 1978, and the business is not to replace practice, or to
discussion below). Modernism is imprac- tell us how to do what we cannot do al-
tical. ready;but to protect our naturalskill from
the interference of unnecessarily crude
Any Method Is Arrogant and Pretentious
views about it" (1936, p. 116).
The objections to modernist method so The crudeness of modernist methodol-
far, however, are lesser ones. The greater ogy, or of any methodology reducible to
objection is simply that modernism is a rigid precept, is bad; but that it is allowed
method. It sets up laws of argument drawn to interfere with practice is worse. The
from an ideal science or the underlying custom of methodological papers in eco-
history of science or the essence of knowl- nomics is to scold economists for not allow-
edge. The claim is that the philosopher ing it to interfere more. MarkBlaug'suse-
of science can tell what makes for good, ful book summarizing the state of play of
useful, fruitful, progressive science. He economic methodology in 1980, The
knows this so confidently that he can limit Methodology of Economics:Or How Econ-
arguments that worthy scientists make omists Explain, is a recent case in point.
spontaneously, casting out some as un- It would be better subtitled "How the
scientific, or at best placing them firmly Young Karl Popper Explained," since it
in the "context of discovery." The philoso- repeatedly attacks extant arguments in
pher undertakes to second-guess the sci- economics for failing to comply with the
entific community. In economics the rules Popper laid down in Logik der For-
claim of methodological legislation is that schung in 1934. Blaug's exordium is typi-
the legislator is not merely expert in all cal of the best of the methodologists in
branches of economic knowledge within economics: "Economists have long been
sound of his proclamations but expert in aware of the need to defend 'correct'prin-
all possible future economics, limiting the ciples of reasoning in their subject; al-
growth of economics now in order to though actual practice may bear little
relationship to what is preached, the the word "evidence." Should it all be "ob-
preaching is worth considering on its own jective," "experimental," "positive," "ob-
ground" (Blaug, p. xii). Words like these servable"?Can it be? In The Open Society
flow easily from a modernist's pen. But and Its Enemies (1945) Popper closes the
why would preaching unrelated to actual borders of his society to psychoanalysts
practice be worth considering at all? Why and Marxistson the grounds that they do
do economists have to defend in the ab- not conform to the modernist notion of
stract their principles of reasoning, and evidence prevalent there. He would also
before what tribunal? A case for having have to close it to physicists from Galileo
a methodology-whether logical positivist Galilei to particle charmers. An economist
or Popperian or Austrian or Marxist- bracero, surely, would be deported on the
would be expected to give answers to the next truck from such an open intellectual
questions of why, but commonly does not. society.
Recent philosophy of science and ordinary
Other Sciences Do Not Follow Modernist
good sense suggest that it cannot. Blaug's
Methods
peroration is frankly prescriptive, taking
economic rhetoric directly from philoso- For all its claims to the scientific priest-
phy: hood, then, economics is different from
What methodology can do is to provide criteria the man-in-the-street's image of Science.
for the acceptance and rejection of research Economists should be glad that their sub-
programs, setting standards that will help us ject fits poorly with this image and well
to discriminate between wheat and chaff. The with the New Rhetoric, as do studies long
ultimate question we can and indeed must pose foreign to economics such as the study of
about any research program is the one made
familiarby Popper:what events, if they materi- literature or law or politics. Economics,
alize, would lead us to reject that program? in other words, is not a Science in the way
A program that cannot meet that question has we came to understand that word in high
fallen short of the highest standardsthat scien- school.
tific knowledge can attain [1980, p. 264]. But neither, really, are other sciences.
It sounds grand, but Einstein's gods are Other sciences, even the other mathemat-
rolling in the aisles. Why should a dubious ical sciences, even the Queen herself, are
epistemological principle be any test of rhetorical. Mathematics appears to an in-
practice, much less the ultimate test? And cognoscento to be the limiting example
doesn't science take place most of the time of objectivity, explicitness, and demon-
well short of the ultimate? strability.Surely here is bedrock for belief.
Anyone would commend the vision of Yet standards of mathematical demon-
science that Popper and his followers stration change. The last fifty years have
have-of science as a self-correcting ex- been a disappointment to followers of Da-
ploration verging on the dialectic other- vid Hilbert and his program to put mathe-
wise so foreign to the analytic tradition matics on indubitable foundations. The
in philosophy. For an economic scientist historian of mathematics, Morris Kline,
to adopt an obdurate refusal to consider wrote recently that "it is now apparent
objections and to resist offering hostages that the concept of a universally accepted,
to evidence, though as common in mod- infallible body of reasoning-the majestic
ernist as in nonmodernist circles, is not mathematics of 1800 and the pride of
merely unscientific; it is cowardly. So man-is a grand illusion." Or again:
much one can take from the idea of falsifi- There is no rigorousdefinition of rigor. A proof
cation by evidence. The problem comes, is accepted if it obtains the endorsement of
and the modernist preaching begins, with the leading specialistsof the time and employs
the principles that are fashionable at the mo- mathematician becomes totally invisible. This
ment. But no standardis universallyacceptable is the problem of giving a philosophicalaccount
today [1980, pp. 6, 315]. ... of preformal mathematics.. . , including
an examination of how [it] relates to and is af-
The recent flap over a computerized proof fected by formalization [1981, p. 344].
of the four-color proposition is one exam-
They assert that "informal mathematics
ple. The more fundamental example is
is mathematics. Formalization is only an
said to be Kurt G6del's proof fifty years
abstract possibility which no one would
ago that some true and statable proposi-
want or be able actually to carry out" (p.
tions in mathematics are unprovable. The
349). Real proofs "are established by 'con-
point is controversial.John van Heijenoort
sensus of the qualified"' and are "not
writes that "the bearing of G6del's results
checkable . . . by any mathematician not
on epistemological problems remains un-
privy to the gestalt, the mode of thought
certain. . . . [T]hey should not be rashly
in the particular field. . . . It may take
called upon to establish the primacy of
generations to detect an error" (p. 354).
some act of intuition that would dispense
They conclude:
with formalization" (1967, p. 357). To be
sure. But one need not dispense with for- The actual experience of all schools-and the
malization and flee to an unexamined act actual daily experience of mathematicians-
shows that mathematical truth, like other kinds
of intuition to think that formalization has of truth, is fallible and corrigible.... It is rea-
limits. sonable to propose a different task for mathe-
Kline's opinions are somewhat loosely matical philosophy, not to seek indubitable
expressed, and unpopular among mathe- truth, but to give an account of mathematical
maticians. Apparently less so are those of knowledge as it really is-fallible, corrigible,
tentative, and evolving, as is every other kind
Philip J. Davis and Reuben Hersh, whose of human knowledge [p. 406].
recent book The Mathematical Experi-
ence (1981) was described in the American Not much in this line has been done,
Mathematical Monthly as "one of the though one astounding piece has shown
masterpieces of our age." Davis and Hersh what can be: Imre Lakatos' Proofs and
speak of the crisis of confidence in modern Refutations: The Logic of Mathematical
mathematical philosophy, however, in Discovery gives an account for a theorem
terms nearly identical with Kline's. In the in topology of the rhetoric of mathemat-
work of The Ideal Mathematician "the ics.
line between complete and incomplete It appears, then, that some deep prob-
proof is always somewhat fuzzy, and often lems facing mathematics are problems of
controversial"(p. 34; cf. p. 40). They quote rhetoric, problems in "the art of probing
a living Ideal Mathematician, Solomon what men believe they ought to believe."
Feferman, who writes "it is also clear that Similar points can be made about other
the search for ultimate foundationsvia for- sciences, such as paleontology. The sud-
mal systems has failed to arrive at any con- den proliferation of species at the begin-
vincing conclusion" (p. 357). Without us- ning of the Cambrian period, one of the
ing the word, Davis and Hersh argue that great puzzles in evolution, was explained
what is required is a rhetoric of mathemat- by Steven Stanley in 1973 by supposing
ics: the sudden arrival of forms of life that fed
on other forms of life, single-celled her-
The dominantstyle of Anglo-Americanphiloso- bivores, as it were, in a grassy sea. Their
phy ... tends to perpetuate identification'of
the philosophy of mathematics with logic and grazing on the dominant forms allowed
the study of formal systems. From this stand- new forms to survive the competition
point, a problem of principal concern to the from the previously dominant ones, which
in turn resulted in new grazers. Stephen do not know why. Any economist believes
Jay Gould remarks of the arguments of- more than his evidence of a suitably mod-
fered in support of this brilliant and per- ernist and objective sort implies. A recent
suasive theory that: poll of economists, for example, found that
. . .they do not correspond to the simplistic
only three percent of those surveyed flatly
notions about scientificprogressthat are taught disagreed with the assertion that "tariffs
in most high schoolsand advanced by most me- and import quotas reduce general eco-
dia. Stanleydoes not invoke proof by new infor- nomic welfare." Only two percent dis-
mation obtained from rigorousexperiment. His agreed with the assertion that "a ceiling
second criterion is a methodological presump-
tion, the third a philosophical preference, the
on rents reduces the quantity and quality
fourth an application of prior theory. . . . Sci- of housing available." Only eight percent
ence, at its best, interposes human judgment disagreed with the assertion that "the tax-
and ingenuity upon all its proceedings. It is, ing and spending of government has a sig-
after all (although we sometimes forget it), nificant impact on the income of a partly
practiced by human beings [Gould, 1977, p.
125].
idle economy" (J. R. Kearl, Clayne Pope,
Gordon Whiting, and Larry Wimmer,
One can even say the same of physics, 1979). You probably fall into the 97, 98,
that favorite of outsiders seeking a pre- and 92 percent majorities. The evidence
scription for real, objective, positive, for the assertions, however, is obscure.
predictive science. The sequence Carnap- How do economists know these state-
Popper-Lakatos-Kuhn-Feyerabendrepre- ments are true? Where did they acquire
sents in the history and philosophy of such confidence? The usual answer is that
physics a descent, accelerating recently, "theory tells us." But great social ques-
from the frigid peaks of scientific absolut- tions are not answered by looking at a dia-
ism to the sweet valleys of anarchic rheto- gram on a blackboard, because it is trivi-
ric (see Popper, 1934, 1976; Lakatos, 1970; ally easy to draw a diagram that yields
Kuhn, 1970; Feyerabend, 1975, 1978). If the opposite answer. The factual experi-
economics should imitate other sciences, ence of the economy, certainly, has little
imitate even the majesty of physics and to do with their confidence. No study has
mathematics (there is, to be sure, consid- shown in ways that would satisfy a consis-
erable doubt that it should), then it should tent modernist, for example, that high tar-
officially open itself to a wider range of iffs in America during the 19th century,
discourse. on balance, hurt Americans. Yet it is be-
lieved that tariffshurt then and now.6 No
IV. The Unofficial Rhetoric Is Honorable study has shown that an inadvertent pol-
But Unexamined icy of fiscal ease brought unemployment
Econometric Rhetoric Is Too Narrow down during the War. Yet it is believed
on all sides. Economists have not consid-
But unofficiallyit does. The second atti- ered their rhetoric.
tude towards discourse is that adopted in Everywhere in the literature of eco-
actual scientific work in economics. It is nomics one is met with premises that are
different from the official,modernist rhet- unargued, tricks of style masquerading as
oric. What is alarmingabout the workaday reason ("it is evident that"), forms of evi-
rhetoric is not its content but that it is dence that ignore the concerns of the au-
unexamined, and that in consequence the
official rhetoric pops up in mischievous 6Charles Peirce, the founder of pragmatism, re-
ways. Economists agree or disagree-their lated in 1877 how he had been "entreated not to
read a certain newspaper lest it might change my
disagreements are exaggerated-but they opinion upon free-trade" (p. 101).
dience, and other symptoms of a lack of lines are fitted to someone else's collection
self-consciousness in rhetoric. The lack is of facts. So far the official and workaday
most evident in quarrels across research rhetoric correspond, and the one might
paradigms. Some economists, (I am one) with justice be called a guide to the other.
believe that peasants are rational. The Presently, however, they diverge. If the
mass of modernist proofs, originating results of the fitting to the data are reason-
largely from Chicago, that resistance to able, on grounds that are not themselves
the "Green Revolution" or persistence in subject to examination, the article is sent
scattering plots of land are rational leave off to a journal. If the results are unreason-
many other economists cold. Some econo- able, the hypothesis is consigned to a do
mists (I am one) believe that competition loop: the economic scientist returns to the
is a robust characterization of the modern hypotheses or the specifications, altering
American economy. The mass of mod- them until a publishable article emerges.
ernist proofs, originating largely from Chi- The product may or may not have value,
cago, that, for instance, advertising has but it does not acquire its value from its
small effects on profits leaves the others adherence to the official rhetoric. It vio-
cold. Why? Why do Chicago proofs leave lates the official rhetoric blatantly.
Texas institutionalistsor NYU Austriansor But why shouldn't it? Even at the level
Massachusetts Marxists or even Berkeley of tests of statistical significance the
neoclassicists cold? The non-Chicago workaday rhetoric violates the philoso-
economists, of course, believe they have pher's law. But so what? It is a cliche of
modernist evidence of their own. But part cynicism in economics and related statisti-
of the problem is that they also believe, cal fields to point out that a result signifi-
without thinking about it much, that they cantly different from one that may have
have evidence of a non-modernist sort: been gotten by chance does not have the
stories of peasants and their lumpish char- significance it claims if the hypothesis has
acter in the flesh; self-awareness of the been manipulated to fit the data. That
force of advertising. A good part of the only significant results get published has
disagreement is over evidence that is not long been a scandal among statistical pur-
brought openly into the discussion, ists: they fear with some reason that at
though it is used. the five percent level of significance some-
Even in the most narrowly technical thing like five percent of the computer
matters of scientific discussion economists runs will be successful. The scandal is not,
have a shared set of convictions about however, the failure to achieve modernist
what makes an argument strong, but a set standards of scientific purity. The scandal
which they have not examined, which is the failure to articulate reasons why one
they can communicate to graduate stu- might want to ignore them.
dents only tacitly, and which contains It would be arrogant to suppose that
many elements embarrassing to the offi- one knew better than thousands of intelli-
cial rhetoric. A good example is the typical gent and honest economic scholars what
procedure in econometrics. From eco- the proper form of argument was. The
nomic theory, politics, and the workings Received View is arrogantin this way, lay-
of the economist's psyche, all of which are ing down legislation for science on the ba-
in the rhetorical sense unexamined, come sis of epistemological convictions held
hypotheses about some bit of the econ- with vehemence inversely proportionalto
omy. The hypotheses are then specified the amount of evidence that they work.
as straight lines, linear models being those Better to look hard at what is in fact done.
most easily manipulated. The straight In an important book that is an exception
to the general neglect of rhetorical consid- "flimsy" ones, for instance that money
erations in economics Edward Leamer causes inflation, shows the strength of
asks what purpose the workaday proce- prior beliefs. (The beliefs can be reversed
dures in econometrics may be serving without changing the example.) To leave
(Leamer, 1978, esp. p. 17). Instead of com- the discussion at prior beliefs, however,
paring them with a doctrine in the philos- perhaps formalizing them as prior proba-
ophy of science he compares them with bility distributions, is to perpetuate the
reasons that ought to persuade a reasona- fact-value split of modernism, leaving
ble person, with what really warrants as- most of what matters in science to squeals
sent, with, in short, economic rhetoric. As of pleasure or pain. What is required is
Christopher Sims points out in a review, an examination of the workaday rhetoric
"there is a myth that there are only two that leads to the prior beliefs. It is not
categories of knowledge about the enough, as Thomas F. Cooley and Stephen
world-'the' model, given to us by 'eco- F. LeRoy do in their recent, penetrating
nomic theory,' without uncertainty, and paper on "Identification and Estimation
the parameters, about which we know of Money Demand" (1981) to merely
nothing except what the data, via objec- stand appalled at the infection of econo-
tively specified econometric methods, metric conclusions by prior beliefs. If
tells us. . . . The sooner Leamer's cogent econometric argument does not persuade
writings can lead us to abandon this myth, it is because the field of argument is too
to recognize that nearly all applied work narrow, not because the impulse towards
is shot through with applications of uncer- thoughtfulness and explicitness which it
tain, subjective knowledge, and to make embodies is wrong. The arguments need
the role of such knowledge more explicit to be broadened, not merely dismissed.
and more effective, the better" (Sims,
The Controversy Over Purchasing Power
1979, p. 567). Yes. The very title of Lea-
Parity Is an Example of Unexamined
mer's book is an outline of rhetoric in
Rhetoric
econometrics: Specification Searches: Ad
Hoc Inference with Nonexperimental A good example of how the officialrhet-
Data. oric-in the absence of an examination of
Examples of the search abound. It is the workaday rhetoric-can lead a litera-
common in a seminar in economics for ture in economics astray, especially in
the speaker to present a statistical result, econometric matters, is the debate about
apparently irrefutable by the rules of posi- purchasing power parity. It is worth exam-
tive economics, and to be met by a chorus ining in detail as a case study in unex-
of "I can't believe it" or "It doesn't make amined rhetoric and the need to broaden
sense." Milton Friedman's own Money it (Donald McCloskey and J. Richard
Workshopat Chicago in the late 1960s and Zecher, 1982). The question is: is the inter-
the early 1970s was a case in point. Put national economy more like the economy
in statistical language, the rhetorical con- of the Midwest, in which Iowa City and
text that creates such skepticism can be Madison and Champaign all face given
called a priori beliefs and can be analyzed prices for goods; or is it more like the solar
in Bayesian terms. It seldom is, but such system, in which each planet's economy
a step would not be enough even if it were is properly thought of in isolation? If the
taken. That the rhetorical community in Iowa City view is correct, then the prices
economics might reject "solid"results, for of all goods will move together every-
instance that oil prices appear in a regres- where, allowing for exchange rates. If the
sion explaining inflation, and accept Martian view is correct they will move
differently. If the Iowa City view is cor- States (of steel or of goods-in-general, in
rect, then all closed models of economies, levels or in differences) against the corre-
whether Keynesian or monetarist or ra- sponding price abroad, allowing for the
tionally expecting, are wrong; if the Mar- exchange rate. If the slope coefficient is
tian view is correct, then economists can 1.00 the hypothesis of purchasing power
(as they do) go on testing macroeconomic parity is said to be confirmed; if not, not.
faiths against American experience since Kravisand Lipsey perform such a test. Be-
the War. ing good economists they are evidently
The question of whether prices are made a little uncomfortable by the rheto-
closely connected internationally, then, is ric involved. They admit that "Each ana-
important. The official rhetoric does not lyst will have to decide in the light of his
leave much doubt as to what is required purposes whether the purchasing power
to answer it: collect facts on prices in, say, parity relationships fall close enough to
the United States and Canada and . . . 1.00 to satisfy the theories" (p. 214). Pre-
well . . . test the hypothesis (derived in cisely. In the next sentence, however, they
orthodox fashion from a higher order hy- lose sight of the need for an explicit stan-
pothesis, using objective data, looking dard if their argument is to be cogent:
only at observable facts, controlling the "As a matter of general judgment we ex-
experiment as much as possible, and so press our opinion that the results do not
forth, according to the received view). A support the notion of a tightly integrated
large number of economists have done international price structure." They do
this. Half of them conclude that purchas- not say what a "general judgment" is or
ing power parityworks;the other half con- how one might recognize it. The purpose
clude that it fails. A misleading but none- of an explicit economic rhetoric would be
theless superb paper by Irving Kravis and to provide guidance. The guidance Kravis
Robert Lipsey on the subject concludes and Lipsey provide for evaluating their
that it fails, in terms that are worth repeat- general judgment is a footnote (p. 214)
ing: reporting the general judgments of Hou-
thakker, Haberler, and Johnson that devi-
We think it unlikely that the high degree of ations from parity of anything under 10
national and international commodity arbi-
trage that many versionsof the monetarist [sic] to 20 percent are acceptable to the hy-
theory of the balance of payments contemplate pothesis. It happens, incidentally, that the
is typical of the real world. This is not to deny bulk of the evidence offered by Kravisand
that the price structuresof the advanced indus- Lipsey passes rather than fails such a test,
trial countries are linked together, but it is to belying their conclusions. But accepting
suggest that the links are loose rather than
rigid [1978, p. 243, italics added]. or rejecting one unargued standard by
comparing it with another unargued stan-
Every italicized word involves a com- dard does not much advance the art of
parison against some standard of what argument in economics.
constitutes unlikelihood or highness or Kravisand Lipsey, to be fair, are unusu-
typicality or being linked or looseness or ally sensitive to the case for having some
rigidity. Yet here and elsewhere in the standard, more sensitive than are most
tortured literature of purchasing power economists working the field. They return
parity no standard is proposed. repeatedly to the question of a standard,
The narrowest test of purchasing power though without resolving it. On page 204
parity, and the one that springs most read- they reject in one irrelevant sentence the
ily to a mind trained in the official rheto- only standard proposed in the literature
ric, is to regress the price in the United so far, the Genberg-Zecher criterion, de-
scribed below. On pages 204-05 and on a standard error of .0000001 was signifi-
235 and again on 242 they draw a distinc- cantly different from unity in a significant
tion between the statistical and the eco- meaning of significance. Such common
nomic significance of their results. So fre- sense should be applied to findings of
quently do they make the point that it slopes of .90 or 1.20. It is not.7
must be counted one of the major ones The irrelevance of the merely statistical
in the paper. On page 205 they remark, standard of fit does not undermine only
for example, that even small differences that half of the empirical literature that
between domestic and export prices can finds purchasing power parity to be
make a big difference to the incentive to wrong. Towards the end of a fine article
export: "this is a case in which statistical favorable to purchasing power parity,
significance [that is, a correlation of the Paul Krugman writes:
two prices near 1.0, which one might mis- There are several ways in which we might try
takenly suppose to imply that they were to evaluate purchasing power parity as a the-
insignificantly different] does not neces- ory. We can ask how much it explains [that
sarilyconnote economic significance."Yet is, R-square];we can ask how large the devia-
they do not turn the sword on themselves. tions from purchasingpower parityare in some
absolute sense; and we can ask whether the
No wonder: without a rhetoric of eco- deviations from purchasing power parity are
nomic significance, and in the face of a in some sense systematic [1978, p. 405].
modernist rhetoric of statistical signifi-
cance with the prestige of alleged science The defensive usage "in some absolute
behind it, they are unaware they are sense" and "in some sense" betrays his
wielding it. unease, which is in the event justified.
The abuse of the word "significant"in There is no "absolute sense" in which a
connection with statistical arguments in description is good or bad. The sense must
economics is universal. Statistical signifi- be comparative to a standard, and the
cance seems to give a standard by which standard must be argued.
to judge whether a hypothesis is true or Similarly, Jacob Frenkel, an enthusiast
false that is independent of any tiresome for purchasing power parity as such things
consideration of how true a hypothesis go among economists but momentarily
must be to be true enough. The point in bewitched by the ceremony of regression,
the present case is that the "failure" of says that "if the market is efficient and if
purchasing power parity in a regression the forward exchange rate is an unbiased
of the usual type is not measured against forecast of the future spot exchange rate,
a standard.How close does the slope have the constant [in a regression of the spot
to be to the ideal of 1.00 to say that pur- rate today on the future rate for today
chasing power parity succeeds? The litera- quoted yesterday] . . . should not differ
ture is silent. The standard used is the ir- significantly from unity." In a footnote
relevant one of statistical significance. A on the next page, speaking of the standard
sample size of a million yielding a tight
estimate that the slope was .9999, "signifi- 7An example is J. D. Richardson'spaper, "Some
Empirical Evidence on Commodity Arbitrage and
cantly" different from 1.00000, could be the Law of One Price" (1978).He regressesCanadian
produced as evidence that purchasing on American prices multiplied by the exchange rate
power parity had "failed," at least if the for a number of industriesand concludes:"It is nota-
ble that the 'law of one price' fails uniformly. The
logic of the usual method were to be fol- hypothesis of perfect commodity arbitrage is re-
lowed consistently. Common sense, pre- jected with 95 percent confidence for every com-
sumably, would rescue the scholar from modity group" (p. 347, italics added). The question
is, why in an imperfect world would it matter that
asserting that an estimate of .9999 with perfect arbitrage is rejected?
errors of the estimates for such an equa- we are not told whether it matters to the
tiori in the 1920s, he argues that "while truth of purchasing power parity where
these results indicate that markets were such limits of confidence are placed.
efficient and that on average forward rates Silence on the matter is not confined
were unbiased forecasts of future spot to the literature of purchasing power par-
rates, the 2-8 percent errors were signifi- ity. Most texts on econometrics do not
cant"(1978, pp. 175-76, italics added). He mention that the goodness or badness of
evidently has forgotten his usage of "sig- a hypothesis is not ascertainableon merely
nificant" in another signification. What he statistical grounds. Statisticians them-
appears to mean is that he judges a 2-8 selves are more self-conscious, although
percent error to be large in some unspeci- the transition from principle to practice
fied economic sense, perhaps as offering is sometimes awkward. A practical diffi-
significant profits for lucky guessers of the culty in the way of using the Neyman and
correct spot rate. In any event, it is un- Pearson theory in pure form, A. F. Mood
clear what his results imply about their and F. A. Graybill say, is that
subject, purchasing power parity, because
the loss function is not known at all or else it
significance in statistics, however useful is not known accurately enough to warrantits
it is as an input into economic significance, use. If the loss function is not known, it seems
is not the same thing as economic signifi- that a decision function that in some sense min-
cance. imizes the error probabilitieswill be a reason-
The point is not that levels of signifi- able procedure [1963, p. 278].
cance are arbitrary. Of course they are. The phrase "in some sense" appears to
The point is that it is not known whether be a marker of unexplored rhetoric in the
the range picked out by the level of signifi- works of intellectually honest scholars. In
cance affirms or denies the hypothesis. any event, the procedure they suggest
Nor is the point that econometric tests are might be reasonable for a general statisti-
to be disdained. Quite the contrary. The cian, who makes no claim to know what
point is that the econometric tests have is a good or bad approximation to truth
not followed their own rhetoric of hypoth- in fields outside statistics. It is not reason-
esis testing. Nowhere in the literature of able for a specialist in international trade
tests of purchasing power parity does or macroeconomics. If the loss function
there appear a loss function. We do not is not known it should be discovered. And
know how much it will cost in policy that will entail a study of the question's
wrecked or analysis misapplied or reputa- rhetoric.
tion ruined if purchasing power parity is One standard of economic significance
said to be true when by the measure of in questions of parity, for example, might
the slope coefficient it is only, say, 85 per- be the degree to which the customary re-
cent true. That is, the argument due to gressions between countries resembled
Neyman and Pearson that undergirds similarregressions within a single country.
modern econometrics has been set aside We agree, for purposes of argument, that
here as elsewhere in favor of a merely the United States is to be treated as a sin-
statistical standard, and an irrelevant one gle point in space, as one economy across
related to sampling error at that. We are which distances are said not to matter for
told how improbable it is that a slope coef- the purposes of thinking about inflation
ficient of .90 came from a distribution cen- or the balance of payments. Having done
tered on 1.00 in view of the one kind of so we have a standard:is Canadaeconomi-
error we claim we know about (unbiased cally speaking just as closely integrated
sampling error with finite variance), but with the United States as is Californiawith
Massachusetts?Is the Atlantic Economy ric, mere game playing in aid of ego grati-
as closely integrated as the American fication; the serious business of Science
Economy? The standardis called the Gen- will come on that happy day when the
berg-Zecher criterion, after its inventors information theory of oligopoly or the vul-
(Hans Genberg, 1976; McCloskey and gar Marxisttheory of the state is brought
Zecher, 1976). It is not the only conceiv- to a critical test under the auspices of
able one. The degree of market integra- naive falsificationism.
tion in some golden age (1880-1913 per- Economists can do better if they will
haps; or 1950-1970) might be a standard; look soberly at the varieties of their argu-
the profits from arbitrage above normal ments. The varieties examined here can
profits might be another standard;the de- only be crude preliminaries to a fuller
gree to which an X percentage deviation study, a study that might dissect samples
from purchasing power parity does or of economic argument, noting in the man-
does not disturb some assertion about the ner of a literary or philosophical exegesis
causes of inflation might be still another. exactly how the arguments sought to con-
The point is to have standards of argu- vince the reader. It is not obvious a priori
ment, to go beyond the inconclusive rhet- what the categories might be; in view of
oric provided by the pseudo-scientific the methodological range of modern eco-
ceremony of hypothesis-regression-test- nomics they doubtless would vary much
publish in most of modern economics. from author to author. A good place to
start might be the categories of classical
V. The Rhetoric of Economics Is a rhetoric, Aristotle's divisions into inven-
Literary Matter tion, arrangement, delivery, and style, for
instance, with his paired sub-headings of
Even a Modernist Uses, and Must Use,
artificial (i.e., argumentative) and inartifi-
Literary Devices
cial (i.e., factual) proofs, syllogism and ex-
The mere recognition that the official ample, and the like. A good place to con-
rhetoric might be dubious, then, frees the tinue would be the procedures of modern
reason to examine how economists really literary critics, bright people who make
argue. Obscured by the official rhetoric their living thinking about the rhetoric of
the workaday rhetoric has not received texts.
the attention it deserves, and the knowl- The purpose would not be to make the
edge of it is therefore contained only in author look foolish or to uncover fallacies
seminar traditions,advice to assistantpro- for punishment by ridicule-fallacymon-
fessors, referee reports (a promising pri- gering is evidence of a legislative attitude
mary source for its study), and jokes. It towards method, and it is no surprise that
is significant that George Stigler, a leader Jeremy Bentham, confident of his ability
of modernism in economics, chose to ex- to legislate for others in matters of method
press his observations about the rhetoric as in education, prisons, and government,
of economics in a brilliantly funny "The had compiled from his notes The Book of
Conference Handbook" ("Introductory Fallacies (1824). David Hackett Fischer's
Remark number E: 'I can be very sympa- book, Historians'Fallacies (1970), has this
thetic with the author; until 2 years ago flaw: that it takes as fallacious what may
I was thinking along similarlines' ")rather be merely probable and supporting argu-
than as a serious study in one of the several ment.
fields he has mastered, the history of eco- The purpose of literary scrutiny of eco-
nomic thought (1977). The attitude of the nomic argument would be to see beyond
Handbook is that rhetoric is mere rheto- the received view on its content. Two
pages (pp. 122-23) chosen literally at around 1983-those who have acquired
random from that premier text of the re- a skill at partitioned matrices and eigen-
ceived view, and a local maximum in eco- values should have charge of a great econ-
nomic scholarship, Samuelson's Founda- omy. The argument is not absurdor a "fal-
tions, will suffice for illustration: lacy" or "mere rhetoric." Virtuosity is
(1) To begin with he gives a general some evidence of virtue.8
mathematical form from which detailed (2) There are six instances of appeal to
results in comparative statics can be ob- authority (C. E. V. Leser, Keynes, Hicks,
tained by reading across a line. The impli- Aristotle, Knight, and Samuelson; appeal
cation of the lack of elaboration of the to authorities is something of a Samuel-
mathematics is that the details are trivial sonian specialty). Appeal to authority is
(leading one to wonder why they are men- often reckoned as the worst kind of
tioned at all). An "interesting"special case "mere" rhetoric. Yet it is a common and
is left "as an exercise to the interested often legitimate argument, as here. No sci-
reader," drawing on the rhetorical tradi- ence would advance without it, because
tions of applied mathematics to direct the no scientist can redo every previous argu-
reader's mind in the right directions. The ment. We stand on the shoulders of giants,
mathematics is presented in an offhand and it is a perfectly legitimate and persua-
way, with an assumption that we all can sive argument to point this out from time
read off partitioned matrices at a glance, to time.
inconsistent with the level of mathematics (3) There are several appeals to relax-
in other passages. The air of easy mathe- ation of assumptions. The demand for
matical mastery was important to the in- money is "really interesting . . . when un-
fluence of the book, by contrast with the certainty . . . is admitted." Again, the im-
embarrassed modesty with which British plicit assumption in Hicks that money
writers at the time (Hicks most notably) bears no interest is relaxed, unhitching the
pushed mathematics off into appendices. interest rate from the zero return on
Samuelson's skill at mathematics in the money. Relaxation of assumptions is the
eyes of his readers, an impression nur- literature generating function of modern
tured at every turn, is itself an important economics. In the absence of quantitative
and persuasive argument. He presents evidence on the importance of the as-
himself as an authority, with good reason. sumption relaxed it is no modernist evi-
That the mathematics is so often pointless, dence at all. Samuelson is careful to stick
as here, is beside the point. Being able to the subjunctive mood of theory (money
to do such a difficult thing (so it would "would pass out of use"), but no doubt
have seemed to the typical economist wants his strictures on a theory of the in-
reading in 1947) is warrant of expertise. terest rate based merely on liquidity pref-
The argument is similar in force to that erence (that is, on risk) to be taken seri-
of a classical education conspicuously dis- ously as comments on the actual world.
played. To read Latin like one's mother They are, surely, but not on the operation-
tongue and Greek like one's aunt's tongue alist grounds he articulates when preach-
is extremely difficult, requiring applica- ing methodology.
tion well beyond the ordinary;therefore- (4) There are several appeals to hypo-
or so it seemed to Englishmen around
1900-men who have acquired such a skill 8 The limiting case is spelling. Most college teach-
should have charge of a great empire. ers will agree that those who do not know how to
spell "consensus" lose some of their authority to
Likewise-or so it seemed to economists speak on it.
thetical toy economies, constrained to one they are easily misclassified. A common
or two sectors, from which practical re- argument in economics, for example, is
sults are derived. This has since Ricardo one from verbal suggestiveness. The prop-
been among the commonest forms of eco- osition that "the economy is basicallycom-
nomic argument, the Ricardian vice. It is petitive" may well be simply an invitation
no vice if done reasonably. "It would be to look at it this way, on the assurance
quite possible to have an economy in that to do so will be illuminating. In the
which money did not exist, and in which same way a psychologist might say "we
there was still a substantial rate of inter- are all neurotic"-it does not mean that
est." Yes, of course. 95 percent of a randomly selected sample
(5) There is, finally, one explicit appeal of us will exhibit compulsive handwash-
to analogy, which is said to be "not ... ing; rather, it is merely a recommendation
superficial."Analogy, as will be shown in that we focus attention on the neurotic
detail in a moment, pervades economic ingredient "in us all" (Passmore, 1966, p.
thinking, even when it is not openly 438). To misunderstand the expression as
analogical: transaction "friction," yield a properly modernist hypothesis would be
"spread," securities "circulating,"money to invite much useless testing. The case
"withering away" are inexplicit examples is similar to MV=PT understood as an
here from one paragraph of live or only identity. The equation is the same term-
half-dead metaphors. Yet analogy and for-term as the equation of state of an ideal
metaphor, like most of the other pieces gas, and has the same status as an irrefuta-
of Samuelson's rhetoric, have no standing ble but useful notion in chemistry as it
in the official canon. has in economics. The identity can be ar-
gued against, but not on grounds of "fail-
Most of the Devices Are Only Dimly
Recognized ing a test." The arguments against it will
deny its capacity to illuminate, not its
The range of persuasive discourse in modernist truth.
economics is wide, ignored in precept Another common argument in econom-
while potent in practice. At the broadest ics with no status in the official rhetoric
level it is worth noting that the practice is philosophical consistency: "If you as-
of economic debate often takes the form sume the firm knows its own cost curve
of legal reasoning, for, as Booth put it, you might as well assume it knows its pro-
"the processes developed in the law are duction function, too: it is no more dubi-
codifications of reasonable processes that ous that it knows one than the other." The
we follow in every part of our lives, argument, usually inexplicit though sig-
even the scientific" (1974, p. 157). Econ- nalled by such a phrase as "it is natural
omists would do well to study jurispru- to assume," is in fact characteristic of
dence, then, with some other aim than philosophical discourse (Passmore, 1970).
subordinating it to economic theory. For It is analogous to symmetry as a criterion
instance, economists, like jurists, argue by of plausibility, which appears in many
example, by what Edward Levi calls "the forms and forums. A labor economist tells
controlling similarity between the pres- a seminar about compensating differen-
ent and prior case" (1967, p. 7). tials for the risk of unemployment, refer-
The details of the pleading of cases at ring only to the utility functions of the
economic law have little to do with the workers. An auditor remarks that the
official scientific method. Without self- value of unemployment on the demand
consciousness about workaday rhetoric side (that is, to the firm) is not included.
The remark is felt to be powerful, and a any part of the range. They can deliver
long discussionensues of how the demand summary grunts of belief or disbelief but
side might alter the conclusions. The argu- find it difficult to articulate their reasons
ment from the-other-side-is-empty is per- in a disciplined way.
suasive in economics, but economists are
unaware of how persuasive it is. VI. Economics Is Heavily Metaphorical
Likewise (and here we reach the border
of self-consciousnessin rhetoric), "ad hoc- Models Are Metaphors
cery" is universally condemned by semi-
nar audiences. An economist will cheer- The most important example of eco-
fully accept a poor R2 and terrible and nomic rhetoric, however, falls well outside
understated standard errors if only she the border of self-consciousness. It is the
"has a theory" for the inclusion of such- language economists use, and in particular
and-such a variable in the regressions. its metaphors. To say that markets can be
"Having a theory" is not so open and shut represented by supply and demand
as it might seem, depending for instance "curves"is no less a metaphor than to say
on what reasoning is prestigious at the mo- that the west wind is "the breath of au-
ment. Anyone who threw accumulated tumn's being." A more obvious example
past output into an equation explaining is "game theory," the very name being
productivity change before 1962 would a metaphor. It is obviously useful to have
have been accused of ad hoccery. But in one's head the notion that the arms race
after Arrow's essay on "The Economics is a two-person, negative-sum cooperative
of Learning By Doing" (which as it hap- "game." Its persuasiveness is instantly ob-
pened had little connection with max- vious, as are some of its limitations. Each
imizing behavior or other higher order step in economic reasoning, even the rea-
hypotheses in economics), there was sud- soning of the officialrhetoric, is metaphor.
denly a warrant for doing it. The world is said to be "like" a complex
An example of the rhetoric of econom- model, and its measurements are said to
ics which falls well within the border of be like the easily measured proxy variable
self-consciousness is simulation. Econo- to hand. The complex model is said to be
mists will commonly make an argument like a simpler model for actual thinking,
for the importance of this or that variable which is in turn like an even simpler
by showing its potency in a model with model for calculation. For purposes of per-
back-of-the-envelope estimates of the pa- suading doubters the model is said to be
rameters. Common though it is, few books like a toy model that can be manipulated
or articles are devoted to its explication quickly inside the doubter's head while
(but, see Richard Zeckhauser and Edith listening to the seminar. John Gardner
Stokey, 1978). It would be as though stu- wrote:
dents learned econometrics entirely by
studying examples of it-no bad way to There is a game-in the 1950s it used to be
played by the members of the Iowa Writers'
learn, but not self-conscious in grounding Workshop-called 'Smoke.' The player who is
the arguments. What is legitimate simula- 'it' [thinks of] some famous person .. . and
tion? Between A. C. Harberger's modest then each of the other players in turn asks one
little triangles of distortion and Jeffrey question. .. such as 'What kind of weather
Williamson's immense multiequation are you?'. . . Marlon Brando, if weather, would
be sultry and uncertain.... To understand
models of the American or Japanese econ- that Marlon Brando is a certain kind of weather
omies since 1870 is a broad range. Econo- is to discover something (though something
mists have no vocabulary for criticizing neither useful nor demonstrable) and in
the same instant to communicate something mind-stretching fancy; "depression" was
[Gardner, 1978, pp. 118-19]. depressing; "equilibrium" compared an
On the contrary, in economics the com- economy to an apple in a bowl, a set-
parable discovery is useful and by re- tling idea; "competition" once induced
thoughts of horseraces; money's "veloc-
course to rhetorical standards demonstr-
ity" thoughts of swirling bits of paper.
able.
Much of the vocabulary of economics con-
Metaphors in Economics Are Not sists of dead metaphors taken from non-
Ornamental economic spheres.
Comparing noneconomic with eco-
Metaphor, though, is commonly viewed nomic matters is another sort of novelty,
as mere ornament. From Aristotle until apparent in the imperialism of the new
the 1930s even literary critics viewed it economics of law, history, politics, crime,
this way, as an amusing comparison able and the rest, and most apparent in the
to affect the emotions but inessential for work of that Kipling of the economic em-
thought. "Men are beasts": if we cared pire, Gary Becker. Among the least bi-
to be flat-footed about it, the notion was, zarre of his many metaphors, for instance,
we could say in what literal way we is that children are durable goods. The
thought them beastly, removing the orna- philosopher Max Black pointed out that
ment to reveal the core of plain meaning "a memorable metaphor has the power
underneath. The notion was in 1958 com- to bring two separate domains into cogni-
mon in philosophy, too: tive and emotional relation by using lan-
guage directly appropriate to the one as
With the decline of metaphysics, philosophers a lens for seeing the other" (1962, p. 236).
have grown less and less concerned about God-
liness and more and more obsessed with clean- So here: the subject (a child) is viewed
liness, aspiringto ever higher levels of linguistic through the lens of the modifier (a durable
hygiene. In consequence, there has been a ten- good). A beginning at literal translation
dency for metaphors to fall into disfavour,the would say, "A child is costly to acquire
common opinion being that they are a frequent
initially, lasts for a long time, gives flows
source of infection [H. J. N. Horsburgh, 1958,
p. 231]. of pleasure during that time, is expensive
to maintain and repair, has an imperfect
Such suspicion toward metaphor is widely second-hand market.... Likewise, a du-
recognized by now to be unnecessary, rable good, such as a refrigerator..
even harmful. That the very idea of "re- That the list of similarities could be ex-
moving" an "ornament" to "reveal" a tended further and further, gradually re-
"plain" meaning is itself a metaphor sug- vealing the differences as well-"children,
gests why. Perhaps thinking is metaphori- like durable goods, are not objects of affec-
cal. Perhaps to remove metaphor is to re- tion and concern"; "children, like durable
move thought. The operation on the goods, do not have their own opinions"-
metaphoric growth would in this case be is one reason that, as Black says, "meta-
worse than the disease. phorical thought is a distinctive mode of
The question is whether economic achieving insight, not to be construed as
thought is metaphorical in some nonorna- an ornamental substitute for plain
mental sense. The more obvious meta- thought" (p. 237). The literal translation
phors in economics are those used to con- of an important metaphor is never fin-
vey novel thoughts, one sort of novelty ished. In this respect and in others an im-
being to compare economic with noneco- portant metaphor in economics has the
nomic matters. "Elasticity" was once a quality admired in a successful scientific
theory, a capacity to astonish us with im- both fields was improved, labor economics
plications yet unseen.9 by recognizing that skills, for all their in-
But it is not merely the pregnant quality tangibility, arise from abstention from
of economic metaphors that makes them consumption; capital theory by recogniz-
important for economic thinking. The lit- ing that skills, for all their lack of capitali-
erary critic I. A. Richards was among the zation, compete with other investments
first to make the point, in 1936, that meta- for a claim to abstention. Notice by con-
phor is "two thoughts of different things trast that because economists are experts
active together, . . . whose meaning is a only in durable goods and have few (or
resultant of their interaction" (Richards, at any rate conventional) thoughts about
1936, p. 93, my italics; Black, 1962, p. 46; children, the metaphor that children are
Owen Barfield, 1947, p. 54). A metaphor durable goods has so to speak only one
is not merely a verbal trick, Richardscon- direction of flow. The gains from the trade
tinues, but "a borrowing between and were earned mostly by the theory of chil-
intercourse of thoughts, a transaction be- dren (fertility, nuptiality, inheritance),
tween contexts" (p. 94, his italics). Econo- gaining from the theory of durable goods,
mists will have no trouble seeing the point not the other way around.
of his economic metaphor, one of mutu-
ally advantageous exchange. The opposite Economic Metaphors Constitute a Poetics
notion, that ideas and their words are in- of Economics
variant lumps unaltered by combination, What is successful in economic meta-
like bricks (Richards,p. 97), is analogous phor is what is successful in poetry, and
to believing that an economy is a mere is analyzable in similar terms. Concerning
aggregation of Robinson Crusoes. But the the best metaphors in the best poetry,-
point of economics since Smith has been comparing thee to a summer's day or com-
that an island-fullof Crusoes trading is dif- paring A to B, argued Owen Barfield,
ferent from and often better off than the
mere aggregation. We feel that B, which is actually said, ought
to be necessary, even inevitable in some way.
Another of Becker'sfavorite metaphors, It ought to be in some sense the best, if not
"human capital," illustrates how two sets the only way, of expressingA satisfactorily.The
of ideas, in this case both drawn from in- mind should dwell on it as well as on A and
side economics, can thus mutually illumi- thus the two should be somehow inevitably
nate each other by exchanging connota- fused together into one simple meaning [Bar-
field, 1947, p. 54].
tions. In the phrase "human capital" the
field in economics treating human skills If the modifier B (a summer's day, a refrig-
was at a stroke unified with the field treat- erator, a piece of capital) were trite-in
ing investment in machines. Thought in these cases it is not, although in the poem
Shakespeare was more self-critical of his
9 A good metaphor depends on the ability of its simile than economists usually are of
audience to suppress incongruities, or to wish to. theirs-it would become as it were de-
Booth gives the example of: tached from A, a mechanical and unillu-
'All the world'sa stage' . . . [The reader must make a minating correspondence. If essential, it
choice only if the incongruities-failures of fit-come
too soon]. Usually they arrive late and without much fuses with A, to become a master meta-
strength.... [W]e have no difficultyruling from our phor of the science, the idea of "human
attention, in the life-stagemetaphor,the selling of tick- capital," the idea of "equilibrium," the
ets, fire insurance laws, the necessity for footlights
[1961, p. 22f]. idea of "entry and exit," the idea of "com-
The appreciation of "human capital" requires the
petition." The metaphor, quoth the poet,
same suspension of disbelief. is the "consummation of identity."
Extent ever spinning "parables" or telling "sto-

Explicit- ries." The word "story" has in fact come
ness Short Long to have a technical meaning in mathemat-
ical economics, though usually spoken in
Explicit simile tiresome caution seminars rather than written in papers.
(The firm behaves (repeat the simile)
as if it were one It means an extended example of the eco-
mind maximiz- nomic reasoning underlying the mathe-
ing its dis- matics, often a simplified version of the
counted value.) situation in the real world that the mathe-
Middling metaphor allegory
(human capital) (economics of edu-
matics is meant to characterize. It is an
cation using hu- allegory, shading into extended symbol-
man capital) ism. The literary theories of narrative
Implicit symbol a symbol system: a could make economists self-conscious
(income) mathematics;a about what use the story serves. Here the
(demand curve) theory (Keynes-
ian theory of in-
story is the modifier, the mathematics the
come determi- subject. A tale of market days, traderswith
nation) (supply bins of shmoos, and customers with costs
and demand of travel between bins illuminates a fixed
analysis) point theorem.
Figure 1. AnalogicalThinking Has Two Dimensions Even Mathematical Reasoning Is
(And Economic Cases in Point)
Metaphorical
Few would deny, then, that economists The critical question is whether the op-
frequently use figurative language. Much posite trick, modifying human behavior
of the pitiful humor available in a science with mathematics, is also metaphorical. If
devoted to calculations of profit and loss it were not, one might acknowledge the
comes from talking about "islands"in the metaphorical element in verbal econom-
labor market or "putty-clay"in the capital ics about the "entrepreneur,"for instance,
market or "lemons" in the commodity or more plainly of the "invisible hand,"
market. The more austere the subject the yet argue that the linguistic hygiene of
more fanciful the language. We have mathematics leaves behind such fancies.
"turnpikes"and "golden rules" in growth This indeed was the belief of the advanced
theory, for instance, and long disquisitions thinkers of the 1920s and 1930s who in-
on what to do with the "auctioneer" in spired the now-received view in economic
general equilibrium theory. A literary method. Most economists subscribe to the
man with advanced training in mathemat- belief without doubt or comment or
ics and statistics stumbling into Econome- thought. When engaging in verbal eco-
trica would be astonished at the meta- nomics we are more or less loose, it is said,
phors surrounding him, lost in a land of taking literary license with our "story";
allegory. but when we do mathematics we put away
Allegory is merely long-winded meta- childish things.
phor, and all such figures are analogies. But mathematical theorizing in eco-
Analogies can be arrayed in terms of ex- nomics is metaphorical, and literary. Con-
plicitness, with simile ("as if") the most sider, for example, a relatively simple
explicit and symbol ("the demand curve") case, the theory of production functions.
the least explicit; and they can be arrayed Its vocabulary is intrinsically metaphori-
by extent. cal. "Aggregate capital" involves an anal-
Economists, especially theorists, are for- ogy of "capital" (itself analogical) with
something-sand, bricks, shmoos-that Even when the metaphors of one's eco-
can be "added" in a meaningful way; so nomics appear to stay well and truly dead
does "aggregate labor," with the addi- there is no escape from literary questions.
tional peculiarity that the thing added is The literary man C. S. Lewis pointed out
no thing, but hours of conscientious atten- in 1939 that any talk beyond the level
tiveness; the very idea of a "production of the-cow-standing-here-is-in-fact-purple,
function" involves the astonishinganalogy any talk of "causes, relations, of mental
of the subject, the fabrication of things, states or acts . . . [is] incurably metaphori-
about which it is appropriate to think in cal" (1962, p. 47). For such talk he enunci-
terms of ingenuity, discipline, and plan- ated what may be called Screwtape's
ning, with the modifier, a mathematical Theorem on Metaphor, the first corollary
function, about which it is appropriate to of which is that the escape from verbal
think in terms of height, shape, and single into mathematical metaphor is not an es-
valuedness. cape:
The metaphorical content of these ideas
when a man claims to think independently of
was alive to its inventors in the 19th cen- the buried metaphor in one of his words, his
tury. It is largely dead to 20th-century claim may .. . [be] allowed only in so far as
economists, but deadness does not elimi- he could really supply the place of that buried
nate the metaphorical element. The meta- metaphor.... [TMhisnew apprehension will
usually turn out to be itself metaphorical [p.
phor got out of its coffin in an alarming 46].
fashion in the Debate of the Two Cam-
bridges in the 1960s. The debate is testa- If economists forget and then stoutly deny
ment, which could be 'multiplied, to the that the production function is a meta-
importance of metaphorical questions to phor, yet continue talking about it, the
economics. The very violence of the com- result is mere verbiage. The word "pro-
bat suggests that it was about something duction function" will be used in ways
beyond mathematics or fact. The com- satisfying grammatical rules, but will not
batants hurled mathematical reasoning signify anything. The charge of meaning-
and institutional facts at each other, but lessness applied so freely by modernists
the important questions were those one to forms of argument they do not under-
would ask of a metaphor-is it illuminat- stand or like sticks in this way to them-
ing, is it satisfying, is it apt? How do you selves. Lewis' second corollaryis that "the
know? How does it compare with other meaning in any given composition is in
economic poetry? After some tactical re- inverse ratio to the author's belief in his
treats by Cambridge, Massachusetts on own literalness" (p. 27). An economist
points of ultimate metaphysics irrelevant speaking "literally" about the demand
to these important questions, mutual ex- curve, the national income, or the stability
haustion set in, without decision. The rea- of the economy is engaging in mere syn-
son there was no decision was that the tax. Lewis cuts close to the bone here,
important questions were literary, not though sparing himself from the car-
mathematical or statistical.The continued nage:
vitality of the idea of an aggregate produc- The percentage of mere syntax masquerading
tion function in the face of mathematical as meaning may vary from something like 100
proofs of its impossibility and the equal percent in politicalwriters,journalists,psychol-
vitality of the idea of aggregate economics ogists, and economists, to something like forty
as practiced in parts of Cambridge, En- percent in the writers of children'sstories..
The mathematician, who seldom forgets that
gland in the face of statistical proofs of his symbols are symbolic, may often rise for
its impracticality would otherwise be a short stretches to ninety percent of meaning
great mystery. and ten of verbiage [p. 49].
If economists are not comparing a social be argued cautiously. Self-consciousness
fact to a one-to-one mapping, thus bring- about metaphor in economics would be
ing two separate domains into cognitive an improvement on many counts. Most
and emotional relation, they are not think- obviously, unexamined metaphor is a sub-
ing: stitute for thinking-which is a recom-
I've never slapped a curved demand; mendation to examine the metaphors, not
I never hope to slap one. to attempt the impossible by banishing
But this thing I can tell you now: them.10 Richard Whately, D.D., Arch-
I'd rather slap than map one. bishop of Dublin, publicist for free trade
Literary Thinking Reunifies the Two as for other pieces of classical political
Cultures economy, and author of the standardwork
in the 19th century on The Elements of
Metaphor,then, is essential to economic Rhetoric, drew attention to the metaphor
thinking, even to economic thinking of of a state being like an individual, and
the most formal kind. One may still doubt, therefore benefiting like an individual
though, whether the fact matters. For it from free trade. But he devoted some at-
is possible for rhetoricians as well as unre- tention, not all of it ironic, to the question
constructed modernists to commit the of the aptness of the figure:
Philosophizing Sin, to bring high-brow To this is it replied, that there is a great differ-
considerations of the ultimate into discus- ence between a Nation and an Individual.And
sions about how to fix a flat tire. Pushkin's so there is, in many circumstances. . . [he enu-
poetry may be ultimately untranslatable, merates them, mentioning for instance the un-
in view of the difference in language, to limited duration of a Nation] and, moreover,
the transactions of each man, as far as he is
be sure, but also the difference in situation left free, are regulated by the very person who
between a Pushkin in Russia in the early is to be a gainer or loser by each,-the individ-
19th century and a bilingual translator in ual himself; who, though his vigilance is sharp-
New York in the late 20th century. Be- ened by interest, and his judgment by exercise
cause he was a different man speaking to in his own department, may chance to be a
man of confined education,possessedof no gen-
a different audience even Nabokov's bril- eral principles,and not pretending to be versed
liant translation,in the words of the econ- in philosophical theories; whereas the affairs
omist and litterateur, Alexander Ger- of a State are regulated by a Congress, Cham-
schenkron, "can and indeed should be ber of Deputies, etc., consistingperhapsof men
studied but . . . cannot be read" (in of extensive reading and speculative minds
[1894, p. 63].
Steiner, 1975, p. 315). Our intrinsic loneli-
ness will make some nuance dark. Yet The case for intervention cannot be put
crude translation,even by machine, is use- better. And the metaphor is here an occa-
ful for the workaday purposes of inform- sion for and instrument of thought, not
ing the Central Intelligence Agency (for a substitute.
instance, "out of sight, out of mind" = Metaphors,further, evoke attitudes that
"blind madman"). Likewise, the intrinsic are better kept in the open and under
metaphors of language may make it ulti- the control of reasoning. This is plain in
mately impossible to communicate plain the ideological metaphors popular with
meaning without flourishes-the flour- parties: the invisible hand is so very dis-
ishes are the meaning. But the economist crete, so soothing, that we might be in-
may be able to get along without full clined to accept its touch without protest;
awareness of his meaning for the worka-
10 An example of a naive attack on economic meta-
day purposes of advising the Central Intel-
phors, and of a failure to realize that economic the-
ligence Agency. ory is itself armed with metaphor, is the first page
So it might be argued. But it should of McCloskey (1981).
the contradictions of capitalism are so in contexts where the economist is simul-
very portentous, so scientifically precise, taneously fitting 50 other equations. The
that we might be inclined to accept their response that the metaphor will be tested
existence without inquiry. But it is true eventually by the facts is a stirring prom-
even of metaphors of the middling sort. ise, but seldom fulfilled (see again Leamer,
The metaphors of economics convey the throughout). A better response would be
authority of Science, and often convey, that we like the metaphor of, say, the self-
too, its claims to ethical neutrality. It is ishly economic person as calculating ma-
no use complaining that we didn't mean chine on grounds of its prominence in ear-
to introduce moral premises. We do. lier economic poetry plainly successful or
"Marginal productivity" is a fine, round on grounds of its greater congruence with
phrase, a precise mathematical metaphor introspection than alternative metaphors
that encapsulates a most powerful piece (of people as religious dervishes, say, or
of social description. Yet it brings with it as sober citizens). In The New Rhetoric:
an air of having solved the moral problem A Treatise on Argumentation (1967),
of distribution facing a society in which Chaim Perelman and L. Olbrechts-Tyteca
people cooperate to produce things to- note that "acceptance of an analogy . . .
gether instead of producing things alone. is often equivalent to a judgment as to
It is irritating that it carries this message, the importance of the characteristics that
because it may be far from the purpose the analogy brings to the fore" (p. 390).
of the economist who uses it to show ap- What is remarkable about this unremark-
proval for the distribution arising from able assertion is that it occurs in a discus-
competition. It is better, though, to admit sion of purely literary matters, yet fits so
that metaphors in economics can contain easily the matters of economic science.
such a political message than to use the This is in the end the significance of
jargon innocent of its potential. metaphors and of the other rhetorical ma-
A metaphor, finally, selects certain re- chinery of argument in economics: econo-
spects in which the subject is to be com- mists and other scientists are less separate
pared with the modifier; in particular, it from the concerns of civilization than
leaves out the other respects. Max Black, many think. Their modes of argument and
speaking of the metaphor "men are the sources of their conviction-for in-
wolves," notes that "any human traits that stance, their uses of metaphor-are not
can without undue strain be talked about very different from Cicero's speeches or
in 'wolf-language'will be rendered promi- Hardy's novels. This is a good thing. As
nent, and any that cannot will be pushed Black wrote, discussing "archetypes" as
into the background"(1962, p. 41). Econo- extended metaphors in science: "When
mists will recognize this as the source of the understanding of scientific models and
the annoying complaints from non-mathe- archetypes comes to be regarded as a rep-
matical economists that mathematics utable part of scientific culture, the gap
"leaves out" some feature of the truth or between the sciences and the humanities
from non-economists that economics will have been partly filled" (p. 243).
"leaves out" some feature of the truth.
Such complaints are often trite and ill- VII. Be Not Afraid
formed. The usual responses to them,
The Alternative to Modernism Is Not
however, are hardly less so. The response Irrationalism
that the metaphor leaves out things in or-
der to simplify the story temporarily is It will be apparent by now that the ob-
disingenuous, occurring as it often does jectivity of economics is overstated and,
what is more important, overrated. Preg- for wider rationality. The tactic is an old
nant economic knowledge depends little one. RichardRorty notes that "the charges
on, as Michael Polanyi put it, "a scientific of 'relativism'and 'irrationalism'once lev-
rationalism that would permit us to be- eled against Dewey [were] merely the
lieve only explicit statements based on mindless defensive reflexes of the philo-
tangible data and derived from these by sophical tradition which he attacked"
a formal inference, open to repeated test- (1979, p. 13; Rorty, 1982a, Ch. 9). The posi-
ing" (1966, p. 62). A rhetoric of economics tion taken by the opponents of Dewey,
makes plain what most economists know Polanyi, Kuhn, and the rest is "if the
anyway about the richness and complexity choice is between Science and irrational-
of economic argument but will not state ity, I'm for Science." But that's not the
openly and will not examine explicitly. choice.
The invitation to rhetoric, however, is
The Barbarians Are Not at the Gates
not an invitation to irrationality in argu-
ment. Quite the contrary. It is an invita- Yet still the doubt remains. If we aban-
tion to leave the irrationality of an artifi- don the notion that econometrics is by it-
cially narrowed range of arguments and self a method of science in economics, if
to move to the rationality of arguing like we admit that our arguments require
human beings. It brings out into the open comparative standards, if we agree that
the arguing that economists do anyway- personal knowledge of various sorts plays
in the dark,for they must do it somewhere a part in economic knowledge, if we look
and the various official rhetorics leave at economic argument with a literary eye,
them benighted. will we not be abandoning science to its
The charge of irrationalismcomes easily enemies? Will not scientific questions
to the lips of methodological authoritari- come to be decided by politics or whim?
ans. The notion is that reasoning outside Is the routine of Scientific Method not a
the constricted epistemology of modern- wall against irrational and authoritarian
ism is no reasoning at all. Mark Blaug, for threats to inquiry? Are not the barbarians
instance, charges that Paul Feyerabend's at the gates?
book Against Method "amounts to replac- The fear is a surprisinglyold and persis-
ing the philosophy of science by the phi- tent one. In classical times it was part of
losophy of flower power" (1980, p. 44). the debate between philosophy and rheto-
Feyerabend commonly attracts such dis- ric, evident in the unsympathetic way in
missive remarks by his flamboyance. But which the sophists are portrayed in Plato's
Stephen Toulmin and Michael Polanyi are dialogues. Cicero viewed himself as bring-
nothing if not sweetly reasonable; Blaug ing the two together, disciplining rheto-
lumps them with Feyerabend and attacks ric's tendency to become empty advocacy
the Feyerabend-flavored whole. On a and trope on the one hand and disciplin-
higher level of philosophical sophistica- ing philosophy's tendency to become use-
tion Imre Lakatos' Methodology of Scien- less and inhuman speculation on the
tific ResearchProgrammes(1978, from ar- other. The classicalproblem was that rhet-
ticles published from 1963 to 1976) oric was a powerful device easily misused
repeatedly tars Polanyi, Kuhn, and Feyer- for evil ends, the atomic power of the clas-
abend with "irrationalism"(e.g., Vol. 1, sical world, and like it the subject of wor-
pp. 9nl, 76n6, 91nl, 130 and 130n3), em- rying about its proliferation. The solution
phasizing their sometimes aggressively ex- was to insist that the orator be good as
pressed case against rigid rationalism and well as clever: Cato defined him as "vir
ignoring their moderately expressed case bonus dicendi peritus," the good man
skilled at speaking, a Ciceronian ideal as it must be admitted, are not so bad an
well. Quintilian, a century and a half after argument for authoritarianism,at least un-
Cicero, said that "he who would be an til one looks more closely at the results
orator must not only appear to be a good of authoritarianism.Surely, though, the al-
man, but cannot be an orator unless he ternative to blindered rules of modernism
is a good man" (Institutio XII, 1, 3). The is not an irrational mob but a body of en-
classicalproblem looks quaint to moderns, lightened scholars,,perhaps more enlight-
who know well that regressions, radios, ened when freed to make arguments that
computers, experiments, or any of the actually bear on the questions at issue.
now canonized methods of persuasion can
ThereIs No Good Reason to Wish to Make
be and have been used as methods of de-
ceit. There is nothing about anaphora, "Scientific"As Against Plausible
Statements
chiasmus, metonymy, or other pieces of
classical rhetoric that make them more The other main objection to an openly
subject to evil misuse than the modern rhetorical economics is not so pessimistic.
methods. One can only note with regret It is the sunny view that scientific knowl-
that the Greeks and Romans were more edge of a modernist sort may be hard to
sensitive to the possibility,and less hypno- achieve, even impossible, but all will be
tized by the claims of method to moral well on earth and in heaven if we strive
neutrality. in our poor way to reach it. We should
The 20th century's attachment to limit- have a standard of Truth beyond persua-
ing rules of inquiry solves a German prob- sive rhetoric to which to aspire. In Figure
lem. In the German Empire and Reich 2 all possible propositions about the world
it was of course necessary to propound a are divided into objective and subjective,
split of fact from values in the social sci- positive and normative, scientific and hu-
ences if anything was to be accomplished manistic, hard and soft. The modernist
free of political interference. And German supposes that the world comes divided
speculative philosophy, one hears it said, nicely along such lines.
warranted a logical positivist cure. The
German habits, however, have spilled
over into a quite different world. It is said scientific humanistic
fact opinion
that if we are to avoid dread anarchy we objective subjective
cannot trust each scientist to be his own positive normative
methodologist. We must legislate a uni- vigorous sloppy
form though narrowing method to keep precise vague
scholars from resorting to figurative and things words
cognition intuition
literal murder in aid of their ideas. We hard soft
ourselves could be trusted with method-
ological freedom, of course, but the others Figure 2. The Task of Science Is to Move the
cannot. The argument is a strange and au- Line
thoritarian one, uncomfortably similar to
the argument of, say, the Polish authori- According to the modernist methodolo-
ties against Solidarity or of the Chilean gist the scientist's job is not to decide
authorities against free politics. It is odd whether propositions are useful for under-
to hear intellectuals making it. Perhaps standing and changing the world but to
their low opinion of the free play of ideas classify them into one or the other half,
comes from experiences in the faculty sen- scientific or nonscientific, and to bring as
ate: the results of academic democracy, many as possible into the scientific por-
tion. But why? Whole teams of philosoph- conceivable but practically impossible test
ical surveyors have sweated long over the takes over the prestige of the real test,
placing of the demarcation line between but free of its labor. Such a step needs
scientific and other propositions,worrying to be challenged. It is identical to the one
for instance about whether astrology can involved in equating as morally similarthe
be demarcated from astronomy;it was the actual compensation of those hurt during
chief activity of the positivist movement a Pareto optimal move with a hypothetical
for a century. It is not clear why anyone compensation not actually paid, as in the
troubled to do so. People are persuaded Hicks-Kaldortest; and it is identically du-
of things in many ways, as has been shown bious. A properly identified econometric
for economic persuasion. It is not clear measurement of the out-of-sample prop-
why they should labor at drawing lines erties of macroeconomic policy is "opera-
on mental maps between one way and an- tional," that is, conceivable, but for all the
other. scientific prestige the conceivability lends
The modernists have long dealt with the to talk about it, there are grave doubts
embarrassmentthat metaphor, case study, whether it is practically possible. While
upbringing, authority, introspection, sim- economists are waiting for the ultimate
plicity, symmetry, fashion, theology, and they might better seek wisdom in the hu-
politics serve to convince scientists as they manism of historical evidence on regime
do other folk by labeling these the "con- changes or of introspection about how in-
text of discovery." The way scientists dis- vestors might react to announcements of
cover hypotheses has been held to be dis- new monetary policies. And of course they
tinct from the "context of justification," do.
namely, proofs of a modernist sort. Tho- The point is that one cannot tell
mas Kuhn's autobiographical reflections whether an assertion is persuasive by
on the matter can stand for puzzlement knowing at which portion of the scientific/
in recent years about this ploy: humanistic circle it came from. One can
tell whether it is persuasive only by think-
Having been weaned intellectually on these ing about it. Not all regression analyses
distinctions and others like them, I could
scarcely be more aware of their import and
are more persuasive than all moral argu-
force. For many years I took them to be about ments; not all controlled experiments are
the nature of knowledge, and . .. yet my at- more persuasive than all introspections.
tempts to apply them, even grosso modo, to Economic intellectuals should not dis-
the actual situations in which knowledge is criminate against propositionson the basis
gained, accepted, and assimilated have made
them seem extraordinarilyproblematic [Kuhn, of race, creed, or epistemological origin.
1970, p. 9]. There are some subjective, soft, vague
propositions that are more persuasive
The methodologist's claim is that "ulti- than some objective, hard, precise propo-
mately" all knowledge in science can be sitions.
brought into the hard and objective side Take, for instance, the law of demand.
of Figure 2. Consequently, in certifying The economist is persuaded that he will
propositions as really scientific there is buy less oil when its price doubles better
great emphasis placed on "conceivable than he or anyone else is persuaded of
falsification"and "somefuture test." The the age of the universe. He may reason-
apparent standard is the Cartesian one ably be persuaded of it better than he is
that we can find plausible only the things that the earth goes around the sun, be-
we cannot possibly doubt. But even this cause not being an astronomer with direct
curious standard is not in fact applied: a knowledge of the experiments involved
he has the astronomical facts only from cient on M in a regression of prices in 30
the testimony of people he trusts, a reli- countries over 30 years is insignificantly
able though not of course infallible source different from 1.0") should take over the
of knowledge.1"The economic fact he has whole of persuasiveness, leaving moral
mostly from looking into himself and see- persuasiveness incomparablyinferior to it.
ing it sitting there. The ceremony of the Arguments such as that "murder violates
official rhetoric to the contrary, it is not the reasonable moral premise that we
because the law of demand has predicted should not force other people to be means
well or has passed some statistical test that to our ends" or that "frombehind a prena-
it is believed-although such further tests tal veil of ignorance of which side of the
are not to be scorned. The "scientific" murderer's revolver we would be after
character of the tests is irrelevant. It may birth we would enact laws against mur-
be claimed in reply that people can agree der" are persuasive in comparable units.
on precisely what a regression coefficient Not always, but sometimes, they are, in-
means but cannot agree precisely on the deed, more persuasive, better, more prob-
character of their introspection. Even if able (Toulmin, 1958, p. 34). We believe
true (it is not) this is a poor argument for and act on what persuades us-not what
ignoring introspection if the introspection persuades a majority of a badly chosen
is persuasive and the regression coeffi- jury, but what persnades well educated
cient, infected with identification prob- participants in our civilization and justly
lems and errors in variables, is not. Preci- influential people in our field. To attempt
sion means low variance of estimation; but to go beyond persuasive reasoning is to
if the estimate is greatly biased it will tell let epistemology limit reasonable persua-
precisely nothing. sion.
An extreme case unnecessary for the ar-
gument here will make the point clear. VIII. The Good of Rhetoric
You are persuaded that it is wrong to mur-
der better than you are persuaded that Better Writing
inflation is always and everywhere a mon- Well, what of it? What is to be gained
etary phenomenon. This is not to say that by taking the rhetoric of economics seri-
similar techniques of persuasion will be ously? The question can be answered by
applicable to both propositions. It says noting the burdens imposed by an unex-
merely that each within its field, and each amined rhetoric.
therefore subject to the methods of honest First of all, economics is badly written,
persuasion appropriate to the field, the written by a formula for scientific prose.
one achieves a greater certainty than the The situation is not so bad as it is in, say,
other. To deny the comparison is to deny psychology, where papers that do not con-
that reason and the partial certitude it can form to the formula (introduction, survey
bring applies to nonscientific subjects, a of literature, experiment, discussion, and
common but unreasonableposition. There so forth) are in some journalsnot accepted.
is no reason why specifically scientific per- But economists are stumbling towards
suasiveness ("at the .05 level the coeffi- conventions of prose that are bad for clar-
ity and honesty. The study of rhetoric, it
"The astronomical "fact" that the earth goes
around the sun, of course, is not even a properly must be said, does not guarantee the stu-
modernist fact, though it is commonly treated as one dent a good English style. But at least it
in such discussions. Which goes around which is a makes him blush at the disdain for the
matter of the point of view one chooses. It is the
aesthetics of the simpler theory, not the "facts," that reader that some economics exhibits (Wal-
leads to heliocentrism. ter Salant, 1969).
The economist's English contains a mes- is the tacit knowledge of the sort Polanyi-
sage, usually that "I am a Scientist: give describes.12We know the economics, but
way." Occasionally the message is more cannot say it, in the same way a musician
genial: Zvi Griliches' irony says "Do not knows the note he plays without con-
make a fetish out of these methods I am sciously recalling the technique for exe-
expounding: they are mere human arti- cuting it. A singer is a prime example, for
fices." Milton Friedman's style, so careful there is no set of mechanical instructions
and clear, has to an exceptional degree one can give to a singer on how to hit a
the character of the Inquirer. We will not high C. Al Harberger often speaks of so-
raise up a race of Dennis Robertsons,Rob- and-so being able to make an economic
ert Solows, George Stiglers, or Robert Lu- argument "sing." Like the directions to
cases by becoming more sensitive to the Carnegie Hall, the answer to the question
real messages in scientific procedure and "how do you get to the Council of Eco-
prose, but maybe we will stunt the growth nomic Advisors?"is "practice, practice."
of the other kind.
Better Foreign Relations
Better Teaching A third burden placed on economics by
A second burden is that economics is its modernist methodology is that eco-
badly taught, not because its teachers are nomics is misunderstood and, when re-
boring or stupid, but because they often garded at all, disliked by both humanists
do not recognize the tacitness of economic and scientists. The humanists dislike it for
knowledge, and therefore teach by axiom its baggage of antihumanist methodology.
and proof instead of by problem-solv- The scientists dislike it because it does not
ing and practice. To quote Polanyi yet in reality attain the rigor that its method-
again: ology claims to achieve. The bad foreign
relations have many costs. For instance,
. . .the transmissionof knowledge from one as was noted above, economics has re-
generation to the other must be predominately
tacit.... The pupil must assume that a teach- cently become imperialistic. There is now
ing which appears meaningless to start with an economics of history, of sociology, of
has in fact a meaning that can be discovered law, of anthropology, of politics, of politi-
by hitting on the same kind of indwelling [a cal philosophy, of ethics. The flabbymeth-
favorite Polanyi expression] as the teacher is odology of modernist economics simply
practicing [1966, p. 61].
makes this colonization more difficult,
It is frustratingfor students to be told that raising irrelevant methodological doubts
economics is not primarily a matter of in the minds of the colonized folk.
memorizing formulas,but a matter of feel-
Better Science
ing the applicability of arguments, of see-
ing analogies between one application and A fourth burden is that economists
a superficially different one, of knowing pointlessly limit themselves to "objective"
when to reason verbally and when mathe- facts, admitting the capabilities of one's
matically, and of what implicit character- own or others' minds as merely sources
ization of the world is most useful for cor- of hypotheses to be tested, not as them-
rect economics. Life is hard. As a blind selves arguments for assenting to hypothe-
man uses his stick as an extension of his ses. The modernist notion is that common
body, so whenever we use a theory "we sense is nonsense, that knowledge must
incorporate it in our body-or extend our somehow be objective, not verstehen or
body to include it-so that we come to 120n this score, and some others, I can heartily
dwell in it." Problem-solvingin economics recommend McCloskey, 1982.
introspection. But, to repeat, we have nomics. But self-testimony is not useless,
much information immediately at our dis- even for the purpose of resolving the mar-
posal about our own behavior as economic ginal cost-average cost debate of the
molecules, if we would only examine the 1930s. One could have asked "Has your
grounds of our beliefs. The idea that obser- profit margin' always been the same?"
vational proofs of the law of demand, such "What do you think when you find sales
as the Rotterdam School's multi-equation lagging?" (Lower profit margin? Wait it
approach, are more compelling than in- out?) Foolish inquiries into motives and
trospection is especially odd. Even the foolish use of human informants will pro-
econometrics itself would be better, as duce nonsense. But this is also true of fool-
Christopher Sims has recently argued: ish use of the evidence more commonly
admitted into the economist's study.
If we think carefully about what we are doing,
we will emerge, I think, both more confident Better Dispositions
that much of applied econometrics is useful,
despite its differences from physical science, A fifth and final burden is that scientific
and more ready to adapt our language and debates in economics are long-lasting and
methods to reflect what we are actually doing. ill-tempered. Journals in geology are not
The result will be econometrics which is more filled with articles impugning the charac-
scientific [by which he means "good"] if less
superficiallysimilar to statisticalmethods used
ter of other geologists. They are not filled
in experimental sciences [Sims, 1982, p. 25]. with bitter controversies that drone on
from one century to the next. No wonder.
The curious status of survey research Economists do not have an official rhetoric
in modern economics is a case in point. that persuasively describes what econo-
Unlike other social scientists, economists mists find persuasive. The mathematical
are extremely hostile towards question- and statistical tools that gave promise in
naires and other self-descriptions. Second- the bright dawn of the 1930s and 1940s
hand knowledge of a famous debate of ending economic dispute have not suc-
among economists in the late 1930s is part ceeded, because too much has been asked
of an economist's formal education. The of them. Believing mistakenly that opera-
debate concerned the case of asking busi- tionalism is enough to end all dispute, the
nessmen if they equalized marginal cost economist assumes his opponent is dishon-
to marginal revenue. It is revealing that est when he does not concede the point,
the failure of such a study-never mind that he is motivated by some ideological
whether that was indeed the study-is passion or by self-interest, or that he is
supposed to convince economists to aban- simply stupid. It fits the naive fact-value
don all self-testimony. One can literally split of modernism to attribute all dis-
get an audience of economists to laugh agreements to political differences, since
out loud by proposing ironically to send facts are alleged to be, unlike values, im-
out a questionnaire on some disputed eco- possible to dispute. The extent of disagree-
nomic point. Economists are so impressed ment among economists, as was men-
by the confusions that might possibly re- tioned, is in fact exaggerated. The amount
sult from questionnaires that they aban- of their agreement, however, makes all
don them entirely, in favor of the confu- the more puzzling the venom they bring
sions resulting from external observation. to relatively minor disputes. The assaults
They are unthinkingly committed to the on Milton Friedman or on John Kenneth
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The Rhetoric of Economics

The Rhetoric of Economics

The length of the acknowledgments here testifies to an unexplored

Extent ever spinning "parables" or telling "sto-

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