The Mismeasure of Capital: A Response to McCloskey

I. INTRODUCTIONI have known Deirdre McCloskey for a long time. We used to go drinking at the annual History of Economics Society conferences (beer not wine) in the 1980s. After publication of The rhetoric of economics (McCloskey 1985), I wrote a rather critical piece in the Eastern Economic Journal (Pressman 1987) that elicited a "disagreeable" response from McCloskey (1987). My main point was that there was a difference between rhetoric and the actual argument, and that we should focus on what is important-the argument. Rhetoric is there only to remind us of the argument. Tjalling Koopmans made a similar point when he asserted that he intentionally wrote badly so that he would not gain an unfair advantage in the marketplace of ideas (Samuelson 1988). Anyone who has tried reading Koopmans can testify to the veracity of this statement. Despite his poor rhetoric, Koopmans had a good case. In her superb book on rhetoric McCloskey pointed out that, contra Koopmans, how arguments are presented is important; nonetheless, good rhetoric is no substitute for a sound argument.The review essay of Capital in the twenty-first century (hereafter Capital) by Thomas Piketty (2014), recently published in this journal, is typical McCloskey. On the one hand, it is well-written, clever, and erudite. Rhetorically it is a gem. Just as Piketty peppers his book with references to the novels of Jane Austin and Honore Balzac, McCloskey makes reference to Aristotle, to Stephen Hawking, and to Anthony Trollope's delightful political novel Phineas Finn. On the other hand, the paper is poorly argued and filled with straw men.Overall, McCloskey finds Capital "honest and massively researched" but flawed because it does not understand "a key piece of economics" and because of a "fundament ethical problem in the book" (McCloskey 2014, 94; future references to this work will just contain page numbers). Section 2 below discusses some of the many straw man arguments in the paper. Section 3 then addresses the substantive issues raised by McCloskey. Section 4 concludes.II. STRAW MAN ARGUMENTSBecause McCloskey's paper is loaded with straw man arguments I spent some time in the previous section discussing rhetoric. Like socrates and Plato, I am bothered by a sole focus on rhetoric. Good rhetoric helps us remember key points, but good rhetoric is no substitute for good argumentation. Unfortunately, McCloskey's review contains many rhetorical flourishes that do not address the main arguments of Capital. Many are straw men, erected to cast doubt on the analysis and the policy prescriptions of Piketty. They hinder, rather than aid, an understanding of Piketty. We address a handful of these straw men here.First, McCloskey (75) claims the book contains "leftish worries" about capitalism, something with a long history in economics. She cites the concerns of Malthus about land scarcity and the worries of Ricardo about landowners usurping the national surplus, leaving little for investment and improving living standards. J.S. Mill is accused of worrying about the stationary state being just around the corner. McCloskey (79) contends that these leftists see capitalism as seriously defective and fail to understand its many benefits. She even adds to her list of leftist concerns the worries that many people have about the environment. McCloskey (81) concludes by accusing Piketty of setting forth a pessimistic message because pessimism sells.This entire line of attack is rather baffling. How anyone could accuse Malthus of being a leftist is hard understand. Malthus opposed all forms of government aid to the poor. Instead of supporting peasants or laborers, he defended the interests of wealthy landowners. Nor is Ricardo a notorious lefty. He defended the same capitalist interests that McCloskey (2006) champions. Mill wrote about the stationary state for the same reasons that other classical economists did-this was the logical conclusion of Ricardo's corn model. …