Review of McCloskey, Deidre Nansen. (2021). Bettering Humanomics: A New, and Old, Approach to Economic Science. Chicago: The University of Chicago Press.
The McCloskey (2021) book on Bettering Humanomics follows on the McCloskey and Carden (2020) book Leave Me Alone and I'll Make You Rich (see Lynne in press, and, the Review here in the Blog). The key idea, which was first proffered in the 3-book trilogy by McCloskey, is the key role of the evolving Bourgeois ethic, also holding dignity and equality of opportunity, especially gaining ground in the late-1700s. The new ethic was about the liberty and freedom of ordinary people to have a go. The dramatic change in the ethic came to be represented in a Bourgeois Deal that led to the Great Enrichment: People are simply wealthier than ever before in recorded economic history, with a dramatic increase since 1800.
Travelers on the Spaceship (Earth) who had typically lived on $3-6/capita/day for thousands of years prior to 1800 are now enjoying a 3000 to 10000 percent increase in income per capita per day since 1800. Readers, check it out, just divide your annual income by 365: What do you see? Your (unless you descend from the monarchy and oligarchy and church hierarchy still in charge in the mid-1700s) great-great-great grandparents were living on $3!
McCloskey's careful analysis of economic history points to how the unprecedented increase was driven by the changed ethic, an increase unexplained by mainstream Single Interest Theory (SIT) in mainstream Microeconomics that has no placeholder for the role of the ethic at play. The conclusion of the 2020 book pointed to the need to transcend SIT in order to make sense of the Great Enrichment by building a Humanomics. It would be an economics with the Human and their ethics left in which is essential for not only understanding what drove the Great Enrichment but also understanding all manner of Human economic behavior. Again, ethics are key.
McCloskey (2022) continues the story started in Bettering Humanomics with such Bettering made possible only by also going Beyond Positivism, Behaviorism, and Neoninstitutionalism. Moving beyond is essential in order to bring ethics into view within an alternative Humanomics: A Blog has also been posted on Going Beyond, too.
And, why Reviewing the McCloskey books here? Easy: Metaeconomics is a Humanomics with a core theory having a placeholder for the ethic as represented in Dual Interest Theory (DIT), which also goes beyond positivisim, behaviorism, and neoinstitutionalism . DIT transcends SIT. And, the McCloskey version of Humanomics, well, it lacks a specific theory for including the ethic such as to transcend SIT which leaves it out. DIT includes the ethic through the vehicle of the shared other-interest, so a Humanomics with DIT is all about striking good balance in the joint Self & Other-interest, or, another way to frame it, good balance in the Profane F & Sacred S as McCloskey refers to it. DIT transcends SIT by seeing the key role of the shared other-interest, the ethic, in tempering the self-interest, which is essential in all manner of economic choice, especially choices on the way to Enrichment.
The quickest way to gain an understanding of what is in McCloskey (2021) is to simply read the Part and Chapter titles: McCloskey tells the overall story with same. So, here we go.
Part I: The Proposal. Chapters point to how humanomics and liberty promise better economic science; Adam Smith practiced humanomics, and so should we; economic history illustrates the problems with nonhumanomics; an economic science needs the humanities; it’s merely a matter of common sense and intellectual free trade; after all, sweet talk rules a free economy; therefore we should walk on both feet, like Ludwig Lachmann; and, that is, economics needs theories of human minds beyond behaviorism.
Main MetaEcon reaction to The Proposal: Well, Adam Smith was a MetaEcon, so, no new news here. Like a MetaEcon, Adam Smith made the claim it was all about striking a balance in the joint Wealth & Sentiments of a Nation: The Sentiments (ethics) had to temper the pursuit of Wealth in order to achieve True Wealth for everyone, not just a few. And, MetaEcon, well, we read across all of the sciences and humanities, and work to integrate same: DIT is an integration. Said integration leads to DIT pointing to the essential need to walk on both feet, as in self talk to temper ownself & sweet talk with the other helping, person & community, incentives & ethics, Market & Community: Government. DIT goes well beyond behaviorism, seeing the reflective mind working to balance the ego & empathy, the sub-selves within each brain over which the mind must take self-command, with DIT built as it were on a foundation of STEM & Humanities, science & ethics.
Part II: The Killer App. Chapters point to the killer app of humanomics is the evidence that the great enrichment came from ethics and rhetoric; the dignity of liberalism did it; ideas, not incentives, underlie it; even as to time and location; and, the word’s the thing.
Main MetaEcon reaction to The Killer App: Humanomics is clearly a Killer App, seeing the key role of the Humanities in making sense of people as Humans not just Econs. People strike a balance in the self & other(shared)-interest, not just focusing on self-interest, at least the people that survive the evolutionary process that has gone one for thousands of years. Self-interest only destroys. Self-interest tempered by altruism (an ethic of a bit of self-sacrifice) wins, as DIT demonstrates. Self-interest only as represented in the Econs destroys the own-self and everything around. And, yes, the freedom and liberty of ordinary people to pursue Ideas D that work for both self & other, while building Institutions N and the resulting Innovism V that brings Great Enrichment: The MetaEcon get it. The Killer App sees the key role of the Humanities, as in Science & Humanities, Science & Ethics: Makes common sense, which a MetaEcon has, and DIT represents it.
Part III: The Doubts. Chapters point to how reviewers of McCloskey's contentions, now represented in 2000+ pages in 6-books, about the role of the ethic and rhetoric in giving content to the Bourgeois Deal that led to the Great Enrichment, analytic philosophers about the killer app are not persuasive; nor by sociologists or political philosophers; nor even by economic historians.
Main MetaEcon reaction to The Doubts: Read McCloskey's response, and, yes, McCloskey gets it mainly correct, winning the rhetorical debate, ethics matter hugely in the economic system. Humanities are essential to making sense of a Humanomics economic science that really is a science and not an ideology. Yet, McCloskey needs DIT to tighten the story even more. DIT brings an analytical system into play in the search for empirical content coming out of a joint STEM & Humanities look at Bettering Humanomics, making it very much easier to counter the doubts.
A formal Review will eventually be published in some Journal: Stay tuned. Also, for The Details, a 20+ page paper, sorry, but the book is detailed, click here.
References
Lynne, Gary D. (in press). Review of "McCloskey, Deidre Nansen and Art Carden. Leave Me Alone and I’ll Make You Rich: How the Bourgeois Deal Enriched the World. Chicago: The University of Chicago Press, 2020." Journal of Behavioral and Experimental Economics
McCloskey, Deidre Nansen. (2022). Beyond Positivism, Behavioralism, and Neoinstitutionalism in Economics. Chicago: The University of Chicago Press.