Cargo-Cult Economics to Metaeconomics

Toward a Humanomics with a Theory

About to be published: Lynne, Gary D. 2025. Cargo-Cult Economics to Metaeconomics: Toward H Humanomics with a Theory. Review of Behavioral Economics

The focus here is on a review of the trilogy by McCloskey (2006, 2010, 2016) with the essence of that trilogy reflected in McCloskey and Carden (2020). Also see the Reviews in Khachaturyan and Lynne (2010), Lynne (2024). Further elaboration of main themes is presented in McCloskey (2019, 2021, 2020). Lynne (2025) is an overall Review of the 2980 pages in the 7 books, organized and given even more credence by the use of Dual Interest Theory (DIT) in Metaeconomics.

What is Cargo-Cult Science?

To frame the Review, the notion of a Cargo-Cult Science (which now describes mainstream economics) comes from an actual case. From Lynne (2025): "The notion of cargo-cult comes from the story weaved in McCloskey (2021) of the highlanders of New Guinea after World War II, who wanted to keep the flow of enriching cargo that had been experienced during the war.  The highlanders set up coconut-shell lamps along runway-like clearings hoping for the big war planes to come back.  The planes did not come back.  It was in effect a cargo-cult, a system without reality.  McCloskey (2021, p. xi) points out that cargo-cult science is  “… the label the physicist Richard Feynman assigned to projects having the external look of science but that are actually make-believe.” McCloskey (2021, p. xi) claims economics - SIT in Microeconomics - is a cargo-cult science, pointing to shortcomings in both empirical evidence and high-level theorizing.  SIT in Microeconomics  is a cargo-cult science about a make-believe Econ.  Lynne (2020) makes the same argument: SIT needs to be transcended with a Humanomics built on a foundation of empirical science & humanities (human science), like DIT in Metaeconomics which is about a real Human." SIT is about a make-believe Econ. DIT is about a real Human.

Focus is on Explaining the Great Enrichment

The review points to the reason for the Great Enrichment, as McCloskey refers to it, as represented in GDP/capita/day going from $3 in 1780 to $36 Spaceship Earth wide at the current (2023) time, and to like $224/capita/day in the US. And, what made it possible? In a word: Innovism which leads to betterment, a better life with $224 rather than $3. It is not Capitalism that made possible the Great Enrichment, and the betterment, but rather it was Innovism. And, what is Innovism? Well, it is a word coined by McCloskey to make clear it was about a new Ethic that worked to give context to, and temper, the Incentive put in place by Capitalism. The problem is: Capitalism fails to make for Great Enrichment unless the Incentive is tempered by the Ethic, as in Incentive & Ethic. Capitalism tends to not only ignore the Ethic but is often even opposed to Ethical reflection. As Adam Smith fully understood in the 1700s, it was about Incentive & Ethic, Wealth & Sentiment --- the Moral Sentiment (the Ethic) had to temper the Incentive based pursuit of the Wealth of the Nation.

Using DIT (Dual Interest Theory) in Metaeconomics, Innovism is about striking good balance in the jointly experienced self & other-interest recognizing the self-interest is ego-based and the other (shared with the other)-interest is empathy-based. Ego & empathy arise jointly in the Human brain, the two tendencies jointly arising out of biological & cultural evolution. So, Innovism is about striking balance in the joint ego & empathy, joint Incentive & Ethic, joint Wealth & Sentiments. The Great Enrichment is about striking good balance in the Profane & Sacred (see Figure 1 in Lynne 2025, and, at the bottom of the Blog), said balance essential to Betterment. Also note that Figure 1 handles the money valued goods. Figure 2 allows for non-money valued goods to also play in the Great Enrichment arising on the Betterment path 0Z.

Dual Interest Theory (DIT) in Metaeconomics Sees Betterment is about Joint Private & Public Good

McCloskey makes clear that the Ethic that made possible the Great Enrichment was all about liberty and freedom, dignity and equality for an ordinary person to tinker --- to act on Incentive --- make a better widget and otherwise innovate to make life better for self & other. Whether it was better --- the Betterment of the innovation --- would be tested in the Market (money-valued) of self-interest.

DIT adds the insight the Betterment must also stand the test of the Community (often non-money valued), in the community of shared other-interest. DIT clarifies betterment is tested in the joint payoff in the self & other-interest, measured in both money & non-money valued goods. DIT clarifies betterment from the Innovism is tested in striking good balance in the joint private & public good, the Profane & Sacred. Said balance also means good balance in Market & Government, each essential to the other. Said Government will reflect the widely shared (other)-interest in the Community.

Great Enrichment is NOT from Tax Cuts for the Wealthy, Colonialism, and Cruel Libertarianism

The Great Enrichment as in a GDP/capita/day of $224 did not arise out of any of the specific reasons suggested by SIT, like massive tax cuts for the wealthy that serve mainly to concentrate wealth and the power it buys. It also did not come from colonialism, as in the US taking over Canada or Russia taking over Ukraine. And, it certainly did not arise from Extreme Libertarianism, as in the "I've got mine. Let's be cruel." framing which lacks in empathy-with the other. It is inherently Unethical, and, as a result, runs counter to achieving a high and increasing GDP.

McCloskey makes much of the fact that the "marginals" used in SIT explanations of what drove the $3 ---> $224 as represented in the marginal changes of such things as trade, imperialism, improved transportation, finding and using carbon-based fuels, property rights, capital accumulation, and even science --- well, none of same were the main reasons. The main reason was that the Ethic changed as regards the role of ordinary people.

It was no longer just about Prudence-Incentive as in the $3/capita/day period in all history prior to 1780, the self-interest only frame of reference. It was also about the Ethic writ large, widely shared --- as represented in the Other Virtues of Temperance, Courage, Justice, Hope, Faith and Love. DIT brings all such things together in a Figure 1 styled representation (see bottom of this Blog) with Prudence (Incentive) related self-interest on path 0G Tempered by the empathy-based (Love) other-interest which integrates across the other virtues of Courage, Justice, Hope and Faith as represented on path 0M. The shared other-interest on path 0M --- holding the Ethic --- work to temper the arrogance of self-interest only Incentive on path 0G, resulting in the Betterment on path 0Z.

Empirical Credence Gained by DIT in Metaeconomics from the McCloskey Research into the Humanities

McCloskey makes clear that the result of looking to the economic history especially since about 1780 points to Innovism and the key role of the Ethic. The point came from serious and systematic inquiry using both the sciences and humanities (human science). That is, said inquiry is empirical in character, using the scientific method to find and give fact-content to the claims about Innovism and the Ethic. The empirical findings about the role of the Ethic involved examining the content of the talk, the content of the conversation among people as represented in everything from scripts of plays, through newspapers and books, to include all manner of conversation. It looked into the talk, talk, talk --- among people in everything from the local church, in clubs, and in political parties, or perhaps the sports groups, just day-to-day talk. Finding the key role for the Ethic in Innovism, and in economic choice in general, makes for building a truly scientific economics, like is DIT in Metaeconomics.

DIT already rests on a solid, empirical foundation coming out of data collection and Null Hypotheses testing about no influence of the shared other-interest holding the Ethic. That Null has been rejected over and over in every test going back to the mid-1990s (for an overview see Lynne 2020). The testing has drawn on techniques in the sciences of psychology, sociology, social psychology, economic psychology and sociology. McCloskey's research into the empirical content of the arenas framed by the humanities finds the same thing: The Ethic (represented in the shared other-interest of DIT) matters in economic choice.

So, the connection goes both directions: McCloskey claims support DIT, and DIT supports the McCloskey claims about Innovism. The Ethic is key.

Innovism Needs Optimal Inequality

Now, while DIT and McCloskey claims about the key role of the Ethic complement and support each other, the McCloskey claim that extreme inequality does not matter is not supported by DIT. The Ethic also needs to include Optimal Inequality, as Extreme Inequality works counter to Innovism. The resentment of the middle-class as a result of the 1970-2008 Neoliberal Order which concentrated wealth and the power at the top in the US is a case in point. The result was the US political economic chaos starting with the 2016 Election, and now again with the 2024 Election. Such voter outcomes are empirical evidence of the DIT claim that Extreme Inequality takes away from Innovism. The resentment always leads to economic populism which then tends to lead to an authoritarian arriving on the scene to fix it all. Innovism suffers.

See Williams (2024) for how the Plague of Extreme Inequality brings all manner of problems in economy, political economy, and society, as well understood by Adam Smith. See Chapter 5 in Williams 2024 on Adam Smith's concern about Extreme Inequality, which when tempered with the Sentiments leads to something more akin to Optimal Inequality which is essential to the true Wealth of a Nation. McCloskey gets this part of the story on Innovism wrong, while the rest of the story is well worth considering.

More Detail on the Way

To be continued... a link to the Lynne (2025) Review will be placed here as soon as it is published in the Review of Behavioral Economics. Figures 1 and 2 from Lynne (2025) are represented here at the end the Blog.

References

Khachaturyan, Marianna and Gary D. Lynne.  2010. "Review of McCloskey, D. N. The Bourgeois Virtues:  Ethics for an Age of Commerce. Chicago, IL: The University of Chicago Press, 2006, 616 pp."  Journal of Socioeconomics (now Journal of Behavioral and Experimental Economics)  39:610-612.

Lynne, Gary D. 2024. “Review of McCloskey, Deirdre Nansen and Art Carden. (2020). Leave Me Alone and I’ll Make You Rich: How the Bourgeois Deal Enriched the World. Chicago: The University of Chicago Press.”  Journal of Behavioral and Experimental Economics

McCloskey, Deirdre N. 2006. The Bourgeois Virtues: Ethics for An Age of Commerce. Chicago: The University of Chicago Press.

McCloskey, Deidre Nansen. 2010. Bourgeois Dignity:  Why Economics Can't Explain the Modern World. Chicago: The University of Chicago Press.

McCloskey, Deidre Nansen. 2016. Bourgeois Equality:   How Ideas, Not Capital or Institutions, Enriched the World. Chicago: The University of Chicago Press.

McCloskey, Diedre Nansen. 2019. Why Liberalism Works: How True Liberal Values Produce a Freer, More Equal, Prosperous World for All. New York: Yale University Press.

McCloskey, Deidre Nansen. 2021. Bettering Humanomics:  A New, and Old, Approach to Economic Science. Chicago: The University of Chicago Press.

McCloskey, Deidre Nansen. 2022. Beyond Positivism, Behaviorism, and Neoinstitutionalism in Economics. Chicago: The University of Chicago Press.

McCloskey, Deidre Nansen and Art Carden. 2020. Leave Me Alone and I'll Make You Rich:  How the Bourgeois Deal Enriched the World. Chicago: The University of Chicago Press.

Williams, David Lay. 2024. The Greatest of All Plagues:  How Economic Inequality Shaped Political Thought from Plato to Marx. Princeton, NJ: Princeton University Press.