McCloskey 1983 The Rhetoric of Economics

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
T h e Rh etoric of Economics
By DONALD N. MCCLOSKEY
T h e University of Iowa
T h e length of th e acknowledgments h ere testifies to an unexplored
feature of th e rh etoric of economics, th e role of th e audience: like
oratory, sch olarsh ip depends for its virtues on th e virtues of its
audience. I h ave been fortunate in mine. I must apologize for my
amateurish understanding of wh at is h appening in ph ilosoph y,
math ematics, literary criticism, rh etorical studies, and oth er places
beyond my competence, and ask th at practitioners in th ese fields
assist in my furth er education. For th eir early attempts I th ank
Evan Fales, Paul Hernadi, Joh n Lyne, Mich ael McGee, Allan Megill,
Joh n Nelson, and Jay Semel of th e Colloquium on Applied Rh etoric
at T h e University of Iowa; Wayne Booth , Ira Katznelson, and oth ers
at th e University of Ch icago in th e program in Politics, Rh etoric
and Law, before wh ich th e earliest version was delivered; Robert
Boynton, Bernard Coh n, Joh n Comaroff; Otis Dudley Duncan, James
0. Freedman, Clifford Geertz, William Kruskal, Donald Levine,
Laura McCloskey, Rich ard Rorty, Renato Rosaldo; and th e Humani-
ties Society at th e University of Iowa. T h at th e economists on wh om
I h ave inflicted th e argument h ave reacted with such intelligent
skepticism and generous encouragement suggests, as th e paper does,
th at we are better sch olars th an our meth odology would allow. I
th ank my colleagues in economics at Iowa, especially th e Sanctuary
Seminar in Economic Argument; Seminars at th e World Bank and
th e National Science Foundation; my colleagues at th e Institute of
Advanced Studies and th e Faculty of Economics at th e Australian
National University; seminars at th e universities of Adelaide, Auck-
land, Melbourne, New South Wales, T asmania and Western Austra-
lia; at Monash , and Iowa State universities; Victoria University of
Wellington; and an assemblage of economists elsewh ere: William
Breit, Ronald Coase, Arth ur Diamond, Stanley Engerman, J. M. Fin-
ger, Milton Friedman, Allan Gibbard, Robert Goodin, Gary Hawke,
Robert Higgs, Albert Hirsch man, Eric Jones, Arjo Klamer, Harvey
Leibenstein, David Levy, Peter Lindert, Neil de March i, Mich ael
McPh erson, Amartya Sen, Robert Solow, Larry Westph al, Gordon
Winston, and Gavin Wrigh t. T h omas Mayer's encouragement at
an early stage and h is detailed comments as referee for th is Journal
at a later stage were exceptionally h eartening and useful.
481
482 Journal
of
Economic
Literature,
Vol. XXI
(June 1983)
ECONOMIST S DO NOT FOLLOW th e laws
of enquiry th eir meth odologies lay
down. A good th ing, too. If th ey did th ey
would stand silent on h uman capital, th e
law of demand, random walks down Wall
Street, th e elasticity of demand for gaso-
line, and most oth er matters about wh ich
th ey commonly speak. In view of th e volu-
bility of economists th e many official
meth odologies are apparently not th e
grounds for th eir scientific conviction.
Economists in fact argue on wider
grounds, and sh ould. T h eir genuine,
workaday rh etoric, th e way th ey argue in-
side th eir h eads or th eir seminar rooms,
diverges from th e official rh etoric. Econo-
mists sh ould become more self-conscious
about th eir rh etoric, because th ey will
th en better know wh y th ey agree or dis-
agree, and will find it less easy to dismiss
contrary arguments on merely meth odo-
logical grounds. Ph ilosoph y as a set of nar-
rowing rules of evidence sh ould be set
aside in scientific argument, as even many
ph ilosoph ers h ave been saying now for
fifty years.
Economics will not ch ange much in sub-
stance, of course, wh en economists recog-
nize th at th e economic emperor h as posi-
tively no cloth es. He is th e same fellow
wh eth er ph ilosoph ically naked or cloth ed,
in reasonably good h ealth aside from h is
sartorial delusion. But th e temper of argu-
ment among economists would improve
if th ey recognized on wh at grounds th ey
were arguing. T h ey claim to be arguing
on grounds of certain limited matters of
statistical inference, on grounds of posi-
tive economics, operationalism, beh avior-
ism, and oth er positivistic enth usiasms of
th e 1930s and 1940s. T h ey believe th at
th ese are th e only grounds for science. But
in th eir actual scientific work th ey argue
about th e aptness of economic metaph ors,
th e relevance of h istorical precedents,
th e persuasiveness of introspections, th e
power of auth ority, th e ch arm of symme-
try, th e claims of morality. Crude positiv-
ism labels such issues "meaningless" or
"nonscientific" or "just matters of opin-
ion." Yet even positivists actually beh ave
as th ough th e matters are discussable. In
fact, most discussion in most sciences, and
especially in economics, arises from th em.
Noth ing is gained from clinging to th e Sci-
entific Meth od, or to any meth odology ex-
cept h onesty, clarity, and tolerance. Noth -
ing is gained because th e meth odology
does not describe th e sciences it was once
th ough t to describe, such as ph ysics or
math ematics; and because ph ysics and
math ematics are not good models for eco-
nomics anyway; and because th e meth od-
ology is now seen by many ph ilosoph ers
th emselves to be uncompelling; and be-
cause economic science would stop pro-
gressing if th e meth odology were in fact
used; and, most important, because eco-
nomics, like any field, sh ould get its stan-
dards of argument from itself, not from
th e legislation of ph ilosoph er kings. T h e
real arguments would th en be joined.
I. Rh etoric Is Disciplined Conversation
T h ese points, elaborated below, amount
to an appeal to examine th e rh etoric of
economics. By "rh etoric" is not meant a
verbal sh ell game, as in "empty rh etoric"
or "mere rh etoric" (alth ough form is not
trivial, eith er: disdain for th e form of
words is evidence of a mind closed to th e
varieties of argument). In Modern Dogma
and th e Rh etoric of Assent Wayne Booth
gives many useful definitions. Rh etoric is
"th e art of probing wh at men believe th ey
ough t to believe, rath er th an proving
wh at is true according to abstract meth -
ods"; it is "th e art of discovering good rea-
sons, finding wh at really warrants assent,
because any reasonable person ough t to
be persuaded"; it is "careful weigh ing of
more-or-less good reasons to arrive at
more-or-less probable or plausible conclu-
sions-none too secure but better th an
would be arrived at by ch ance or unth ink-
McCloskey: T h e Rh etoric of Economics 483
ing impulse"; it is th e "art of discovering
warrantable beliefs and improving th ose
beliefs in sh ared discourse"; its purpose
must not be "to talk someone else into a
preconceived view; rath er, it must be to
engage in mutual inquiry" (Booth , 1974,
pp. xiii, xiv, 59, 137). It is wh at economists,
like oth er dealers in ideas, do anyway: as
Booth says elsewh ere, "We believe in mu-
tual persuasion as a way of life; we live
from conference to conference" (Booth ,
1967, p. 13). Rh etoric is exploring th ough t
by conversation.
T h e word "rh etoric" is doubtless an ob-
stacle to understanding th e point, so de-
based h as it become in common parlance.
If "pragmatism" and "anarch ism" h ad not
already suffered as much , unable to keep
clear of irrelevant associations with th e
bottom line or th e bomb, th e title migh t
better h ave been "Pragmatism's Concep-
tion of T ruth in Economics" or "Outline
of an Anarch istic T h eory of Knowledge
in Economics" (William James, 1907; Paul
Feyerabend, 1975). But th e enemies of so-
ph isticated pragmatism and gentle anar-
ch ism, as of h onest rh etoric, h ave used th e
weapons at h and. T h e results discourage
onlookers from satisfying th e curiosity
th ey migh t h ave h ad about alternatives
to coercion in ph ilosoph y, politics, or
meth od. A title such as "How Economists
Explain" (Mark Blaug, 1980; but see be-
low) or "Wh y Meth odology Is a Bad"
would perh aps h ave been meeker and
more persuasive.1 Still, "rh etoric" like th e
oth ers is a fine and ancient word, wh ose
proper use ough t to be more widely
known among economists and calculators.
T h e rh etoric h ere is th at of Aristotle,
Cicero, and Quintilian among th e an-
cients, reincarnated in th e Renaissance,
crucified by th e Cartesian dogma th at only
th e indubitable is true; wh ich in th e th ird
century after Descartes rose from th e
dead. T h e faith built on th ese miracles is
known in literary studies as th e New Rh et-
oric, new in th e 1930s and 1940s from
th e h ands of I. A. Rich ards in Britain and
Kenneth Burke in America (Rich ards,
1936; Burke, 1950). In ph ilosoph y Joh n
Dewey and Ludwig Wittgenstein h ad al-
ready begun to criticize Descartes' pro-
gram of erecting belief on a foundation
of skepticism. More recently Karl Popper,
T h omas Kuh n, and Imre Lakatos among
oth ers h ave undermined th e positivist
supposition th at scientific progress does in
fact follow Descartes' doubting rules of
meth od. T h e literary, epistemological,
and meth odological strands h ave not yet
wound into one cord, but th ey belong to-
geth er. On th e eve of th e Cartesian revo-
lution th e French ph ilosoph er and educa-
tional reformer, Peter Ramus
(fi.
1550),
brough t to completion a medieval ten-
dency to relegate rh etoric to mere elo-
quence, leaving logic in ch arge of reason.
In th e textbooks th at Descartes h imself
read as a boy probable argument was
made th us for th e first time wh olly subser-
vient to indubitable argument. Hostile to
classical rh etoric, such a reorganization of
th e liberal arts was well suited for th e
Cartesian program extending over th e
next th ree centuries to put knowledge on
foundations built by ph ilosoph y and math -
ematics. T h e program failed, and in th e
meantime probable argument languish ed.
In Rich ard Rorty's words, following
Dewey, th e search for th e foundations of
knowledge by Descartes, Locke, Hume,
Kant, Russell, and Carnap was "th e tri-
umph of th e quest for certainty over th e
quest for wisdom" (Rorty, 1979, p. 61; cf.
Joh n Dewey, 1929, pp. 33, 227). T o rein-
state rh etoric properly understood is to
reinstate wider and wiser reasoning.
T h e reaction to th e narrowing of argu-
ment by th e Cartesian program is by now
broad. Its leading figures range from pro-
fessional ph ilosoph ers (Steph en T oulmin,
IAfter recognizing th e intent, Colin Forster of
Australian National University suggested th e title
"T h e Last Paper on Meth odology." But ambition
must h ave limits.
484 Journal of Economic Literature, Vol. XXI (June 1983)
Paul Feyerabend, Rich ard Rorty) to a
miscellany of practitioners-turned-ph ilos-
oph ers in ch emistry (Mich ael Polanyi), law
(Ch aim Perelman), and literary criticism
(Wayne Booth ). T h e reach of th e idea now-
adays th at argument is more th an syllo-
gism is illustrated well by th e lucid treat-
ment of it in wh at would seem an unlikely
place, by Glenn Webster, Ada Jacox, and
Beverly Baldwin in "Nursing T h eory and
th e Gh ost of th e Received View" (1981,
pp. 25-35). T h e reach , h owever, h as not
extended to economics. Austrian, institu-
tionalist, and Marxist economists, to be
sure, h ave for a century been attacking
certain parts of positivism as th e basis for
economic knowledge. But th ey h ave
seized on oth er parts with redoubled fer-
vor, and h ave so expressed th eir remain-
ing doubts as to make th em unintelligible
to anyone but th emselves. In th eir own
way th ey h ave been as narrowing as th or-
ough going positivists-th e rejection of
econometrics, for instance, would be rea-
sonable only if its more naive claims were
taken seriously. For th e rest, economists
h ave let ph ilosoph ical scribblers of a few
years back supply th eir official th inking
about wh at a good argument is.
II. T h e
Official
Meth odology of
Economics Is Modernist
Economists h ave two attitudes towards
discourse, th e official and unofficial, th e
explicit and th e implicit. T h e official rh eto-
ric, to wh ich th ey subscribe in th e abstract
and in meth odological ruminations, de-
clares th em to be scientists in th e modern
mode. T h e credo of Scientific Meth od,
known mockingly among its many critics
as th e Received View, is an amalgam of
logical positivism, beh aviorism, operation-
alism, and th e h ypoth etico-deductive
model of science. Its leading idea is th at
all sure knowledge is modeled on th e early
20th century's understanding of certain
pieces of 19th century ph ysics. T o emph a-
size its pervasiveness in modern th inking
well beyond sch olarsh ip it is best labeled
simply "modernism," th at is, th e notion
(as Booth puts it) th at we know only wh at
we cannot doubt and cannot really know
wh at we can merely assent to.
Among th e precepts of modernism are:
(1) Prediction (and control) is th e- goal
of science.
(2) Only th e observable implications (or
predictions) of a th eory matter to its
truth .
(3) Observability entails objective, re-
producible experiments.
(4) If (and only if) an experimental impli-
cation of a th eory proves false is th e
th eory proved false.
(5) Objectivity is to be treasured; subjec-
tive "observation" (introspection) is
not scientific knowledge.
(6) Kelvin's Dictum: "Wh en you cannot
express it in numbers, your knowl-
edge is of a meagre and unsatisfac-
tory kind."2
(7) Introspection, metaph ysical belief,
aesth etics, and th e like may well fig-
ure in th e discovery of an h ypoth esis
but cannot figure in its justification.
(8) It is th e business of meth odology to
demarcate scientific reasoning from
non-scientific, positive from norma-
tive.
(9) A scientific explanation of an event
brings th e event under a covering
law.
(10) Scientists, for instance economic sci-
entists, h ave noth ing to say as scien-
tists about values, wh eth er of moral-
ity or art.
2From Sir William T h omson (Lord Kelvin), Popu-
larAddresses, edition of 1888-1889, quoted in Kuh n,
1977, p. 178n. An approximation to th is version is
inscribed on th e front of th e Social Science Research
Building at th e University of Ch icago. Frank Knigh t,
th e famous University of Iowa economist, is said to
h ave remarked on it one day: "Yes, and wh en you
can express it in numbers your knowledge is of a
meagre and unsatisfactory kind."
(11) Hume's Fork: "Wh en we run over li-
braries, persuaded of th ese princi-
ples, wh at h avoc must we make? If
we take in our h and any volume-
of divinity or sch ool metaph ysics, for
instance-let us ask, Does it contain
any abstract reasoning concerning
quantity or number? No. Does it con-
tain any experimental reasoning con-
cerning matter offact and existence?
No. Commit it th en to th e flames, for
it can contain noth ing but soph istry
and illusion" (italics h is [1748], 1955,
p. 173).
Few in ph ilosoph y now believe as many
as h alf of th ese propositions. A substantial,
respectable, and growing minority be-
lieves none of th em. But a large majority
in economics believes th em all.
For instance, th e leading meth odolo-
gists in economics do. It is odd but true
th at modernism in economic meth odol-
ogy is associated with th e Ch icago Sch ool.3
T h e main texts of economic modernism,
such as Milton Friedman's "T h e Meth od-
ology of Positive Economics" (1953) or
Gary Becker and George Stigler's "De
Gustibus Non Est Disputandum" (1977),
bear a Ch icago postmark; and th e more
extreme interpretations of th e texts flour-
ish among economists bearing a Ch icago
degree. Wh at is odd about it is th at a group
so annoying to oth er economists in most
of its activities sh ould h ave th eir assent
in th e matter of official meth od: Oddly,
a watered down version of Friedman's es-
say is part of th e intellectual equipment
of most economists, and its arguments
come readily to th eir lips.
Premeditated writings on meth od, not
excluding Ch icago's own, are more careful
th an th e remark in th e course of oth er
business th at reveals modernism in its
rawer form. In precept one can be vague
enough to earn th e assent of everyone;
in practice one must make enemies. Kal-
man Coh en and Rich ard Cyert, to take
one among many examples of first-ch apter
meth odology in economics texts, present
in th eir book an outline of modernism,
wh ich th ey assert is th e meth od "used in
all scientific analyses" (1975, p. 17). T h e
"meth od" th ey th en outline, with a bibli-
ograph y h eavily weigh ted towards logical
positivism and its allies, reduces to an ap-
peal to be h onest and th ough tful. Only
wh en such a ph rase as "at least in princi-
ple testable by experiment and observa-
tion" (p. 23) is given content by practice
do we know wh at is at stake. T o be sure,
vague precepts are not with out th eir uses.
Wh en Friedman wrote, for instance, th e
practice of economics was split into th eory
with out fact and fact with out th eory. His
modernist incantations, supported by
ch oruses of ph ilosoph ers, were at th e time
probably good for th e souls of all con-
cerned.
Friedman's essay was even th en more
post-modernist th an one migh t suppose
from sligh t acquaintance with its ideas. He
did, for example, mention with approval
th e aesth etic criteria of simplicity and
fruitfulness th at an economist migh t use
to select among a multiplicity of th eories
with th e same predictions, th ough in th e
next sentence h e attempted to reduce
th em to objective matters of prediction
(p. 10). He accepted th at questionnaires,
forbidden to th e modernist in economics,
are useful for suggesting h ypoth eses,
th ough in th e next sentence h e asserted
th at th ey are "almost entirely useless as
a means of testing th e validity of eco-
3Noth ing in th is essay is meant to give comfort
to th e enemies of Ch icago. Having long been a vic-
tim of th eir anti-Ch icago dogmatism, I am not im-
pressed by th e assertion th at Ch icago economics is
peculiarly dogmatic. Ch icago is merely a particularly
clear and candid version of a dogmatic impulse com-
mon to all economics, expressing itself in meth odo-
logical imperatives. Economists appear to believe
th at economics is too important to be left to th e
open-minded, and especially must never be left to
anyone lacking faith in some approved formula for
ach ieving knowledge. Ch icago is no worse th an th e
rest. Immo, civis Ch icagonus sum, subspecies T P (cf
Melvin Reder, 1982).
nomic h ypoth eses" (p. 31n). He emph a-
sized th e role of th e rh etorical community
to wh ich th e scientist speaks in producing
conviction-wh eth er made up of sociolo-
gists, say, or of economists-th ough in th e
next sentence h e returned to an "objec-
tive" th eory of testing. Like Karl Popper,
Friedman appeared to be struggling to es-
cape th e grip of positivism and its intellec-
tual traditions, th ough with only sporadic
success. Perh aps th at th e locus classicus
of economic modernism contains so much
th at is anti-modernist indicates th at mod-
ernism cannot survive intelligent discus-
sion even by its best advocates.
T h e unpremeditated remark in th e h eat
of economic argument, h owever, usually
h as a crudely modernist content, often in
Friedman's very words. An article by
Rich ard Roll and Steph en Ross on finance,
for instance, asserts th at "th e th eory
sh ould be tested by its conclusions, not
by its assumptions" and th at "similarly,
one sh ould not reject th e conclusions de-
rived from firm profit maximization on th e
basis of sample surveys in wh ich managers
claim th at th ey trade off profit for social
good" (1980, p. 1093 and footnote). T h e
same can be found elsewh ere, in nearly
identical terms, all dating back to Fried-
man's essay: William Sh arpe (1970, p. 77),
for instance, writing on th e same matter
as Roll and Ross, takes it as a rule of polite
scientific beh avior th at "th e realism of th e
assumptions matters little. If th e implica-
tions are reasonably consistent with ob-
served ph enomena, th e th eory can be said
to 'explain' reality" (1970, p. 77). Repeated
often, and exh ibiting modernism as well
in th eir devotion to objective evidence,
quantifiable tests, positive analysis, and
oth er articles of th e faith , such ph rases
h ave th e ring of incantation. Modernism
is influential in economics, but not be-
cause its premises h ave been examined
carefully and found good. It is a revealed,
not a reasoned, religion.
III. Modernism Is a Poor Meth od
Modernism Is Obsolete in Ph ilosoph y
T h ere are a great many th ings wrong
with modernism as a meth odology for sci-
ence or for economic science.4 Even wh en
ph ilosoph ically 'inclined, economists ap-
pear to read about as much in professional
ph ilosoph y as ph ilosoph ers do in profes-
sional economics. It is unsurprising, th en,
th at th e news of th e decline of modernism
h as not reach ed all ears. From a ph iloso-
ph er's point of view th e worst flaw in th e
h ostility to th e "metaph ysics" th at mod-
ernism sees everywh ere is th at th e h ostil-
ity is itself metaph ysical. If metaph ysics
is to be cast into th e flames, th en th e meth -
odological declarations of th e modernist
family from Descartes th rough Hume and
Comte to Russell and Hempel and Popper
will be th e first to go. For th is and oth er
good reasons ph ilosoph ers agree th at strict
logical positivism is dead, raising th e ques-
tion wh eth er economists are wise to carry
on with th eir necroph ilia.5
In th e economic case th e metaph ysical
position akin to logical positivism is not
well argued, probably because its roots lie
more in th e ph ilosoph izing of ph ysicists
from Mach to Bridgeman th an in th e par-
allel th inking of professional ph ilosoph ers.
It is at least obscure wh at migh t be th e
appeal of "operationally meaningful state-
ments" (Paul Samuelson, 1947, p. 3 and
4 T h e overdiscussed question of wh eth er th ere can
be a value-free social science will not be much dis-
cussed h ere, but it must be accounted one of th e
ch ief failings of modernism th at it places moral argu-
ment outside th e pale of rational discussion. In th is
connection it sh ould be more widely known th at
Morris Sch lick, th e founder of th e Vienna Circle of
logical positivism and a vigorous lecturer on th e
th eme th at moral knowledge is no knowledge at all,
was murdered in 1936 by one of h is students.
6See Joh n Passmore, 1967. Karl Popper quotes
Passmore with approval for th e motto of a ch apter
of h is own entitled "Wh o Killed Logical Positivism?"
(Popper, 1976, pp. 87-90), in wh ich h e confesses to
th e murder.
th rough out) or "valid and meaningful pre-
dictions about ph enomena not yet ob-
served" (Friedman, p. 7) as standards
against wh ich all but math ematical asser-
tions are to be judged. Samuelson, Fried-
man, or th eir followers do not present rea-
sons for adopting such metaph ysical
positions, except for confident assertions,
at th e time correct, th at th ey were th e
received views of ph ilosoph ers on th e
meth od of science. T h e trust in ph ilosoph y
was a tactical error, for th e ph ilosoph y it-
self h as since ch anged. Some ph ilosoph ers
now doubt th e entire enterprise of epis-
temology and its claim to provide founda-
tions for knowledge (Rich ard Rorty,
1982b). A great many doubt th e prescrip-
tions of modernist meth odology.
Falsification Is Not Cogent
A prescription th at economic meth odol-
ogists h ave in common, for instance, is an
emph asis on th e crucial falsifying test, sup-
posedly th e h allmark of scientific reason-
ing. But ph ilosoph ers h ave recognized for
many decades th at falsification runs afoul
of a criticism made by th e ph ysicist and
ph ilosoph er Pierre Duh em in 1906, evi-
dent at once with out ph ilosoph ical read-
ing to an economist wh o h as tried to use
falsification for science. Suppose th at th e
h ypoth esis H ("British businessmen per-
formed very poorly relative to Americans
and Germans in th e late 19th century")
implies a testing observation 0 ("Mea-
sures of total factor productivity in iron
and steel sh ow a large difference between
British and foreign steelmaking"); it im-
plies it, th at is, not by itself, but only with
th e addition of ancillary h ypoth eses H1,
H2, and so forth th at make th e measure-
ment possible ("Marginal productivity
th eory applies to Britain 1870-1913";
"British steel h ad no h idden inputs offset-
ting poor business leadersh ips"; and so
forth ). T h en of course not-0 implies not-
H-or not-H1 or not-H2 or any number
of failures of premises irrelevant to th e
main h ypoth esis in question. T h e h ypoth e-
sis in question is insulated from crucial test
by th e ancillary h ypoth eses necessary to
bring it to a test. T h is is no mere possibility
but th e substance of most scientific dis-
agreement: "Your experiment was not
properly controlled"; "You h ave not
solved th e identification problem"; "You
h ave used an equilibrium (competitive,
single-equation) model wh en a disequi-
librium (monopolistic, 500-equation)
model is relevant." And even if th e one
h ypoth esis in question could be isolated,
th e probabilistic nature of h ypoth eses,
most especially in economics, makes cru-
cial experiments non-crucial: ch ance is th e
ever present alternative, th e Hn th at
spoils falsificationism.
Prediction Is Impossible in Economics
T h e common claim th at prediction is
th e defining feature of a real science, and
th at economics possesses th e feature, is
equally open to doubt. It is a clich e among
ph ilosoph ers and h istorians of science, for
instance, th at one of th e most successful
of all scientific th eories, th e th eory of evo-
lution, h as no predictions in th e normal
sense, and is th erefore unfalsifiable by pre-
diction. It is at least suggestive of some-
th ing odd in prediction as a criterion for
useful economics th at Darwin's th eory
was inspired by classical economics, a sys-
tem as it h appens erroneous in most of
th e predictions it made. With no apparent
awareness of th e incongruity, Friedman
quoted Alch ian's revival of th e connection
(Armen Alch ian, 1950) in th e midst of h is
most famous piece of predictionist meta-
ph ysics ("th e leaves are positioned as if
each leaf deliberately sough t to maximize
th e amount of sunligh t it receives").
In any event, predicting th e economic
future is, as Ludwig von Mises put it, "be-
yond th e power of any mortal man" (1949,
p. 867). Wh at puts it beyond h is power
is th e very economics h e uses to make th e
prediction. Wh en th e economist for a big
bank predicts lower interest rates after
Ch ristmas, and h as not before th e predic-
tion placed h is net worth in margin loans
on bonds, properly h edged and insured
against variance, h e is beh aving eith er ir-
rationally or self-deceivingly. If h e knows
th e expected value of th e future, h e for
some reason ch ooses not to take th e unlim-
ited wealth th at such Faustian knowledge
can surely bring, and is willing for some
reason instead to dissipate th e opportunity
by th e act of telling oth ers about it. If h e
does not really know, th en h e faces no
such unexploited opportunity. But th en
h e h as perh aps no business talking as
th ough h e does. Predictionism cannot be
rescued by remarking th at th e big bank
economist makes only conditional predic-
tions. Conditional predictions sell for th eir
value in a soft market: if th e sea were to
disappear, a rock would accelerate in fall-
ing from sea level to th e sea floor at about
32.17 feet per second per second. But a
serious prediction h as serious boundary
conditions. If it does it must answer again
th e American Question: If you're so smart
wh y aren't you rich ? At th e margin (be-
cause th at is wh ere economics works) and
on average (because some people are
lucky) th e industry of making economic
predictions, wh ich includes universities,
earns only normal returns.
Modernism Itself Is Impossible, and Is Not
Followed
T h e most damaging, h owever, of th ese
lesser criticisms of th e modernist meth od-
ology is th at if taken at its word it is narrow
to absurdity. Consider again th e steps to
modernist knowledge, from predictionism
th rough Kelvin's Dictum to Hume's Fork.
If economists (or ph ysicists) confined
th emselves to economic (or ph ysical)
propositions th at literally conformed to
such steps th ey would h ave noth ing to say.
Cartesian or Humean skepticism is too
corrosive a standard of belief for a real
h uman. As th e ch emist and ph ilosoph er
Mich ael Polanyi put it, th e meth odology
of modernism sets up "quixotic standards
of valid meaning wh ich , if rigorously prac-
ticed, would reduce us all to voluntary
imbecility" (1962, p. 88). Modernism
promises knowledge free from doubt,
metaph ysics, morals, and personal convic-
tion; wh at it delivers merely renames as
Scientific Meth od th e scientist's and espe-
cially th e economic scientist's metaph ys-
ics, morals, and personal convictions. It
cannot, and sh ould not, deliver wh at it
promises. Scientific knowledge is no dif-
ferent from oth er personal knowledge
(Polanyi, 1962). T rying to make it differ-
ent, instead of simply better, is th e death
of science.
In oth er words, th e literal application
of modernist meth odology cannot give a
useful economics. T h e best proofs are h is-
torical. In h is Against Meth od (1975) Paul
Feyerabend uses an interpretation of Gal-
ileo's career to attack th e claims of pre-
scriptive meth odology in ph ysics; th e
same point can be made about economics.
Had th e modernist criterion of persuasion
been adopted by Galileo's contemporar-
ies, h e argues, th e Galilean case would
h ave failed. A grant proposal to use th e
strange premise th at terrestrial optics ap-
plied also to th e celestial sph ere, to assert
th at th e tides were th e slosh ing of water
on a mobile earth , and to suppose th at
th e fuzzy views of Jupiter's alleged moons
would prove, by a wild analogy, th at th e
planets, too, went around th e sun as did
th e moons around Jupiter would not h ave
survived th e first round of peer review
in a National Science Foundation of 1632,
at any rate if th at one (unlike ours) were
wedded to modernist ideology. T h e argu-
ment applies widely to th e h istory of ph ys-
ics: observational anomalies in th e experi-
ments testing Einstein's th eories were
ignored for many years, to be revealed
as errors of measurement long after th e
th eories h ad been embraced, embraced
on grounds of "th e reason of th e matter,"
as Einstein was fond of saying (Feyera-
bend, 1975, pp. 56-57).
Historians of biology h ave uncovered
one after anoth er case of cooking th e sta-
tistical results to fit modernist precepts of
wh at counts as evidence, from Pasteur and
Mendel down to th e present. T h e mea-
surement of IQ h as been a scandal of self-
deception and bold fraud in th e name of
scientific meth od from its beginning (Ste-
ph en Jay Gould, 1981). Perh aps modern-
ism fits poorly th e complexities of biology
and psych ology: straining after evidence
of a sort typically available only in th e sim-
plest experiments in ph ysics may not suit
th eir frontiers. It suits th e frontiers of eco-
nomics poorly enough . For better or
worse th e Keynesian revolution in eco-
nomics would not h ave h appened under
th e modernist legislation recommended
for th e meth od of science. T h e Keynesian
insigh ts were not formulated as statistical
propositions until th e early 1950s, well af-
ter th e bulk of younger economists h ad
become persuaded th ey were true. By th e
early 1960s liquidity traps and accelerator
models of investment, despite failures in
th eir statistical implementations, were
taugh t to first-year students of economics
as matters of scientific routine. Modernist
meth odology would h ave stopped all th is
in 1936: wh ere was th e evidence of an
objective, statistical, controlled kind?
Nor was th e monetarist counterrevolu-
tion a success for modernist meth odology,
th ough so powerful h ad th e meth odology
become by th e 1960s in th e minds of econ-
omists and especially of monetarist econo-
mists th at most of th e explicit debate took
place in its terms. Yet in truth crude ex-
periments and big books won th e day, by
th eir very crudeness and bigness. T h e
Kennedy tax cut boosted th e Keynesians
to th eir peak of prestige; th e inflation of
th e 1970s brough t th em down again, leav-
ing th e monetarists as temporary kings of
th e castle. An important blow for mone-
tarism was Friedman and Sch wartz' big
book, A Monetary History of th e United
States, 1867-1960. It establish ed a correla-
tion, wh ich Keynesians would not deny,
between money and money income. T h e
significance of th e correlation, h owever,
depended on th e assumption th at money
caused prices and th at money was deter-
minable by th e monetary auth ority (in
1929-1933, for example) despite th e open-
ness of th e American economy to trade
in both goods and money itself. Noneth e-
less, wh at was telling in th e debate was
th e sh eer bulk of th e book-th e rich ness
and intelligence of its arguments, h ow-
ever irrelevant most of th e arguments
were to th e main point.
A modernist meth od th orough ly ap-
plied, in oth er words, would probably stop
advances in economics. Wh at empirical
anomaly in th e traditional tale inspired
th e new labor economics or th e new eco-
nomic h istory? None: th ey were merely
realizations th at th e logic of economics
h ad not exh austed its applicability at con-
ventional borders. Wh at observable impli-
cations justify th e investment of intellect
since 1950 in general equilibrium th eory?
For all th e modernist talk common among
its th eorists, none; but so wh at? Could ap-
plications of economics to legal questions
rely entirely on objective evidence? No;
but wh y would one wish to limit th e play
of understanding? And so forth . T h ere is
noth ing to be gained and a great deal to
be lost by adopting modernism in eco-
nomic meth odology.
T h e very point is economic. In order
for an economic th eory to be tested, Ron-
ald Coase points out, some economists
must care enough about it to both er. T h ey
care only wh en it is believed by some in-
vestigators-th ey and th eir allies or some
significant group of opponents. Only wh en
many believe is th ere a demand for tests.
Fortunately, "economists, or at any rate
enough of th em, do not wait to discover
wh eth er a th eory's predictions are accu-
rate before making up th eir minds"; to
wait in proper modernist style "would re-
sult in th e paralysis of scientific activity"
(Coase, 1982, p. 14) because no one would
h ave an incentive to ch oose one out of
th e infinite number of h ypoth eses for test.
Even quantitative studies, h e argues, rely
h eavily on pre-quantitative arguments
founding belief, and h e quotes with ap-
proval T . S. Kuh n's remark th at "th e road
from scientific law to scientific measure-
ment can rarely be traveled in th e reverse
direction" (Coase, p. 18, quoting Kuh n,
1977, p. 219). T h e laws come from a rh eto-
ric of tradition or introspection, and in
ph ysics as in economics "quantitative
studies . . . are explorations with th e aid
of a th eory" (Coase, p. 17), search es for
numbers with wh ich to make specific a
th eory already believed on oth er grounds
(see Edward Leamer, 1978, and th e
discussion below). Modernism is imprac-
tical.
Any Meth od Is Arrogant and Pretentious
T h e objections to modernist meth od so
far, h owever, are lesser ones. T h e greater
objection is simply th at modernism is a
meth od. It sets up laws of argument drawn
from an ideal science or th e underlying
h istory of science or th e essence of knowl-
edge. T h e claim is th at th e ph ilosoph er
of science can tell wh at makes for good,
useful, fruitful, progressive science. He
knows th is so confidently th at h e can limit
arguments th at worth y scientists make
spontaneously, casting out some as un-
scientific, or at best placing th em firmly
in th e "context of discovery." T h e ph iloso-
ph er undertakes to second-guess th e sci-
entific community. In economics th e
claim of meth odological legislation is th at
th e legislator is not merely expert in all
branch es of economic knowledge with in
sound of h is proclamations but expert in
all possible future economics, limiting th e
growth of economics now in order to
make it fit a ph ilosoph er's idea of th e ulti-
mate good.
It is h ard to take such claims seriously.
Einstein remarked th at "Wh oever under-
takes to set h imself up as a judge in th e
field of T ruth and Knowledge is sh ip-
wrecked by th e laugh ter of th e gods" (Ein-
stein, 1953, p. 38). Modernism sets up a
court of th e Red Queen ("Normative argu-
ment," sh e says, "off with h is h ead"), and
th e gods laugh merrily. Any meth odology
th at is law-making and limiting will do so.
It will do so with th e noblest intentions,
but economists are fond of pointing out
in like cases th at noble intentions can h ave
bad consequences. T h e meth odologist
fancies h imself th e judge of th e practi-
tioner. His proper business, th ough , is an
anarch istic one, resisting th e rigidity and
pretension of rules. I. A. Rich ards applied
th e point to th e th eory of metaph or: "Its
business is not to replace practice, or to
tell us h ow to do wh at we cannot do al-
ready; but to protect our natural skill from
th e interference of unnecessarily crude
views about it" (1936, p. 116).
T h e crudeness of modernist meth odol-
ogy, or of any meth odology reducible to
rigid precept, is bad; but th at it is allowed
to interfere with practice is worse. T h e
custom of meth odological papers in eco-
nomics is to scold economists for not allow-
ing it to interfere more. Mark Blaug's use-
ful book summarizing th e state of play of
economic meth odology in 1980, T h e
Meth odology of Economics: Or How Econ-
omists Explain, is a recent case in point.
It would be better subtitled "How th e
Young Karl Popper Explained," since it
repeatedly attacks extant arguments in
economics for failing to comply with th e
rules Popper laid down in Logik der For-
sch ung in 1934. Blaug's exordium is typi-
cal of th e best of th e meth odologists in
economics: "Economists h ave long been
aware of th e need to defend 'correct' prin-
ciples of reasoning in th eir subject; al-
th ough actual practice may bear little
relationsh ip to wh at is preach ed, th e
preach ing is worth considering on its own
ground" (Blaug, p. xii). Words like th ese
flow easily from a modernist's pen. But
wh y would preach ing unrelated to actual
practice be worth considering at all? Wh y
do economists h ave to defend in th e ab-
stract th eir principles of reasoning, and
before wh at tribunal? A case for h aving
a meth odology-wh eth er logical positivist
or Popperian or Austrian or Marxist-
would be expected to give answers to th e
questions of wh y, but commonly does not.
Recent ph ilosoph y of science and ordinary
good sense suggest th at it cannot. Blaug's
peroration is frankly prescriptive, taking
economic rh etoric directly from ph iloso-
ph y:
Wh at meth odology can do is to provide criteria
for th e acceptance and rejection of research
programs, setting standards th at will h elp us
to discriminate between wh eat and ch aff. T h e
ultimate question we can and indeed must pose
about any research program is th e one made
familiar by Popper: wh at events, if th ey materi-
alize, would lead us to reject th at program?
A program th at cannot meet th at question h as
fallen sh ort of th e h igh est standards th at scien-
tific knowledge can attain [1980, p. 264].
It sounds grand, but Einstein's gods are
rolling in th e aisles. Wh y sh ould a dubious
epistemological principle be any test of
practice, much less th e ultimate test? And
doesn't science take place most of th e time
well sh ort of th e ultimate?
Anyone would commend th e vision of
science th at Popper and h is followers
h ave-of science as a self-correcting ex-
ploration verging on th e dialectic oth er-
wise so foreign to th e analytic tradition
in ph ilosoph y. For an economic scientist
to adopt an obdurate refusal to consider
objections and to resist offering h ostages
to evidence, th ough as common in mod-
ernist as in nonmodernist circles, is not
merely unscientific; it is cowardly. So
much one can take from th e idea of falsifi-
cation by evidence. T h e problem comes,
and th e modernist preach ing begins, with
th e word "evidence." Sh ould it all be "ob-
jective," "experimental," "positive," "ob-
servable"? Can it be? In T h e Open Society
and Its Enemies (1945) Popper closes th e
borders of h is society to psych oanalysts
and Marxists on th e grounds th at th ey do
not conform to th e modernist notion of
evidence prevalent th ere. He would also
h ave to close it to ph ysicists from Galileo
Galilei to particle ch armers. An economist
bracero, surely, would be deported on th e
next truck from such an open intellectual
society.
Oth er Sciences Do Not Follow Modernist
Meth ods
For all its claims to th e scientific priest-
h ood, th en, economics is different from
th e man-in-th e-street's image of Science.
Economists sh ould be glad th at th eir sub-
ject fits poorly with th is image and well
with th e New Rh etoric, as do studies long
foreign to economics such as th e study of
literature or law or politics. Economics,
in oth er words, is not a Science in th e way
we came to understand th at word in h igh
sch ool.
But neith er, really, are oth er sciences.
Oth er sciences, even th e oth er math emat-
ical sciences, even th e Queen h erself, are
rh etorical. Math ematics appears to an in-
cognoscento to be th e limiting example
of objectivity, explicitness, and demon-
strability. Surely h ere is bedrock for belief.
Yet standards of math ematical demon-
stration ch ange. T h e last fifty years h ave
been a disappointment to followers of Da-
vid Hilbert and h is program to put math e-
matics on indubitable foundations. T h e
h istorian of math ematics, Morris Kline,
wrote recently th at "it is now apparent
th at th e concept of a universally accepted,
infallible body of reasoning-th e majestic
math ematics of 1800 and th e pride of
man-is a grand illusion." Or again:
T h ere is no rigorous definition of rigor. A proof
is accepted if it obtains th e endorsement of
th e leading specialists of th e time and employs
th e principles th at are fash ionable at th e mo-
ment. But no standard is universally acceptable
today [1980, pp. 6, 315].
T h e recent flap over a computerized proof
of th e four-color proposition is one exam-
ple. T h e more fundamental example is
said to be Kurt G6del's proof fifty years
ago th at some true and statable proposi-
tions in math ematics are unprovable. T h e
point is controversial. Joh n van Heijenoort
writes th at "th e bearing of G6del's results
on epistemological problems remains un-
certain. . . . [T ]h ey sh ould not be rash ly
called upon to establish th e primacy of
some act of intuition th at would dispense
with formalization" (1967, p. 357). T o be
sure. But one need not dispense with for-
malization and flee to an unexamined act
of intuition to th ink th at formalization h as
limits.
Kline's opinions are somewh at loosely
expressed, and unpopular among math e-
maticians. Apparently less so are th ose of
Ph ilip J. Davis and Reuben Hersh , wh ose
recent book T h e Math ematical Experi-
ence (1981) was described in th e American
Math ematical Month ly as "one of th e
masterpieces of our age." Davis and Hersh
speak of th e crisis of confidence in modern
math ematical ph ilosoph y, h owever, in
terms nearly identical with Kline's. In th e
work of T h e Ideal Math ematician "th e
line between complete and incomplete
proof is always somewh at fuzzy, and often
controversial" (p. 34; cf. p. 40). T h ey quote
a living Ideal Math ematician, Solomon
Feferman, wh o writes "it is also clear th at
th e search for ultimate foundations via for-
mal systems h as failed to arrive at any con-
vincing conclusion" (p. 357). With out us-
ing th e word, Davis and Hersh argue th at
wh at is required is a rh etoric of math emat-
ics:
T h e dominant style of Anglo-American ph iloso-
ph y ... tends to perpetuate identification' of
th e ph ilosoph y of math ematics with logic and
th e study of formal systems. From th is stand-
point, a problem of principal concern to th e
math ematician becomes totally invisible. T h is
is th e problem of giving a ph ilosoph ical account
... of preformal math ematics.. . , including
an examination of h ow [it] relates to and is af-
fected by formalization [1981, p. 344].
T h ey assert th at "informal math ematics
is math ematics. Formalization is only an
abstract possibility wh ich no one would
want or be able actually to carry out" (p.
349). Real proofs "are establish ed by 'con-
sensus of th e qualified"' and are "not
ch eckable . . . by any math ematician not
privy to th e gestalt, th e mode of th ough t
in th e particular field. . . . It may take
generations to detect an error" (p. 354).
T h ey conclude:
T h e actual experience of all sch ools-and th e
actual daily experience of math ematicians-
sh ows th at math ematical truth , like oth er kinds
of truth , is fallible and corrigible.... It is rea-
sonable to propose a different task for math e-
matical ph ilosoph y, not to seek indubitable
truth , but to give an account of math ematical
knowledge as it really is-fallible, corrigible,
tentative, and evolving, as is every oth er kind
of h uman knowledge [p. 406].
Not much in th is line h as been done,
th ough one astounding piece h as sh own
wh at can be: Imre Lakatos' Proofs and
Refutations: T h e Logic of Math ematical
Discovery gives an account for a th eorem
in topology of th e rh etoric of math emat-
ics.
It appears, th en, th at some deep prob-
lems facing math ematics are problems of
rh etoric, problems in "th e art of probing
wh at men believe th ey ough t to believe."
Similar points can be made about oth er
sciences, such as paleontology. T h e sud-
den proliferation of species at th e begin-
ning of th e Cambrian period, one of th e
great puzzles in evolution, was explained
by Steven Stanley in 1973 by supposing
th e sudden arrival of forms of life th at fed
on oth er forms of life, single-celled h er-
bivores, as it were, in a grassy sea. T h eir
grazing on th e dominant forms allowed
new forms to survive th e competition
from th e previously dominant ones, wh ich
in turn resulted in new grazers. Steph en
Jay Gould remarks of th e arguments of-
fered in support of th is brilliant and per-
suasive th eory th at:
. . .th ey do not correspond to th e simplistic
notions about scientific progress th at are taugh t
in most h igh sch ools and advanced by most me-
dia. Stanley does not invoke proof by new infor-
mation obtained from rigorous experiment. His
second criterion is a meth odological presump-
tion, th e th ird a ph ilosoph ical preference, th e
fourth an application of prior th eory. . . . Sci-
ence, at its best, interposes h uman judgment
and ingenuity upon all its proceedings. It is,
after all (alth ough we sometimes forget it),
practiced by h uman beings [Gould, 1977, p.
125].
One can even say th e same of ph ysics,
th at favorite of outsiders seeking a pre-
scription for real, objective, positive,
predictive science. T h e sequence Carnap-
Popper-Lakatos-Kuh n-Feyerabend repre-
sents in th e h istory and ph ilosoph y of
ph ysics a descent, accelerating recently,
from th e frigid peaks of scientific absolut-
ism to th e sweet valleys of anarch ic rh eto-
ric (see Popper, 1934, 1976; Lakatos, 1970;
Kuh n, 1970; Feyerabend, 1975, 1978). If
economics sh ould imitate oth er sciences,
imitate even th e majesty of ph ysics and
math ematics (th ere is, to be sure, consid-
erable doubt th at it sh ould), th en it sh ould
officially open itself to a wider range of
discourse.
IV. T h e
Unofficial
Rh etoric Is Honorable
But Unexamined
Econometric Rh etoric Is T oo Narrow
But unofficially it does. T h e second atti-
tude towards discourse is th at adopted in
actual scientific work in economics. It is
different from th e official, modernist rh et-
oric. Wh at is alarming about th e workaday
rh etoric is not its content but th at it is
unexamined, and th at in consequence th e
official rh etoric pops up in misch ievous
ways. Economists agree or disagree-th eir
disagreements are exaggerated-but th ey
do not know wh y. Any economist believes
more th an h is evidence of a suitably mod-
ernist and objective sort implies. A recent
poll of economists, for example, found th at
only th ree percent of th ose surveyed flatly
disagreed with th e assertion th at "tariffs
and import quotas reduce general eco-
nomic welfare." Only two percent dis-
agreed with th e assertion th at "a ceiling
on rents reduces th e quantity and quality
of h ousing available." Only eigh t percent
disagreed with th e assertion th at "th e tax-
ing and spending of government h as a sig-
nificant impact on th e income of a partly
idle economy" (J. R. Kearl, Clayne Pope,
Gordon Wh iting, and Larry Wimmer,
1979). You probably fall into th e 97, 98,
and 92 percent majorities. T h e evidence
for th e assertions, h owever, is obscure.
How do economists know th ese state-
ments are true? Wh ere did th ey acquire
such confidence? T h e usual answer is th at
"th eory tells us." But great social ques-
tions are not answered by looking at a dia-
gram on a blackboard, because it is trivi-
ally easy to draw a diagram th at yields
th e opposite answer. T h e factual experi-
ence of th e economy, certainly, h as little
to do with th eir confidence. No study h as
sh own in ways th at would satisfy a consis-
tent modernist, for example, th at h igh tar-
iffs in America during th e 19th century,
on balance, h urt Americans. Yet it is be-
lieved th at tariffs h urt th en and now.6 No
study h as sh own th at an inadvertent pol-
icy of fiscal ease brough t unemployment
down during th e War. Yet it is believed
on all sides. Economists h ave not consid-
ered th eir rh etoric.
Everywh ere in th e literature of eco-
nomics one is met with premises th at are
unargued, tricks of style masquerading as
reason ("it is evident th at"), forms of evi-
dence th at ignore th e concerns of th e au-
6Ch arles Peirce, th e founder of pragmatism, re-
lated in 1877 h ow h e h ad been "entreated not to
read a certain newspaper lest it migh t ch ange my
opinion upon free-trade" (p. 101).
dience, and oth er symptoms of a lack of
self-consciousness in rh etoric. T h e lack is
most evident in quarrels across research
paradigms. Some economists, (I am one)
believe th at peasants are rational. T h e
mass of modernist proofs, originating
largely from Ch icago, th at resistance to
th e "Green Revolution" or persistence in
scattering plots of land are rational leave
many oth er economists cold. Some econo-
mists (I am one) believe th at competition
is a robust ch aracterization of th e modern
American economy. T h e mass of mod-
ernist proofs, originating largely from Ch i-
cago, th at, for instance, advertising h as
small effects on profits leaves th e oth ers
cold. Wh y? Wh y do Ch icago proofs leave
T exas institutionalists or NYU Austrians or
Massach usetts Marxists or even Berkeley
neoclassicists cold? T h e non-Ch icago
economists, of course, believe th ey h ave
modernist evidence of th eir own. But part
of th e problem is th at th ey also believe,
with out th inking about it much , th at th ey
h ave evidence of a non-modernist sort:
stories of peasants and th eir lumpish ch ar-
acter in th e flesh ; self-awareness of th e
force of advertising. A good part of th e
disagreement is over evidence th at is not
brough t openly into th e discussion,
th ough it is used.
Even in th e most narrowly tech nical
matters of scientific discussion economists
h ave a sh ared set of convictions about
wh at makes an argument strong, but a set
wh ich th ey h ave not examined, wh ich
th ey can communicate to graduate stu-
dents only tacitly, and wh ich contains
many elements embarrassing to th e offi-
cial rh etoric. A good example is th e typical
procedure in econometrics. From eco-
nomic th eory, politics, and th e workings
of th e economist's psych e, all of wh ich are
in th e rh etorical sense unexamined, come
h ypoth eses about some bit of th e econ-
omy. T h e h ypoth eses are th en specified
as straigh t lines, linear models being th ose
most easily manipulated. T h e straigh t
lines are fitted to someone else's collection
of facts. So far th e official and workaday
rh etoric correspond, and th e one migh t
with justice be called a guide to th e oth er.
Presently, h owever, th ey diverge. If th e
results of th e fitting to th e data are reason-
able, on grounds th at are not th emselves
subject to examination, th e article is sent
off to a journal. If th e results are unreason-
able, th e h ypoth esis is consigned to a do
loop: th e economic scientist returns to th e
h ypoth eses or th e specifications, altering
th em until a publish able article emerges.
T h e product may or may not h ave value,
but it does not acquire its value from its
adh erence to th e official rh etoric. It vio-
lates th e official rh etoric blatantly.
But wh y sh ouldn't it? Even at th e level
of tests of statistical significance th e
workaday rh etoric violates th e ph iloso-
ph er's law. But so wh at? It is a clich e of
cynicism in economics and related statisti-
cal fields to point out th at a result signifi-
cantly different from one th at may h ave
been gotten by ch ance does not h ave th e
significance it claims if th e h ypoth esis h as
been manipulated to fit th e data. T h at
only significant results get publish ed h as
long been a scandal among statistical pur-
ists: th ey fear with some reason th at at
th e five percent level of significance some-
th ing like five percent of th e computer
runs will be successful. T h e scandal is not,
h owever, th e failure to ach ieve modernist
standards of scientific purity. T h e scandal
is th e failure to articulate reasons wh y one
migh t want to ignore th em.
It would be arrogant to suppose th at
one knew better th an th ousands of intelli-
gent and h onest economic sch olars wh at
th e proper form of argument was. T h e
Received View is arrogant in th is way, lay-
ing down legislation for science on th e ba-
sis of epistemological convictions h eld
with veh emence inversely proportional to
th e amount of evidence th at th ey work.
Better to look h ard at wh at is in fact done.
In an important book th at is an exception
to th e general neglect of rh etorical consid-
erations in economics Edward Leamer
asks wh at purpose th e workaday proce-
dures in econometrics may be serving
(Leamer, 1978, esp. p. 17). Instead of com-
paring th em with a doctrine in th e ph ilos-
oph y of science h e compares th em with
reasons th at ough t to persuade a reasona-
ble person, with wh at really warrants as-
sent, with , in sh ort, economic rh etoric. As
Ch ristoph er Sims points out in a review,
"th ere is a myth th at th ere are only two
categories of knowledge about th e
world-'th e' model, given to us by 'eco-
nomic th eory,' with out uncertainty, and
th e parameters, about wh ich we know
noth ing except wh at th e data, via objec-
tively specified econometric meth ods,
tells us. . . . T h e sooner Leamer's cogent
writings can lead us to abandon th is myth ,
to recognize th at nearly all applied work
is sh ot th rough with applications of uncer-
tain, subjective knowledge, and to make
th e role of such knowledge more explicit
and more effective, th e better" (Sims,
1979, p. 567). Yes. T h e very title of Lea-
mer's book is an outline of rh etoric in
econometrics: Specification Search es: Ad
Hoc Inference with Nonexperimental
Data.
Examples of th e search abound. It is
common in a seminar in economics for
th e speaker to present a statistical result,
apparently irrefutable by th e rules of posi-
tive economics, and to be met by a ch orus
of "I can't believe it" or "It doesn't make
sense." Milton Friedman's own Money
Worksh op at Ch icago in th e late 1960s and
th e early 1970s was a case in point. Put
in statistical language, th e rh etorical con-
text th at creates such skepticism can be
called a priori beliefs and can be analyzed
in Bayesian terms. It seldom is, but such
a step would not be enough even if it were
taken. T h at th e rh etorical community in
economics migh t reject "solid" results, for
instance th at oil prices appear in a regres-
sion explaining inflation, and accept
"flimsy" ones, for instance th at money
causes inflation, sh ows th e strength of
prior beliefs. (T h e beliefs can be reversed
with out ch anging th e example.) T o leave
th e discussion at prior beliefs, h owever,
perh aps formalizing th em as prior proba-
bility distributions, is to perpetuate th e
fact-value split of modernism, leaving
most of wh at matters in science to squeals
of pleasure or pain. Wh at is required is
an examination of th e workaday rh etoric
th at leads to th e prior beliefs. It is not
enough , as T h omas F. Cooley and Steph en
F. LeRoy do in th eir recent, penetrating
paper on "Identification and Estimation
of Money Demand" (1981) to merely
stand appalled at th e infection of econo-
metric conclusions by prior beliefs. If
econometric argument does not persuade
it is because th e field of argument is too
narrow, not because th e impulse towards
th ough tfulness and explicitness wh ich it
embodies is wrong. T h e arguments need
to be broadened, not merely dismissed.
T h e Controversy Over Purch asing Power
Parity Is an Example of Unexamined
Rh etoric
A good example of h ow th e official rh et-
oric-in th e absence of an examination of
th e workaday rh etoric-can lead a litera-
ture in economics astray, especially in
econometric matters, is th e debate about
purch asing power parity. It is worth exam-
ining in detail as a case study in unex-
amined rh etoric and th e need to broaden
it (Donald McCloskey and J. Rich ard
Zech er, 1982). T h e question is: is th e inter-
national economy more like th e economy
of th e Midwest, in wh ich Iowa City and
Madison and Ch ampaign all face given
prices for goods; or is it more like th e solar
system, in wh ich each planet's economy
is properly th ough t of in isolation? If th e
Iowa City view is correct, th en th e prices
of all goods will move togeth er every-
wh ere, allowing for exch ange rates. If th e
Martian view is correct th ey will move
differently. If th e Iowa City view is cor-
rect, th en all closed models of economies,
wh eth er Keynesian or monetarist or ra-
tionally expecting, are wrong; if th e Mar-
tian view is correct, th en economists can
(as th ey do) go on testing macroeconomic
faith s against American experience since
th e War.
T h e question of wh eth er prices are
closely connected internationally, th en, is
important. T h e official rh etoric does not
leave much doubt as to wh at is required
to answer it: collect facts on prices in, say,
th e United States and Canada and . . .
well . . . test th e h ypoth esis (derived in
orth odox fash ion from a h igh er order h y-
poth esis, using objective data, looking
only at observable facts, controlling th e
experiment as much as possible, and so
forth , according to th e received view). A
large number of economists h ave done
th is. Half of th em conclude th at purch as-
ing power parity works; th e oth er h alf con-
clude th at it fails. A misleading but none-
th eless superb paper by Irving Kravis and
Robert Lipsey on th e subject concludes
th at it fails, in terms th at are worth repeat-
ing:
We th ink it unlikely th at th e h igh degree of
national and international commodity arbi-
trage th at many versions of th e monetarist [sic]
th eory of th e balance of payments contemplate
is typical of th e real world. T h is is not to deny
th at th e price structures of th e advanced indus-
trial countries are linked togeth er, but it is to
suggest th at th e links are loose rath er th an
rigid [1978, p. 243, italics added].
Every italicized word involves a com-
parison against some standard of wh at
constitutes unlikelih ood or h igh ness or
typicality or being linked or looseness or
rigidity. Yet h ere and elsewh ere in th e
tortured literature of purch asing power
parity no standard is proposed.
T h e narrowest test of purch asing power
parity, and th e one th at springs most read-
ily to a mind trained in th e official rh eto-
ric, is to regress th e price in th e United
States (of steel or of goods-in-general, in
levels or in differences) against th e corre-
sponding price abroad, allowing for th e
exch ange rate. If th e slope coefficient is
1.00 th e h ypoth esis of purch asing power
parity is said to be confirmed; if not, not.
Kravis and Lipsey perform such a test. Be-
ing good economists th ey are evidently
made a little uncomfortable by th e rh eto-
ric involved. T h ey admit th at "Each ana-
lyst will h ave to decide in th e ligh t of h is
purposes wh eth er th e purch asing power
parity relationsh ips fall close enough to
1.00 to satisfy th e th eories" (p. 214). Pre-
cisely. In th e next sentence, h owever, th ey
lose sigh t of th e need for an explicit stan-
dard if th eir argument is to be cogent:
"As a matter of general judgment we ex-
press our opinion th at th e results do not
support th e notion of a tigh tly integrated
international price structure." T h ey do
not say wh at a "general judgment" is or
h ow one migh t recognize it. T h e purpose
of an explicit economic rh etoric would be
to provide guidance. T h e guidance Kravis
and Lipsey provide for evaluating th eir
general judgment is a footnote (p. 214)
reporting th e general judgments of Hou-
th akker, Haberler, and Joh nson th at devi-
ations from parity of anyth ing under 10
to 20 percent are acceptable to th e h y-
poth esis. It h appens, incidentally, th at th e
bulk of th e evidence offered by Kravis and
Lipsey passes rath er th an fails such a test,
belying th eir conclusions. But accepting
or rejecting one unargued standard by
comparing it with anoth er unargued stan-
dard does not much advance th e art of
argument in economics.
Kravis and Lipsey, to be fair, are unusu-
ally sensitive to th e case for h aving some
standard, more sensitive th an are most
economists working th e field. T h ey return
repeatedly to th e question of a standard,
th ough with out resolving it. On page 204
th ey reject in one irrelevant sentence th e
only standard proposed in th e literature
so far, th e Genberg-Zech er criterion, de-
scribed below. On pages 204-05 and on
235 and again on 242 th ey draw a distinc-
tion between th e statistical and th e eco-
nomic significance of th eir results. So fre-
quently do th ey make th e point th at it
must be counted one of th e major ones
in th e paper. On page 205 th ey remark,
for example, th at even small differences
between domestic and export prices can
make a big difference to th e incentive to
export: "th is is a case in wh ich statistical
significance [th at is, a correlation of th e
two prices near 1.0, wh ich one migh t mis-
takenly suppose to imply th at th ey were
insignificantly
different]
does not neces-
sarily connote economic significance." Yet
th ey do not turn th e sword on th emselves.
No wonder: with out a rh etoric of eco-
nomic significance, and in th e face of a
modernist rh etoric of statistical signifi-
cance with th e prestige of alleged science
beh ind it, th ey are unaware th ey are
wielding it.
T h e abuse of th e word "significant" in
connection with statistical arguments in
economics is universal. Statistical signifi-
cance seems to give a standard by wh ich
to judge wh eth er a h ypoth esis is true or
false th at is independent of any tiresome
consideration of h ow true a h ypoth esis
must be to be true enough . T h e point in
th e present case is th at th e "failure" of
purch asing power parity in a regression
of th e usual type is not measured against
a standard. How close does th e slope h ave
to be to th e ideal of 1.00 to say th at pur-
ch asing power parity succeeds? T h e litera-
ture is silent. T h e standard used is th e ir-
relevant one of statistical significance. A
sample size of a million yielding a tigh t
estimate th at th e slope was .9999, "signifi-
cantly" different from 1.00000, could be
produced as evidence th at purch asing
power parity h ad "failed," at least if th e
logic of th e usual meth od were to be fol-
lowed consistently. Common sense, pre-
sumably, would rescue th e sch olar from
asserting th at an estimate of .9999 with
a standard error of .0000001 was signifi-
cantly different from unity in a significant
meaning of significance. Such common
sense sh ould be applied to findings of
slopes of .90 or 1.20. It is not.7
T h e irrelevance of th e merely statistical
standard of fit does not undermine only
th at h alf of th e empirical literature th at
finds purch asing power parity to be
wrong. T owards th e end of a fine article
favorable to purch asing power parity,
Paul Krugman writes:
T h ere are several ways in wh ich we migh t try
to evaluate purch asing power parity as a th e-
ory. We can ask h ow much it explains [th at
is, R-square]; we can ask h ow large th e devia-
tions from purch asing power parity are in some
absolute sense; and we can ask wh eth er th e
deviations from purch asing power parity are
in some sense systematic [1978, p. 405].
T h e defensive usage "in some absolute
sense" and "in some sense" betrays h is
unease, wh ich is in th e event justified.
T h ere is no "absolute sense" in wh ich a
description is good or bad. T h e sense must
be comparative to a standard, and th e
standard must be argued.
Similarly, Jacob Frenkel, an enth usiast
for purch asing power parity as such th ings
go among economists but momentarily
bewitch ed by th e ceremony of regression,
says th at "if th e market is efficient and if
th e forward exch ange rate is an unbiased
forecast of th e future spot exch ange rate,
th e constant [in a regression of th e spot
rate today on th e future rate for today
quoted yesterday] . . . sh ould not differ
significantly from unity." In a footnote
on th e next page, speaking of th e standard
7An example is J. D. Rich ardson's paper, "Some
Empirical Evidence on Commodity Arbitrage and
th e Law of One Price" (1978). He regresses Canadian
on American prices multiplied by th e exch ange rate
for a number of industries and concludes: "It is nota-
ble th at th e 'law of one price' fails uniformly. T h e
h ypoth esis of perfect commodity arbitrage is re-
jected with 95 percent confidence for every com-
modity group" (p. 347, italics added). T h e question
is, wh y in an imperfect world would it matter th at
perfect arbitrage is rejected?
errors of th e estimates for such an equa-
tiori in th e 1920s, h e argues th at "wh ile
th ese results indicate th at markets were
efficient and th at on average forward rates
were unbiased forecasts of future spot
rates, th e 2-8 percent errors were signifi-
cant"(1978, pp. 175-76, italics added). He
evidently h as forgotten h is usage of "sig-
nificant" in anoth er signification. Wh at h e
appears to mean is th at h e judges a 2-8
percent error to be large in some unspeci-
fied economic sense, perh aps as offering
significant profits for lucky guessers of th e
correct spot rate. In any event, it is un-
clear wh at h is results imply about th eir
subject, purch asing power parity, because
significance in statistics, h owever useful
it is as an input into economic significance,
is not th e same th ing as economic signifi-
cance.
T h e point is not th at levels of signifi-
cance are arbitrary. Of course th ey are.
T h e point is th at it is not known wh eth er
th e range picked out by th e level of signifi-
cance affirms or denies th e h ypoth esis.
Nor is th e point th at econometric tests are
to be disdained. Quite th e contrary. T h e
point is th at th e econometric tests h ave
not followed th eir own rh etoric of h ypoth -
esis testing. Nowh ere in th e literature of
tests of purch asing power parity does
th ere appear a loss function. We do not
know h ow much it will cost in policy
wrecked or analysis misapplied or reputa-
tion ruined if purch asing power parity is
said to be true wh en by th e measure of
th e slope coefficient it is only, say, 85 per-
cent true. T h at is, th e argument due to
Neyman and Pearson th at undergirds
modern econometrics h as been set aside
h ere as elsewh ere in favor of a merely
statistical standard, and an irrelevant one
related to sampling error at th at. We are
told h ow improbable it is th at a slope coef-
ficient of .90 came from a distribution cen-
tered on 1.00 in view of th e one kind of
error we claim we know about (unbiased
sampling error with finite variance), but
we are not told wh eth er it matters to th e
truth of purch asing power parity wh ere
such limits of confidence are placed.
Silence on th e matter is not confined
to th e literature of purch asing power par-
ity. Most texts on econometrics do not
mention th at th e goodness or badness of
a h ypoth esis is not ascertainable on merely
statistical grounds. Statisticians th em-
selves are more self-conscious, alth ough
th e transition from principle to practice
is sometimes awkward. A practical diffi-
culty in th e way of using th e Neyman and
Pearson th eory in pure form, A. F. Mood
and F. A. Graybill say, is th at
th e loss function is not known at all or else it
is not known accurately enough to warrant its
use. If th e loss function is not known, it seems
th at a decision function th at in some sense min-
imizes th e error probabilities will be a reason-
able procedure [1963, p. 278].
T h e ph rase "in some sense" appears to
be a marker of unexplored rh etoric in th e
works of intellectually h onest sch olars. In
any event, th e procedure th ey suggest
migh t be reasonable for a general statisti-
cian, wh o makes no claim to know wh at
is a good or bad approximation to truth
in fields outside statistics. It is not reason-
able for a specialist in international trade
or macroeconomics. If th e loss function
is not known it sh ould be discovered. And
th at will entail a study of th e question's
rh etoric.
One standard of economic significance
in questions of parity, for example, migh t
be th e degree to wh ich th e customary re-
gressions between countries resembled
similar regressions with in a single country.
We agree, for purposes of argument, th at
th e United States is to be treated as a sin-
gle point in space, as one economy across
wh ich distances are said not to matter for
th e purposes of th inking about inflation
or th e balance of payments. Having done
so we h ave a standard: is Canada economi-
cally speaking just as closely integrated
with th e United States as is California with
Massach usetts? Is th e Atlantic Economy
as closely integrated as th e American
Economy? T h e standard is called th e Gen-
berg-Zech er criterion, after its inventors
(Hans Genberg, 1976; McCloskey and
Zech er, 1976). It is not th e only conceiv-
able one. T h e degree of market integra-
tion in some golden age (1880-1913 per-
h aps; or 1950-1970) migh t be a standard;
th e profits from arbitrage above normal
profits migh t be anoth er standard; th e de-
gree to wh ich an X percentage deviation
from purch asing power parity does or
does not disturb some assertion about th e
causes of inflation migh t be still anoth er.
T h e point is to h ave standards of argu-
ment, to go beyond th e inconclusive rh et-
oric provided by th e pseudo-scientific
ceremony of h ypoth esis-regression-test-
publish in most of modern economics.
V. T h e Rh etoric of Economics Is a
Literary Matter
Even a Modernist Uses, and Must Use,
Literary Devices
T h e mere recognition th at th e official
rh etoric migh t be dubious, th en, frees th e
reason to examine h ow economists really
argue. Obscured by th e official rh etoric
th e workaday rh etoric h as not received
th e attention it deserves, and th e knowl-
edge of it is th erefore contained only in
seminar traditions, advice to assistant pro-
fessors, referee reports (a promising pri-
mary source for its study), and jokes. It
is significant th at George Stigler, a leader
of modernism in economics, ch ose to ex-
press h is observations about th e rh etoric
of economics in a brilliantly funny "T h e
Conference Handbook" ("Introductory
Remark number E: 'I can be very sympa-
th etic with th e auth or; until 2 years ago
I was th inking along similar lines' ") rath er
th an as a serious study in one of th e several
fields h e h as mastered, th e h istory of eco-
nomic th ough t (1977). T h e attitude of th e
Handbook is th at rh etoric is mere rh eto-
ric, mere game playing in aid of ego grati-
fication; th e serious business of Science
will come on th at h appy day wh en th e
information th eory of oligopoly or th e vul-
gar Marxist th eory of th e state is brough t
to a critical test under th e auspices of
naive falsificationism.
Economists can do better if th ey will
look soberly at th e varieties of th eir argu-
ments. T h e varieties examined h ere can
only be crude preliminaries to a fuller
study, a study th at migh t dissect samples
of economic argument, noting in th e man-
ner of a literary or ph ilosoph ical exegesis
exactly h ow th e arguments sough t to con-
vince th e reader. It is not obvious a priori
wh at th e categories migh t be; in view of
th e meth odological range of modern eco-
nomics th ey doubtless would vary much
from auth or to auth or. A good place to
start migh t be th e categories of classical
rh etoric, Aristotle's divisions into inven-
tion, arrangement, delivery, and style, for
instance, with h is paired sub-h eadings of
artificial (i.e., argumentative) and inartifi-
cial (i.e., factual) proofs, syllogism and ex-
ample, and th e like. A good place to con-
tinue would be th e procedures of modern
literary critics, brigh t people wh o make
th eir living th inking about th e rh etoric of
texts.
T h e purpose would not be to make th e
auth or look foolish or to uncover fallacies
for punish ment by ridicule-fallacymon-
gering is evidence of a legislative attitude
towards meth od, and it is no surprise th at
Jeremy Benth am, confident of h is ability
to legislate for oth ers in matters of meth od
as in education, prisons, and government,
h ad compiled from h is notes T h e Book of
Fallacies (1824). David Hackett Fisch er's
book, Historians'Fallacies (1970), h as th is
flaw: th at it takes as fallacious wh at may
be merely probable and supporting argu-
ment.
T h e purpose of literary scrutiny of eco-
nomic argument would be to see beyond
th e received view on its content. T wo
pages (pp. 122-23) ch osen literally at
random from th at premier text of th e re-
ceived view, and a local maximum in eco-
nomic sch olarsh ip, Samuelson's Founda-
tions, will suffice for illustration:
(1) T o begin with h e gives a general
math ematical form from wh ich detailed
results in comparative statics can be ob-
tained by reading across a line. T h e impli-
cation of th e lack of elaboration of th e
math ematics is th at th e details are trivial
(leading one to wonder wh y th ey are men-
tioned at all). An "interesting" special case
is left "as an exercise to th e interested
reader," drawing on th e rh etorical tradi-
tions of applied math ematics to direct th e
reader's mind in th e righ t directions. T h e
math ematics is presented in an offh and
way, with an assumption th at we all can
read off partitioned matrices at a glance,
inconsistent with th e level of math ematics
in oth er passages. T h e air of easy math e-
matical mastery was important to th e in-
fluence of th e book, by contrast with th e
embarrassed modesty with wh ich British
writers at th e time (Hicks most notably)
push ed math ematics off into appendices.
Samuelson's skill at math ematics in th e
eyes of h is readers, an impression nur-
tured at every turn, is itself an important
and persuasive argument. He presents
h imself as an auth ority, with good reason.
T h at th e math ematics is so often pointless,
as h ere, is beside th e point. Being able
to do such a difficult th ing (so it would
h ave seemed to th e typical economist
reading in 1947) is warrant of expertise.
T h e argument is similar in force to th at
of a classical education conspicuously dis-
played. T o read Latin like one's moth er
tongue and Greek like one's aunt's tongue
is extremely difficult, requiring applica-
tion well beyond th e ordinary; th erefore-
or so it seemed to English men around
1900-men wh o h ave acquired such a skill
sh ould h ave ch arge of a great empire.
Likewise-or so it seemed to economists
around 1983-th ose wh o h ave acquired
a skill at partitioned matrices and eigen-
values sh ould h ave ch arge of a great econ-
omy. T h e argument is not absurd or a "fal-
lacy" or "mere rh etoric." Virtuosity is
some evidence of virtue.8
(2) T h ere are six instances of appeal to
auth ority (C. E. V. Leser, Keynes, Hicks,
Aristotle, Knigh t, and Samuelson; appeal
to auth orities is someth ing of a Samuel-
sonian specialty). Appeal to auth ority is
often reckoned as th e worst kind of
"mere" rh etoric. Yet it is a common and
often legitimate argument, as h ere. No sci-
ence would advance with out it, because
no scientist can redo every previous argu-
ment. We stand on th e sh oulders of giants,
and it is a perfectly legitimate and persua-
sive argument to point th is out from time
to time.
(3) T h ere are several appeals to relax-
ation of assumptions. T h e demand for
money is "really interesting . . . wh en un-
certainty . . . is admitted." Again, th e im-
plicit assumption in Hicks th at money
bears no interest is relaxed, unh itch ing th e
interest rate from th e zero return on
money. Relaxation of assumptions is th e
literature generating function of modern
economics. In th e absence of quantitative
evidence on th e importance of th e as-
sumption relaxed it is no modernist evi-
dence at all. Samuelson is careful to stick
to th e subjunctive mood of th eory (money
"would pass out of use"), but no doubt
wants h is strictures on a th eory of th e in-
terest rate based merely on liquidity pref-
erence (th at is, on risk) to be taken seri-
ously as comments on th e actual world.
T h ey are, surely, but not on th e operation-
alist grounds h e articulates wh en preach -
ing meth odology.
(4) T h ere are several appeals to h ypo-
8
T h e limiting case is spelling. Most college teach -
ers will agree th at th ose wh o do not know h ow to
spell "consensus" lose some of th eir auth ority to
speak on it.
th etical toy economies, constrained to one
or two sectors, from wh ich practical re-
sults are derived. T h is h as since Ricardo
been among th e commonest forms of eco-
nomic argument, th e Ricardian vice. It is
no vice if done reasonably. "It would be
quite possible to h ave an economy in
wh ich money did not exist, and in wh ich
th ere was still a substantial rate of inter-
est." Yes, of course.
(5) T h ere is, finally, one explicit appeal
to analogy, wh ich is said to be "not ...
superficial." Analogy, as will be sh own in
detail in a moment, pervades economic
th inking, even wh en it is not openly
analogical: transaction "friction," yield
"spread," securities "circulating," money
"with ering away" are inexplicit examples
h ere from one paragraph of live or only
h alf-dead metaph ors. Yet analogy and
metaph or, like most of th e oth er pieces
of Samuelson's rh etoric, h ave no standing
in th e official canon.
Most of th e Devices Are Only Dimly
Recognized
T h e range of persuasive discourse in
economics is wide, ignored in precept
wh ile potent in practice. At th e broadest
level it is worth noting th at th e practice
of economic debate often takes th e form
of legal reasoning, for, as Booth put it,
"th e processes developed in th e law are
codifications of reasonable processes th at
we follow in every part of our lives,
even th e scientific" (1974, p. 157). Econ-
omists would do well to study jurispru-
dence, th en, with some oth er aim th an
subordinating it to economic th eory. For
instance, economists, like jurists, argue by
example, by wh at Edward Levi calls "th e
controlling similarity between th e pres-
ent and prior case" (1967, p. 7).
T h e details of th e pleading of cases at
economic law h ave little to do with th e
official scientific meth od. With out self-
consciousness about workaday rh etoric
th ey are easily misclassified. A common
argument in economics, for example, is
one from verbal suggestiveness. T h e prop-
osition th at "th e economy is basically com-
petitive" may well be simply an invitation
to look at it th is way, on th e assurance
th at to do so will be illuminating. In th e
same way a psych ologist migh t say "we
are all neurotic"-it does not mean th at
95 percent of a randomly selected sample
of us will exh ibit compulsive h andwash -
ing; rath er, it is merely a recommendation
th at we focus attention on th e neurotic
ingredient "in us all" (Passmore, 1966, p.
438). T o misunderstand th e expression as
a properly modernist h ypoth esis would be
to invite much useless testing. T h e case
is similar to MV=PT understood as an
identity. T h e equation is th e same term-
for-term as th e equation of state of an ideal
gas, and h as th e same status as an irrefuta-
ble but useful notion in ch emistry as it
h as in economics. T h e identity can be ar-
gued against, but not on grounds of "fail-
ing a test." T h e arguments against it will
deny its capacity to illuminate, not its
modernist truth .
Anoth er common argument in econom-
ics with no status in th e official rh etoric
is ph ilosoph ical consistency: "If you as-
sume th e firm knows its own cost curve
you migh t as well assume it knows its pro-
duction function, too: it is no more dubi-
ous th at it knows one th an th e oth er." T h e
argument, usually inexplicit th ough sig-
nalled by such a ph rase as "it is natural
to assume," is in fact ch aracteristic of
ph ilosoph ical discourse (Passmore, 1970).
It is analogous to symmetry as a criterion
of plausibility, wh ich appears in many
forms and forums. A labor economist tells
a seminar about compensating differen-
tials for th e risk of unemployment, refer-
ring only to th e utility functions of th e
workers. An auditor remarks th at th e
value of unemployment on th e demand
side (th at is, to th e firm) is not included.
T h e remark is felt to be powerful, and a
long discussion ensues of h ow th e demand
side migh t alter th e conclusions. T h e argu-
ment from th e-oth er-side-is-empty is per-
suasive in economics, but economists are
unaware of h ow persuasive it is.
Likewise (and h ere we reach th e border
of self-consciousness in rh etoric), "ad h oc-
cery" is universally condemned by semi-
nar audiences. An economist will ch eer-
fully accept a poor R2 and terrible and
understated standard errors if only sh e
"h as a th eory" for th e inclusion of such -
and-such a variable in th e regressions.
"Having a th eory" is not so open and sh ut
as it migh t seem, depending for instance
on wh at reasoning is prestigious at th e mo-
ment. Anyone wh o th rew accumulated
past output into an equation explaining
productivity ch ange before 1962 would
h ave been accused of ad h occery. But
after Arrow's essay on "T h e Economics
of Learning By Doing" (wh ich as it h ap-
pened h ad little connection with max-
imizing beh avior or oth er h igh er order
h ypoth eses in economics), th ere was sud-
denly a warrant for doing it.
An example of th e rh etoric of econom-
ics wh ich falls well with in th e border of
self-consciousness is simulation. Econo-
mists will commonly make an argument
for th e importance of th is or th at variable
by sh owing its potency in a model with
back-of-th e-envelope estimates of th e pa-
rameters. Common th ough it is, few books
or articles are devoted to its explication
(but, see Rich ard Zeckh auser and Edith
Stokey, 1978). It would be as th ough stu-
dents learned econometrics entirely by
studying examples of it-no bad way to
learn, but not self-conscious in grounding
th e arguments. Wh at is legitimate simula-
tion? Between A. C. Harberger's modest
little triangles of distortion and Jeffrey
Williamson's immense multiequation
models of th e American or Japanese econ-
omies since 1870 is a broad range. Econo-
mists h ave no vocabulary for criticizing
any part of th e range. T h ey can deliver
summary grunts of belief or disbelief but
find it difficult to articulate th eir reasons
in a disciplined way.
VI. Economics Is Heavily Metaph orical
Models Are Metaph ors
T h e most important example of eco-
nomic rh etoric, h owever, falls well outside
th e border of self-consciousness. It is th e
language economists use, and in particular
its metaph ors. T o say th at markets can be
represented by supply and demand
"curves" is no less a metaph or th an to say
th at th e west wind is "th e breath of au-
tumn's being." A more obvious example
is "game th eory," th e very name being
a metaph or. It is obviously useful to h ave
in one's h ead th e notion th at th e arms race
is a two-person, negative-sum cooperative
"game." Its persuasiveness is instantly ob-
vious, as are some of its limitations. Each
step in economic reasoning, even th e rea-
soning of th e official rh etoric, is metaph or.
T h e world is said to be "like" a complex
model, and its measurements are said to
be like th e easily measured proxy variable
to h and. T h e complex model is said to be
like a simpler model for actual th inking,
wh ich is in turn like an even simpler
model for calculation. For purposes of per-
suading doubters th e model is said to be
like a toy model th at can be manipulated
quickly inside th e doubter's h ead wh ile
listening to th e seminar. Joh n Gardner
wrote:
T h ere is a game-in th e 1950s it used to be
played by th e members of th e Iowa Writers'
Worksh op-called 'Smoke.' T h e player wh o is
'it' [th inks of] some famous person .. . and
th en each of th e oth er players in turn asks one
question. .. such as 'Wh at kind of weath er
are you?'. . . Marlon Brando, if weath er, would
be sultry and uncertain.... T o understand
th at Marlon Brando is a certain kind of weath er
is to discover someth ing (th ough someth ing
neith er useful nor demonstrable) and in
th e same instant to communicate someth ing
[Gardner, 1978, pp. 118-19].
On th e contrary, in economics th e com-
parable discovery is useful and by re-
course to rh etorical standards demonstr-
able.
Metaph ors in Economics Are Not
Ornamental
Metaph or, th ough , is commonly viewed
as mere ornament. From Aristotle until
th e 1930s even literary critics viewed it
th is way, as an amusing comparison able
to affect th e emotions but inessential for
th ough t. "Men are beasts": if we cared
to be flat-footed about it, th e notion was,
we could say in wh at literal way we
th ough t th em beastly, removing th e orna-
ment to reveal th e core of plain meaning
underneath . T h e notion was in 1958 com-
mon in ph ilosoph y, too:
With th e decline of metaph ysics, ph ilosoph ers
h ave grown less and less concerned about God-
liness and more and more obsessed with clean-
liness, aspiring to ever h igh er levels of linguistic
h ygiene. In consequence, th ere h as been a ten-
dency for metaph ors to fall into disfavour, th e
common opinion being th at th ey are a frequent
source of infection [H. J. N. Horsburgh , 1958,
p. 231].
Such suspicion toward metaph or is widely
recognized by now to be unnecessary,
even h armful. T h at th e very idea of "re-
moving" an "ornament" to "reveal" a
"plain" meaning is itself a metaph or sug-
gests wh y. Perh aps th inking is metaph ori-
cal. Perh aps to remove metaph or is to re-
move th ough t. T h e operation on th e
metaph oric growth would in th is case be
worse th an th e disease.
T h e question is wh eth er economic
th ough t is metaph orical in some nonorna-
mental sense. T h e more obvious meta-
ph ors in economics are th ose used to con-
vey novel th ough ts, one sort of novelty
being to compare economic with noneco-
nomic matters. "Elasticity" was once a
mind-stretch ing fancy; "depression" was
depressing; "equilibrium" compared an
economy to an apple in a bowl, a set-
tling idea; "competition" once induced
th ough ts of h orseraces; money's "veloc-
ity" th ough ts of swirling bits of paper.
Much of th e vocabulary of economics con-
sists of dead metaph ors taken from non-
economic sph eres.
Comparing noneconomic with eco-
nomic matters is anoth er sort of novelty,
apparent in th e imperialism of th e new
economics of law, h istory, politics, crime,
and th e rest, and most apparent in th e
work of th at Kipling of th e economic em-
pire, Gary Becker. Among th e least bi-
zarre of h is many metaph ors, for instance,
is th at ch ildren are durable goods. T h e
ph ilosoph er Max Black pointed out th at
"a memorable metaph or h as th e power
to bring two separate domains into cogni-
tive and emotional relation by using lan-
guage directly appropriate to th e one as
a lens for seeing th e oth er" (1962, p. 236).
So h ere: th e subject (a ch ild) is viewed
th rough th e lens of th e modifier (a durable
good). A beginning at literal translation
would say, "A ch ild is costly to acquire
initially, lasts for a long time, gives flows
of pleasure during th at time, is expensive
to maintain and repair, h as an imperfect
second-h and market.... Likewise, a du-
rable good, such as a refrigerator..
T h at th e list of similarities could be ex-
tended furth er and furth er, gradually re-
vealing th e differences as well-"ch ildren,
like durable goods, are not objects of affec-
tion and concern"; "ch ildren, like durable
goods, do not h ave th eir own opinions"-
is one reason th at, as Black says, "meta-
ph orical th ough t is a distinctive mode of
ach ieving insigh t, not to be construed as
an ornamental substitute for plain
th ough t" (p. 237). T h e literal translation
of an important metaph or is never fin-
ish ed. In th is respect and in oth ers an im-
portant metaph or in economics h as th e
quality admired in a successful scientific
th eory, a capacity to astonish us with im-
plications yet unseen.9
But it is not merely th e pregnant quality
of economic metaph ors th at makes th em
important for economic th inking. T h e lit-
erary critic I. A. Rich ards was among th e
first to make th e point, in 1936, th at meta-
ph or is "two th ough ts of different th ings
active togeth er, . . . wh ose meaning is a
resultant of th eir interaction" (Rich ards,
1936, p. 93, my italics; Black, 1962, p. 46;
Owen Barfield, 1947, p. 54). A metaph or
is not merely a verbal trick, Rich ards con-
tinues, but "a borrowing between and
intercourse of th ough ts, a transaction be-
tween contexts" (p. 94, h is italics). Econo-
mists will h ave no trouble seeing th e point
of h is economic metaph or, one of mutu-
ally advantageous exch ange. T h e opposite
notion, th at ideas and th eir words are in-
variant lumps unaltered by combination,
like bricks (Rich ards, p. 97), is analogous
to believing th at an economy is a mere
aggregation of Robinson Crusoes. But th e
point of economics since Smith h as been
th at an island-full of Crusoes trading is dif-
ferent from and often better off th an th e
mere aggregation.
Anoth er of Becker's favorite metaph ors,
"h uman capital," illustrates h ow two sets
of ideas, in th is case both drawn from in-
side economics, can th us mutually illumi-
nate each oth er by exch anging connota-
tions. In th e ph rase "h uman capital" th e
field in economics treating h uman skills
was at a stroke unified with th e field treat-
ing investment in mach ines. T h ough t in
both fields was improved, labor economics
by recognizing th at skills, for all th eir in-
tangibility, arise from abstention from
consumption; capital th eory by recogniz-
ing th at skills, for all th eir lack of capitali-
zation, compete with oth er investments
for a claim to abstention. Notice by con-
trast th at because economists are experts
only in durable goods and h ave few (or
at any rate conventional) th ough ts about
ch ildren, th e metaph or th at ch ildren are
durable goods h as so to speak only one
direction of flow. T h e gains from th e trade
were earned mostly by th e th eory of ch il-
dren (fertility, nuptiality, inh eritance),
gaining from th e th eory of durable goods,
not th e oth er way around.
Economic Metaph ors Constitute a Poetics
of Economics
Wh at is successful in economic meta-
ph or is wh at is successful in poetry, and
is analyzable in similar terms. Concerning
th e best metaph ors in th e best poetry,-
comparing th ee to a summer's day or com-
paring A to B, argued Owen Barfield,
We feel th at B, wh ich is actually said, ough t
to be necessary, even inevitable in some way.
It ough t to be in some sense th e best, if not
th e only way, of expressing A satisfactorily. T h e
mind sh ould dwell on it as well as on A and
th us th e two sh ould be someh ow inevitably
fused togeth er into one simple meaning [Bar-
field, 1947, p. 54].
If th e modifier B (a summer's day, a refrig-
erator, a piece of capital) were trite-in
th ese cases it is not, alth ough in th e poem
Sh akespeare was more self-critical of h is
simile th an economists usually are of
th eirs-it would become as it were de-
tach ed from A, a mech anical and unillu-
minating correspondence. If essential, it
fuses with A, to become a master meta-
ph or of th e science, th e idea of "h uman
capital," th e idea of "equilibrium," th e
idea of "entry and exit," th e idea of "com-
petition." T h e metaph or, quoth th e poet,
is th e "consummation of identity."
9 A good metaph or depends on th e ability of its
audience to suppress incongruities, or to wish to.
Booth gives th e example of:
'All th e world's a stage' . . . [T h e reader must make a
ch oice only if th e incongruities-failures of fit-come
too soon]. Usually th ey arrive late and with out much
strength .... [W]e h ave no difficulty ruling from our
attention, in th e life-stage metaph or, th e selling of tick-
ets, fire insurance laws, th e necessity for footligh ts
[1961, p. 22f].
T h e appreciation of "h uman capital" requires th e
same suspension of disbelief.
Extent
Explicit-
ness Sh ort Long
Explicit simile tiresome caution
(T h e firm beh aves
(repeat
th e
simile)
as if it were one
mind maximiz-
ing its dis-
counted value.)
Middling metaph or allegory
(h uman capital) (economics of edu-
cation using h u-
man capital)
Implicit symbol a symbol system: a
(income) math ematics; a
(demand curve) th eory (Keynes-
ian th eory of in-
come determi-
nation) (supply
and demand
analysis)
Figure 1. Analogical T h inking Has T wo Dimensions
(And Economic Cases in Point)
Few would deny, th en, th at economists
frequently use figurative language. Much
of th e pitiful h umor available in a science
devoted to calculations of profit and loss
comes from talking about "islands" in th e
labor market or "putty-clay" in th e capital
market or "lemons" in th e commodity
market. T h e more austere th e subject th e
more fanciful th e language. We h ave
"turnpikes" and "golden rules" in growth
th eory, for instance, and long disquisitions
on wh at to do with th e "auctioneer" in
general equilibrium th eory. A literary
man with advanced training in math emat-
ics and statistics stumbling into Econome-
trica would be astonish ed at th e meta-
ph ors surrounding h im, lost in a land of
allegory.
Allegory is merely long-winded meta-
ph or, and all such figures are analogies.
Analogies can be arrayed in terms of ex-
plicitness, with simile ("as if") th e most
explicit and symbol ("th e demand curve")
th e least explicit; and th ey can be arrayed
by extent.
Economists, especially th eorists, are for-
ever spinning "parables" or telling "sto-
ries." T h e word "story" h as in fact come
to h ave a tech nical meaning in math emat-
ical economics, th ough usually spoken in
seminars rath er th an written in papers.
It means an extended example of th e eco-
nomic reasoning underlying th e math e-
matics, often a simplified version of th e
situation in th e real world th at th e math e-
matics is meant to ch aracterize. It is an
allegory, sh ading into extended symbol-
ism. T h e literary th eories of narrative
could make economists self-conscious
about wh at use th e story serves. Here th e
story is th e modifier, th e math ematics th e
subject. A tale of market days, traders with
bins of sh moos, and customers with costs
of travel between bins illuminates a fixed
point th eorem.
Even Math ematical Reasoning Is
Metaph orical
T h e critical question is wh eth er th e op-
posite trick, modifying h uman beh avior
with math ematics, is also metaph orical. If
it were not, one migh t acknowledge th e
metaph orical element in verbal econom-
ics about th e "entrepreneur," for instance,
or more plainly of th e "invisible h and,"
yet argue th at th e linguistic h ygiene of
math ematics leaves beh ind such fancies.
T h is indeed was th e belief of th e advanced
th inkers of th e 1920s and 1930s wh o in-
spired th e now-received view in economic
meth od. Most economists subscribe to th e
belief with out doubt or comment or
th ough t. Wh en engaging in verbal eco-
nomics we are more or less loose, it is said,
taking literary license with our "story";
but wh en we do math ematics we put away
ch ildish th ings.
But math ematical th eorizing in eco-
nomics is metaph orical, and literary. Con-
sider, for example, a relatively simple
case, th e th eory of production functions.
Its vocabulary is intrinsically metaph ori-
cal. "Aggregate capital" involves an anal-
ogy of "capital" (itself analogical) with
someth ing-sand, bricks, sh moos-th at
can be "added" in a meaningful way; so
does "aggregate labor," with th e addi-
tional peculiarity th at th e th ing added is
no th ing, but h ours of conscientious atten-
tiveness; th e very idea of a "production
function" involves th e astonish ing analogy
of th e subject, th e fabrication of th ings,
about wh ich it is appropriate to th ink in
terms of ingenuity, discipline, and plan-
ning, with th e modifier, a math ematical
function, about wh ich it is appropriate to
th ink in terms of h eigh t, sh ape, and single
valuedness.
T h e metaph orical content of th ese ideas
was alive to its inventors in th e 19th cen-
tury. It is largely dead to 20th -century
economists, but deadness does not elimi-
nate th e metaph orical element. T h e meta-
ph or got out of its coffin in an alarming
fash ion in th e Debate of th e T wo Cam-
bridges in th e 1960s. T h e debate is testa-
ment, wh ich could be 'multiplied, to th e
importance of metaph orical questions to
economics. T h e very violence of th e com-
bat suggests th at it was about someth ing
beyond math ematics or fact. T h e com-
batants h urled math ematical reasoning
and institutional facts at each oth er, but
th e important questions were th ose one
would ask of a metaph or-is it illuminat-
ing, is it satisfying, is it apt? How do you
know? How does it compare with oth er
economic poetry? After some tactical re-
treats by Cambridge, Massach usetts on
points of ultimate metaph ysics irrelevant
to th ese important questions, mutual ex-
h austion set in, with out decision. T h e rea-
son th ere was no decision was th at th e
important questions were literary, not
math ematical or statistical. T h e continued
vitality of th e idea of an aggregate produc-
tion function in th e face of math ematical
proofs of its impossibility and th e equal
vitality of th e idea of aggregate economics
as practiced in parts of Cambridge, En-
gland in th e face of statistical proofs of
its impracticality would oth erwise be a
great mystery.
Even wh en th e metaph ors of one's eco-
nomics appear to stay well and truly dead
th ere is no escape from literary questions.
T h e literary man C. S. Lewis pointed out
in 1939 th at any talk beyond th e level
of th e-cow-standing-h ere-is-in-fact-purple,
any talk of "causes, relations, of mental
states or acts . . . [is] incurably metaph ori-
cal" (1962, p. 47). For such talk h e enunci-
ated wh at may be called Screwtape's
T h eorem on Metaph or, th e first corollary
of wh ich is th at th e escape from verbal
into math ematical metaph or is not an es-
cape:
wh en a man claims to th ink independently of
th e buried metaph or in one of h is words, h is
claim may .. . [be] allowed only in so far as
h e could really supply th e place of th at buried
metaph or....
[T Mh is
new appreh ension will
usually turn out to be itself metaph orical [p.
46].
If economists forget and th en stoutly deny
th at th e production function is a meta-
ph or, yet continue talking about it, th e
result is mere verbiage. T h e word "pro-
duction function" will be used in ways
satisfying grammatical rules, but will not
signify anyth ing. T h e ch arge of meaning-
lessness applied so freely by modernists
to forms of argument th ey do not under-
stand or like sticks in th is way to th em-
selves. Lewis' second corollary is th at "th e
meaning in any given composition is in
inverse ratio to th e auth or's belief in h is
own literalness" (p. 27). An economist
speaking "literally" about th e demand
curve, th e national income, or th e stability
of th e economy is engaging in mere syn-
tax. Lewis cuts close to th e bone h ere,
th ough sparing h imself from th e car-
nage:
T h e percentage of mere syntax masquerading
as meaning may vary from someth ing like 100
percent in political writers, journalists, psych ol-
ogists, and economists, to someth ing like forty
percent in th e writers of ch ildren's stories..
T h e math ematician, wh o seldom forgets th at
h is symbols are symbolic, may often rise for
sh ort stretch es to ninety percent of meaning
and ten of verbiage [p. 49].
If economists are not comparing a social
fact to a one-to-one mapping, th us bring-
ing two separate domains into cognitive
and emotional relation, th ey are not th ink-
ing:
I've never slapped a curved demand;
I never h ope to slap one.
But th is th ing I can tell you now:
I'd rath er slap th an map one.
Literary T h inking Reunifies th e T wo
Cultures
Metaph or, th en, is essential to economic
th inking, even to economic th inking of
th e most formal kind. One may still doubt,
th ough , wh eth er th e fact matters. For it
is possible for rh etoricians as well as unre-
constructed modernists to commit th e
Ph ilosoph izing Sin, to bring h igh -brow
considerations of th e ultimate into discus-
sions about h ow to fix a flat tire. Push kin's
poetry may be ultimately untranslatable,
in view of th e difference in language, to
be sure, but also th e difference in situation
between a Push kin in Russia in th e early
19th century and a bilingual translator in
New York in th e late 20th century. Be-
cause h e was a different man speaking to
a different audience even Nabokov's bril-
liant translation, in th e words of th e econ-
omist and litterateur, Alexander Ger-
sch enkron, "can and indeed sh ould be
studied but . . . cannot be read" (in
Steiner, 1975, p. 315). Our intrinsic loneli-
ness will make some nuance dark. Yet
crude translation, even by mach ine, is use-
ful for th e workaday purposes of inform-
ing th e Central Intelligence Agency (for
instance, "out of sigh t, out of mind"
=
"blind madman"). Likewise, th e intrinsic
metaph ors of language may make it ulti-
mately impossible to communicate plain
meaning with out flourish es-th e flour-
ish es are th e meaning. But th e economist
may be able to get along with out full
awareness of h is meaning for th e worka-
day purposes of advising th e Central Intel-
ligence Agency.
So it migh t be argued. But it sh ould
be argued cautiously. Self-consciousness
about metaph or in economics would be
an improvement on many counts. Most
obviously, unexamined metaph or is a sub-
stitute for th inking-wh ich is a recom-
mendation to examine th e metaph ors, not
to attempt th e impossible by banish ing
th em.10 Rich ard Wh ately, D.D., Arch -
bish op of Dublin, publicist for free trade
as for oth er pieces of classical political
economy, and auth or of th e standard work
in th e 19th century on T h e Elements of
Rh etoric, drew attention to th e metaph or
of a state being like an individual, and
th erefore benefiting like an individual
from free trade. But h e devoted some at-
tention, not all of it ironic, to th e question
of th e aptness of th e figure:
T o th is is it replied, th at th ere is a great differ-
ence between a Nation and an Individual. And
so th ere is, in many circumstances . . . [h e enu-
merates th em, mentioning for instance th e un-
limited duration of a Nation] and, moreover,
th e transactions of each man, as far as h e is
left free, are regulated by th e very person wh o
is to be a gainer or loser by each ,-th e individ-
ual h imself; wh o, th ough h is vigilance is sh arp-
ened by interest, and h is judgment by exercise
in h is own department, may ch ance to be a
man of confined education, possessed of no gen-
eral principles, and not pretending to be versed
in ph ilosoph ical th eories; wh ereas th e affairs
of a State are regulated by a Congress, Ch am-
ber of Deputies, etc., consisting perh aps of men
of extensive reading and speculative minds
[1894, p. 63].
T h e case for intervention cannot be put
better. And th e metaph or is h ere an occa-
sion for and instrument of th ough t, not
a substitute.
Metaph ors, furth er, evoke attitudes th at
are better kept in th e open and under
th e control of reasoning. T h is is plain in
th e ideological metaph ors popular with
parties: th e invisible h and is so very dis-
crete, so sooth ing, th at we migh t be in-
clined to accept its touch with out protest;
10
An example of a naive attack on economic meta-
ph ors, and of a failure to realize th at economic th e-
ory is itself armed with metaph or, is th e first page
of McCloskey (1981).
th e contradictions of capitalism are so
very portentous, so scientifically precise,
th at we migh t be inclined to accept th eir
existence with out inquiry. But it is true
even of metaph ors of th e middling sort.
T h e metaph ors of economics convey th e
auth ority of Science, and often convey,
too, its claims to eth ical neutrality. It is
no use complaining th at we didn't mean
to introduce moral premises. We do.
"Marginal productivity" is a fine, round
ph rase, a precise math ematical metaph or
th at encapsulates a most powerful piece
of social description. Yet it brings with it
an air of h aving solved th e moral problem
of distribution facing a society in wh ich
people cooperate to produce th ings to-
geth er instead of producing th ings alone.
It is irritating th at it carries th is message,
because it may be far from th e purpose
of th e economist wh o uses it to sh ow ap-
proval for th e distribution arising from
competition. It is better, th ough , to admit
th at metaph ors in economics can contain
such a political message th an to use th e
jargon innocent of its potential.
A metaph or, finally, selects certain re-
spects in wh ich th e subject is to be com-
pared with th e modifier; in particular, it
leaves out th e oth er respects. Max Black,
speaking of th e metaph or "men are
wolves," notes th at "any h uman traits th at
can with out undue strain be talked about
in 'wolf-language' will be rendered promi-
nent, and any th at cannot will be push ed
into th e background" (1962, p. 41). Econo-
mists will recognize th is as th e source of
th e annoying complaints from non-math e-
matical economists th at math ematics
"leaves out" some feature of th e truth or
from non-economists th at economics
"leaves out" some feature of th e truth .
Such complaints are often trite and ill-
formed. T h e usual responses to th em,
h owever, are h ardly less so. T h e response
th at th e metaph or leaves out th ings in or-
der to simplify th e story temporarily is
disingenuous, occurring as it often does
in contexts wh ere th e economist is simul-
taneously fitting 50 oth er equations. T h e
response th at th e metaph or will be tested
eventually by th e facts is a stirring prom-
ise, but seldom fulfilled (see again Leamer,
th rough out). A better response would be
th at we like th e metaph or of, say, th e self-
ish ly economic person as calculating ma-
ch ine on grounds of its prominence in ear-
lier economic poetry plainly successful or
on grounds of its greater congruence with
introspection th an alternative metaph ors
(of people as religious dervish es, say, or
as sober citizens). In T h e New Rh etoric:
A T reatise on Argumentation (1967),
Ch aim Perelman and L. Olbrech ts-T yteca
note th at "acceptance of an analogy . . .
is often equivalent to a judgment as to
th e importance of th e ch aracteristics th at
th e analogy brings to th e fore" (p. 390).
Wh at is remarkable about th is unremark-
able assertion is th at it occurs in a discus-
sion of purely literary matters, yet fits so
easily th e matters of economic science.
T h is is in th e end th e significance of
metaph ors and of th e oth er rh etorical ma-
ch inery of argument in economics: econo-
mists and oth er scientists are less separate
from th e concerns of civilization th an
many th ink. T h eir modes of argument and
th e sources of th eir conviction-for in-
stance, th eir uses of metaph or-are not
very different from Cicero's speech es or
Hardy's novels. T h is is a good th ing. As
Black wrote, discussing "arch etypes" as
extended metaph ors in science: "Wh en
th e understanding of scientific models and
arch etypes comes to be regarded as a rep-
utable part of scientific culture, th e gap
between th e sciences and th e h umanities
will h ave been partly filled" (p. 243).
VII. Be Not Afraid
T h e Alternative to Modernism Is Not
Irrationalism
It will be apparent by now th at th e ob-
jectivity of economics is overstated and,
wh at is more important, overrated. Preg-
nant economic knowledge depends little
on, as Mich ael Polanyi put it, "a scientific
rationalism th at would permit us to be-
lieve only explicit statements based on
tangible data and derived from th ese by
a formal inference, open to repeated test-
ing" (1966, p. 62). A rh etoric of economics
makes plain wh at most economists know
anyway about th e rich ness and complexity
of economic argument but will not state
openly and will not examine explicitly.
T h e invitation to rh etoric, h owever, is
not an invitation to irrationality in argu-
ment. Quite th e contrary. It is an invita-
tion to leave th e irrationality of an artifi-
cially narrowed range of arguments and
to move to th e rationality of arguing like
h uman beings. It brings out into th e open
th e arguing th at economists do anyway-
in th e dark, for th ey must do it somewh ere
and th e various official rh etorics leave
th em benigh ted.
T h e ch arge of irrationalism comes easily
to th e lips of meth odological auth oritari-
ans. T h e notion is th at reasoning outside
th e constricted epistemology of modern-
ism is no reasoning at all. Mark Blaug, for
instance, ch arges th at Paul Feyerabend's
book Against Meth od "amounts to replac-
ing th e ph ilosoph y of science by th e ph i-
losoph y of flower power" (1980, p. 44).
Feyerabend commonly attracts such dis-
missive remarks by h is flamboyance. But
Steph en T oulmin and Mich ael Polanyi are
noth ing if not sweetly reasonable; Blaug
lumps th em with Feyerabend and attacks
th e Feyerabend-flavored wh ole. On a
h igh er level of ph ilosoph ical soph istica-
tion Imre Lakatos' Meth odology of Scien-
tific Research Programmes (1978, from ar-
ticles publish ed from 1963 to 1976)
repeatedly tars Polanyi, Kuh n, and Feyer-
abend with "irrationalism" (e.g., Vol. 1,
pp. 9nl, 76n6, 91nl, 130 and 130n3), em-
ph asizing th eir sometimes aggressively ex-
pressed case against rigid rationalism and
ignoring th eir moderately expressed case
for wider rationality. T h e tactic is an old
one. Rich ard Rorty notes th at "th e ch arges
of 'relativism' and 'irrationalism' once lev-
eled against Dewey [were] merely th e
mindless defensive reflexes of th e ph ilo-
soph ical tradition wh ich h e attacked"
(1979, p. 13; Rorty, 1982a, Ch . 9). T h e posi-
tion taken by th e opponents of Dewey,
Polanyi, Kuh n, and th e rest is "if th e
ch oice is between Science and irrational-
ity, I'm for Science." But th at's not th e
ch oice.
T h e Barbarians Are Not at th e Gates
Yet still th e doubt remains. If we aban-
don th e notion th at econometrics is by it-
self a meth od of science in economics, if
we admit th at our arguments require
comparative standards, if we agree th at
personal knowledge of various sorts plays
a part in economic knowledge, if we look
at economic argument with a literary eye,
will we not be abandoning science to its
enemies? Will not scientific questions
come to be decided by politics or wh im?
Is th e routine of Scientific Meth od not a
wall against irrational and auth oritarian
th reats to inquiry? Are not th e barbarians
at th e gates?
T h e fear is a surprisingly old and persis-
tent one. In classical times it was part of
th e debate between ph ilosoph y and rh eto-
ric, evident in th e unsympath etic way in
wh ich th e soph ists are portrayed in Plato's
dialogues. Cicero viewed h imself as bring-
ing th e two togeth er, disciplining rh eto-
ric's tendency to become empty advocacy
and trope on th e one h and and disciplin-
ing ph ilosoph y's tendency to become use-
less and inh uman speculation on th e
oth er. T h e classical problem was th at rh et-
oric was a powerful device easily misused
for evil ends, th e atomic power of th e clas-
sical world, and like it th e subject of wor-
rying about its proliferation. T h e solution
was to insist th at th e orator be good as
well as clever: Cato defined h im as "vir
bonus dicendi peritus," th e good man
510 Journal
of
Economic
Literature,
Vol. XXI
(June 1983)
skilled at speaking, a Ciceronian ideal as
well. Quintilian, a century and a h alf after
Cicero, said th at "h e wh o would be an
orator must not only appear to be a good
man, but cannot be an orator unless h e
is a good man" (Institutio XII, 1, 3). T h e
classical problem looks quaint to moderns,
wh o know well th at regressions, radios,
computers, experiments, or any of th e
now canonized meth ods of persuasion can
be and h ave been used as meth ods of de-
ceit. T h ere is noth ing about anaph ora,
ch iasmus, metonymy, or oth er pieces of
classical rh etoric th at make th em more
subject to evil misuse th an th e modern
meth ods. One can only note with regret
th at th e Greeks and Romans were more
sensitive to th e possibility, and less h ypno-
tized by th e claims of meth od to moral
neutrality.
T h e 20th century's attach ment to limit-
ing rules of inquiry solves a German prob-
lem. In th e German Empire and Reich
it was of course necessary to propound a
split of fact from values in th e social sci-
ences if anyth ing was to be accomplish ed
free of political interference. And German
speculative ph ilosoph y, one h ears it said,
warranted a logical positivist cure. T h e
German h abits, h owever, h ave spilled
over into a quite different world. It is said
th at if we are to avoid dread anarch y we
cannot trust each scientist to be h is own
meth odologist. We must legislate a uni-
form th ough narrowing meth od to keep
sch olars from resorting to figurative and
literal murder in aid of th eir ideas. We
ourselves could be trusted with meth od-
ological freedom, of course, but th e oth ers
cannot. T h e argument is a strange and au-
th oritarian one, uncomfortably similar to
th e argument of, say, th e Polish auth ori-
ties against Solidarity or of th e Ch ilean
auth orities against free politics. It is odd
to h ear intellectuals making it. Perh aps
th eir low opinion of th e free play of ideas
comes from experiences in th e faculty sen-
ate: th e results of academic democracy,
it must be admitted, are not so bad an
argument for auth oritarianism, at least un-
til one looks more closely at th e results
of auth oritarianism. Surely, th ough , th e al-
ternative to blindered rules of modernism
is not an irrational mob but a body of en-
ligh tened sch olars,, perh aps more enligh t-
ened wh en freed to make arguments th at
actually bear on th e questions at issue.
T h ere Is No Good Reason to Wish to Make
"Scientific"
As Against Plausible
Statements
T h e oth er main objection to an openly
rh etorical economics is not so pessimistic.
It is th e sunny view th at scientific knowl-
edge of a modernist sort may be h ard to
ach ieve, even impossible, but all will be
well on earth and in h eaven if we strive
in our poor way to reach it. We sh ould
h ave a standard of T ruth beyond persua-
sive rh etoric to wh ich to aspire. In Figure
2 all possible propositions about th e world
are divided into objective and subjective,
positive and normative, scientific and h u-
manistic, h ard and soft. T h e modernist
supposes th at th e world comes divided
nicely along such lines.
scientific h umanistic
fact opinion
objective subjective
positive normative
vigorous sloppy
precise vague
th ings words
cognition intuition
h ard soft
Figure 2. T h e T ask of Science Is to Move th e
Line
According to th e modernist meth odolo-
gist th e scientist's job is not to decide
wh eth er propositions are useful for under-
standing and ch anging th e world but to
classify th em into one or th e oth er h alf,
scientific or nonscientific, and to bring as
many as possible into th e scientific por-
tion. But wh y? Wh ole teams of ph ilosoph -
ical surveyors h ave sweated long over th e
placing of th e demarcation line between
scientific and oth er propositions, worrying
for instance about wh eth er astrology can
be demarcated from astronomy; it was th e
ch ief activity of th e positivist movement
for a century. It is not clear wh y anyone
troubled to do so. People are persuaded
of th ings in many ways, as h as been sh own
for economic persuasion. It is not clear
wh y th ey sh ould labor at drawing lines
on mental maps between one way and an-
oth er.
T h e modernists h ave long dealt with th e
embarrassment th at metaph or, case study,
upbringing, auth ority, introspection, sim-
plicity, symmetry, fash ion, th eology, and
politics serve to convince scientists as th ey
do oth er folk by labeling th ese th e "con-
text of discovery." T h e way scientists dis-
cover h ypoth eses h as been h eld to be dis-
tinct from th e "context of justification,"
namely, proofs of a modernist sort. T h o-
mas Kuh n's autobiograph ical reflections
on th e matter can stand for puzzlement
in recent years about th is ploy:
Having been weaned intellectually on th ese
distinctions and oth ers like th em, I could
scarcely be more aware of th eir import and
force. For many years I took th em to be about
th e nature of knowledge, and . .. yet my at-
tempts to apply th em, even grosso modo, to
th e actual situations in wh ich knowledge is
gained, accepted, and assimilated h ave made
th em seem extraordinarily problematic [Kuh n,
1970, p. 9].
T h e meth odologist's claim is th at "ulti-
mately" all knowledge in science can be
brough t into th e h ard and objective side
of Figure 2. Consequently, in certifying
propositions as really scientific th ere is
great emph asis placed on "conceivable
falsification" and "some future test." T h e
apparent standard is th e Cartesian one
th at we can find plausible only th e th ings
we cannot possibly doubt. But even th is
curious standard is not in fact applied: a
conceivable but practically impossible test
takes over th e prestige of th e real test,
but free of its labor. Such a step needs
to be ch allenged. It is identical to th e one
involved in equating as morally similar th e
actual compensation of th ose h urt during
a Pareto optimal move with a h ypoth etical
compensation not actually paid, as in th e
Hicks-Kaldor test; and it is identically du-
bious. A properly identified econometric
measurement of th e out-of-sample prop-
erties of macroeconomic policy is "opera-
tional," th at is, conceivable, but for all th e
scientific prestige th e conceivability lends
to talk about it, th ere are grave doubts
wh eth er it is practically possible. Wh ile
economists are waiting for th e ultimate
th ey migh t better seek wisdom in th e h u-
manism of h istorical evidence on regime
ch anges or of introspection about h ow in-
vestors migh t react to announcements of
new monetary policies. And of course th ey
do.
T h e point is th at one cannot tell
wh eth er an assertion is persuasive by
knowing at wh ich portion of th e scientific/
h umanistic circle it came from. One can
tell wh eth er it is persuasive only by th ink-
ing about it. Not all regression analyses
are more persuasive th an all moral argu-
ments; not all controlled experiments are
more persuasive th an all introspections.
Economic intellectuals sh ould not dis-
criminate against propositions on th e basis
of race, creed, or epistemological origin.
T h ere are some subjective, soft, vague
propositions th at are more persuasive
th an some objective, h ard, precise propo-
sitions.
T ake, for instance, th e law of demand.
T h e economist is persuaded th at h e will
buy less oil wh en its price doubles better
th an h e or anyone else is persuaded of
th e age of th e universe. He may reason-
ably be persuaded of it better th an h e is
th at th e earth goes around th e sun, be-
cause not being an astronomer with direct
knowledge of th e experiments involved
h e h as th e astronomical facts only from
th e testimony of people h e trusts, a reli-
able th ough not of course infallible source
of knowledge.1" T h e economic fact h e h as
mostly from looking into h imself and see-
ing it sitting th ere. T h e ceremony of th e
official rh etoric to th e contrary, it is not
because th e law of demand h as predicted
well or h as passed some statistical test th at
it is believed-alth ough such furth er tests
are not to be scorned. T h e "scientific"
ch aracter of th e tests is irrelevant. It may
be claimed in reply th at people can agree
on precisely wh at a regression coefficient
means but cannot agree precisely on th e
ch aracter of th eir introspection. Even if
true (it is not) th is is a poor argument for
ignoring introspection if th e introspection
is persuasive and th e regression coeffi-
cient, infected with identification prob-
lems and errors in variables, is not. Preci-
sion means low variance of estimation; but
if th e estimate is greatly biased it will tell
precisely noth ing.
An extreme case unnecessary for th e ar-
gument h ere will make th e point clear.
You are persuaded th at it is wrong to mur-
der better th an you are persuaded th at
inflation is always and everywh ere a mon-
etary ph enomenon. T h is is not to say th at
similar tech niques of persuasion will be
applicable to both propositions. It says
merely th at each with in its field, and each
th erefore subject to th e meth ods of h onest
persuasion appropriate to th e field, th e
one ach ieves a greater certainty th an th e
oth er. T o deny th e comparison is to deny
th at reason and th e partial certitude it can
bring applies to nonscientific subjects, a
common but unreasonable position. T h ere
is no reason wh y specifically scientific per-
suasiveness ("at th e .05 level th e coeffi-
cient on M in a regression of prices in 30
countries over 30 years is insignificantly
different from 1.0") sh ould take over th e
wh ole of persuasiveness, leaving moral
persuasiveness incomparably inferior to it.
Arguments such as th at "murder violates
th e reasonable moral premise th at we
sh ould not force oth er people to be means
to our ends" or th at "from beh ind a prena-
tal veil of ignorance of wh ich side of th e
murderer's revolver we would be after
birth we would enact laws against mur-
der" are persuasive in comparable units.
Not always, but sometimes, th ey are, in-
deed, more persuasive, better, more prob-
able (T oulmin, 1958, p. 34). We believe
and act on wh at persuades us-not wh at
persuades a majority of a badly ch osen
jury, but wh at persnades well educated
participants in our civilization and justly
influential people in our field. T o attempt
to go beyond persuasive reasoning is to
let epistemology limit reasonable persua-
sion.
VIII. T h e Good of Rh etoric
Better Writing
Well, wh at of it? Wh at is to be gained
by taking th e rh etoric of economics seri-
ously? T h e question can be answered by
noting th e burdens imposed by an unex-
amined rh etoric.
First of all, economics is badly written,
written by a formula for scientific prose.
T h e situation is not so bad as it is in, say,
psych ology, wh ere papers th at do not con-
form to th e formula (introduction, survey
of literature, experiment, discussion, and
so forth ) are in some journals not accepted.
But economists are stumbling towards
conventions of prose th at are bad for clar-
ity and h onesty. T h e study of rh etoric, it
must be said, does not guarantee th e stu-
dent a good English style. But at least it
makes h im blush at th e disdain for th e
reader th at some economics exh ibits (Wal-
ter Salant, 1969).
"T h e astronomical "fact" th at th e earth goes
around th e sun, of course, is not even a properly
modernist fact, th ough it is commonly treated as one
in such discussions. Wh ich goes around wh ich is a
matter of th e point of view one ch ooses. It is th e
aesth etics of th e simpler th eory, not th e "facts," th at
leads to h eliocentrism.
T h e economist's English contains a mes-
sage, usually th at "I am a Scientist: give
way." Occasionally th e message is more
genial: Zvi Grilich es' irony says "Do not
make a fetish out of th ese meth ods I am
expounding: th ey are mere h uman arti-
fices." Milton Friedman's style, so careful
and clear, h as to an exceptional degree
th e ch aracter of th e Inquirer. We will not
raise up a race of Dennis Robertsons, Rob-
ert Solows, George Stiglers, or Robert Lu-
cases by becoming more sensitive to th e
real messages in scientific procedure and
prose, but maybe we will stunt th e growth
of th e oth er kind.
Better T each ing
A second burden is th at economics is
badly taugh t, not because its teach ers are
boring or stupid, but because th ey often
do not recognize th e tacitness of economic
knowledge, and th erefore teach by axiom
and proof instead of by problem-solv-
ing and practice. T o quote Polanyi yet
again:
. . .th e transmission of knowledge from one
generation to th e oth er must be predominately
tacit.... T h e pupil must assume th at a teach -
ing wh ich appears meaningless to start with
h as in fact a meaning th at can be discovered
by h itting on th e same kind of indwelling [a
favorite Polanyi expression] as th e teach er is
practicing [1966, p. 61].
It is frustrating for students to be told th at
economics is not primarily a matter of
memorizing formulas, but a matter of feel-
ing th e applicability of arguments, of see-
ing analogies between one application and
a superficially different one, of knowing
wh en to reason verbally and wh en math e-
matically, and of wh at implicit ch aracter-
ization of th e world is most useful for cor-
rect economics. Life is h ard. As a blind
man uses h is stick as an extension of h is
body, so wh enever we use a th eory "we
incorporate it in our body-or extend our
body to include it-so th at we come to
dwell in it." Problem-solving in economics
is th e tacit knowledge of th e sort Polanyi-
describes.12 We know th e economics, but
cannot say it, in th e same way a musician
knows th e note h e plays with out con-
sciously recalling th e tech nique for exe-
cuting it. A singer is a prime example, for
th ere is no set of mech anical instructions
one can give to a singer on h ow to h it a
h igh C. Al Harberger often speaks of so-
and-so being able to make an economic
argument "sing." Like th e directions to
Carnegie Hall, th e answer to th e question
"h ow do you get to th e Council of Eco-
nomic Advisors?" is "practice, practice."
Better Foreign Relations
A th ird burden placed on economics by
its modernist meth odology is th at eco-
nomics is misunderstood and, wh en re-
garded at all, disliked by both h umanists
and scientists. T h e h umanists dislike it for
its baggage of antih umanist meth odology.
T h e scientists dislike it because it does not
in reality attain th e rigor th at its meth od-
ology claims to ach ieve. T h e bad foreign
relations h ave many costs. For instance,
as was noted above, economics h as re-
cently become imperialistic. T h ere is now
an economics of h istory, of sociology, of
law, of anth ropology, of politics, of politi-
cal ph ilosoph y, of eth ics. T h e flabby meth -
odology of modernist economics simply
makes th is colonization more difficult,
raising irrelevant meth odological doubts
in th e minds of th e colonized folk.
Better Science
A fourth burden is th at economists
pointlessly limit th emselves to "objective"
facts, admitting th e capabilities of one's
own or oth ers' minds as merely sources
of h ypoth eses to be tested, not as th em-
selves arguments for assenting to h ypoth e-
ses. T h e modernist notion is th at common
sense is nonsense, th at knowledge must
someh ow be objective, not versteh en or
120n th is score, and some oth ers, I can h eartily
recommend McCloskey, 1982.
introspection. But, to repeat, we h ave
much information immediately at our dis-
posal about our own beh avior as economic
molecules, if we would only examine th e
grounds of our beliefs. T h e idea th at obser-
vational proofs of th e law of demand, such
as th e Rotterdam Sch ool's multi-equation
approach , are more compelling th an in-
trospection is especially odd. Even th e
econometrics itself would be better, as
Ch ristoph er Sims h as recently argued:
If we th ink carefully about wh at we are doing,
we will emerge, I th ink, both more confident
th at much of applied econometrics is useful,
despite its differences from ph ysical science,
and more ready to adapt our language and
meth ods to reflect wh at we are actually doing.
T h e result will be econometrics wh ich is more
scientific [by wh ich h e means "good"] if less
superficially similar to statistical meth ods used
in experimental sciences [Sims, 1982, p. 25].
T h e curious status of survey research
in modern economics is a case in point.
Unlike oth er social scientists, economists
are extremely h ostile towards question-
naires and oth er self-descriptions. Second-
h and knowledge of a famous debate
among economists in th e late 1930s is part
of an economist's formal education. T h e
debate concerned th e case of asking busi-
nessmen if th ey equalized marginal cost
to marginal revenue. It is revealing th at
th e failure of such a study-never mind
wh eth er th at was indeed th e study-is
supposed to convince economists to aban-
don all self-testimony. One can literally
get an audience of economists to laugh
out loud by proposing ironically to send
out a questionnaire on some disputed eco-
nomic point. Economists are so impressed
by th e confusions th at migh t possibly re-
sult from questionnaires th at th ey aban-
don th em entirely, in favor of th e confu-
sions resulting from external observation.
T h ey are unth inkingly committed to th e
notion th at only th e externally observable
beh avior of economic actors is admissable
evidence in arguments concerning eco-
nomics. But self-testimony is not useless,
even for th e purpose of resolving th e mar-
ginal cost-average cost debate of th e
1930s. One could h ave asked "Has your
profit margin' always been th e same?"
"Wh at do you th ink wh en you find sales
lagging?" (Lower profit margin? Wait it
out?) Foolish inquiries into motives and
foolish use of h uman informants will pro-
duce nonsense. But th is is also true of fool-
ish use of th e evidence more commonly
admitted into th e economist's study.
Better Dispositions
A fifth and final burden is th at scientific
debates in economics are long-lasting and
ill-tempered. Journals in geology are not
filled with articles impugning th e ch arac-
ter of oth er geologists. T h ey are not filled
with bitter controversies th at drone on
from one century to th e next. No wonder.
Economists do not h ave an official rh etoric
th at persuasively describes wh at econo-
mists find persuasive. T h e math ematical
and statistical tools th at gave promise in
th e brigh t dawn of th e 1930s and 1940s
of ending economic dispute h ave not suc-
ceeded, because too much h as been asked
of th em. Believing mistakenly th at opera-
tionalism is enough to end all dispute, th e
economist assumes h is opponent is dish on-
est wh en h e does not concede th e point,
th at h e is motivated by some ideological
passion or by self-interest, or th at h e is
simply stupid. It fits th e naive fact-value
split of modernism to attribute all dis-
agreements to political differences, since
facts are alleged to be, unlike values, im-
possible to dispute. T h e extent of disagree-
ment among economists, as was men-
tioned, is in fact exaggerated. T h e amount
of th eir agreement, h owever, makes all
th e more puzzling th e venom th ey bring
to relatively minor disputes. T h e assaults
on Milton Friedman or on Joh n Kenneth
Galbraith , for example, h ave a bitterness
th at is quite unreasonable. If one cannot
reason about values, and if most of wh at
matters is placed in th e value h alf of th e
fact-value split, th en it follows th at one
will embrace unreason wh en talking
about th ings th at matter. T h e claims of
an overblown meth odology of Science
merely end conversation.13
A rh etorical cure for such disabilities
would reject ph ilosoph y as a guide to sci-
ence, or would reject at least a ph ilosoph y
th at pretended to legislate th e knowable.
T h e cure would not th row away th e illu-
minating regression, th e crucial experi-
ment, th e unexpected implication unex-
pectedly falsified. T h ese too persuade
reasonable sch olars. Non-argument is th e
necessary alternative to narrow argument
only if one accepts th e dich otomies of
modernism. T h e cure would merely rec-
ognize th e good h ealth of economics, dis-
guised now under th e neurotic inh ibitions
of an artificial meth odology of Science.
13Listen to Harry Joh nson: "T h e meth odology of
positive economics was an ideal meth odology for
justifying work th at produced apparently surprising
results with out feeling obliged to explain wh y th ey
occurred" (Joh nson, 1971, p. 13). I do not need to
th ink about your evidence for widespread monopo-
listic competition because my meth odology tells me
th e evidence is irrelevant.
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