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If You're So Smart: The Narrative of Economic Expertise.

As in his earlier book, The Rhetoric of Economics |1~, Donald McCloskey again applies the devices of literary criticism to the literature of economics. He proposes to his colleagues that they think of economics as a form of rhetoric, but he does not use the term pejoratively. Rhetoric is the study of how people persuade.

Those familiar with McCloskey's work will find this book to be an engaging and literate continuation of the themes explored in The Rhetoric of Economics. Economists cannot avoid communicating rhetorically, a style of argument which consists of facts, logic, metaphors and story. Persuasion requires that all of these be used. While scholars must be factual and logical, they must also devise good metaphors and construct compelling stories.

McCloskey is a superb storyteller who is comfortable using a broad spectrum of material including literature, history, ethics, linguistics and poetry. This book is rich with examples of how metaphors and stories have been used to shape one's opinion about economic research. Stories such as Great Britain's so-called economic "failure" after 1870 and Robert Fogel's remarkable counterfactual study on the American railroad industry are used to illustrate how they support economic arguments. But how do we know whether the stories being told by scholars are good or bad ones? The answer is that they must be tested against other parts of the rhetorical tetrad--facts, logic and metaphor.

The author also examines the limits of economic expertise. The claim that prediction is the defining feature of a "real" science and economics possesses that feature has been challenged before by McCloskey |1~. Economics is seen as an historical and philosophical rather than a predictive science. When economists pretend otherwise they risk the scorn of non-economists who ask the American question: If you're so smart why ain't you rich? The book's title is a literary device used by McCloskey to demonstrate the practical limitations of economic expertise. Perhaps the market test of riches explicit in the American question is a reasonable one if the expertise claims actual riches (or for that matter glory or power) from being able to predict the future. But rational expectations leads people to react to economic predictions in ways that dampen or magnify those predictions. The inability of economists to provide consistent and accurate forecasts of the stock market, interest rates, or the price of corn, for example, should be enough to elicit a sense of intellectual humility:

The American question puts more fundamental limits on what we humans can say about ourselves. It puts a limit on mechanical models of human behavior. It does not make the mechanical models useless for interesting history or routine predictions; it just makes them useless for gaining an edge about the future.

The author suggests that economists should accept a more modest role which is to speak well about the past and reflect intelligently about current conditions.

The economic profession's attempt to sidestep ethical issues is ridiculed in Chapter Ten of the book ("Keeping the Company of Economists"). Economic stories, whether recognized or not, do have an ethical context. There is an implied reader of economic papers who is not entirely attractive to us. The selfish, calculating and unreflective economic man is not someone we like. Nevertheless, McCloskey acknowledges that bourgeois values are necessary and useful. The economic man is "realistic, unsentimental, aware of life's scarcity". Because we have failed to recognize the ethical burden of our work, economists "have limited their imagination in the telling of ethical stories". What is suggested is that economists should rediscover the philosophical tradition of Adam Smith and John Steward Mill and engage the intellectual community in an ethical conversation.

The concluding chapter illustrates how rhetoric can influence public policy. Although many examples are provided, Lester Thurow's The Zero-Sum Solution: Building a World Class American Economy |2~ is the author's most striking illustration of inappropriate rhetoric. Thurow uses "sporting" and "war" metaphors to describe our economic relationships with other nations. There is talk about "beating" the rest of the world. Foreign trade is frequently viewed as the economic equivalent of "war". These metaphors do not seem appropriate since trade benefits everyone whereas in sport or war there is only one winner. In addition, the term "social problems" may be used where no "real" problem exists, encouraging us to find an unnecessary solution. For example, the so-called "balance-of-payments problems" may not be something requiring government action.

According to McCloskey, the trouble with this kind of rhetoric is that it may lead to economic nationalism which then galvanizes the public to demand remedies which are unwise. The fact that many of our politicians continue to call for either trade restrictions or industrial policy as a solution to our current trade "problems" with Japan seem to support the author's concern. While this may not have been Thurow's intention, all the more reason to choose metaphors more carefully. The more appropriate metaphors say this: "we do not need to be number one in order to be happy and prosperous; we do not need to crush the Japanese to keep our self-respect".

This is an elegant and lively book that sometimes gives us a disturbing portrait of the economic profession. At times McCloskey's criticism of economists appears to be somewhat extravagant. Nevertheless, this book is highly recommended. McCloskey demonstrates that even economic writing can be provocative yet still be enjoyable to read.


1. McCloskey, Donald N. The Rhetoric of Economics. Madison, Wisconsin: University of Wisconsin, 1985.

2. Thurow, Lester. The Zero-Sum Solution: Building a World-Class American Economy. New York: Simon and Schuster, 1985.
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Author:Sandler, Ralph
Publication:Southern Economic Journal
Article Type:Book Review
Date:Apr 1, 1993
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