Some Metaphors Are Better Than Others: Deirdre McCloskey and the Capital Debates


Well, my previous piece on the work of Deirdre McCloskey generated some discussion. I just thought that perhaps I should lay out what I find problematic about her work.

The problem with McCloskey is that she practices a sort of false postmodernism of the most insipid kind. Now, I’m not one to throw around that term too much — I greatly admire many of the post-structuralist philosophers. What I mean when I say that is that McCloskey reduces everything to literary criticism and then consigns rational debate to the bin.

I think that this is disingenuous in the extreme because, of course, she herself as a working economist does think that some theories are more true than others that are more false. But the discourse in her books shuts the debate down before it reaches this stage. Consider the following passage on the Cambridge Capital Controversies from her book The Rhetoric of Economics,

The metaphor [of ‘capital’] got out of its coffin in an alarming fashion in the Debate of the Two Cambridges in the 1960s. The violence of the combat suggests that it was about something beyond mathematics or fact. The combatants hurled mathematical reasoning and institutional facts at each other, but the important questions were those you would ask of a metaphor: Is it illuminating, is it satisfying, is it apt? How do you know? How does it compare with other economic poetry? Do we want to talk this way? Why not? After some tactical retreats by Cambridge, Massachusetts, on points of ultimate metaphysics irrelevant to these important questions, mutual exhaustion set in, without decision. Daniel Hausman, a philosopher of economics, noted this in his book on the subject (1981) and nearly saw why. The reason there was no decision reached was that the important questions were literary, not mathematical or statistical (or philosophical). The debaters were answering the wrong questions, as though showing mathematically or statistically that a woman cannot be a summer’s day. No one noticed. The continued vitality of the idea of an aggregate production function (in the face of mathematical proofs of its impossibility) and the equal vitality of the idea of aggregate economics as practiced in parts of Cambridge, England (in the face of statistical proofs of its impracticality), would otherwise be a mystery. (p45)

“Oh, those silly old economists!” we are supposed to say, “how on earth didn’t they realise that they were really just dealing with metaphors?” After a chuckle we go back to our respective camps without having really said anything at all.

The problem with the above paragraph is that the debaters were not as silly as McCloskey thinks. Joan Robinson, who kicked off the debate, knew exactly what it was all about. Indeed, I would say that Joan Robinson had one up on McCloskey because she saw that what was at issue here was only secondarily a question of metaphor. Primarily it was a question of a literary trope that McCloskey seems unaware of; that is, an ’empty’ or ‘floating signifier‘**. Floating signifiers are words without defined meanings. And this is precisely what Robinson found the idea of ‘capital’ to be. (It is also what Sraffa sought to avoid by using a neo-Ricardian framework — in this view, which Robinson adhered to, capital is quite clearly defined as dated labour inputs; or ‘dead labour’, to use Marx’s metaphor).

But of course this all gets buried because McCloskey — doing some rather half-hearted literary excavation — wants to insist that its all about metaphor. Well, let’s take the metaphorical aspects of the Capital Debates then.

The question then becomes which is a more apt metaphor for capitalist society? Is the notion that every person gets compensated exactly in line with the marginal product they produce a superior metaphor to the idea that capital and labour struggle over the social product? That is not an airy fairy question. There is an answer to such a question. But McCloskey seems to imply that there isn’t. She pretends that all metaphors have the same standing. But this is nonsense.

Let’s show why this is nonsense by taking two different metaphorical sentences about modern capitalism.

(1) Modern capitalism is like a machine that grinds over the globe, taking in underdeveloped societies at the front and spitting them out with higher levels of development out the back.

(2) Modern capitalism is like a turtle that gets up out of the ocean and climbs on the beaches of underdeveloped societies before plodding along for a while and then finally falling asleep in the sun of a newly developed country.

Now, are these two metaphors equally valid? Of course not! Metaphor (1) contains information that actually describes some features of modern capitalism. Metaphor (2) is a confused hodge-podge that conveys nothing of relevance about contemporary capitalism. If it were read out of context Metaphor (2) might be considered a sort of absurdist or surrealist joke, while Metaphor (1) would not be out of place in a glossy magazine like The Economist. One metaphor conveys information better than the other — which tries to scramble communication for surrealistic laughs.

So, back to the Capital Debates. Which metaphor is better for describing the world we live in? Well, let’s see. We know from recent empirical work by James Galbraith and his team that income inequality largely tracks the upswings and downswings in financial markets. Well now, the marginalist would have to then say that the marginal productivity of capital tracks the stock market.

Okay, but I would say that the stock market is more so speculative because it crashes all the time and it’s P/E Ratios are all over the place. Indeed, if the marginal productivity of capital tracked the stock market it would be terribly volatile, wouldn’t it? It seems to me highly unlikely that the production share of capital goes through such swings. In which case the stock market is more likely a redistributive mechanism that is utilised by those with already existing economic power and thus the “division of the social product” metaphor seems a better fit.

Now, all that considered, the Cambridge UK theory is looking a lot more plausible than the old marginal productivity theory. Not only that but it appears ever more pressing given that we are faced with such horrendous income inequalities today.

In an ideal world, where both sides of these debates had an equal say in the halls of academia and policy, McCloskey’s relativism would be a harmless distraction. But if it were ever taken seriously today it would simply mean that we should all just stop arguing rational points at all. After all, it’s only a whole pile of metaphors! And the Capital Debates are really just about people with different metaphorical constructions about how the world works (no they are not… but let’s play along…)! We’re never going to agree, anyway, so what’s the point!?

I’ll tell you who wins the day should that nonsense ever be accepted: the group with the most institutional power. That is, the group of economists from out of which McCloskey comes. In another essay McCloskey defends the Greek sophists. She paints a nice picture but she forgets to mention one thing: the sophists were trained to wield the power of the state over their fellow men. And as the great filmmaker Errol Morris once said:

Well, someone comes up to you and says “I’m a postmodernist” or “I don’t care about truth” or “Truth is subjective and there are all kinds of different versions of truth, your truth, my truth, someone else’s truth”, and then you say to them “Oh, so it doesn’t matter to you who pulled the trigger? It doesn’t matter to you whether someone committed murder or not? Or someone in jail is innocent or not? That’s just a matter of personal opinion?” I strongly think that our intuition is that it does matter. It matters a great deal what happens in the world.

In her relativism McCloskey forgets that, well, some people are in jail just as some economists find it more difficult than others to get jobs and publications.


** Actually McCloskey probably is aware of ‘floating signifiers’ as her emphasis on the ‘oomph’ factor in empirical work deploys such a floating signifier. The question then becomes: why did she want to veneer over this aspect of the debates? The answer, I would say, is because she wants to remain above and beyond these debates while providing a ‘metacommentary’ but if she actually studied them properly she would be forced to realise that some of the participants were not as naive as she thinks that they were. In that case she might — shock! — have to actually take a side in the debate by weighing up the logic and completeness of the arguments put forward.



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Philip Pilkington is a macroeconomist and investment professional. Writing about all things macro and investment. Views my own.You can follow him on Twitter at @philippilk.
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5 Responses to Some Metaphors Are Better Than Others: Deirdre McCloskey and the Capital Debates

  1. Perhaps enlightenment is simply finding the proper tree to meditate beneath, trees being among favored places of saints and for that matter any who wish to avoid the harshness of the sun at midday, and perhaps not.

    If the tree however was set close beside a well traveled road the passing persons and traffic would seem like a river, its current rising and falling as the day progressed and the diversity of human commerce trekked along.

    Now falsehoods come to us in seemingly infinite variety of forms, some perfectly acceptable even friendly, while some of these less than truths test even the best, most open minds and clearest conscience.

    Walking the straight path away from falsehood one might pick any direction only to find themselves right back where they started. Sitting down under just that right tree begins to make sense. There at least we might take some instruction from falsehood, not to imitate but to recognize it.

    Maybe there was one of 10,000 buddhas, who when young sat down under such a tree, beside such a road and asked – what is the truth of myself ?

    All those observed passing seemed intent on some object or another, carts full of goods driven to sale, pilgrims journeying to this or that temple or shrine, all this variety and more seeking one end or another.

    The day was coming to its close when one passerby attracted attention. An obviously intoxicated person staggering along, singing loudly and carrying two empty wineskins on a stick held over the shoulder. ” Where are you going?sir” the buddha questioned. Ha, the man laughed, “to buy as much wine as I can with these coins, the more the better at the best price, as long as it gets the job done”. He grinned, started singing and continued down the road.

    The buddha folded his blanket then returned home where his mother was cooking over a small stove. “Mother” he said “I discovered the truth today” while she looked doubtfully at him. “The truth is what you are willing to do, give or pay to get what you want.” She banged the lid down on the pot and after striking him sharply with the spoon paused then firmly spoke ” The Truth of Being is the Golden Thread which binds humanity together in the fulfillment of each life’s purpose.” and giving an intent glance eye to eye turned back to the stove.

    The buddha so taken aback fell over a small stool and picking himself up went out the door to nurse the dusk until the meal was ready. He looked up through the branches of the tall tree shading the house and saw stars begin to appear out of the night sky.

    Hey Phillip, thought you might enjoy adding this to the discussion of metaphor, validity, appropriate use and why it matters.
    Still a regular here at Fixing the Economists. Scotland

  2. Anand says:

    I read some of McCloskey’s work myself and had the opposite reaction to yours. Just so you know where I am coming from, I am not an economist. I am a theoretical computer scientist. My political hero is Noam Chomsky and agree with most of what he says. I read a lot of Alan Sokal on the dangers of postmodernism and agree with most of what he says. Both Chomsky and Sokal are vehemently opposed to postmodernist thinking, and I completely agree with what they say.

    Nevertheless, I found her useful. The essay I found most intersting from McCloskey was “Rhetoric of Economics” (henceforth: RoE). I didn’t read the book, just the article. I also read the Secret Sins of Economists (SSoE).

    Let me summarize what you say is wrong with her writing and then say why I disagree. You say that “McCloskey reduces everything to literary criticism and then consigns rational debate to the bin.” “She pretends that all metaphors have the same standing”. You say she does not want to “actually take a side in the debate by weighing up the logic and completeness of the arguments put forward.” You worry that “I’ll tell you who wins the day should that nonsense ever be accepted: the group with the most institutional power.”

    In the last post you write: “why McCloskey is, for all intents and purposes, acceptable to the mainstream: she justifies the rubbish that pours out of the profession”. You worry that the metaphor of children as durable goods “…also has overtones of commercialism and commodification that indicate the user of the metaphor has probably absorbed it un-self-critically from the dominant discourse of the day.”

    Each of the above statements is unfair at best and wrong at worst. Let me start from the last and go on backwards.

    She explicitly denies all the statements you imputed to her. Her whole point of metaphor is not the use them “un-self-critically” but to realize that they are metaphors, not reality. This will make them more-self-conscious of their use. For example, in “durable goods” metaphor, she simultaneously talks about (RoE): “The list of similarities could be extended further and further gradually revealing the differences as well: “children like durable goods are not objects of affection, children like durable goods do not have opinions”.” Does this sound like “commodification and commercialization”?

    When you say that McCloskey justifies the rubbish that pours out of the profession. Here is she in SSoE: “You can’t believe anything that comes out of
    the Two Sins. Not a word. It is all nonsense, which
    future generations of economists are going to have to
    do all over again. Most of what appears in the best
    journals of economics is unscientific rubbish.”

    On the point that she thinks all metaphors are the same, and rational debate is consigned to the bin. This is what you mentioned the main problem with her work is, in your comment: “It’s all metaphor, so the metaphor that is being used really doesn’t matter”. That is explicitly not what she is saying. She is simply saying that once the self-imposed bounds of simplistic modeling with unrealistic assumptions (changing them and getting new results, without getting any nearer to the truth) and the fetishization of significance testing is broken through, one can use new ways of thinking, like anthropology and so on, to get at the real world. She addresses the fear that this will lead to irrationality in a whole section in RoE (which you mentioned obliquely when you talked about the sophists). She wants more empiricism, not less. She objects to the Ricardian Vice, same as James Galbraith.

    Here is a very short article where she makes the point:

    Here are two quotes:

    ” Gary Becker “shows” that families are efficient because they exploit comparative advantage. In neither case does the theoretical reasoning in itself, without calculating the oomph, “show” anything of the kind”

    “Let me be clear. A scientist must of course think and watch, theorize and observe. Real and progressive sciences, like social history or geomorphology, do both. But the trouble with blackboard proof and statistical significance is that though they look like thinking and watching, they are actually not.”

    She is not talking about an extreme pomo program, but a modest program which recognizes the different standards and ways of argument. By recognizing the implicit use of metaphor used all the time by economists, they would become more self-conscious about them. The metaphors are not all equal. Each has to be argued empirically. In this respect, Alan Sokal’s defence of a “modest scientific realism” is not too far from her position.

    • McCloskey is a dyed-in-the-wool Chicago School economist. Everyone in the profession knows it. She defends awful right-wing propaganda and trash economics. You’ve been fooled. Sorry.

  3. Anand says:

    Even dyed-in-the-wool Chicago School economists can be right sometimes. I have certainly not become a raving right-winger after reading her.

    I guess my post was too long to reply to. That is quite ok.

  4. Hak Choi says:

    My objection to “aggregate production function” can be found in (1), and my attempt to clarify the capital controversy in (2).

    (1) Choi, Hak. 2009a. “Much Ado About the Aggregate Production Function.”
    (2) ____. 2009b. “Resolving the Cambridge-Cambridge Controversy: Clarifying the Tree and Forest Confusion.”

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