I really like the name of this blog, I must say. How one can go through life as a pessimist I don't know. Maybe you get caught with your pants down a little less often, but in the terms of Professor Walter Williams, I prefer opting for the type II error when it comes to predicting a better future than a type I error (he professes the reverse, though, but after having dinner with so many politicians maybe it's merited).
We as economists (or future economists) should be optimistic about most things not related to the expansion of government. If you listen to the popular idioms regarding economists - that they've predicted nine of the last five recessions, etc, heck, Economics's nickname is the Dismal Science thanks to the writings of the Reverend Malthus, and if you read the writings of the Reverend Krugman you might be inclined to think the definition is still valid. Really though, if you look at what Economics tells us, it's hard to think of it as anything BUT an optimistic science. The Fundamental Theorem of Exchange tells us that voluntary trade is mutually beneficial, which means that people, by the simple act of trading with each other can make everyone better. Ricardo teaches us that everyone - not just the rich, the powerful, the least ethical, so on, but everyone can be enriched by specializing in the thing they are comparatively best at. Economics even tells us that greed, that dirty vice that we're all supposed to resist, can be turned into a productive force.
Despite all of this, there is hardly a shortage of doom-saying Economists. If you took a poll of Economists writing for a public audience, they might say that the Mayans were unrealistic in believing that we would get to 2012. Certainly, when the economy is rocky people are more willing to listen to the people who think we're on a train to hell.
So what I want to do is highlight an economist who is telling us just the opposite - Deirdre McCloskey. McCloskey is, as maybe some have heard, my current academic crush. I recently read her latest book The Bourgeois Virtues: Ethics for an Age of Commerce. It is a book seemingly aimed at two audiences: first and more generally, it is aimed at those who think Capitalism is a force of amorality or immorality, and she argues that it is in fact conducive to a moral world. Her second target audience is the economist, especially the Utilitarian economist, and her goal is to preach the virtue of Virtues. Economics seems to have become a science where Prudence, or Utility, is king (if there is even anything else in play). She thinks we economists should remember and take into account ALL of the virtues when practicing our science.
She reaches back to Aristotle and St. Thomas Aquinas for these virtues, of which there are seven; the Pagan four, Courage, Justice, Temperance, and ol' Prudence, and the Christian three, Hope, Faith, and Love. As a side note, while previous sentence contains scary words like 'Saint' and 'Christian,' non-believers like me can take just as much from it (and heck, even Ayn Rand once said the only philosophers ever worth a damn were the three A's: Aristotle, Aquinas, and... you guess). Ever the economist, McCloskey actually has a chart of each of the virtues, with 'self vs community' on the x-axis and 'profane vs transcendent' on the y axis. So what does McCloskey qua virtue ethicist have to say to economists? Well, lots of things - this is a 600 page book and volume one of a conceived of six volumes - but the basic message is this: the economy cannot run on Prudence alone. Entrepreneurs require Courage and Hope and Faith (not just a low CRRA), workers and capitalists require a Love of their work and a love of those close to them, and a love of your fellow man doesn't always hurt. Society must be Just (something Pinochet didn't understand) and, yes, Prudence and Temperance are necessary for making things work.
Why the Bourgeois Virtues? Well, because we're all Bourgeois now. Even the detractors of Capitalism are all Bourgeoisie these days - how many Proletarians get to sit around for four years reading and learning how evil wealth is?
So let us Economists stay optimistic (Hope + Faith + Courage) and convince others that our science is anything but dismal.
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