What Boulding Said Went Wrong with Economics, A Quarter Century On

Deirdre Nansen McCloskey¹
Forthcoming 2013, Routledge volume edited by Wilfred Dolfsma
Filed under editorials

In 1986, in one of his 1000-odd articles, this one published in The American Economist in connection with receiving the John R. Commons Award from the undergraduate economics honorary society, Boulding told us what had gone wrong in economics up until then. Some of what he worried about in 1986 seems dated now. The nuclear threat, whose impetus, Boulding noted, was the Cold War, has since receded, and with it the wise concern that propelled so much of Boulding's work in the public sphere. In 1986 we had lived since 1945 with the threat of nuclear Armageddon. By then our fears were perhaps not quite so vivid as in the 1950s, when American school children were drilled to hide, if the bombs fell, under their desks (the memory is the basis of a vulgar but funny spoof of a civil defense poster, which ends with ''kiss your a.. good-bye''). Yet Boulding the great Quaker pacifist was still in 1986 properly fearful, a fear which in most of us had by long acquaintance dulled-even the Cuban Missile Crisis of 1962 was by then a fading memory. One can't stand to attention, or hide under one's desk, all the time. Boulding could stay alert to the reality of the threat because his fear was rooted in his solid Christian faith and his solid economic understanding, both.

Likewise his strictures in 1986 on the then and still feeble contributions of economists to understanding the nature and causes of the wealth of nations, especially in what was in those days appropriately called the Third World, have lost some of their bite. Economists, whether Marxist or bourgeois, had been giving bad advice to China and India for a long time. In China since 1978 and India since 1991, however, Adam Smith pretty much rules, and the results have been astounding. The long tradition of economics has by now earned its keep. Boulding had been saying for some time (for example in 1964) that what was needed for the great transition to a stable, high-level technology was a ''growth industry,'' permeating the society. That is surely correct. Look around a country like Sweden or Korea and you can see such an industry puffing away. But, as we economists all thought in 1964, he added that population needed to be controlled (though surely as a pacifist he would have been horrified at the means that governments subsequently adopted to achieve Malthusian control, following mistaken First-World ideas about limits to growth). And he added, too, that ''accumulation of goods'' in a capital stock is what achieves growth (Boulding 1964, p. 105). Neither is correct. The better guide to the economics of population turned out to be Julian Simon, who wrote in 1981 The Ultimate Resource. And the better guide to mistaken "capital fundamentalism" in foreign aid turned out to be William Easterley, who wrote in 2001 The Elusive Quest for Growth. But in those days of the 1980s many of us still believed in the verities of postwar development economics: stop population growth; pile up the capital; by all means plan. Boulding wrote later in the same essay that ''the success of Japanese development is due simply to the fact that Japan [by planning] devoted a substantial portion of its resources to the growth industry, and particularly to the human resources'' and then commended Max Weber's emphasis on ''hard work and thrift'' (1964, p. 116). Incorrect again.

Yet Boulding immediately afterwards in the old 1964 essay got it exactly right: ''Mere accumulation is not enough. Economic development does not consist merely in the piling up of things, but in the accumulation of new kinds of things.'' Despite the ongoing attempts in New Growth Theory to make growth lie down on capital accumulation one more time, the argument in truth should not shock a thoughtful economist. All economists have realized since the 1870s that economics is something that happens between people's ears, and always about the future, of which Yogi Berra said: "Prediction is difficult. Especially about the future." The economists learned such truths after the 1870s from the various forms of neoclassical economics Mengerian or Marshallian, or from institutionalism or from modern Marxism. Valuations, opinions, the image, talk on the street, imagination, expectations, hope are what drive an economy. In other words, as Boulding knew, you don't have to be a materialist, denying the force of ideas, just because you are an economist. Rather to the contrary. One of the leading contributors to New Growth Theory, Robert Lucas, declared that "for income growth to occur in a society, a large fraction of people must experience changes in the possible lives they imagine for themselves and their children. . . . In other words. . . economic development requires [in V. S. Naipaul's phrase] 'a million mutinies.'" ³

Economic growth depends mainly on Schumpeterian/Austrian innovation, which is what Boulding believed on his good days, not, as some economists and historians still believe, on classical/Marxist/Samuelsonian accumulation, reallocation, exploitation. Boulding distinguished human knowledge from know-how, the one being science, the other craft. But both drove the world, ''genetically,'' as he would say, that is by the inheritance of skills and ideas. ''Production functions involving only land, labor and capital. . . never work and never explain economic development'' (1990, pp. 127-128). Once upon a time the economists thought that growth depended on physical capital and now some think that it depends on various sorts of human capital. But the economist Peter Howitt has reported on a recent literature of present-day cross-country comparisons which concludes that "more than 60 percent of the cross-country variation of per-worker GDP is attributable to productivity rather than to the accumulation of physical and human capital," and over 90 percent of its growth rate. ³ "Thus it seems," he argues, "that almost everything to be explained by the theory lies in the Solow residual," the A term in Solow's classic paper of 1957. "This is part of the evidence," Howitt continues, "that inclines me towards innovation-based growth theory." It seems a sensible conclusion, and echoes Boulding's as early as 1964: "It is clear that we must look at pure science, technological change, and social invention as parts of a single pattern of development in which each supported the other" (Boulding 1964, p. 11).

That is, what matters is Boulding's "growth industry," supported by the surrounding society. The finding was anticipated by Smith, whose Theory of Moral Sentiments (1759 [1790]) treats of dignity, and whose Wealth of Nations treats of liberty. Smith believed that the obvious and simple system of natural liberty was necessary and sufficient for the (modest) growth he imagined. Kenneth Boulding was no dogmatist of laissez faire, but in view of the success of Smithian economic liberty in China and Smithian dignity in India, and our clearer understanding now of their importance in the first Industrial Revolution, I think he would have agree (had he lived to age 112) that forced or artificial capital accumulation, or forced or artificial allocation of labor, is not the ticket that we proud and rationalist economists of the 1960s thought it was.

On many of the points Boulding made in 1986, though, the essay could have been written yesterday. His warning a quarter of a century ago about ''the pathology of the financial system,'' and in particular the burden of debt, looks prophetic, though Boulding put it in his idiosyncratic way as the problem of interest payments of all kinds, public and private, not merely the government's debt. He worried, too, about the ''casino effect'' of such financial markets, a worry which could not be heard very well in 1986, but rings true in these latter days: ''The Great Depression hovers over the imagination. . . almost as much as does the nuclear threat. It was the Hiroshima of the market, and who knows whether it might not be repeated'' (1986, p. 6). In September 2008 we faced Hiroshima.

On a more strictly methodological point Boulding was all his life correctly suspicious of ''models and observational methods of celestial mechanics,'' which are those of modern Samuelsonian economics. They ''are fine for the solar system, where the parameters are stable. . . . [But] may be quite inappropriate for the study of economic and social systems, even of biological systems'' (1986, p. 7). His is of course an old worry about economics imitating Newton rather than Darwin. One wonders what would now be the relative prestige of mechanical as against evolutionary models if a Darwin had published The Origin of Species in 1687 and a Newton had not published Principia Mathematica until 1859.

Boulding, it should be understood, was a theorist, not an empiricist. He did not have the inclination or the patience for getting the facts exactly, precisely, forever right. As such, he was no enemy of mathematics (and neither am I, by the way, though an empiricist), unless an article is ''prettied up in what is frequently cosmetic and unnecessary mathematics. The number of propositions, certainly about social systems, which can only be reached with the aid of mathematics, is quite small'' (1986, p. 12, italics supplied). He was a producer of economic ideas, which after all is what matters in mathematical theory.

For example, he argued early and late for better accounting of what is really ''consumed," that is, used up, such as ice cream, and household stocks, such as clothing or autos, that give their use value by being used, not usedup. Getting the accounting right is the key to clear economic theorizing, as Boulding often observed. When I. M. D. Little and Milton Friedman showed that direct taxes could not be proven on a blackboard superior to indirect taxes (as economists briefly thought in the 1940s), they were using a full accounting of the use of time for work and for leisure. When Robert Barro asked if government bonds were net wealth, or when Robert Gordon noted in the national accounts that many billions of dollars of investment had been mislaid, they were using net wealth = assets - liabilities, what Boulding called The Bathtub Theorem.

He pioneered the taking of information and knowledge into the realm of economics, though the contrast between his writings on the matter and George Stigler's precise little foray in 1961 exhibits well the difference between an essentially qualitative eeconomic theorist like Boulding and an essentially quantitative economic theorist like Stigler. Still, Boulding got "knowledge" more right, mainly by not reducing it to "information." Stigler wanted whatever it was to be a matter of routine marginal benefit and marginal cost. Boulding observed, in a style reminiscent of the economists who have in fact gotten furtherest on the role of knowledge in the economy, the Austrians, that "there are non-existence theorems about prediction, for information has to be surprising. . . . Human knowledge is itself an essential part of the social system. . . . We cannot learn about it without changing it'' (p. 7). I can hearily agree (McCloskey 1990, 2009).

For another important example, Boulding invented what he called, infelicitiously, "grants economics" (he might better have used the anthropologist's term ''gifts,'' or even the theologian's term ''grace'' [see Klemm 2004]). It's an idea about the economy, but draws the attention of economists to exactly what they do not attend to when thinking of exchange alone. You know you are in a part of the economy dealing with ''grants'' instead of exchange when '' A gives B something and B does not give A anything in the way of an economic good'' (Boulding 1973, p. i). In a parent's gift to her child or the state's extraction from a citizen (the citizen being viewed as Mr. A) ''there must be some integrative relationship between them,'' some sociology or politics legitimating the matter, such as The Family or The Tax-and-IRS System, an economy of love or an economy of fear. Thus courtesy, a man opening a door for a woman, say, signals the existence of a certain kind of gender relationship, for good or ill. We need both to get the whole of the society right, both the heroic gift and the sensible exchange: ''Without the heroic, man has no meaning; without the economic, he has no sense'' (Boulding 1958, pp. 186, quoted in Silk 1976, p. 229).

An extended example: Sneering at commerce from the heights of the aristocracy or the depths of the peasantry is of course ancient and usual. Still, it's odd, since commerce itself is also ancient and usual. We all get our livings or our food and housing and books from it. Most of us literate people nowadays, and for many centuries past our illiterate ancestors, have spent most of our lives doing . . . commerce. You sell your labor, you buy your bread. What's the beef?

Yet wherever we are in the social hierarchy we suspect that the other person is cheating us. If "cheating" means "leaving us with less profit than we would have had if the other was idiotically imprudent or wonderfully charitable," then every single exchange involves it. We resent the non-gift (set aside that we also sometimes resent the sheer gift, or even grace: so complicated are humans). Anxiety and irritation have always flowed from the gap between what you are willing to pay and what the seller is willing to accept. The gap characterizes all deals in the realm of exchange-wage deals, house deals, bread deals.

By the "realm of exchange" I mean the middling realm of human contact stuck, Boulding-style, between a social layer of biology and violence at the bottom and rhetoric and a social layer of the gift at the top:

In the realm of violence your satisfaction is not at issue, merely your obedience. You will be distressed that the thief has robbed you or the judge has sentenced you, but you understand the violence being applied. "If you ever go to Houston, you better walk right,/ You better not stagger and you better not fight./ The police will arrest you, they'll take you down./ The judge will sentence you:/ You're penitentiary bound." By contrast, at the far other end of human relations, the realm of rhetoric, you are after the persuasive act satisfied. When someone persuades you to believe the Pythagorean Theorem, or to believe in the mutual gains from trade, or to drive a Toyota, or to marry, or to worship, you are not anxious (buyer's remorse and the dark night of the soul aside). You have, as we say, "changed your mind."

In the middling realm of exchange, though, your mind is given-the economist's assumption of given tastes-and you try to get what gain can be achieved in a deal about goods bought and sold. But after the deal you always know that it could have been more gainful to you. In the nature of mutual advantage, you could have got a larger share of the mutual gain. There's always that annoying gap between what you paid and what you could have paid. Marshallian economists and one of their heirs the Samuelsonian economists call the gap between willingness to pay and willingness to accept "the sum of consumer's and producer's surplus." Marxists call it, more vividly, "exploitation" or "surplus value." It is the social gain from trade-the value created by trade-to be divided somehow into your profit and the rest of the world's profit.

The "somehow" is the source of the irritation. The amount that makes trade good for both parties also leaves both parties thinking they could have done better. In fact, either party could have done better, though not both. Did I get the best deal I could? Has he made a fool of me? The trouble is imagination, combined with an aversion to loss that tends to be stronger psychologically than the pleasure of gain. The psychologists call it "negativity bias." When I fork over the money for a new house I imagine (more vividly than the utility gain) the loss you the seller have imposed on me, twice: after all, you "took" my money, and you also took, you rat, the larger net gain for me I can imagine you could have let me have . . . by charging less. The brain scientists observe that the amygdala, a primitive part of the brain interested in fight or flight, gets first dibs on impressions. It's necessary for quick moves for survival: jump away from the saber-toothed tiger's claw, now. No wonder our more advanced prefrontal cortex, which would tell us not to be so silly as to resent a mutually advantageous sale of a house, gets overwhelmed with negativity. ⁴

From reasoning of this sort, Boulding concluded early on that ''Economic problems have no sharp edges. They shade off imperceptibly into politics, sociology, and ethics. Indeed, it is hardly an exaggeration to say that the ultimate answer to every economic problem lies in some other field'' (The Economics of Peace, 1945, p. 252, quoted in Silk, 1976, p. 208). Here he reflects his friendship with Frank Knight, who had been saying something similar since the early 1920s. In 1949 Samuelsonian economists took no heed of old Frank Knight or (then) young Kenneth Boulding. Attracted in 1949 after some years at Iowa State and Toronto to the University of Michigan by an opportunity for a seminar integrating the social science, Boulding found that ''social scientists did not want to be integrated very much' (Harcourt 1993, p. 101).

It is appropriate to call economics since 1948 "Samuelsonian," because Paul Anthony Samuelson and his brother-in-law Kenneth Arrow (Lawrence Summers is their mutual nephew) set the tone for economics for sixty years by claiming that qualitative theorems were all that economic theory could do, quantities being left to significance tests (as Lawrence Klein, Samuelson's first PhD student, urged on us). The more common labels for the school that dominates modern academic economics are wrong: "neoclassical" is wrong because the neoclassicals of the 1870s are the common ancestors of heterodox economists like Boulding, too, and Samuelson and Arrow merely formalized one family descended from the Neoclassical Revolution; and "mainstream," another common label, is self-defeating on the lips of a heterodox economist, because it condemns her by the very rhetoric to a backwater.

Boulding wasn't quite as clear as perhaps he could have been on what went wrong deep inside Samuelsonian economics, even if one accepts-he did not-all the premises of a Samuelsonian (or as he calls it, Walrasian) economics. Perhaps it is because he was, as I say, a theorist, an ideas person rather than a measuring person, despite his early experience with Henry Schultz at Chicago in econometrics. In little of his work does one find that obsession with How Much that characterizes the Departments of Physics or Engineering or indeed History.

The characteristic vice of Samuelsonian economic theory and its colleague Kleinian econometrics, the very one that Boulding couldn't see because he was himself a man of qualities, is a fixation on proofs that things exist, on/off, yes/no, never an interest in How Much. The qualitative "existence proofs" compulsory in the Journal of Economic Theory reflect the education of economists in the Department of Mathematics. That the Goldbach Conjecture-that every even number is the sum of two primes-has been shown by actual calculations to be true up to 1018 has no charm for mathematicians: they want forever-True, Greek-style proof, and it annoys them that we do not even know if the Conjecture is decidable, and certainly do not know whether it is True. No science of the world, as against the sciences of existence (mathematics, philosophy, theology), cares about such profundities. The economists should be educated in their math in the Department of Physics or of Engineering, which do not care a bit about existence, or Truth, only about magnitude, or truth, showing so far as mathematics is involved merely how such-and-such an expression based on theory can be transformed into another expression better suited to observation and experiment.

One might think that econometrics would therefore come in at the end to save the day for economics as a serious science (so it is written in the formal constitution of Samuelsonian economics, brought down from the mountaintop in 1957 by Tjalling Koopmans' Three Essays on the State of Economics Science). Alas, econometrics does not in fact make theory into empiricism, because it in turn has become fixated on "tests of significance." Such tests are again matters of Existence, not magnitude. They priport to tell you whether an effect Exists in the date. But the data speak only of magnitude, whose relevance must be judged every time by a human, since we humans are the scientists. Nothing in the numbers themselves makes this or that regression coefficient important. The numbers are inputs into a human judgment, but very rarely is sampling variability the only relevant input.

Until economics gets over these twin fixations on the existence, on/off, yes/no it is going to waste an awful lot of energy to no scientific point. Science is about Mow Much. Existence theorems and tests of statistical significance have no connection to actual findings about How Much in actual economies, despite their surface similarity to real science in their talk of x and y. A sad business. One wishes that more economists of Boulding's generation had seen how phony the existence-theorem-and-significance-test part of economics was becoming, and had stopped it, to focus, mathematically and verbally and especially quantitatively, on economic ideas measured by How Much. ⁵

What, then, did Boulding say, in 1986, or whenever, that nonetheless remains helpful in thinking about the Future of Economics? In a word, "humanomics." That is the word Bart Taub, the experimental economist, uses to label what he and I and Arjo Klamer and now many others see as the a fruitful merging of the social sciences with the humanities for scientific purposes. We think humanomics is the future of a truly scientific economics. Pounding away endlessly on the Samuelsonian formula of Max U s.t. C reduces everything, simply everything, to the virtue of Prudence and its corresponding vice of Greed. It's time to get serious about human motivation, say the behavioral economists and especially the experimental economists and some now of the development economists, all of whose arguments were anticipated by the old institutional economists (remember: Boulding got the Commons prize, and admired his work), the feminist economists, and some economic historians and economic philosophers (not many of any of the categories, admittedly, and even I in my wild youth: most kept grinding away on Max U and logical positivism vintage 1922).

Boulding was in fact a pioneer of humanomics. As Leonard Silk put it, ''Boulding . . . began [in The Organizational Revolution (1953)] to see . . . society as a whole . . . as subject to three organizing forces: the exchange of goods and services for mutual benefit, coercion or fear of reprisal, and love or the integration of desires and objectives'' (Silk 1976, p. 19). I would add only meaning and persuasion, as in the "rhetoric" line in the table above, to make it a fully humanistic economics. In Boulding's otherwise highly favorable review in 1948 of Samuelson's Foundations (I repeat, neither Boulding nor I are machine-breakers when it comes to mathematics; our complaint is deeper) he nonetheless warned of losing ''art and literature where that essential . . . quality is developed, . . . its essentially humanistic and empirical quality.'' "Empirical" means in Greek, you know (and Boulding did, too), "having to do with experience." Not significance tests.

Boulding for example wisely observes that in science any model depends on a pre-chosen taxonomy, ''a set of classifications into which we divide the enormous complexity of the real world. . . . Land, labor, and capital are extremely heterogeneous aggregates, not much better than earth, air, fire, and water'' (1986, pp. 7-8). In another place he noted that ''political science has never developed an adequate taxonomy of power. . . . [and] has been obsessed with threat power, which actually is probably the weakest of the three elements,'' of exchange power, love power, and threat power (Boulding 1990, p. 126; see again the table above).

The usual assumption (a false one in the halls of economic academe) is that economics only studies practical and exclusively quantitative matters, such as the Euro crisis or the Italian debt or Zurich's city income. In such a view, literature is something "higher," spiritual and verbal rather than material and countable. Such a dichotomy was very powerful during Boulding's era, and it is a tribute to his intellectual strength that he saw through it, partly, as through a glass darkly. Certainly, serious literature such as Mann's Buddenbrooks or Ibsen's The Master Builder is about the spirit, not about how to be a successful North-German grain merchant or how to build tall houses in Norway. It doesn't tell how to make money, or how to make anything much except a good, or a bad, life. Indeed, often enough even a non-serious lyric to a rock song or a non-serious film about cars crashes present an artistic vision of chaos or symmetry or heroism that likewise inspires a form of life, for good or bad.

German speakers call the study of serious literature, along with history and theology and philosophy and musicology and art history, die Geisteswissenschaften. In English the German word sounds weirdly spooky, "spirit sciences." We English speakers from the middle of the nineteenth century, unlike earlier English (and every other language: scienza, science), stopped using our science word for anything but physics and biology. The new English "meaning in ordinary use" (as the Oxford English Dictionary puts it) of the science word is very strange, and has caused all manner of strange worries about whether economics is Real Science. (Worried? Then stop using existence theorems and tests of significance, neither of which play any part in physics or astronomy.) In all other languages (Tamil, Turkish: you test it) the "science" word means "systematic inquiry," as against casual, unexplored opinion or rumor. The German language and the rest have it right. Naturwissenschaften and even Wirtschaftswissenschaften are connected at the root to Geisteswissenschaften. And so economics is or should become, as the French say, une science humaine, a systematic inquiry into humans in the ordinary business of life.

Much of genuine science, I have said, is about quantities, answering the question "How Much?" Good. We need some quantities, such as Zurich's income per head in 2012, or a quantitative sense of its startlingly lower income in 1800 (about three Swiss francs a day per person). When a science like economics gets confused it adopts techniques that do not answer the How Much question, and wanders off into questions of existence and non-existence better treated in mathematics or theology. At its academic levels economics has become largely a cargo-cult science, and has stopped doing real measurement. By contrast with sciences like geology that measure, the humanities, die Geisteswissenschaften are about qualities, that is, categories, asking the prior question, "What?" Vegetable or mineral? Human or animal? Male or female? What we learn from literature are chiefly categories and ethical attitudes-good and bad being categories with which humans are obsessively concerned.

But categories, what Boulding called "taxonomies," are obviously important in science, too, and he said so over and over (as for example in 1990). It was one of his main methodological points, and a highly humanistic one, sitting in the middle of a science of economics. You have to know what red giant stars are before you undertake to count them-though the mixing of quality and quantity shows in the very word "giant." You have to know what Swiss citizens are before you undertake to count them. You have to know the borders of Zurich-"What?"-before you undertake to measure its altitude or income or religious composition. And note the humanistic, qualitative, inquiry-into-what that is entailed in deciding the sub-question in Zurich whether, trivially, the question whether to use meters or feet in measuring the altitude, or-much more significantly-the humanistic, qualitative, even ethical questions involved in deciding the sub-question of what to include in "the income of the city of Zurich" or in "Protestant" or "agnostic."

Categories, then. Categories complete the link between scientific and literary studies. And categories are words, which the linguist Ferdinand de Saussure taught us a century ago to think of as contrasting pairs, such as "sheep" and "goat," or "sheep" in the field and "mutton" on the table. Consumption and investment. Information and knowledge. Accumulation and the growth industry. Exchange and the grants economy.

The sciences and the humanities depend on categories, and categories are words depending on humanly decided contrasts. The Austrian-American poet Rose Äuslander wrote, Am Anfang/war das Wort/und das Wort/war bei Gott/Und Gott gab uns das Wort/und wir wohnten im das Wort/ Und das Wort ist unser Traum/ und der Traum ist unser Leben: "In the beginning was the Word/ And the Word was with God/ And God gave us the Word/ And we lived in the Word/And the Word is our dream/And the dream is our life." Truer words were never spoken. We dream of categories, in our metaphors and stories, and with them make our lives, even our scientific lives (McCloskey 1998 [1st ed. 1986], 1990, 1994). The Danish physicist Niels Bohr, who imagined the atom as a tiny solar system, said in 1927, equally truly (note: not Truly), that "It is wrong to think that the task of physics is to find out how nature is. Physics concerns what we can say about nature." We. Say. With words. Der Traum ist unser Leben. About geisteswissenschaftliche categories.

Adam Smith was Boulding's hero, as he is mine (in a lecture I can easily draw a laugh, and make a substantive point, too, about whom to read seriously, by crossing myself when I mention the Blessed Smith). ''More than any other economist,'' Boulding wrote in an appendix to his own great if commercially unsuccessful textbook, Economic Analysis (another similarity in our careers; that, and stuttering; we're working on a third edition of The Applied Theory of Price [1985]), ''with the possible exception of P. H. Wicksteed, Adam Smith embodies the liberal tradition of humane letters. The student who learns to love his quiet wit and keen but gentle observation of humanity will never generate into a narrow-minded specialist'' (p. 266 of Macroeconomics, published as a separate volume)

There's nothing, in short, unscientific about the humanities. Boulding spoke of the ''inside track'' we have as social scientists because we are the very thing we study, unlike the position of the physicist studying the atom or the biologist the cell or the geologist the mountain. "The outside track is frequently associated with scientific knowledge and the inside with folk or humanistic knowledge. The social scientist is frequently inclined to deprecate the inside track and to pretend that he operates only on the outside track. If we examine the social scientists carefully, however, we shall find that . . . their theoretical models owe a great deal to the power of man to known himself from the inside" (1964, p. 59). And how do we know ourselves from the inside? Through the arts and the humanities.

Many scientists mistakenly think that ethical categorization is not relevant to science: this is an echo of an attitude dating to Max Weber and adopted enthusiastically in economics during the middle of the twentieth century that fact and value are from different realms. Boulding did not agree. He realized, as many economists still do not, that ''a process by which we detect errors in propositions of fact is not very different from that by which we detect error in propositions of value'' (1986, p. 8, the sentence is a good example of the large virtues and occasional vices of his prose: he expresses parallel ideas in parallel form, as one should; but he was addicted as many economists and sociologists are to the hollow word ''process''). About the same time as he was saying this, I was saying also to the economists that all reasoning is rhetorical. And so, Boulding and I both concluded, ''The idea that there is something called 'science' which detects truth faultlessly and cannot have anything to do with valuations is an absurd byproduct of the now largely discarded logical positivism'' (Boulding 1986, p. 9).

My only amendments would be that (1.) the faith in a timeless and perfect Method for detecting error is Platonic, and before him Pythagorean, and is not to be blamed solely on a tiny group of Austrian philosophers in the 1920s and that (2.) despite the best efforts of Boulding and me and Amariglio and Klamer and others, economists still think it's 1922 in Philosophy Land. Boulding would have agreed that a better project than the naïve one of supposing that subjective and objective cover the epistemological territory, and that there is a Method that links the two, is to admit that all we humans know is the ''conjective,'' that is, what we know together. We can study the conjective in our rhetoric, or as Boulding put it in The Imag (1956), we can ''discuss the growth of images [he called it 'eiconics' and I call it 'rhetoric'], both private and public, in individuls, in organizations, in society at large'' (1956, p. 224).

Boulding was not a footnoter, as he himself admitted, and was likely in to confidently offer up a quotation or a fact without checking it. The habit has the effect sometimes of keeping him from breaking through conventional ideas, much against his inclinations. He read widely, especially for a modern economist (born 1910), but would not go back to the library to get it exactly right. He was an Oxford Essayist. I can hardly in good conscience claim that essayists are a bad thing. But the Oxford version does not attend to the details-one has to get the weekly essay to one's tutor this afternoon, and so one relies on general knowledge and intellectual brilliance and a good style. No fact checking. And what is more important, no idea checking, no period of doubting that one's bright idea of the morning is actually true. Excellent writers in economics have the problem: I think of Keynes and Rostow and (the elder, not the younger) Galbraith. It can take a mathematical form, too. Such people (almost exclusively men: hmm) write too well, whether in words or mathematics, and especially too fluently. Boulding was all his life, I repeat, a theorist rather than an empiricist, like Samuelson rather than Friedman. He had the theorist's lack of interest in getting the facts exactly right. What mattered, he thought, was the Image.

Yet he often lights on a beautiful and true idea. He was in this a humanist through and through. Again, the depth of his religion obviously mattered. He writes most truly that ''love, in the sense of Greek agape, emerges as the most anti-entropic of all human relationships. It always builds up, it never tears down'' (Boulding 1964, p. 146). One is reminded of 1 Corinthians 13:7-8, that favorite of Hallmark cards when understood as earthly love, eros or philia, but deeply true, as Boulding was saying, when understood as agape: ''Love bears all things, believes all things, hopes all things, endures all things. Love never ends.'' Or as Boulding said to his fellow Quakers in the midst of World War II, ''true forgiveness comes only in a flood of divine love [agape], that wells up in our souls from places too deep to be hurt by mortal injury, love that draws us together with God and with or enemies in a healing, uniting experience. . . . Apart from the love of God, there is no end to the cycle of war." ⁶ That is social science, making a prediction about a most material activity, war. But it is also humanistic, in the literary sense of drawing on the best that has been thought and written, and humane, too.

Thus Kenneth Ewart Boulding, and, we pray, the economist of the future.

Notes

• 1. Distinguished Professor of Economics, History, English, and Communication at the University of Illinois, Chicago, and Professor of Economic History, University of Gothenburg. I thank Dr. Rick Wicks of the Department of Economics, University of Gothenburg, for allowing me to use his trove of Boulding material in the writing of the essay. deirdre2@uic.edu deirdremccloskey.org.
• 2. Lucas 2002, p. 17.
• 3. Howitt 2005, p. 7 in the Brown University preprint.
• 4. Haidt 2006, p. 29. The argument would be testable with brain scans, I suppose.
• 5. If you disbelieve this because your econometrics professor denies it, but are willing to think for yourself, have a look at McCloskey 1998 and Ziliak and McCloskey 2008.
• 6. "The Practice of Love of God," William Penn Lecture, pp. 20-21, quoted in Silk 1974, p. 207.

Works Cited

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• Silk, Leonard. 1976. The Economists. New York: Basic Books.
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• Ziliak, Stephen, and Deirdre N. McCloskey. 2008. The Cult of Statistical Significance: How the Standard Error Costs Us Jobs, Justice, and Lives. Ann Arbor: University of Michigan Press.