She sings the praises of the free market

Deirdre McCloskey has changed almost everything in her life: she used to be a Marxist, now she preaches the virtues of capitalism; she used to be indifferent to religion, now she is a Christian.

And prior to 1995 she was a man.

"I'm a capitalist, just like you Swedes", Deirdre McCloskey says with an innocent smile.

I've just stumbled into her room, hidden within the labyrinth that is the Department of Economic History, and I'm not quite sure what she means.

"When an American company is in trouble, our first instinct is to subsidize it with taxes. But when Saab is in a crisis, Swedes don't really want the government to interfere. And the Swedes are right, there's no point in supporting industries that aren't profitable. So, when I come home I'll tell my Marxist friends that they've got it all wrong. Sweden is more capitalist than the USA."

Deirdre McCloskey is a Visiting Professor at the School of Business, Economics, and Law. She is used to saying and doing things that make it quite difficult to keep up. Take for instance her description of herself as: "a postmodern free-market quantitative rhetorical Episcopalian feminist Aristotelian woman who was once a man". The last part, about once being a man, is something I'll leave to the end of the interview. First I want to know more about her very optimistic views on capitalism.

"People accuse capitalism of everything that is wrong in this world; environmental pollution, poverty in the third world, inequality and so on. But the fact is that it's the opposite that's true. Capitalism favours innovation and competition and that's why the world's economy has been growing the past 200 years."

The current crisis does not contradict this success story. In fact, Deirdre McCloskey says we are not really in a crisis at all.

"I don't want to dismiss all the suffering losing one's job causes people. But the big story, a story that ought to be on top of the entire world's newspaper headlines, is that life has been improving since 1800. And not only for the rich, but even more so for the poor. 200 years ago people lived on three dollar a day. Today people in the rich world live on 137 dollars a day. And yes, the problems of the third world are immense, but the good news is that they're getting richer too. In 1968 Paul Ehrlich published his famous book The Population Bomb where he predicts that the population growth will lead to disaster. Well, we are now some 6.7 billion people in the world and the disaster didn't happen. If any other scientist had been proven so wrong, he would have been disgraced. But people still listen to Paul Ehrlich. Why? Well, I suppose we like to believe that the sky is about to fall down upon us."

So it's not true that our wealth depends upon the poverty of the third world? I ask.

"No, that's just nonsense! On the other hand, if Europe and the USA would give up agricultural and industrial protection, the economic growth of Africa and the poor parts of Asia would increase ten times more than the total of all the aid we give. Africa south of Sahara is suitable for cotton; it shouldn't be grown in the USA. And let the Swedes do what they are good at, such as inventing advanced technology, and leave the automobile manufacturing to Asia. I agree that trying to protect people from unemployment is a good thing, but I'm not in favour of preserving the wrong jobs. And then there is the question of what people we should protect? Today there's no such thing as our people. Our people — that's the entire world. I think Swedes understand this better than Americans or Germans."

Nor is it true that capitalism leads to a more materialistic world, explains Deirdre McCloskey.

"Our grandmothers spent most of their day in the kitchen and in the fields. They went to church out of habit or compulsion, and the status of women was poor. Today we can read and write books, make articles, and be concerned about the environment. All this is made possible because of economic growth."

Economics is about spirit as much as it is about matter, Deirdre McCloskey continues, an idea that she will explain further in the books she is working on.

"I'm writing an apology for capitalism in six volumes, almost as many books as the Harry Potter series, but I guess they won't be as popular. I do what I think God has put me here to do: I write. I belong to the Anglican Church, which is convenient because they have churches all over the world and the sermons are always in English. Swedes are, by the way, shockingly badly informed on Christianity. The Anglican Church for instance was one of the first to accept female priests and to have priests that were openly gay. I wasn't brought up in a religious home, though; I didn't become Christian until after my gender change."

It was in 1995 that Donald, then 53 years old, became Deirdre. When I ask her why she decided to become a woman Deirdre McCloskey starts telling a story about when she bought a Peugeot instead of a Volvo.

"I suppose it was because all the other professors at my department had a Volvo and I wanted to be different. But I soon regretted my choice, the Peugeot was a disaster and when I sold it five years later it was all just junk. But now when I walk the streets here in Gothenburg and see a lot of new automobiles I can't help wondering: Why did all these people decide to buy an automobile instead of getting a gender-change? The cost is about the same and the money so much better spent! Then I remember that most people don't want to change their gender."

But the question that Deirdre McCloskey is repeatedly asked is why.

"People say that changing gender is unnatural. But so is eating chocolate or driving an automobile. We live in a free society where you can get a new occupation, remarry and do all sorts of things that were impossible only some fifty years ago. We need to allow people to be what they want. Women envy men for their privileges. And as long as the world is interpreted as a game, men will have all the advantages. But the world can be seen as something different. And I think that after all, the quality of a woman's life is vastly superior to that of a man."