Deirdre N. McCloskey's research while affiliated with University of Illinois at Chicago and other places

Publications (125)

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I propose, in brief, an intimate, perhaps desirable, but anyway necessary, connection between free will in Abrahamic theology and free action in liberal ideology. The economy, its work, its consumption, even its banking, are not inconsistent with a Christian life if achieved by free will. That is to say, contrary to a century-long supposition among...
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Paolo Silvestri interviews Deirdre Nansen McCloskey on the occasion of her latest book, Bettering Humanomics: A New, and Old, Approach to Economic Science (2021). The interview covers her personal and intellectual life, the main turning points of her journey and her contributions. More specifically, the conversation focuses on McCloskey’s writings...
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Silvestri interviews McCloskey about her forthcoming book, ‘Beyond Behaviorism, Positivism, and Neo-Institutionalism in Economics’, critical of recent economics, especially of neo-institutionalism. Neo-institutionalism uses the ugly character ‘Herr Max U’ as its central idea: the elevation of Prudence to the only virtue. Institutions are mainly int...
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In a long review of Acemoglu and Robinson’s 2019 The Narrow Corridor McCloskey praises their scholarship but criticizes their relentless statism—their enthusiasts for a bigger and bigger Stato, so long as it is somehow “caged.” Their case is mechanical, materialist, and structuralist, none of which is a good guide to history or politics. Their theo...
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Schumpeter’s Capitalism Socialism, Democracy was typical of 1942 in being pessimistic about all three terms of its title. Socialism would come, he thought, but without liberalism. His historical evidence was necessarily imperfect in light of later scholarship. But so too is his economics, good in parts, but falling in with the pre-analytic vision o...
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Liberalism, as Fukuyama assured in 1989, is the end the telos of history. “Liberalism” is to be understood as a society of adult non-slaves, liberi in Latin. It arose for sufficient reasons in northwestern Europe in the 18th century, and uniquely denied the hierarchy of agricultural societies hitherto. It inspired ordinary people to extraordinary a...
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Ludwig Lachmann knew that economists walked on both feet, the quantitative, positivistic one and the qualitative, humanistic one. He was practicing “humanomics” before the word. Decisions about categories are humanistic, as in philosophy, theology, literary study, mathematics (prime number/not), physics (proton/neutron), and economics (monopoly/com...
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My theme is of a Rise and a Fall of understanding, coming from a failure to measure ones understanding. Down to 1848 the new field of political economy was gradually coming to understand the system of market-tested betterment (lamentably called by its enemies “capitalism”). After 1848, however, more and more of the economists, as they increasingly...
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Fogel and North, both of them old radicals in the 1950s, received the Nobel Memorial Prize in 1993 for their advocacy—and practice—during the 1960s and 1970s of quantitative methods and especially of basic economic thinking in the study of the economic past. Both were scientific giants, and great teachers and advocates. But even giants make mistake...
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For almost all of history, people were extremely poor. Beginning in the seventeenth century, European countries (and their overseas extensions) began to grow extremely wealthy. Since World War II, enrichment has spread around the world with the "Asian Tigers" of Hong Kong, Singapore, Taiwan, and South Korea becoming wealthy and with Chinese and Ind...
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Barry Weingast agrees that the idea of liberalism was crucial for the making of the modern world, though in most of his comment he turns to his own writings making institutional change the crux. Yet institutions in Britain did not in fact change much, the changes had little economic oomph, and underlying property rights were good in numerous econom...
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Economics ignores persuasion in the economy. The economics of asymmetric “information” or common “knowledge” over the past 40 years speaks of costs and benefits but bypasses persuasion, “sweet talk.” Sweet talk accounts for a quarter of national income, and so is not mere “cheap talk.” Research should direct economics and the numerous other social...
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The scientific problem in explaining modern economic growth is its astonishing magnitude – anywhere from a 3000% to a 10,000% increase in real income, a ‘Great Enrichment.’ Investment, reallocation, property rights and exploitation cannot explain it. Only the bettering of betterment can, the stunning increase in new ideas, such as the screw propell...
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From 1800 to the present the average person on the planet has been enriched in real terms by a factor of 10, or some 900 percent. In the ever-rising share of places from Belgium to Botswana, and now in China and India, that have agreed to the Bourgeois Deal—“Let me earn profits from creative destruction in the first act, and by the third act I will...
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I reply to amiable criticisms by Greif, Mokyr, Langlois, Lawson, and Tabellini of my own criticism of neo-institutionalism. They say that ‘culture’ is included in neo-institutionalism – which is mistaken on any serious definition of culture, such as those involving ethics, rhetoric, ideology, and ideas. They also say that neo-institutionalism has a...
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The question is why the Great Enrichment of 4,000 or 10,000 percent increase in material scope per person, 1800 to the present, awaited 1800. The answer lies with ideas, ideologies, sociology, habits of lip, conversation, ethics – in short, how people viewed each other. They began rather suddenly in northwestern Europe from 1600 or so to view each...
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‘Institutions’ do not mean the same thing to Samuelsonian economists as they mean to other people. North's ‘rules of game’, like chess, dominates, even when it is claimed that ‘informal institutions’ are allowed into the tale. The tale is that institutions were once clotted, and then became unclotted, and the Great Enrichment occurred. But the enri...
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The economic history on which recent economics has been based is erroneous, based on the Marx and Engels of 1848. What actually happened, 1517-1789, in northwestern Europe was the coming, as Schumpeter put it, of a busiess-0respecting civilization. Ideas mattered as much as, and often more than, material or institutional circumstances, such as prop...
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Bourgeois virtues refer to the moral excellence of business people, such as responsibility, honesty, prudence, and enterprise.
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Wenn Wirtschaftswissenschaftler beispielsweise Kinderbetreuung betrachten, dann denken sie dabei an Märkte. „Kinderbetreuung“ – was für andere Menschen eine Form von sozialer Kontrolle, eine Einrichtung oder ein Problem für junge Eltern bedeutet, erscheint Ökonomen wie ein Wertpapier an der New Yorker Börse. Die Wahl der Metapher treibt Ökonomen da...
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Storr is a free trader in ideas, bringing back into economics meaning, long banished by behaviorist dogma. His elegant little book, though, is too kind to neo-institutionalists. The followers of Douglass North, repeating without much thought over and over, “Institutions matter,” mean to say that “Institutions are constraints like budget lines. They...
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The article reviews theoretical approaches and methods of conventional economics and economic history to address the fundamental question of why the world's economy has experienced unprecedented growth rates only after 1800, following millennial relative stagnation. The intellectual challenge put forward by economic historians and historians of tec...
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In his elegant book Douglas Allen claims that an improvement in the measurement of Nature made for lower transaction costs and the Industrial Revolution. His argument is a typical example of neo-institutionalism in the style of Douglass North (1990) and North et al. (2009). A fall in a wedge of inefficiency is supposed to provide Good Incentives, a...
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Why indeed? Because the Great Fact, 1800 to the present, incomes rising by a factor of a factor of 30, and higher if quality is acknowledged, cannot be explained by piling brick on brick, or BA on BA, in the absence of new ideas. As Keynes said, the marginal product of capital would be driven quickly down to zero. If the key were accumulation, whic...
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Boldizzoni's attack on cliometrics is unpersuasive, in part because he does not grasp economics and its uses, in part because he admires uncritically the German Historical School and their modern descendants, the French Annalistes. Much is to be learned from the earlier schools, but not by throwing away the insights that economics gives into how an...
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In several dozen journal reviews and in many other comments we have received-from, for example, four Nobel laureates, the statistician Dennis Lindley (2012), the statistician Arnold Zellner (2004), the mathematician Olle Häggström (2010), the sociologist Steve Fuller (2008), and the historian Theodore Porter (2008)-no one has ever tried to defend n...
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I think the history of How I Discovered Kirzner and Friedrich, Not To Speak of Ludwig and Murray, illuminates the trouble that Austrian economics has had against Samuelsonian economics (we commonly call it, defeating ourselves in our rhetoric, “the mainstream”), and how in the end the Austrians can save economics from itself.
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Econometricians have been claiming proudly since World War II that significance testing is the empirical side of economics. In fact today most young economists think that the word "empirical" simply means "collect enough data to do a significance test". Tjalling Koopmans's influential book of 1957, Three Essays on the State of Economic Science, sol...
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Economics can be taught much earlier than we usually imagine, as a life skill, with direct experience, from kindergarten on. An experiential, early-grades economics of budgets, buying, and giving-up-to-get may be better than the politically inspired insistence that students get an allegedly healthy dose of free-market ideology just before they are...
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An understanding of thrift in the United States requires a look back at developments in England and, before that, in Holland. With the relative leveling of society in the wake of the Renaissance, and especially the Reformation, aristocratic virtues gradually lost their long-held social dominance. In their place arose new commercial and civic virtue...
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The Great Recession is not the end of capitalism. An innovative economy makes mistakes, but that is not a good reason to regulate it out of its innovations. The innovations - not unions or regulation - have increased real income per head by a factor of 100 in the places that have adopted bourgeois liberty and dignity. An innovative economy is "rhet...
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Economics ignores persuasion in the economy. The economics of asymmetric “information” or common “knowledge” over the past 40 years reduces to costs and benefits but bypasses persuasion, “sweet talk.” Sweet talk accounts for a quarter of national income, and so is not mere “cheap talk.” The research would direct economics and the numerous other soc...
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The clerisy of artists and journalists and college professors thinks that capitalist spending is just awful. In 1985 the historian Daniel Horowitz argued that the American clerisy had been since the 1920s in the grip of a “modern moralism” about spending. The traditional moralism of the nineteenth century looked with alarm from the middle class dow...
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Biometrics has done damage with levels of R or p or Student's t. The damage widened with R. A. Fisher's victory in the 1920s and 1930s in devising mechanical methods of "testing," against methods of common sense and scientific impact, "oomph." The scale along which one would measure oomph is particularly clear in bio-medical sciences: life or death...
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It is a materialist prejudice common in scholarship from 1890 to 1980 that economic results must have economic causes. But ideas caused the modern world. The point can be made by looking through each of the materialist explanations, from the “original accumulation” favored by early Marxist historians to the "new institutionalism” favored by late Sa...
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What happened to make for the factor of 16 were new ideas, what Mokyr calls “industrial Enlightenment.” But the Scientific Revolution did not suffice. Non-Europeans like the Chinese outstripped the West in science until quite late. Britain did not lead in science---yet clearly did in technology. Indeed, applied technology depended on science only a...
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“Commercialization” and “monetization” dance with stage theories from Smith to modern growth theory. The sheer growth of traded or the sheer growth of money, though, do not an Industrial Revolution make. The ill-named “Price Revolution,” for example, came from American gold, not from population increases, and did not inspire innovation. Commerciali...
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North, with many other Samuelsonian economists, thinks of “institutions” as budget constraints in a maximization problem. But as Clifford Geertz put it, an institution such as a toll for safe passage is “rather more than a mere payment,” that is, a mere monetary constraint. “It was part of a whole complex of moral rituals, customs with the force of...
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Sustained growth in both incomes and life spans are the hallmarks of modern development. Fluctuations around trend in the former, or business cycles, have been a traditional focus in macroeconomics, while similar cyclical patterns in mortality are also interesting and are now increasingly studied. In this paper, I assess the welfare implications of...
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Economics will always have few women so long as Max U rules the roost.
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Samuelsonian (mainstream) economics cannot even think of stepping beyond its Max U, prudence-only model. But if we are going to have an economics that works and that matters, as economists like Sen and Akerlof and Hirschman have been saying, we need to admit that people do not live by prudence alone. They love and hope, they are just or unjust, the...
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Smith was mainly an ethical philosopher, though he practiced what was considered for a long time after Smith an obsolete sort of ethical philosophy, known nowadays as “virtue ethics.” Since 1790 most ethical theory as practiced in departments of philosophy has derived instead from Kant or Bentham, but virtue ethics has recently come back. From the...
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After William Gosset (1876-1937), the 'Student' of Student's t, the best statisticians have distinguished economic (or agronomic or psychological or medical) significance from merely statistical 'significance' at conventional levels. A singular exception among the best was Ronald A. Fisher, who argued in the 1920s that statistical significance at t...
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Significance testing as used has no theoretical justification. Our article in the Journal of Economic Literature (1996) showed that of the 182 full-length papers published in the 1980s in the American Economic Review 70% did not distinguish economic from statistical significance. Since 1996 many colleagues have told us that practice has improved. W...
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The now largely forgotten book Asian Drama: An Inquiry into the Poverty of Nations by Swedish social scientist Gunnar Myrdal was published in 1968. Myrdal called his book “Asian Drama†because of the tensions he saw being played out in Asia between modern ideals and the traditional. But there was another drama too— the tension being played out...
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‘Bourgeois virtue’ is not a contradiction in terms. The age of capitalism has enormously enriched the world. But the enrichment is by no means only material. The virtues enabled capitalist development; but a bourgeois life also encouraged new versions of old virtues; and gave scope for varied lives.
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Leading theorists and econometricians agree with our two main points: first, that economic significance usually has nothing to do with statistical significance and, second, that a supermajority of economists do not explore economic significance in their research. The agreement from Arrow to Zellner on the two main points should by itself change res...
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Mark Blyth's rebuttal to our constructive critique of Polanyi “blithely” takes for granted the accuracy of Polanyi's now‐outdated historiography of capitalism—by means of a loose, overly expansive definition of capitalism that question‐beggingly equates it with modernity. Blyth emphasizes the need to view markets as “socially embedded,” with which...
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This column talks about the person, and work of, Milton Friedman, whose 90th birthday was recently celebrated at the University of Chicago's Quadrangle Club. Milton has been these many decades now consequential. He exhibits the classical virtues in a life of the mind. He shows how to be courageous in adversity (for much of his career he was an outc...
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Academic economics in the United States has a scientific range all the way from M to N. This is not because the Samuelsonian mainstream is such a smashing scientific success, unless you count numbers of Samuelsonian articles certified by Samuelsonian professors in Samuelsonian journals as "success." Real insight into the economy does not come from...
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What I intended to accomplish in my little squib on the Earth Charter was only to shake the confidence of environmentalists that everything the most radical amongst them believe is not obviously true. As Oliver Cromwell said to the General Assembly of the Church of Scotland in 1650, and as Professor England and I wish our readers and students would...
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The Earth Charter, based on the model of the United Nations Charter on Human Rights, is circulating in Green Circles. Deirdre McCloskey spells out what's bad and false about the Charter. Although Ms. McCloskey hopes the Charter fails, she is not hopeful. The document, written by biologists and other activists entirely innocent of economics, has a g...
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In this column, Deirdre McCloskey argues that the practice of letters of recommendation is insane. The only correct procedure for assessing scholarship in hiring or promotion is for the responsible body to read the candidate's work and discuss its intellectual quality with immediate colleagues, in a context of believably disinterested assessments f...
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Deirdre McClosky argues that we need to get beyond the Age of Samuelsonianism in economics and get back to theorizing and observing. Economics, especially mainstream American economics, for all its promise, is in very bad shape because it has fallen into a cargo-cult version of “science” in which qualitative theorem-making runs the “theory” and sta...
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McCloskey argues that economists should be proud to be so very expert in one of Seven Cardinal Virtues, Prudence.
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Economists can to some extent enlighten policymakers and the public and influence public policy. That enlightenment is achieved more by concrete policy work and application of basics than by fancy models and fancy statistical significance. There is a trade-off between relevance/importance and rigor/precision. Because many economists concentrate on...
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Karl Polanyi's The Great Transformation has had enormous influence since its publication in 1944. In form, this influence has been salutary: Polanyi targets one of the main weaknesses of modern economics. But in substance, Polanyi's influence has been baneful. Mirroring the methodological blindness he criticizes, Polanyi insists on the all‐or‐nothi...
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Dick Zerbe and I were together at Chicago back in the 1970s, during the creation of law and economics. The point of Dick and Steve’s paper is that law and economics as it has developed in, say, Richard Posner’s work and as it has been absorbed into the mainstream of economics is not the same thing as what might be called a “Coasean” approach. Coase...
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Statistical significance as used in economics has weak theoretical justification. In particular it merges statistical and substantive significance. The 182 papers using regression analysis in the American Economic Review in the 1980s were tested against 19 criteria for the accepted use of statistical significance. Most, some three-quarters of the p...
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It is true that economics needs a theory of moral sentiments along with an account of the nature and causes of the wealth of nations. Economics is damaged analytically by ignoring love, or care. But love is not always nice, and is sometimes a threat to freedom.

Citations

... The functional conception of the rules and the neglect of the obligation issue are two sides of the same coin, and are due to some behavioral assumptions of the NIE which in many ways remain tied to the model of the utility maximizing individual. Starting from this model, it is in fact difficult to explain rule following behaviors based on habits, morality, sense of duty, justice, beliefs or perceived legitimacy of authority (Sen 1982;Searle 2001;Hodgson 2013 andMcCloskey 2015;McCloskey and Silvestri 2021). On the other hand, the failure of the self-interested homo oeconomicus paradigm has long been exposed. ...
... If estimates and standard errors were correlated, the t-statistics reported in the studies would be meaningless. To explain the identification procedure, it is useful to invoke McCloskey & Ziliak (2019), who liken publication selection to the Lombard effect in psychoacoustics: speakers tend to increase their vocal effort proportionally in response to noise. ...
... Individual learning and development was revered, though problems started to arise with institutional regimes in the Middle Ages, as in Europe, where individual entrepreneurs and inventors that upset the social and commercial orders, even with potentially effective innovations were stopped (Ahlstrom et al., 2019;Mokyr, 1992). Institutional reform and a wider acceptance of the position of innovators and entrepreneurs in society that occured in the 18th and 19th centuries in the West is recognized as essential to growth, as innovation and new venture creation are seen as major engines of growth and development (Ahlstrom, 2010;Christensen et al., 2019;McCloskey, & Carden, 2020). This is also true in Iran where these principles are being rediscovered. ...
... name a few, while Deirdre McCloskey (2017McCloskey ( , 2021 explicitly refers to the interpretative turn when presenting her idea of humanomics. ...
... À travers ces différentes filiations se dessinent les trois dimensions constitutives de la démarche cliométrique telle que Fogel l'a défendue : l'analyse historique, la mesure et l'ancrage dans la théorie économique. C'est l'alliance de ces trois dimensions dans l'analyse d'un phénomène historique qui, en contribuant notamment à l'identification de représentations erronées de l'histoire économique, a ouvert une perspective nouvelle dans l'identification de liens de causalité en histoire et l'a définitivement différenciée d'une histoire quantitative qui lui préexistait (Margo, 2018, McCloskey 2018, Mongin, 2018. ...
... When we accept this proposition, it renders serious implications for how we theorise entrepreneurship. If entrepreneurial decision-making cannot be reduced to calculativeness, this also implies that the utility maximisation is a model that cannot capture the phenomenon of entrepreneurship in full (McCloskey, 2006(McCloskey, , 2010(McCloskey, , 2016. Applying McCloskey's rhetoric: entrepreneurial values cannot be reduced to prudence (wealth maximisation), and if we accept this then our understanding of the motivation to enter entrepreneurship and to engage in entrepreneurial actions is richer. ...
... While historically not uniquely tied to modernity, the process of globalization as experienced since "the long nineteenth century" is not only quantitatively different from the integration processes during Antiquity or the Middle Ages. Unlike those earlier times, in the past two hundred years the process of the "Great Enrichment" (McCloskey 2016) has mattered well beyond the ruling elite. Above all, modern globalization since the early nineteenth century has had a gigantic impact on the life of ordinary people -and that not only in the sense of material provisions. ...
... Fortunately, there have been some studies along with real controlled experiments presenting people respond strongly to narratives in the field of health interventions (Slater et al., 2003), Philanthropy (Weber et al., 2006), journalism (Machill et al., 2007), marketing (Escalas, 2007); education (McQuiggan et al., 2008); and aggregate economy (Shiller, 1984;Akerlof & Shiller, 2009;2015). Some more studies are available on narratives and their impact on the social sys-tems such as (Shiller, 1984), to a new çulturnomics"; or "humanomics" (McCloskey, 2016); or for more narratives in economics (Morson & Schapiro, 2017). ...
... We have seen that discovery and creation are often criticized for taking the existence of consumer needs for granted (Bao et al., 2020;Webb et al., 2011). It is true that discovery assumes the pre-existence of willing consumers (McCloskey, 2013;Packard & Burnham, 2021). However, creation is not accountable for this assumption. ...
... Yet those more macro forces, which are weakly correlated at best with growth (Rodrik et al., 2004) largely fail to clearly identify any mechanism as to how growth is energized in firms, apart from general observations about productivity (Ahlstrom et al., 2019;Christensen et al., 2014). Likewise, contrary to popular notions (McCloskey, 2010;McCloskey & Carden, 2020), "macro" factors such as geography, capital, and trade have proven to be quite limited in their impact on economic and (importantly) on firm growth (Christensen et al., 2018;McCloskey, 2016a;Rodrik et al., 2004). Thus as noted, more recent research has sought to look beyond these more traditional, exogenous explanations toward the activities of the firm and individuals (Ahlstrom, 2010;Alvarez et al., 2015;Christensen et al., 2014;McCloskey, 2013) with a closer look at non-rivalous assets, and their production in firms (Arthur, 1996;Christensen & Raynor, 2013;Romer, 1990). ...