Humanomics

Deirdre McCloskey on why liberalism works.

Deirdre McCloskey is a tonic, in the old-fashioned sense of the word. Her clarity of thought, unstinting enthusiasm and willingness to cut directly to the chase restores one’s faith in economists and academia more generally. I recently met and spoke with the Distinguished Professor of Economics, History, English, and Communication at the University of Illinois, Chicago (UIC) in Amsterdam. Here to promote her latest book, ‘Why Liberalism Works’, she tells me that the Netherlands holds a special place in her heart. It was here that she spent the first year of her life as a woman. Over seventy now, McCloskey continues to write, travel and speak to audiences around the world about her special brand of ‘radical, bleeding heart liberalism’. 

McCloskey explains that she came to liberalism ‘from the left’. The eldest child of Robert McCloskey, a law professor at Harvard University and poet, Helen Stueland, Deirdre earned her undergraduate and graduate degrees in Economics at Harvard University. A student in the turbulent years of the 1960’s, she describes her young self as ‘an anarchist, then a Joan Baez socialist, then a Keynesian and then a kind of economic engineer.’

‘I’ve never been conservative’ – McCloskey

Born in Michigan, Deirdre McCloskey has spent much of her working life at the University of Chicago although her fields of study have changed over the years. She describes herself unhesitatingly as ‘a midwestern woman’, presumably aware of the connotations of mid-western conservatism that such a description might evoke. The Chicago School of Economics is considered by many to be at the heart of neoliberalism as is one of its longest associates,  Milton Friedman. McCloskey is a big fan of Friedman, Robert Fogel and the great Adam Smith himself. Yet she tells us clearly, ‘I’ve never been conservative’.

McCloskey is equally critical of both the left and the right in politics. “The Democrats say, “Add more regulatory domineering of prescription drugs, instead of permitting adult Americans to buy them freely abroad.” The Republicans say,“ Add more police domineering of northeast Baltimore, instead of permitting adult Baltimoreans to find employment at a wage that businesses are willing to pay.”” She is equally scathing of both, because neither respect what for her, is the fundamental tenet of true liberalism –  the right to choose for yourself.

‘The real way to help the poor is to let them be adults’ – McCloskey.  

‘Liberalism is the theory that there should be no masters. No husbands over wives, no masters over slaves, no politicians over citizens. It’s egalitarian.’ She describes it as ‘the shocking idea that everyone is equal ,equal in permission, equal in dignity but not in income and outcome.’ For those of a socialist persuasion, the latter may be difficult to stomach. But Deirdre McCloskey is unequivocal. Liberalism is best for poor people, because economic growth is best for the poor. ’The real way to help the poor is to let them be adults.’ Let people do what they want, she insists, ‘because that is the dignity of  adulthood.’

McCloskey’s own life choices resonate with such a perspective. At age 52, she chose to cross over from being Donald to Deirdre. “… As May West might put it, ‘I was Snow White . . . but I drifted!’ she remarks with typically dry humour. She explains that from age 11, she had been a secret cross-dresser, a few times a week. ‘Otherwise I was normal, just a guy.’ Her wife had known about the cross-dressing since the first year of their marriage, when they were 22. ‘No big deal, we decided. Lots of men have this or that sexual peculiarity. Relax, we said.’

‘My gender crossing was motivated by identity, not by a balance sheet of utility.’ – McCloskey

By 1994, the Professor of Economics and History at the University of Iowa had been married three decades, had two grown children, and thought, ‘I might cross-dress a little more’. But this time was different, ‘I visited womanhood and stayed’, she says simply. Costs and benefits wasn’t the point. ‘’The point was who I am.’ Some things simply cannot be quantified. Or, as McCloskey puts it,  ‘My gender crossing was motivated by identity, not by a balance sheet of utility.’

But if we are talking cost and benefits, Deirdre’s transition has come at a high cost, in both human and monetary terms. Her son has not spoken to her since she crossed and, as a result, she has yet to meet her two grandchildren. She tells me with characteristic lack of self-pity, that at age 72, she’s not sure she ever will. Her sister, a Harvard trained psychiatrist, tried 4 times to stop Deirdre going through with the gender change by getting her admitted to a mental institution. Although Deirdre tells me they are now on speaking terms again, her sister has never offered to pay back the thousands of dollars she cost her sister in additional legal and medical bills. Not to mention the sheer trauma of having to fight a close family member, before going through a harrowing series of complex medical procedures. McCloskey writes at length about her numerous encounters with psychiatrists, noting with typical irony; ‘Deirdre was surprised that psychiatrists allowed themselves to be cast as gender police’.

‘We make ourselves, which is our freedom as human beings.’ – McCloskey

Whatever you choose to be, it is your right. There is a clear synchronicity here between McCloskey’s politics and economics and her personal life. The issue of identity is central to the individual. If, as Deirdre McCloskey believes, we make ourselves, then identity is constructed. She admits to some biological tendencies, usually evident from childhood, but as adults, we are free to construct our own identity, piece by piece. ‘We make ourselves, which is our freedom as human beings.’ The ability to do this is what gives us dignity. It’s also difficult. ‘Look being free is scary. But a free society is one in which you can take this job and shove it.’ The alternative is what McCloskey terms ‘ a kind of voluntary slave’, someone tempted by subsidies and ready to stay in their safe, comfortable spot, forever.

To this end then, Professor McCloskey is unrelenting in her belief in the power of markets to optimize equality, because they are a naturally occurring human phenomenon and do not come from the government. Describing herself as ‘a radical’ she advocates for a ‘bleeding heart’ or ‘feminist liberalism’, rather than the kind of social Darwinism that prioritizes  maximization of profit. She believes in a constitutional democracy and the power of the individual over the general will. Deirdre McCloskey refuses to buy into what she terms ‘the economic sky is falling’ argument. ‘There’s something deeply screwy about this idea that exploitation is what made us rich. That’s the argument of the left.’

‘Liberalism is the theory that you should let people be adults’ – McCloskey

Socialism she argues is based on the idea that the economy of a country is like that of a family. This is the attractiveness of socialism – the idea that the government is like a benevolent parent who will shoulder much of the responsibility. Families are inherently socialist in nature, she explains, as they should be. But equating the family with an economy of 300 million people is a mistake. ‘Liberalism is the theory that you should let people be adults’. 

She admits however, that such a position is difficult to maintain when dealing with innocent victims such as the children of drug addicts and the destitute. For this reason McCloskey is in favour of helping the poor, she tells me, even a modest form of Universal Basic Income for those members of society who need it. The professor of Economics also speaks at some length about ‘humanomics’ – a more serious and sensible way of doing economic science, she explains. ‘Quantitatively serious, philosophically serious, historically serious, ethically serious. Indeed she suggests that ethics is in some ways the ‘foundational discipline’ of  humanomics.  

A question of human nature

The issue it seems is not purely a question of economics. Rather it is a matter of how one views human nature. McCloskey makes a case for the manner in which behavioural economics has resulted in the highlighting of irrational behaviour in economic life. Many, like fellow Nobel prize winner (2017) Richard Thaler and Stiglitz himself, regard this as evidence of the need for a strong government – representative of society as a whole, to keep erring individuals on the straight and narrow. ‘The end is near, so take me, the man on the white horse, and let me run your life for you’, McCloskey puts it with characteristic directness. McCloskey’s plea for the prioritization of individual human dignity above all else is challenging and places more responsibility on the individual. Ultimately it celebrates the power of the individual over that of society. Surely there are few better ambassadors for such a celebration, than Deirdre Nansen McCloskey.