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Work and prosperity
4 December 2012

Ed Miliband’s guru versus the transsexual free marketeer

In 1995, a well-respected, economic historian called Donald McCloskey stunned the sedate world of economic history by becoming a well-respected, economic historian called Deirdre McCloskey.

One might assume that the political beliefs of a transsexual academic would incline to the left. But, in fact, McCloskey must count as one of the finest free market advocates anywhere in the world today.

A book review for Prudentia, provides a flavour of McCloskey’s ideas – and, happily for a British Conservative audience, its subject is What Money Can’t Buy by Michael Sandel, the American political philosopher who was the international guest speaker at this year’s Labour Party conference.

McCloskey’s review begins with a statement of common ground: 

  • "One cannot but agree with Sandel that the study of markets should be remoralized. We should know why we believe, morally speaking, that bread should be allocated by a market but children should not... ‘Markets are not mere mechanisms,’ Sandel wisely observes. ‘They embody certain norms’ (p. 64). ‘Market reasoning is incomplete without moral reasoning’ (p. 81)." 

But given this premise, it is therefore rather unfortunate that Sandel’s moral analysis is so thin: 

  • "Sandel doesn't raise the philosophical game of the people he is lecturing. Instead he plays to their least examined political dispositions—their disposition to mere fairness unanalyzed and their disposition to mere disgust unhistoricized…  
  • "…Sandel's moral ideas in the book have no discernible connection to human moral thinking since Moses and Confucius and Socrates…" 

This is a key point about the contemporary left. Having junked Marx and turned their back on religion, they possess very little in terms of a supporting philosophical framework. To be fair, Ed Miliband is at least aware of his philosophical nakedness, hence his repeated attempts to grab the mantle of One Nation conservatism.

McCloskey readily admits that the economic ideas of the right can also lack a serious moral analysis: 

  • "Sandel is right that what is called ‘agency theory,’ which has taken over American graduate schools of business in the past forty years, is naïve in declaring that all we need is incentives, like trained seals. We also need professionalism and judgment and history and norms, as the bankers have recently learned." 

So, Sandel and McCloskey are both agreed that the moral context is of central importance. The difference between them though is this – Sandel, in common with the rest of the contemporary left, fails to provide a proper account of these norms, but instead seemingly assumes them as a natural state of affairs, albeit one that is now threatened by the encroaching, alien presence of market economics: 

  • "Sandel claims repeatedly that ‘market triumphalism’ is a novelty. But that's bad history, albeit the sort that most people believe: that in olden days we were pure and fair, and now we are capitalist and corrupt." 

As McCloskey points out, "in the European Middle Ages one could buy almost anything – wheat and iron, yes, but also husbands, marketplaces, kingdoms, eternal salvation." This was a market of a kind, but nothing to do with the moral market values that underpin the free enterprise of a free society.

Deirdre McCloskey’s great achievement as an economic historian is to provide an account of the emergence and triumph of these values. It is a story than can only be told from the centre-right of politics and we should spend more time telling it.


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