This is NOT a post about Piketty or his arguments (of which I already have more than enough reason to be skeptical). It is NOT a post about McCloskey's rebuttal to those arguments. This is a post about McCloskey's style of argumentation.Which Phd program taught Noah that he could do that without actually reading the argumentation?
Which is not dozens, by his own admission;
Reading and critiquing McCloskey's thoughts on Piketty would be a bad move for me. First of all, it would require me to read dozens more pages of McCloskey than I have already read.
Second, it would require me to know more about Piketty than I do (I haven't read Capital, nor do I own it). Third, it would turn the discussion political, which would detract from the main point of this post, which is that McCloskey is prone to silly-talk. Fourth, it would get very very very long, and you would get very very very bored.And he can't even get much right about those three pages, as a few of his commenters have pointed out to him (including Deirdre, politely, herself). We wrote about how much we enjoyed the McCloskey piece last year (unlike Smith, we read things before we write about them), but only briefly. That was because the McCloskey review was so good we didn't want to dissuade anyone from reading and enjoying it in its entirety. However, since Noah Smith is adamantly denying that there is anything to be gained by actually reading McCloskey's style of argumentation--as opposed to the polite preliminaries (Thomas, such a nice boy; so sweet, so clever...) that are customary in the scholarly groves--we'll produce a little of that style;
So instead, I will simply critique the first three pages of the review, which are an introduction to the rest of the piece.
Piketty does not acknowledge that each wave of inventors, of entrepreneurs, and even of routine capitalists find their rewards taken from them by entry [of competitors], which is an economic concept he does not appear to grasp. Look at the history of fortunes in department stores. The income from department stores in the late nineteenth century, Le Bon Marché, Marshall Fields, and Selfridge's, was entrepreneurial. The model was then copied all over the rich world, and was the basis for little fortunes in Cedar Rapids, Iowa and Benton Harbor, Michigan. Then in the late twentieth century the model was challenged by a wave of discounters, and they then in turn by the internet. The original accumulation slowly or quickly dissipates. In other words the profit going to the profiteers is more or less quickly undermined by outward-shifting supply, if governmental monopolies and protectionisms of the sort Matt Ridley noted in recent British history do not intervene. The economist William Nordhaus has calculated that the inventors and nowadays earn in profit only 2 percent of the social value of their inventions. If you are Sam Walton the 2 percent gives you personally a great deal of money from introducting bar codes into stocking of supermarket shelves. But 98 percent at the cost of 2 percent is nonetheless a pretty good deal for the rest of us.
Noah Smith would have had to get all the way to page 17 for that. Such a big sacrifice for scholarship, too much to ask of a professional economist?