17 October 2024

The most dangerous female economist in the world

By

No, it’s not me. I’m a harmless, 82-year old retired professor of economics and history, a passionate cricket fan, now working at the classical-liberal Cato Institute in Washington. I scribble away at half a dozen damned, thick, square books on English agriculture history, on theology and economics, on ‘equality of permission’. Highly recommended. But, sadly, the denizens of Whitehall do not seek out my wisdom. Foolish of them. Much is to be learned from Anglican theology and the insurance function of medieval open fields.

But even if they did seek my sage advice, I would still be ‘harmless’. That’s because I do not believe that I can second-guess businesspeople and consumers and investors. Decades ago, unlike many of my beloved colleagues in modern economics, I stopped believing that I was so smart that I could socially engineer other people’s lives. 

By contrast, the most fashionable female economist in the world nowadays, Mariana Mazzucato (b. 1968), believes that she can govern innovation by the sheer, hopeful application of ‘contemplation’, or by telling lovely fairy tales about what has caused innovations. 

And, unlike her, I stopped wanting to use the state to coerce people. I follow the liberal motto of my Midwestern grandmother, born in the 1890s: ‘Do anything you want, but don’t scare the horses’. Professor Mazzucato dearly wants to stop you from doing what you want, and has no worry at all about scaring the horses. For their own good, you see – you and the horses. It’s the statist tradition from Hobbes, Rousseau, Comte and the New Liberals of the 1880s and the Keynesians of the 1930s, adopted nowadays without much reflection by most economists. Thus the great Paul Samuelson – my mother’s longtime mixed doubles tennis partner, you need to know – and his prize student, also a Nobel winner, Joseph Stiglitz. Both, you also need to know, were raised in Gary, Indiana. Imagine two Nobel winners from Sculthorpe. Both fiercely statist and anti-liberal, in Mazzucato style, with added maths.

If you know even more of the history of economics you might nominate for the Most Dangerous Prize, female division, Joan Robinson (1903-1983). She was utterly brilliant, the only woman economist of her generation except Anna Jacobson Schwartz to deserve the Nobel Prize. Neither of them got it. Odd.

Like Mazzucato (and many other economists male and female by then), Robinson believed that contemplation, rather than the tiresome quantitative inquiry into actual economies that Schwartz engaged in, could justify coercing her fellow citizens. In 1946, on the eve of the Labour nationalisations and the Town and Country Planning Act, she asserted, with an insouciant wave of the hand, that ‘when large scale adaptions have to be made, central control is much more flexible’ than merely private and non-coercive enterprise. What’s odd is that she could have at once gone into business, taking advantage of her impressive knowledge of flexibility. With the proceeds she could have endowed a Cambridge college. Mazzucato could, too, being so smart about innovation that she could be rich. Odd she doesn’t do it. 

Robinson soon went bonkers and became a Maoist and lost her centrality in modern economics. And anyway, she’s dead, so she can’t get the prize. No, the prize goes to the very much alive, and lively, Mazzucato. She recommends contemplating blackboard proofs and spinning fairy tales. The Anglo-French supersonic airliner Concorde, for example, abandoned after decades of dismal failure, she regards as a triumph, because such ventures allow ‘things to happen that otherwise would not have’ (her italics). It’s a non-measured version of Keynesian multipliers from any expenditure whatever and spillovers from any project whatever, if done by the state. Try stuff. Don’t fret about profit signalling a social gain. Her hero is the ‘entrepreneurial state’ – compare by way of other oxymorons ‘military intelligence’ and ‘academic administration’. Tax. Subsidise. Regulate. ‘Drive’ the economy. 

Politicians love this idea. Odd, that. Mazzucato is all the rage on the Left and the Right and middle – and with those now leading the UK Government. She preaches that the government made us rich and can make us richer – by way of a ‘mission-driven government’, you might say.

Her elegant and self-confident and economically primitive books, such as one reviving the labour theory of value, inspire in my own country Senator Elizabeth Warren from the Left and Senator Marco Rubio from the Right. The senators recommend therefore a Mazzucatian ‘industrial policy’. Let us have arts graduates in governmental offices arrange for innovations. The European Commission under Mario Draghi is about to spend 800 billion euros every year choosing winners from Brussels. Don’t just stand here. Do stuff. Allow things to happen. A century ago, the American journalist and wit H. L. Mencken saw that ‘the whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary’. 

A few years ago, Alberto Mingardi and I catalogued Mazzucato’s economic and historical errors in some detail. Read ‘em and weep. They’re coming. Odd, that.

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Deirdre Nansen McCloskey is a distinguished scholar and Isaiah Berlin Chair in Liberal Thought at the Cato Institute and the co-author of 'The Myth of the Entrepreneurial State'.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.