Deirdre McCloskey against neo-institutionalists North, Weingast, Acemoglu

Here (pdf). Brilliant as always:

  • Mainly ethics—not mainly law—holds societies together, and especially pushes them forward.
  • As I just said, neo-institutional economics in the hands of North, Wallis, Weingast, Williamson, Greif, and others is deeply and conventionally neoclassical, or to be more accurate “Samuelsonian,” reducing social interactions to “incentives.”
  • Hobbes famously claimed, erroneously, that “the bonds of words are too weak to bridle men’s ambition, avarice, anger, and other passions, without the fear of some coercive power” (Leviathan Chp. 14).
  • Rules of politeness and relevance apply there, and have no governmental backing. To argue therefore that the exercise of the government monopoly of violence is necessary, I repeat, is factually mistaken.
  • On what evidence could one assert that rule of law was noticeably absent in, for example, the Ottoman Empire?
  • Language games are loose and interpretable, not mechanical, which is why the United States has a Supreme Court.
  • The economists have not read the opening pages of Aristotle’s Nicomachean Ethics, or the “Exodus” of the Jews, or the Mahabharata of the Hindus, all of which exhibit choice as a painful exercise in ethical identity, by contrast with the snappy determinism of a so-called consumer facing a so-called budget line.

DMcC’s idea of language and talk stretches neatly and mostly along the conservative axis (civilization – barbarism).

Neither Progressives nor Libertarians unfortunately get the importance of institutions or the importance of ethics and language games and sweet talk.