David R. Henderson  

Come Away With Me

Money is fungible... The Wicksellian Natural Rate o...

A minute ago, I read Steven Landsburg's beautiful encomium to Deirdre McCloskey. An excerpt:

We were dazzled, all of us, all of us who had come here hoping to escape the ordinary, to be touched by greatness, to enter into the Life of the Mind. The math students, the history students, the political science students--all of us were dazzled. But there was a special quality to the dazzlement of the economics students, who were taking a course in Price Theory from a certain Professor McCloskey, who kept them in a perpetual state of shock and awe.

In his article, Steven gives a breathless (and I mean that in a good way) description of the excitement of being in McCloskey's class at the University of Chicago in the 1970s.

Another excerpt:

Rising food prices or rising oil prices can't explain inflation, at least not by the mechanisms most people imagine. A frost in Florida won't cause a shortage of oranges. When there's an increase in the price of steel, car prices will rise by less if the auto industry is monopolized than if the auto industry is competitive--though several members of the president's Council of Economic Advisors had believed otherwise.

Steven's whole piece reminded me of why I'm looking forward, at age 64, to starting my new class next week. I never tire of teaching some of the things mentioned above, although Steven's piece reminds me that one result of my office fire in 2007, with the burning of my computer, is that I left the last question--about steel--out of my subsequent problem sets. Problem corrected.

One of the things I tell my students, whose median age is about 31 and who (at least many of them) have seen more of the world than I have, is "you'll learn things you never knew you never knew."

Then between the first and second hours of class, to bring them back into the room, I play this song by Norah Jones. And no, I'm not saying that I will kiss my students. (I do hug.) It's just my way of communicating that we're going to go on a wonderful adventure together.

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CATEGORIES: Economic Education

COMMENTS (8 to date)
Don Boudreaux writes:


I love how you love - just as do Deirdre and Steve - price theory. Such affection is too rare among economists, probably because price theory as Deirdre (and you, and Steve) teaches it is taught so rarely today by economists. Our profession, sadly, is filled with economists who have never mastered - and often have never even been introduced to - price theory as it ought to be done.

David R. Henderson writes:

Thanks, Don.
My versions of McCloskey were Armen Alchian, Chuck Baird, Ben Klein, Sam Peltzman, and Harold Demsetz.

Scott Sumner writes:

David, Yes, that's a wonderful essay. I was in McCloskey's micro class the same year as Steve was (1977), and usually sat a couple rows behind Steve. Lots of fond memories.

ThomasH writes:

I guess you had to be there.

That increases in steel prices cannot cause inflation was pretty standard in the econ I studied in the 60's across the peninsula at Ann Arbor (unless it means an increase in the degree of monopoly power which does slightly decrease AS) [Politicians were, as always, another matter. Nixon and Ford had some pretty funny ideas about inflation.]

On the other hand, I'd like to see the cost benefit analysis on discharging pollution into Lake Erie (unless this means that there is some non-zero optimal level of discharge just as there is some optimal level of crime in Hyde Park.)

And McClowsky's "discovery" that capitalism is a pretty damned good way to create wealth and decrease poverty (compared to other systems) was just not as novel as claimed and does not entail that it can't be improved with Pigou taxes and a dollop of redistribution.

Charlie writes:

I thought it was weird when he went he started going after a bunch of people. It seemed like he tilted to personal scores.

Also, he was basically saying McCloskey taught me that so and so is stupid, so now he's channeling her to settle his scores. Not cool.

He should have channeled "Economical Writing" and cut the second half, and everything unrelated to the point he was trying to convey.

Sean Leal writes:

"...a dollop of redistribution."

Perhaps you could help educate an old armchair economist here.. Exactly how many dollops are in a tad? Is that more or less than a bit? Or maybe you meant to use the technical term, 'trifling?'

Sorry to be such a bore, but I have a penchant for my mugger to be more precise when requesting payment in exchange for not making my children orphans.

Bill writes:

I wonder how the Nobel committee views the work/contributions of McCloskey?

ThomasH writes:

@Sean Leal

Probably not a lot more or less than at present. But it (a progressive consumption tax) ought to be on the table if we do have Pigou taxes, remove labor use disincentives such as the SS tax and minimum wages, eliminate the corporate income tax, and have a sensible discussion about which federal programs to create/expand and which to eliminate/shrink.

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