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February 11, 2014



Typo #1? 'Earn 7% more' => 'Earn 7% less' ?


Ta. Correction made.


As a fairly senior finance professional I could not agree more. The other myth I hear a lot is that it's good to fail. It's not learning from failure that creates "success"..it's simply the fact that society will always give you another chance if you are confident and can blame your failure on someone else. Keep taking big swings and eventually one will pay off...even if, in aggregate, you have destroyed value.


Indeed. I can't understand how any normal person can take home a salary of £1 million while making people redundant. So based on recent events, I conclude that Antony Jenkins of Barclay's is an extremely strange bloke.

Socialism In One Bedroom

Capitalism is built upon the masters of the universe idea, the whole ideological premise of this system is the cream rise to the top and reward is directly and absolutely related to merit.

We should not be surprised that such a system breeds people conditioned to accept this state of affairs. Not only to some people think they have a divine right to a better life than others but the others also think the masters have a divine right to a better life than them!

Bringing Stalin into the equation and letting the 'free' market off the hook entirely misses the point.


In my cyber-journeys I had the displeasure of stumbling upon a character that fits your description wonderfully.

I actually believe this person will eventually make it big in the world of economics, in spite of a clear lack of academic talent.

This is so because this person (and I believe many similar people) has a characteristic you did not mention: the ability to make other people, the really talented, but otherwise naive ones, work for them.

For instance, they write a really shitty working paper, full of howlers, to then ask readers to comment on it, explaining in detail why the howlers are, well, howlers.

Chris Purnell

What a beautiful Hobbesian picture you paint.


In his visionary The Great Transformation (1948) Karl Polanyi described how the fundamental basis of a market economy (as opposed to other ways of organising trade), the profit motive by definition undermines trust and erodes social relations.

If profit is the central measure of success than success depends on paying as little as you can get away with for raw materials and charging the highest possible price for the finished product. Your interest as profit making capitalist is diametrically opposed to those of your suppliers and consumers.

It is not surprising that such an environment encourages those motivated by personal gain rather than empathy.


«But we don't live a purely market world. Instead, we have large islands of Stalinism within a market sea.»

IIRC The Economist of all places once wrote that the market happens outside organizations, and inside it is Soviet style politics.

Another time IIRC they wrote that Soviet style politics mean that the organization is run for the benefit of management.

The combination of the two perhaps wrong memories is however very realistic to me.

Which long ago led me to what I call Blissex's first principle of business: that bankruptcy is far more important an institution than markets, the industrial system, education, ... for economic well being.

Michael Jensen wrote something similar, based on the idea that creditors are better "regulators" of a business than its management or owners. But he turned that into a faith in asset stripping, quite a jump too far.

Pat Griffin

"Deirdre McCloskey's claim that a market economy fosters virtues such as trustworthiness and sympathy"

Fosters? Or depends on? I can see a well functioning market economy developing when trust and sympathy already exist. But where trust and sympathy do not (or no longer) exist, I don't see how a functioning market economy can develop (or continue).

Deirdre N McCloskey


I hesitate the become involved, since blogging back-and-forth is usually not based on actual reading of what the author said, in this case The Bourgeois Virtues [2006] and Bourgeois Dignity [2010]. It descends to dueling bumper stickers about what are after all tricky scientific questions!

But: I agree that islands of Stalinism exist in capitalism . . . and in socialism and in monarchy and in theocracy and in whatever. People can be bad. The question is whether market-tested improvement and supply has made people worse. Well, it has raised up the poor of the world from $3 a day two centuries ago to anywhere from $33 (the present world average) to $140 (Norway). That's good. And a steady focus on what your customers are willing to pay for is not the worst sort of ethics (and is hardly the only ethical commitment of businesspeople anyway). It's better than the aristocracy's highhandedness or the intelligentsia's ignorant sneers.

But I can't persuade you in a bumper sticker, or (unless you are exceptionally open minded) a blog post. Go in peace.

Deirdre McCloskey


"Well, it has raised up the poor of the world from $3 a day two centuries ago to anywhere from $33"

I think most of that is down to China. So I guess they are the standard bearer!

Would make a nice bumper sticker = "Go The Peoples Republic of China"

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