Nacretave 20 vuiture: the Uses of Storytelling the Sciences, Philosophy and Literature, edited by Geistopner Nah (London? Routledge, 1950) . Storytelling in Economics DONALD N. McCLOSKEY I is good to tell the story of science and art, economics and the ninetenth-century novel, the marginal productivity theory of distribution and the tadition of the Horatian ode as simulrly as possible. I intend to do so, Economists are tellers of stories tnd inkers of poems, and from recognizing this we can know berer ‘what economists do, ‘There seem to be two ways of understanding things; either by way of a metaphor or by way of a story, through something lke 4 poem or through someching like a novel. When a biologist is asked to explain why the moulting glands of a erab are located just as they are he has two possiblities. Either he can eall on a model ~ 2 metaphor ~ of rationality inside the crab, explaining ‘that locating them just sere will maximize the effceney of the lands in operation; or he can tel « story, of how erabe with Dadly located glands will fail 10 survive, If he is Tacky with the ‘modelling he wil discover some soluble ciffeenil equations. If he is lucky with the storytelling he wil discover a trie history of Some maladapted variety of crabs, showing it dying out, Meta- ‘hors and stories, models and histories, aze the two ways of smswering “why”, has probably been noticed before cat the metaphorical and the narrauve explanations answer t0 each other. Suppose the Diologst happens first to offer his metphor, his hypothetical individual crab moving bite of ite body from bere to there in search of the optimal location for moulting glands, The Lstenet ss, "Buc why?" The biologist will answer with a stony: he sys, “The reason why the glands must be located optimally i that if s anDONALD N. MeCLOSKEY crabs did a poor job of locating their glands they would die off 8 time passed,” A story answers a model ‘But likewise a model answers story. Ifthe biologist gives the ‘evolutionary story first, and the listener thea asks, "But why?’ the biologist will answer with a metaphor: “The reason why the ‘crabs will di off is that poorly located glands would serve pootly in the emergencies of crabby life... .” The glands would not be located according to the metaphor of maximizing: that’s why. ‘Among what speakers of English call the sciences, metaphors dominate physics and stories dominate biology. Of course, the ‘modes can mix. That we humans regard metaphors and stories as antiphonal guarantees they will. Mendel’s thinking about genetics is a rare case in biology of pure modelling, answered after a loog while by the more usual storyteling. In 1902 W.S. Sutton observed homologous pairs of grasshopper chromosomes. He answered the question put to a metaphor - ‘Why docs the ‘Mendelian model of genes work?” ~ with a story: “Because, 10 begin with, the genes are arranged along pairs of chromosomes, which T have seen, one half from each parent." ‘The modes of explanation are mote closely balanced in economics. An economist explains the success of eotton farming jn the antebellum American South indifferently with static, ‘modelling arguments (the South in 1860 had a comparative advan: tage in cotton) or with dynamic, storytelling arguments (the siua- tion in 1860 was an evolution from earlier successes). The best ‘economics, indeed, combines the two. Ludwig von Miss’ famous paper of 1920 on the impossibility of economic calculation under socialism was both a story of the failures of central planning during the recently concluded war and a model of why any replacement for the market would fail (Lavoie 1985: 49. “The metaphors are best adapted to making predictions of tides in the sea or of shoruges in markets, simulating out into a ‘counterfactual wotld. (One could use here either an evolutionary story from the history of science or a maximizing model from the saciology or philosophy of science.) Seventeenth-century physics sbandoned stories in favour of models, giving up the claim to tell in a marrative sense how gravity reached up and pulled things down; it just did, according to suchvand-such an equation ~ let ‘me show you the model. Similarly a price control on apartments will yield shortages; don’t ask bow it will in sequence; it just will, 6 205 206 Stoning in Economics ‘sccording to suchand-such an equation ~ let me show you the ‘model. On the other hand the storytelling is best adapted to explaining something that has already happened, like the evolution of crabs, ‘or the development of the modem corporation. The Darwinian story was nowy lacking in models, and in predictions. Mendel’ model, which offered to explain the descent of man by a metaphor rather than by a story, was neglected for thirty-four years, all the while that evolutionary stories were being told “The contrast caries over tothe failures of the two modes, When 1 metaphor is used too boldly in narrating a history it becomes bbe used to imagine what would have happened to absence of the industrial revolution then the contradiction is that fn economy of the British sort did infact experience an industrial, revolution, A world in which the Britain of 1780 did not yield up an industrial revolution would have been a very different one, before and after 1780. The model wants to eat the cake and have all the ingredients, too. It contradicts the story. Likewise, when a story attempts to predict something, by extrapolating the sory into the future, it contradicts some persuasive model. The story of business cycles can organize the past, showing capitalist economies, bobbing up and down. But it contradicts itself when itis offered sa prediction of the future. If the modes of business cycles could predict the future there would be no surprises, and consequently ‘Bo business cycles ‘The pont is that economists are lke other human beings ia that they both use metaphors and tell stories. They are concerned both to explain and to understand, erlren and verschen. I am going to concentrate here on storytelling, having written elsewhere about the metaphorical side of the tale (McCloskey 1985). What might be called the poetics or stylistics of economics is worth talking about. ‘But here the subject is the rhetoric of fiction in economics, 1 propose to take seriously an assertion by Peter Brooks, in his Reading for the Plot: ‘Our lives are ceaselessly intertwined with ‘narrative, with the stories that we tll all of which are rewocked {in that story of our own lives that we narrate to ourselves... . We are immersed in narrative’ Brooks 1985: 3) As the historian J.H. Herter put it, storyteling is ‘a sort of knowledge we cannot live 77 DONALD N. MeCLOSKEY without? (exter 1986: 8). Beonomists have not lived without it fot ever. It no accent that che novel and economic scence fwere born atthe sume time, We lve in an age insatate of plot. “Tel me a story, De Smith, Why, of course: A pension scheme is proposed for the natin, in which “the caper ill pey half” It wil say inthe law and on the worker's ‘Slary cheque that the worker contributes 5% of his wages to the ‘pension fund but thatthe employer contributes the other 5%, The (eample it a Ieding cate in the old quarrel berween lawyers and ‘ronomist, A law is paved “designed” (as they say) to have suc fod-such an effec. The Inwyerly mind goes this far, uying us ‘herefore wo init the houre of women workers orto subsidize ship- ping. The women, he thinks, wil be made better off, as will the hips. According to the lamyer, the workers under the pension Scheme wil be on balance 5% better off, geting half of thelr pension free from the employer. “An economist, however, will not want fo leave the story of the peasion plan in the fise act, the lawyer's and legislators act of Jaws “designed” to split the costs. She will want ro go farther inthe rama, She will sa: “At the higher cost of lbour the employers ‘wil hice fewer workers, Inthe second act the situation created by ‘he law will begin to disolve, At the old terms more workers will Srane to work than the employer wishes to hire. Josling queues Vl form outside the factory gates. The competition ofthe workers Wil drive down wages. Ey the thied and final act a part of the employer's” share ~ maybe even all of it~ will sit on the workers shemacves in the form of lower wages. The intent of the lew", the conomst coucdes, "wil have been frustrated.” “Thus in Chicago when a tax on employment was proposed the reporters asked who would pay the tax, Alderman Thomas Keane {Geho est happens ended in jai, though not for misappropriation fof economics) declared thatthe City had been careful o daft the law so tht only the employers paid it. “The City of Chicago, suid ‘Keane, ‘wil never tax the working man.” ‘Thus in 1987, when Senator Kennedy proposed a plan for [American workers and employers to sare the cost of health nsur- fice, newapepers reported Kennedy a5 estimating "the overall cst ft $5 billon ~ §20 billion paid by employers and $5 billion by ‘workers. Senator Kennedy will never tax the working man. The Thunager of employee relations atthe US Chamber of Commerce Stoelting i Bere Gwbo apparealy agreed with Senator Kennedy's economic analyst Gfrwhere de tax would fall) said, ‘I is ridiculous eo believe that Grery company « .» can afford 10 provide such a generous aay of feuth cae beneis,’ The US Chamber of Commerce wil never tas the company. “The ease ilustates a mumbef of points about economic store, Ik ilosrates the delight that economists take in unforeseen conse uence, a delight shared wich oter social scents, I ustaces Gvacion of cerain consequences for special ateasion: 20 Greountant or politica sciendst would want to hear how the freasio was funded, becuse it would affect business or pole i be farare, economists wsvally set such consequences to the side. fiilusuates also the way economists draw on typical scenes ~ the queue infront of the factory ~ and typical metaphors ~ workers PEommodites to be bought snd sold. Especially iustraes the ‘Roy mores support ecouomic argument. Since Adam Smith and ‘Durid Ricardo, economists have been addicted co line anal owes, the Ricardian vce. The economist says, “Yes, Ise how the ‘ory tarts: but I see dramatic possiblities heres I see how events tril develop ftom the situation given in the frst act. It snot controversial that an economist sa storyteller when te ing the nory of the Federal Rewerve Board or of the industrial ferolution. Plainly and routinely, ninety per cent of what ‘onomists do is such storytelling. Yet even in the other ren per seein the part more obviously dominated by models and hetphors, the economist tells stozies. The applied economist can be riomed as a realist novelist or a realsie plareight, a Thomas Tardy or a George Bernard Shaw. The theorist, to, may be viewed as a ler of stories, though 2 non-reaist, whose plots and Characters have the sire relation to tuth as those in Gale’ Travels or A. Midsummer Nigh’s Dream. Economics is saurted with narration, "The analoay on its face seems apt, Economics is sor of soi tistory, For al their brave tale about being the physicists of the torial sciences, economists do their best work when looking ‘becoward, the way a biologist or geologist or historian does. Jour tals and polidclans demand that economists propesy,forcar ing the soil weather, Sometimes, unhappily, the economists will take money for eying. Bot it isnot thee chief skill any more tha tarthquale forecasting isthe chief shill of eismologists, or election °DONALD N. MeCLOSKEY recasting the chief sil of political historians. Economists cannot predict mach, and certainly cannot predict profitably. If they were FOamart they would be rich (MeCloskey 1988). Mainly economists fre tellers of sores. ‘Wel, so what? What i 0 be gained by thinking this way about economies? One answer can be given at once, and illustrates he Ter the Hrerary analogy, namely: storytelling makes it clearer why economists disagree Disagreement among sciennts is suggestive forthe rhetoric of scpnasin the same wey that simultaneous discovery is suggestive SEMIS cteiology. The lay person does not appreciate how much ‘Siomst aot but he enor enirely wrong in thiking that chy See turee a’ lot, Economists have long-lasting and lons- ‘deagreeing schools, sore typical of the humanities than of the feiences. Why then do they disages? ‘Grhcn economists themselves tr 1o answer they become soci Jopical of philosophical, though in ways that a sociologist ot Tlosoper would find uacongeniel. When ina sociological mood lay wil sale kaowingly and explain that what drives monetanss sr elyneeians to ‘differentiate their product’, a5 they delight i Shang te is selt-inerest, Economists are nature's Manas and EEfov covering and then saiggering at self-interest. When they sre More elevated and philosophic mood they will speak sagely Sf successive approximations’ or “treating a chery merely as if i see Re Some have reed bit of Popper or Kuk, and reckon thos know a thing or two about the Methodology of Science. The re that result fom these ventures into erste sociology and REitomare philosophy are unconvincing. To cell the try the onomins do mot kxow why they disagree ‘Stonyteling offers a richer model of how economists ralk and a move Pausible story of thee disagreements. The disagreement a be understood from a literary perspective in more belpful ways fan soving, chat one economist hus divergent material interest Hon ‘aqother, of 2 different “crucial experiment’, or another ‘pandign’ ris fst of al the theory of reading held by scientists chat permits thea o disagree, and with such i temper, The over ‘aple theody of seading adopted officially by economists and other Sets that scientic texts are wansparent, a matter of “mee seeteesicaton', "ust style, simply “writing up" the “theoreicl » Sooling ie Economics, esata’ and ‘empitial findings". If reading is so fice fom ‘etreaker, then naturally the only way our readers can fl seeti'us i through thee il wil or their dimness, (Leave aide SET THkely chance that itis we who are dim.) Is sight there ix black and white, Don’t be a dunce mur theory of reading, one that admited that scietifie prose tid taerary prone is complicated and allusve, drawing ona richer vptocie than mere demonstration, might soothe this ll temper, rae farter theory, after all, i the one a good teacher uses with re Mie. She inows well enough that the text is not trankparest aacemadeats, and she does aot get angry when ther misunder- TR God likewise does not get angry when His students mis- sad ood His text Ia fact, ke scientists and scholars, God er obscurely in order to snare us, As Gerald Brans as noted, Bripagustine siewed the obscurity of the, Bible a having “2 Saginefanclion nthe at of winning over An alienated and even Prmtrmptous audience’ Bruns 1984: 157, He quotes 3 remark of Sagusone about the dificlry of the Bible that might 2x well be aaa the latex proof in mathematical economics: T do aot doubt ‘revi situation was provided by God to conquer pede by work ete combat disdain in our minds, by which those things which tre easly discovered seem frequendy co be worthless.” ‘One source of disazeement, then, is a nave theory of eeading the tnenep that would ask nave forthe ‘messugc' in poem, 2 ABbagh pvems were riddles in rhyme. Another source of disagree Boneh Pocfewine a source of disagreement sbout literure: Compression, a lack of explicitess, Pardy this js eoopomic, Had She but world enough and dime the writer could make everything ‘vlc, In a world of scurcity, howeves, she canaou. Yet einer is no guaante of agreement, because if the weiter has “Gi ine tie in the world the reader does not. I cannot tsten long Showgh to understand some of my Marist tends (Ghough 1 ask Sere Mfeep trying), Similarly, the mathematician in economics cana tsoriory sjle based on expliciness and a zero vale of tine, Everything willbe clear, he promises earnest, if he readers twill but listen carefily to che axoms, The readees grow wean. “They cannot remember all the axioms and anyway cannot 26 WD ‘Gne mould wish to doubt them They do not have the toleration for fuch speech thatthe mathematician has. "The pcint involves more than the economic scarcity of journal auDONALD N. MeCLOSKEY space and of the leisuretime to read, It involves the anthropology of scence, the customs ofits inbitants and their sblty to read f language. A scientist convinced of what she writes will come fom a certain background, supplied with a language. Unless her reader knows roughly the same language ~ that is, unless he hat been ised in approximately the same conversation — he will nisunderstand and will be unpersutded. This is an unforgivable failure only if it is an unforgivable flue to be, say, non-Javanese for non-Freach. The reader comes from snother culture, with & diferent tongue. The taining in reading English tht « D.Phil. in English provides or the traning in reading economics that a PhD. in economics proves are uaiings in rapid reading, Sling in the blanks, ‘A third and final source of disagreement in Hiterarure and in cconomics, beyond the nalve theory of reading and the limits on ‘understanding’ foreign speech, is an inability of dhe reader 10 sssume the poiat of view demanded by the author. A foolishly Senimental poem has the same iitating effect on a reader as does 1 folishly Libertarian piece of economics. The reader refuses 10 enter the author's imaginative world, or is unable to, A literary tiie sid, ‘A bad book, then, isa book in whose mock reader we iscover a person we refuse to become, # mane we refuse to put fn, a role we will not play” (Gibson 1950: 5). The reader therefore vvill of couse misread th text, 2 least in the sense of veating the suthor’s intentions. We do not submit to the authori) intentions of a badly done greeting card. In a welldane novel or well-done Scientific paper we agre to submit to the suthoralinteations, 20 far as we can make them out. The entie game in science such 2 biology or chemistry or economics is to evoke this submission to suthoral intentions. Linus Pauling comands attention, and his readers submit to his itentons, atleast outside of vitamin C; Paul Samusson likewise, atleast outside of monetary policy. “The argument can be pushed further. An economist expounding a result cretes both an ‘authorial audience’ an imagined group of readers who know that this is fiction) and 2 ‘narrative audience’ (an imagined group who do not). As Peter Rabinowitz explains (Rabinowitz 1980: 245) “the arative audience of "Goldlocke” believes in taking’ bears; the authoril audience knows it is fietion. The split berweea the two audiences created by the author seems weaker in economic scence than in explicit fon, probably 2 Stapling in Economics, ‘because we all now that bears do not tak but we do not ll know that marginal prodctivity is a metaphor. Ia scence che ‘narrative audience is fled, as in ‘Goldilocks’. But the authoril audience 5s fooled, too (and commonly so also is the literal audience, the actal readers as against the ideal readers the author wishes ino fstence). Michael Mulkay (1985) has shown ow important i the thoice of authorial audience in the scholarly correspondence of biochemiss. The biochemists, Uke other scientists and scholars, axe largely unaware oftheir Iterary devices, and become puzzled tnd angry when thei audience refuses to believe in talking bears ‘Small wonder that scientists end schoazsdiagre, even when their shotoric of “What the facts say’ would appear to make disgree- ‘ment impossible, “Taking economics as a kind of writing, then, explains some of| the disagreements of economists. Economists go oa disagreeing afer the “theoretical results and empirical findings’, es they put it, Inave been laid out for inspection ot merely because they are ", Sanday ‘Resce Aug. pp. 23 Malay, Miene 1985) The Word ond the Word: Esploratin the Fore of Sevlpeal Anas, Winchester, Masachocats: Allen & Uni, Propp, V. 1968 (1925) Morpaogy of te Fale, 2nd edn. wns. ‘rot and LA. Wagner, Amencan Folklore Society, Austin: Univesity of Tens Free Rabioomis, Peer J. (1980) “What's Hecuba to us” The audience's ‘experince of Kerry Soong, pp. 241-63 in Susan R Suliman and ge Gromman (elt) The Reeder ae Tex: Beye om Andi nd Tne rtm, Pnceton: Princeton University Press Reena, Louse M. 197 The Reader, te Tes he Pao: The Tron fel Thy of he Ltrary Wr, Cavvondle: Souther Tinos aves Sy Pres Roshven, KK, (1979) Citzel Auampin, Cambeige: Cambridge Univenicy Press Swumure, F d& (916) Coune ie Gowal Ling, cans, R. Hare (0985) Leadon Duckworth ‘Todor, Tevetan (1980 (1975) "Reading as constractin’ pp. 67-82 in Sonam R. Silkiman and Toge Crosman (edt) The Ready tthe Text EBusss Audie and ntrpretion, Pacem: Piscean Unies Pres ‘Weinberg, Steven (196) ‘Beautiil then, revision of the Second “Annual Gordon Mile Lerure, unpublished MS, University of Texas, ‘white, Hayden (981) “The tale of narrivity inthe eereenaionof| eaiy', pp. 1-24 a WT. Mitel (el) Ox Nar, Cheapo Unies of Chicago Press. ‘Wo, Virgin (1953 (1925) The Comoe Reeder. Fit Sei, New York ‘sod Lonioa: Harcourt Brace Torani