Let Me Sweet Talk You Into Reading This

Working in restaurants, sweet talk paid my rent. Sweet talk ensured a good dining experience despite the $200 bottle of wine.  It was particularly lucrative when the sweet talk was so good they opted for a second bottle. Or, that five-star dessert adding another $50 to the check. Sweet talk wasn’t only directed at customers. I used sweet talk to persuade managers or fellow servers to put me in good sections or let me go home early.

I’m not the only one, right? We all sweet talk. We all persuade people in some way or fashion. We persuade our employers that we are a good hire and a good investment. We persuade friends into having another round with us. Life is a little better when you can sweet talk effectively.

“Sweet talk” is what Deirdre McCloskey refers to as persuasion. Firstly, she lets the entire economics profession know that what they think they are doing is not what they are actually doing. Economists are not engaging in some rigorous science–they are actually engaging in sweet talk. Laws of thermodynamics, gravity, and motion are easily demonstrated with experiments in a classroom. These laws are replicable outside of the lab as well! You don’t need a well-spoken and opinionated physicist to convince you that an object will stay in motion unless another object or force of equal mass or more gets in its way somehow.

Economics not so much. Two people, with the same “mass” (that is, education level nationality, income, family structure, community, etc.) might behave differently in some situations where they might have a different preference. Even identical twins go down different paths! Economists, however, think they will “prove” something with their statistical significance and fancy mathematical models. In fact, McCloskey says, “…reducing the scientific and commercial problems of testing, estimation and interpretation to one of “statistical significance,” as some sciences have done for a hundred years, has been an exceptionally bad idea. Statistical significance…has little to do with a defensible notion of scientific inference, error analysis, or rational decision making.”

Economics is about rhetoric. It’s about persuasion. It’s about sweet talk.

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CREDIT: Taylor Glascock for The Wall Street Journal CROSSING

Secondly, McCloskey points out that, for the most part, economists have missed out on the importance of persuasion. In an important paper published in an important journal in 1991, she claims that 25 percent of GDP is persuasion. In her recent trilogy, her estimate shoots to 40 percent–and “it will be larger in the future.” The point is not accuracy, but the sheer size of growth throughout history. Yet, it isn’t factored into our economic analysis.

If we miss out on the persuasion aspect, we miss out on the value of the study of economics. Information and knowledge are nothing if it is not persuasive. Knowledge, to McCloskey, is “information, plus judgment, from persuasion.”

In case you were wondering how she gets to 40 percent of GDP, she takes all of the professions from the U.S. Census and makes an educated guess as to how much persuasion is incorporated in the occupation’s marginal product. Lawyers, judges, religious leaders, actors, public relation specialists, and social workers, for example, are at 100 percent. Everything they do is sweet talk. Waiters, like I once was, are arguably in the 50 to 75 percent range. This range also includes professions like project managers, reporters, protective services, executives, administrators, and salespeople.

McCloskey’s emphasis on the importance of sweet talk is how she explains the incredible growth in wealth humanity has experienced in the last 300 years. It wasn’t merely the invention of particular technologies or the accumulation of capital, but the sharing of ideas that increased wealth. We unlocked ourselves to being persuaded, to being convinced of a new thought, argument, or idea, and opened the floodgates of economic growth.

So here I am, an official economist, doing what I’ve been doing my whole life, engaging in sweet talk. Every day I get up and attempt to persuade students, friends, colleagues, and the like, that economics is everywhere. Auntie Deirdre would be proud.  

 

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