Lunch with Deirdre McCloskey

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"I've been most things in my life. A socialist, a positivist, a man": Deirdre (nee Donald) McCloskey. Photo: Ben Rushton

If you think all economists are boring you have never had an encounter with Deirdre McCloskey.

She was once a Marxist but now advocates free markets. She was raised in the American midwest but loves cricket. She was agnostic but converted to Christianity. She was a man ''with guy loves and passions'' but changed gender at the age of 53.

While many scholars delve deeply into a narrow field of inquiry McCloskey's intellectual pursuits sprout like branches from a tree.

Her 16 books and 400-odd academic articles range from highly technical economics to philosophy, ethics and transgender advocacy. McCloskey's Twitter biography is a reasonable 15-word summary: ''Postmodern, quantitative, literary, ex-Marxist, economist, historian, progressive Episcopalian, coastie-bred Chicagoan woman who was once not.''

McCloskey did a PhD at Harvard then worked for 12 years at the influential University of Chicago economics school which is famous for its commitment to free market economics. There she rubbed shoulders with an array of Nobel laureates including free market champion, Milton Friedman. (Although she says Friedman was ''a presence at the school rather than someone you got to know''.)

While McCloskey is still for ''free markets and free people'' she doesn't think humans are motivated by incentives alone. She argues other more meaningful things, especially ''bourgeois ethics'' such as prudence, temperance, justice, courage, faith, hope and love also affect our daily choices.

McCloskey is now a distinguished professor at the University of Illinois in Chicago and teaches history, English and communications as well as economics.

''I've been most things in my life,'' she quips in one book introduction. ''A socialist, a positivist, a man.''

I snuck into a typically expansive lecture by McCloskey at the Alphacrucis theological college in Parramatta on Wednesday. After sharing a buffet lunch with students and faculty members in the college canteen she and I had coffee and cake up the road at the award-winning Circa cafe. Over a double espresso and a pear slice we discussed the birth of capitalism, the importance of bourgeois values, the attractions of cricket and gender crossing.

Sydney's west is not completely alien territory for the internationally renowned economist. In 1996 McCloskey underwent gender reassignment surgery at a private hospital in Concord, a few kilometres along Parramatta Road from where McCloskey and I sat. McCloskey had the operation in Sydney because a friend, Kate Cumming, had recommended an experienced specialist surgeon here.

She combined the procedure (''major surgery but not particularly dangerous'') with a visit to Australia for an academic conference in Canberra. McCloskey likes to joke: ''I was on a business trip … and thought, 'what the heck'.''

Before the gender transition Deirdre had been Donald, a fairly typical male from America's mid-west although an occasional cross-dresser.

''My outward presentation and my spirit are closer together than they were before I became Deirdre,'' she tells me.

McCloskey's book Crossing: A Memoir (a New York Times ''notable book'' in 1999) is an often moving account of her transition which records in detail the reaction of those around her.

When Donald told his university dean, a conservative economist, he had decided to become a woman a stunned silence was followed by: ''Thank God … I thought for a moment you were going to confess to converting to socialism.'' The dean also joked it would be good for the department's affirmative action program - one less man, one more woman - and that McCloskey's pay could now be cut to about 70¢ in the dollar, since she would be a female.

''I knew from that moment he wasn't going to be nasty,'' she says.

McCloskey speaks about her gender transition with candour and humour.

''My motto is play both sides of the street and find out which is more profitable,'' she says. With a smile she tells me her elderly mother has just one request: ''Deirdre, please don't do anything more 'interesting'.''

But there has been a high cost: McCloskey's former wife and two adult children have not spoken to her since 1995.

Some time after her gender change McCloskey was in a meeting of economists - all men except for her - and made a point that everyone ignored.

''Two minutes later a guy named George made an identical point and all the men turned to him and said ''That's a great point George, you ought to write an article about that'' and I said to myself ''Yes! They are treating me like a woman. It was the first, and I should say the last, time I enjoyed that experience.''

McCloskey offered public support to Chelsea Manning (formerly Bradley), the soldier sentenced to 35 years' jail this year for leaking confidential intelligence material and diplomatic cables to the WikiLeaks website, when Manning announced her gender change in prison.

''Relax. It's no big deal,'' McCloskey wrote of Manning in New Republic ''It's not a threat to the family or to the American way of life. It's about 100 per cent American liberty - as was her free speech exposing the government's malfeasance.''

McCloskey expected to lose everything because of the gender transition but her academic career survived. The experience also coincided with a deep spiritual shift. McCloskey was agnostic before crossing but has since found religious faith and is now a practising liberal Anglican.

McCloskey says becoming a woman has also made her a superior economist.

''Economics tends to be treated as a boy's game, it's all about competition, sort of like football,'' she says. ''Women think more in terms of co-operation, which is a great engine in a modern economy. I'm not necessarily better at playing the boys' game now but I'm a better economist as a social scientist, a real economist.''

One of McCloskey's many contributions has been to draw attention to the central role of persuasion, or rhetoric, in modern economies.

''If you want to change people's minds there are only two alternatives: you can either sweet-talk them, or force them,'' she says. ''So in a free society all we have is sweet talk. Sweet talk is gigantic in a modern economy but it's something that economists have ignored almost entirely in the past.''

For McCloskey, a free society is a ''rhetorical society'' where speech is used to persuade people about what to buy or whom to voter for, rather than violence.

She says advertising has been unfairly given a bad name.

''People always say advertising is manipulation,'' says McCloskey. ''But if the only alternative to persuasion is violence how else are we going to decide what car to buy except by people trying to charm us?''

In 1995 McCloskey co-authored an influential study which estimated persuasion - by salespeople, teachers, politicians, lobbyists, lawyers and others - made up a quarter of America's gross domestic product. The same analysis was updated earlier this year by an economist at the Australian Treasury and it showed persuasion is now 30 per cent of US GDP. McCloskey says the proportion is similar in Australia.

''The making of things is going to become a smaller and smaller part of the economy,'' she says as we order a second coffee. ''But persuasion is going to get bigger and bigger.''

McCloskey is critical of economists for not paying more attention to language and says economics would be much improved if economists read more novels.

One of McCloskey's less heralded contributions was to be an early advocate for feminist economics, now a thriving realm of academic inquiry.

''Feminist economics is an important broadening of economics like behavioural economics and experimental economics,'' she says.

''I was a feminist before I became a woman. I did it out of noblesse oblige - I was a man reaching down to help the poor dears. It really helps to be one.''

McCloskey has studied the origins of modern economies at great depth and is very optimistic about the future of the global economy. The economic history of the past 200 years shows that setbacks such as the global financial crisis are temporary.

Over the long term the figures are impressive - McCloskey estimates that in today's dollars the average daily income of an Australian has grown from about $3 a day in the early 1800s to $120 a day now.

''Everybody in the world is getting richer,'' she says. ''Income per head in the world is growing faster right now than it ever has in history. I expect the whole world will become developed in 50 or 100 years.''

We also found time to talk cricket over our coffee and cakes. McCloskey acquired a taste for the game while living in England as a teenager.

''I love cricket, it's a more complicated form of baseball,'' she says.

McCloskey even played wicket-keeper for the University of Illinois cricket team, which was made up mostly of players from the subcontinent and Jamaica.

''Having gloves appealed to me - it seemed to be the comparative advantage of an American on the team.''

McCloskey has timed her visit to Australia to coincide with the current Ashes series. She'll be in Adelaide.

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