1
Rhetoric and Economics

• Stuart Birks
• Massey University

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What is rhetoric?

• Logic ? proof
• Rhetoric ? persuasion
• Adam Smith
• Deliberative eloquence (policy)
• Judicial eloquence (law)

3
People are persuaded by

• Simple points
• Humour
• Analogy
• Appeals to authority
• Appeals to emotion

4
Why worry about rhetoric?

• Rhetoric dominates over logic
• Perception dominates over reality
• Image dominates over substance

5
Mainstream economic theory

• Based on
• Rational individuals
• Exogenous preferences
• Relevant where rhetoric is important?
• Also, rhetoric in economics!!!
• McCloskey, Klamer

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Three types of error
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Types of error, assume

• Type A, theory applies to real world
• Type B, data and functional forms OK
• Type C, policy implications from statistics
• Fallacy of the transposed conditional
• Policy evaluation questions

8
Type A

• Greenspan an ideology is a conceptual
  framework
• Harrod, 1938, when applied
• From being one of the most exact, albeit
  narrowly circumscribed, sciences, economics of
  necessity becomes one of the most conjectural.
• Theory as analogy / metaphor / frame