Amazing, how one misses out on some excellent writers even in this super-charged information age. I've got a valid excuse, though. Before 1994 (when I went to US for five years) I barely had access to any decent library – courtesy Mr. Jawarharlal Nehru's foolish ideology which bankrupted all state governments and universities of India, meaning they could not afford to buy the latest books. People like me were literally starved of information. My brain was wasted. Almost made useless by Mr. Nehru and his Godchildren, the Congress and BJP.

And while I did get access to a lot of books at the University of Southern California (1994-1999), I was "under the pump", doing course work, doctoral dissertation, part time work, etc. I remember working over 70 hours a week, on occasion, including many graveyard shifts, and, of course, studying. Under such situations, it was easily possible to miss out a good author even if that author was otherwise widely published.

Then, from 2000 practically till 2008 I was hunched inwards, focusing on India-related readings and writings. I bought tens of books on Indian history and politics. And wrote. And wrote. In my spare time.

- Even as I tried to resolve the extremely problematic RSI problem I had developed.

Only while writing The Discovery of Freedom (still underway) did I get the chance to read many original works that I had missed out reading earlier.

But that was clearly not enough.

Fortunately, I'm still alive to learn more, to read more.

It is my good fortune to have chanced upon Deirdre McCloskey's work recently.

Piqued by her style – and insights, I decided to read more. Turns out there is a virtual gold mine of excellent writings on her website, here.

I’ve been reading up Deirdre McCloskey quite furiously now in my spare moments, and loving every minute of it.

Intriguingly, Deirdre was a man before, having changed his/her sex in 1995 at age 53. Don’t let this strange biological event put you off, though. Her views are amazingly sensible.

For instance, one thing bothered me at the end of my doctoral dissertation – that I couldn't figure out a way to predict precisely how many children the average couple in a society will have, assuming I know the relevant parameters. My study method, based on the standard economics model, had included a model of demand for children as a function of key independent variables. (If you are interested in the model, please check out my dissertation here.) Then I applied econometric methods to determine whether marginal effects were consistent with model predictions (using an extensive survey dataset from rural Thailand).

But there was no way to determine the precise number of children demanded by an average couple in rural Thailand under different economic or educational circumstances.

This is a major flaw of economics, which makes it less of a science and more of a deductive method based on a-priori assumptions, much like mathematics.

Further, given its focus on logic (deduction) not induction, virtually anything can be “proven” by simply varying the (theoretical) assumptions. There are no boundary conditions grounded in reality that constrain economics.

That doesn't mean it is not useful, but merely that there is often an over-emphasis on method at the expense of real knowledge. This leads to modest theoretical peculiarities (such as the so-called "market for lemons" of Akerlof) being given hugely more importance (even a Nobel award!) than real understanding of the markets or other human behaviour.

Many completely irrelevant and hypothetical theoretical pieces of work are awarded Nobels, even as totally pathbreaking thinkers like Ludwig von Mises are ignored (and continue to be ignored by 'mainstream' economics).

Such kinds of things (or rather, things on these lines) have been discussed by McCloskey.

But she does more; far more.

Let me refer you to three of her best writings I've so far come across. All three are readily available online.

a) The Secret Sins of Economics

b) Happyism (published just last week)

c) A Kirznerian Economic History of the Modern World

Each of these has amazing insights.

McCloskey is a FIRM and committed proponent of liberty. Her work goes to the heart of liberty and dignity.

If you've read chapter 2 of BFN you'll appreciate what she's saying.

We are both saying pretty much similar things. That it is LIBERTY (and consequent dignity) that causes innovation and prosperity.

Enjoy!

Related posts:

1. Deirdre McCloskey on innovation and laissez faire. SUPER brilliant!
2. A fascinating look at Adam Smith’s life and philosophy
3. Taleb’s excellent insights on the economy and international affairs
4. Sugata Mitra, the most fascinating IIT Delhi graduate I’ve come across
5. Walking with Cavemen and other insights into human origin and behaviour
6. Citizens’ Government – project specifications document – for public viewing
7. Good leadership vs. great leadership: THREE key differences
8. Personal Notes
9. Economics: an Introduction for the General Reader, by Henry Clay