The Myth of the Entrepreneurial State

[Amazon Link, See Disclaimer]

Anyone keeping track of my reading (but I assume that's precisely nobody) knows I'm a Deirdre McCloskey fan. See here, here, here, here, and here. So this book, available on Kindle for a mere $5, was a no-brainer. It is co-written by Alberto Mingardi, but it seems to me to be 100% McCloskey's "voice" throughout: idiosyncratic, cranky, sarcastic, hilarious. The book seems to be (more or less) a response to the works of Mariana Mazzucato, mostly (sensibly enough) The Entrepreneurial State.

As with other McCloskey works, you can "get" much of the argument by following the chapter titles. And, since I'm a lazy reporter, they are: Introducing Mazzucato; Statism and its allies; Statist intervention is not innocent; The Great Enrichment came not from the State but from liberty; "Driving" from the top is not its explanation; Bottom-up does work; Economic history rejects Mazzucato's hypothesis; There is no "linear model"; The Internet, for example, was not invented by the State; Bottom-up, then, is pretty good; One must measure the State with a sample of the economy; The State should have a role, but should not be the director; For understandable reasons, the State is bad at innovation; Most governments, after all, are demonstrably incompetent; State foresightedness is implausible; The hypothesis of significantly imperfect markets has never been tested; Stakeholder theory is defective; Mazzucato distrusts ordinary people; Keynesian mastery takes away dignity; The market accords dignity; The economic errors of lawyers and pre-1870s economists; The top-down and legacy-payment of statism are illiberal; The supply-chain fallacy underlies Mazzucato's method; The enchaining of human action reverts to a labor theory of value; What sort of economy do people want?

To me, the book's arguments are sound, and even though I've had Mazzucato's books on my get-at-library list for a while, McCloskey/Mingardi lessened my priority for them.

I highlighted the following, where the authors eloquently debunk the economy-as-machine metaphor:

To the contrary, we repeat, the economy is composed of people, and is not a machine. It is like the English language, not like an English steam engine. The people are motivated in varying proportions by prudence, temperance, courage, justice, faith, hope, and love, with the corresponding vices. By way of such principles of motion, they pursue their endlessly diverse projects, knitting and model railroading, a Beckerian "world." Let them do it, laissez faire. Such an arrangement takes people to be liberated and equal and increasingly competent adults, as against the stolid peasants or helpless proletarians of conservative or progressive theorizing since 1848.

If you like that as much as I do, I think I can recommend the book to you. It's a worthy updating and restating of the classic arguments from Hayek, Sowell, and Friedman.