July 28, 2018 Dear Reader

Sweet Talk is How We Work

And the other direction of causation is equally important: that commerce sweetened people. Cooperation, not alienation, is the usual result of commerce. It results in increasing, not diminishing, social contact. Speech dominates bourgeois society. Show the historical/sociological evidence of this. Coffee house, long-distance deals. Contrast with geniza, e.g.

It makes a difference whether people don’t speak or speak.

Paul Goodman (1971 [1972], p. 3).

About Brindley the canal digger: “As plain a looking man as one of the boors of the Peake, or one of his own carters; but when he speaks, all ears listen, and every mind is filled with wonder, at the things he pronounces to be practicable”

T. Bentley The History of Inland Navigations, 1769, p. 101,

quoted in (Langford, p. 416)).

A potent source of bourgeois virtues and a check on bourgeois vice is the premium that a bourgeois society puts on discourse. The bourgeois must talk. The aristocrat gives a speech; the peasant tells a tale. But the bourgeois must in the bulk of his transactions talk to an equal. “I will buy with you, sell with you, talk with you, walk with you, and so following.” It is wrong to imagine, as modern economics does, that the market is a field of silence. (Or at least it is wrong in anything but wholly perfect competition, and in such conditions, as has been realized for a century, there is a paradox of silence, solved on the blackboard by such talking constructs as the Walrasian auctioneer.)

For one thing, talk defines business reputation. A market economy looks forward and depends therefore on trust. The persuasive talk that establishes trust is of course necessary for doing much business. This is why co-religionists or co-ethnics deal so profitably with each other. Avner Greif has explored over and over the business dealings of Mediterranean Jews in the Middle Ages, accumulating evidence for a reputational conversation: in 1055 one Abun ben Zedaka of Jerusalem, for example, “was accused (though not charged in court) of embezzling the money of a Maghribi trader. When word of this accusation reached other Maghribi traders, merchants as far away Sicily canceled their agency relations with him.”⁴⁶⁸ A letter from Palermo to an Alexandrian merchant who had disappointed the writer said, “Had I listened to what people say, I never would have entered into a partnership with you.” Reputational gossip, Greif notes, was cheap, “a by-product of the commercial activity [itself] and passed along with other commercial correspondence.”⁴⁶⁹ With such information, cheating was profitless within the community, though sometimes not so profitless outside it.

Old Believers in Russia during the eighteenth and nineteenth centuries held a similar position. The Old Believers refused to adopt the late seventeenth-century reforms in the Russian church, and were in other ways far from progressive. Yet because of their peculiarity they were able to establish a speech community within the larger society. Old Believers on the northern River Vyg, for example, were able in the early eighteenth century to become major grain merchants to the new St. Petersburg “by utilizing their connections with the other Old Believers’ communities in the southern parts of the country.”⁴⁷⁰ Sir William Petty observed at the time that “trade is not fixed to any species of religion as such, but rather to the heterodox part of the whole.”⁴⁷¹ Any distinction will suffice. Thus Mennonites dominated the Dutch grain trade in the Golden Age and after. Quakers were great merchants in eighteenth-century England. The overseas Chinese, segregated from the rest of the population (and therefore able to talk inexpensively with each other about breaches of contract among their own), are more successful in trade than their cousins at home.

Defoe (Complete English Tradesman, 1726) notes that the Quakers were the originators of the fixed price offer usual now in rich countries, though he claims that “they by degrees came to ask, and abate [that is, bargain], just as other honest tradesmen do.” “These are, as I call them, ‘trading lies’ . . . [T]he honest tradesman does avoid them as much as possible.” But he sees it as silly to “pretend to go back to the literal sense,” which would make “it impossible for tradesmen to be Christians.” A trader who intends to pay at the end of the week and finds herself sometimes embarrassed, yet at length pays, is not a liar, but merely in business in a world without certitude. The “lie,” Defoe avers, is no more serious than what he calls “table-lies” (“Your pie, Granny, is the best I’ve ever tasted”) or “salutation-lies” (“What a lovely outfit!”).

The aristocrat does not deign to bargain. Hector tries to, but Achilles replies: “argue me no agreements. I cannot forgive you./ As there are no trustworthy oaths between men and lions,/ Nor wolves and lambs have spirit that can be brought into agreement.”⁴⁷² The Duke of Ferrara speaks of his last duchess there upon the wall looking as if she were alive, “Even had you skill/ In speech—(which I have not)—to make your will/ Quite clear to such an one . . . . / —E’en then would be some stooping; and I choose/ Never to stoop.” The aristocrat never stoops; the peasant stoops to harvest or to run the machine; the bourgeois stoops daily to make his will quite clear, and to know the will and reasons of the other. The aristocrat’s speech is declamation, imitated by the professoriate. The aristocrat’s proofs are like commands, which is perhaps why Plato the aristocrat and rationalist loved them so. Plato, it needs to be remembered, was a conspirator against democracy, a disdainer of law courts, a hater of poets, a friend of tyrants, a designer of closed societies. His proofs modeled on the new Greek mathematics convince, vincere, conquer. [Go to his fattest statements in Gorgias or whatever and get the Greek he uses] The bourgeois by contrast must persuade, sweetly, suadeo, from the same Indo-European root as “sweet." As Plato does, of course, every time we pick him up and read.

About a quarter of national income, to be statistical about it, and to speak of many people motivated by profit, is earned from such merely bourgeois and feminine persuasion: not orders or information but persuasion, “sweet talk,” you might say. One thinks immediately of advertising, but in fact advertising is a tiny part of the total. Take the detailed categories of employment and make a guess as to the percentage of the time in each category spent on persuasion. For example, read down the roughly 250 occupations listed in “Employed Civilians by Occupation” (Table 602) in the Statistical Abstract of the U. S. (2007) looking for the jobs with a lot of sweet-talking, or on the contrary the jobs without any of it. The 125,000 “appraisers and assessors of real estate” are not in an honest economy open to human persuasion, as any American knows who has had a house appraised recently. The 243,000 firefighters just do their jobs, with little talk---although one sees here the depth of sweet talk in a modern economy, because of course a firefighter with colleagues in a burning building does actually a good deal of talking, and sometimes engages in urgent persuasion. The 121,000 aircraft pilots and flight engineers persuade us to keep our seat belts fastened until the plane arrives at the gate and the seat-belt sign is turned off. But that’s a trivial part of their job---though again think of the supervisory roles they often assume, and the sweet talk needed to keep the crew cooperating. The 1,491,000 construction laborers are not known for persuasive language, except in the old days when a pretty girl walked by, such as Dil in the movie The Crying Game. But anyone who has actually worked in such a job knows the necessity to get cooperation from your work mates, to soothe the feelings of the boss, to be a regular guy or gal: sweet talk. But set all those jobs aside.

Out of the 142 million civilian employment in 2005 it seems reasonable to assign 100 percent of the time of the 1,031,000 lawyers and judges to persuasion, or being an audience for persuasion; and likewise all the 154,000 public relations specialists and the large number of “Social, recreational, and religious workers” (such as counselors, social workers, clergy), 2,138,000 of them persuading people how to live.

Managers and supervisors of various sorts are the biggest category to which it seems reasonable to assign a somewhat lower figure, 75 percent of income earned from sweet talk. In a free society the workers are not merely peremptorily ordered about, to be beaten with knouts if they do not respond. They need to be persuaded. What the U. S. Census Bureau styles “managerial occupations,” such as CEOs, school principals, marketing managers, and the like are a massive 14.7 million, fully 10 percent of the labor force. Adding the “first-line supervisors” scattered over all sectors---which I suppose similarly to be a workforce earning 75 percent of its earnings from persuasion---such as in construction and personal services and gaming (i.e. gambling) workers, adds another big 5.5 million. Add 380,000 for personal financial advisors. The 150,000 editors and (merely) 89,000 news analysts, reporters, and correspondents are probably 75-percent folk. They imagine themselves to be doing “straight reporting,” but it doesn’t take much rhetorical education to realize that they must select their facts persuasively and report them interestingly in sweet words. Likewise the enormous 13.4 million salespeople (which excludes 3.1 million cashiers) are reasonably put down as 75-percent sweet talkers. “The dress is you, dear.” It may even be true. In my experience, actually, it usually is. We exaggerate the amount of lying that salespeople engage in.

At 50-percent persuaders we can put down loan councilors and officers (429,000: like judges, they are often professional audiences for persuasion, saying yes or no after listening to your sweet talk, and gathering your information), human resources, training, and labor relations occupations (660,000: “Mr. Babbitt, I just don’t think you have much of a future at Acme”), writers and authors (we are merely 178,000), claims adjusters and investigators (303,000), and a big category, the 8,114,000 educational, training, and library occupations, such as college professors (1.2 million alone) and nursery school teachers.

A mere quarter of the effort of the 1,313,000 police and sheriff’s patrol officers, detectives and criminal investigators, correctional officers, and private detectives, one might guess, is spent on persuasion. That’s what they’ll tell you (actually the ones I’ve talked to put it at higher than a quarter; one way of backing all this up would be to do in-depth interviews, probing in a job for sweet talk as against mere information or coercion or physical activity; or riding along in the squad car and listening). In health care anyone who has worked in it knows that sweet talk is important, to get the patient to stay on his medicine, of course, and to coordinate with other care-givers, to advocate for the patient, to deal with insurance companies and hospital administrators (some of whom are included above in the managerial category). But the large group of “health care practitioners and technical occupations” needs to have the technical occupations (x-ray technicians, medical records technicians, and so forth) removed, leaving physicians, dentists, nurses, speech pathologists, and so forth actually talking to patients and each other, for a total of 7,600,000 talkers persuading for a quarter of their economic value. Perform the mental experiment (which is still another way to back it up): imagine a speech pathologist, an occupation I am familiar with, with no persuasive skills whatever, and imagine how much less valuable she or he would be. The 353,000 paralegals and legal assistants figure in the one-quarter category, too. The quarter sounds low.

The occupations I mention alone, without hunting in putatively un-persuasive categories like mail carriers or bus drivers or “life, physical, and social science occupations” (within which are buried many of the persuasive economists and law professors themselves), amount to 36,100,000 equivalent workers---that is, weighted by 1.0, 0.75, 0.50, or 0.25 as the case warrants and then added up. That was in 2005 about a quarter of the income-earning numbers of private employees in the U. S. Weighted instead by dollar incomes, considering the big role for managers and supervisors (about 20 million, remember, out of all the 142 million workers), who are of course paid much more---these days sometimes grotesquely more---than the people they persuade to work hard and long and well, the share would probably be larger still.

A similar calculation for 1988 and 1992, using the slightly different categories available for those years, yielded similar results (Klamer & McCloskey, 1995). Somewhat surprisingly the weight of sweet talk in the economy has not risen since then---though if police and health-care workers were put in the 50-percent category, and educators in the 75 percent, as the earlier calculations assumed, the share of persuasive work in 2005 would nudge up to 28.4 percent of the total.

The calculation could be improved with more factual and economic detail; for instance, the workers as I just said could be weighted by salaries; the marginal product of persuasion could be considered in more detail; the occupational categories could be subdivided; the premium to better persuasion could be estimated from sales commissions or promotions; squad cars could be ridden in, and---as Ronald Coase in fact did to discover transaction costs and as Robyn Penrose in fiction did to discover persuasion --the managers could be shadowed. I intend here only to raise the scientific issue, not to settle it.

The result can be checked against other measures. John Wallis and Douglass North reckoned that fifty percent of American national income was Coasean transaction costs, the costs of persuasion being part of these (1986). Expenditures to negotiate and enforce contracts---their definition of transaction costs---rose from a quarter of national income in 1870 to over half of national income in 1970 (Wallis & North, 1986, Table 3.13). Their measure is not precisely the one wanted here. Transactions costs include, for example, “protective services,” such as police and prisons, some of whose income (I am claiming three quarters of it) is “talk” only in an extended and sometimes physically violent sense. Literal talk is special—in particular it is cheap, as guns and locks and walls are not—in a way that makes it analytically separate from the rest of transaction costs.

Not all the half of American workers who are white-collar talk for a living, but in a not-very-extended sense many do, and more so as office work gets less physical in typing and filing and copying. So for that matter do many blue-collar workers persuading each other to handle the cargo just so, and especially pink collar workers dealing all day with talking people. And a good percentage of the talkers are persuaders. The secretary shepherding a document through the company bureaucracy is often called on to exercise sweet talk and its evil twin, veiled threats. If she can’t use sweet talk she’s not doing her job. The bureaucrats and professionals who constitute most of the white-collar workforce are not themselves merchants, but they do a merchant’s business inside and outside their companies. Walk with me, talk with me. What news on the Rialto? Note the persuasion exercised the next time you buy a necktie. Specialty clothing stores charge more than discount stores not staffed with rhetoricians. The differential pays for the persuasion: “The fish tie makes a statement.” As Smith said “everyone is practicing oratory.” Not everyone, perhaps, but in Smith’s time a substantial percentage and in modern times fully twenty-five percent.

The same point can be made from the other side of the national accounts, the product side. The more obviously talkie parts of production amount to a good share of the total, and much of these is persuasion rather than information or command. Out of an American domestic product of $11,734 billion in 2004 (Statistical Abstract 2006, Table 650, p. 430) one can sort through the categories of value added at the level of fifty or so industries, assigning rough guesses as to the percentage of sweet talk produced by each---80 percent for “Management of companies,” 20 percent for “Real estate rental and leasing,” 40 percent for “art and entertainment” for example---and get up to about 17 percent of the total. The figure squares crudely with the income side. Persuasion is anyway big, very big. Economists should stop ignoring it.

Over the very long run of centuries the sweet talk is surely rising as a share of income, and will become very large indeed over the next century. Jobs for peasants, proletarians, and aristocrats are disappearing, and jobs for the talkative bourgeoisie are what remain. The production of things has become and will continue to become cheaper and cheaper relative to persuasion. A piece of cotton cloth that sold for 70 or 80 shillings in the 1780s sold in the 1850s for 5 shillings, and now adjusting for inflation it sells for pennies. The cheapening of things first led peasants off the land: three-quarters of American workers in 1800 worked on farms; forty percent in 1900; eight percent in 1960; two-and-a-half percent in 1990. The two-and-a-half percent produced 800 times more than the three-quarters had. A lawyer or professor was not much more productive in 1990 than in 1800. But an American farmer was more productive by a factor of 36. The making of things in factories will go the same way as the preparing of food in kitchens and the growing of crops on farms. The calculating power---adding, multiplying, and carrying---that sold for $400 in 1970 sold for $4 in 1990 and 4 cents in 2000. The silent proletarian labor required to make a radio, a window pane, or an automobile is dropping towards zero. Workers on the line in manufacturing peaked at about a fifth of the labor force after World War II and have since been falling, at first slowly and now quickly. In 2003 a mere 2 percent of the civilian labor force was in agriculture, 10 percent in manufacturing. What is left is hamburger flipping and secretarial work on the one side and bourgeois occupations, largely persuasive, on the other. In fifty years a maker of things on an assembly line will be as rare as a farmer is now, the non-persuaders vanishing into the automated background of the economy.

The delivery of information and commands partakes in the euthanasia of the maker. A farmer can turn on his computer in the morning and know at once the price of hogs on every exchange. A single electronic source of information on the hog prices does the work of fifty newspapers. When a Grameen bank finances the purchase by a local woman of a cell phone the farmers in her neighborhood suddenly know for sure the prices on offer in Dhaka. In an army the order to march can be conveyed cheaper by radio than by a lieutenant on a horse. Information and commands become cheaper and cheaper.

But persuasion does not become cheaper. It will not go the way of goods and information, the subject of conventional economics since Bentham, into close-to-zero-opportunity-cost extinction. The decision what to do with the farmer’s hogs, knowing all there is to know about prices, is still made in the kitchen council by farmer and son and wife, persuading each other; or in the councils of the farmer’s mind. The decision about where to send the regiments, into the Wheat Field or around the Union left, is still a matter of persuasive talk.

And sweet talk is sometimes adversarial. If the other salesman has a computer-assisted video to persuade the customers, then you as his competitor will need one, too. If the defense attorney in a product liability case starts hiring economists to testify that Fisherian statistical significance is true science, then the plaintiff’s attorney, if she has good sense, will start hiring economists to persuade the judge that Fisherian statistical significance is nonsense. If teachers get better at persuading people to read books, then television executives will devote more resources to persuading them to watch reruns of Sex and the City.

The technology is irrelevant, and therefore the fevered talk about the “information society” and the economist’s over-simple focus on bits of information is misleading. Persuasion is in this way like pure queuing. The time (or something else) must be spent in a queue somehow or else the queuing will not serve its function of allocating bread or gasoline or Bears season tickets being sold for below the market price. Oregon Plans, queue tickets, and other technology of queuing, we Chicago economists delight to point out, have no effect at all on the amount spent, when time and other inconvenience is measured at its money value.

Likewise, persuasive energies must somehow be spent arguing, or else the persuasion will not serve its function of allocating decisions to the proper side. (This, by the way, is good news for lawyers, politicians, advertisers, poets, and the like.) The economic problem is that the decision making itself, unlike the acquisition of information or cotton cloth, is intrinsically costless. After all, we could decide in an instant henceforth never to produce anything different from what we produced today, as rotten as such a plan would be. Do tomorrow exactly what you did yesterday. The decision to adopt such a Groundhog-Day central plan would take the stroke of a dictator’s pen. Since it is not intrinsically costly (unlike the very production of information or orders, which require costly paper and computers and loudspeakers) decision-making has to be made, so to speak, artificially costly.

These then are facts, historical facts---not schoolbook history, not Mr. Wells' history, but history, nevertheless. They create a big problem for conduit-metaphor economics. The problem is that economics after---but not including---Adams Smith has no room for persuasion. And yet one quarter of national income is earned by it. It would be as though economics had no room for an analysis of land and physical capital, which in some periods earned as much as one quarter of national income---though these are falling, while the earning of sweet talk gradually but inevitably rises.
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Is the persuasive talk of the bourgeoisie then “empty,” mere comforting chatter with no further economic significance? If that was all it was then the economy would be engaging in an expensive activity to no purpose. A quarter of national income is a lot to pay for economically functionless warm and fuzzies. The fact would not square with economics. The businesspeople circling La Guardia on a rainy Monday night could have stayed home. The crisis meeting in the plant cafeteria between the managers and the workers would lack point. Wasteful motion, or empty words, sit poorly with conventional economics. By shutting up we could pick up a $20 bill (or more exactly a $1,500,000,000,000 bill). That cannot be. A quarter of our working time in the marketplace is spent in persuasive converse.

Adam Smith knew. The second chapter of The Wealth of Nations speaks of “the faculty of . . . speech.” The book does not again speak of the faculty of speech in a foundational role, though Smith, who began his career as a teacher of rhetoric, did remark frequently on how business people and politicians talked together. In The Theory of Moral Sentiments he calls speech “the characteristical faculty of human nature.”⁴⁷³ The other half of his foundational formula, the faculty of reason, became in time the characteristic obsession of economists. Smith himself did not much pursue it. Economic Man, rationally seeking, is not a Smithian character. It was later economists, especially Paul Samuelson during the 1940s, who reduced economics to the reasoning of a constrained maximizer, Seeking Man, Homo petens. The seeking has a peasant cast to it: the maximization of known utility under known constraints sounds more like Piers Ploughman than Robinson Crusoe. The utilitarian reduction of all the virtues to one maximand makes all virtues into prudence. The wind-up mice of modern economic theory know nothing of integrity, humor, affection, and self-possession. Smith’s notion of Homo loquans squares better with the varied virtues of the bourgeoisie.

The high share of persuasion provides a scene for the bourgeois virtues. One must establish a relationship of trust with someone in order to persuade him. Ethos, the character that a speaker claims, is the master argument. So the world of the bourgeoisie is jammed with institutions for making relationships and declaring character, unlike that of the aristocracy or peasantry, who get their relationships and characters ready-made by status, and who in any case need not persuade. Thomas Buddenbrook bitterly scolds his unbusinesslike brother, a harbinger of bohemianism in the family: “In a company consisting of business as well as professional men, you make the remark, for everyone to hear, that, when one really considers it, every businessman is a swindler---you, a business man yourself, belonging to a firm that strains every nerve and muscle to preserve its perfect integrity and spotless reputation.”⁴⁷⁴

The class work of an Austen novel is not done by portrayal of the middle class but by the effect on the implied audience. The virtues recommended are not those of aristocrats or (and this is more surprising in the devout daughter of a clergyman) Christian. They are bourgeois, which is to say, helpful for a life in commerce. [Check this.] So notes Walter Benn Michaels (refer to him).

The bourgeoisie works with its mouth, and depends on word of mouth. Buddenbrooks is not social history (though Mann was proud of having “intuited and invented the thought that modern-capitalist acquisitive man, the bourgeois with his ascetic ideal of professional duty, is a creature of the Protestant ethic, completely on my own, without reading . . . learned thinkers, namely, Weber, Troeltsch, Sombart.”⁴⁷⁵) It imagines rather than reports Mann’s own family of Lübeck grain merchants. But if it testified to the attitudes towards the bourgeoisie only in 1901 (and Mann did go to a good deal of trouble to get his family history right) rather than in the 1850s it would still weigh.⁴⁷⁶ The fictional Tom speaks in the 1850s of his grandfather during the Napoleonic Wars: “he drove in a four-horse coach to Southern Germany, as commissary to the Prussian army---an old man in pumps, with his head powdered. And there he played his charms and his talents and made an astonishing amount of money.”⁴⁷⁷ Fix here At the crisis of 1848 the Assembly is trapped by a mob in the town hall. “The natural instinct towards industry, common to all these good burgers, began to assert itself: they ventured to bargain a little, to pick up a little business here and there.”⁴⁷⁸ Charming the generals, chatting with the miller, picking up a little business here and there.

On the other hand, idle talk is not bourgeois. Idle, artistic, romantic talk is a habit of the new bohemians sprung from the bourgeoisie, adumbrated in Christian Buddenbrook, of whom Tom the bourgeois says, “There is such a lack of modesty in so much communicativeness . . . . Control, equilibrium, is, at least for me, the important thing. There will always be men who are justified in this interest in themselves, this detailed observation of their own emotions, . . . poets” or indeed novelists like Heinrich and Thomas Mann.⁴⁷⁹

Now of course the sweet talk among the bourgeoisie can be parodied, and has been for two centuries to the point of tedium. “Everybody puts his best foot forward before strangers. We all take care to say what will be pleasant to hear.”⁴⁸⁰ The intellectuals can sneer at the vulgarity of business talk (“Run it up the flagpole and see if anyone salutes”), “the clumsy but comfortable idioms which seemed to embody to [the burgers] the business efficiency and the easy well-being of their community.”⁴⁸¹

And speech of course can be false. In Buddenbrooks Grünlich is the bad bourgeois, a mere acquirer. His false speech is aimed from the beginning at acquiring Antonie and her fortune: “He regarded her with the air of a satisfied possessor.”⁴⁸² Grünlich gets his rival for Antonie’s hand out of the way by committing the worst sin among the bourgeoisie, lying about a contract: he claims falsely that she had promised him. It develops that he was lying, too, about his firm’s prosperity. At first he seems to the elder Buddenbrook “an agreeable man, and well recommended, the son of a clergyman. I have business dealings with him.”⁴⁸³ Grünlich “talked business and politics, and spoke soundly and weightily.”⁴⁸⁴ Buddenbrook is later “wounded in his pride as a merchant, . . . the disgrace of having been so thoroughly taken in,” taken in by a torrent of sweet words.⁴⁸⁵

Bourgeois friendship is false in aristocratic or peasant terms. Tom’s father recalls his own business experiments as a young man: “My journey to England had for its chief purpose to look out for connections there for my undertakings. To this end I went as far as Scotland, and made many valuable acquaintances.”⁴⁸⁶ These acquaintances of which one hears so much in a bourgeois society are hardly friends on the aristocratic model of Achilles and Patroclus. The friends could turn, exhibiting “all the sudden coldness, the reserve, the mistrust at the banks, with ‘friends,’ and among firms abroad which such an event, such a weakening of working capital, was sure to bring in its train.”⁴⁸⁷

The virtues of the bourgeois are those necessary for town life, for commerce and self-government. The virtue of tolerance, for example, can be viewed as bourgeois. The experience of uncertainty in trading creates a skepticism about certitudethe arrogant and self-possessed certitude of the aristocrat or the humble and routine certitude of the peasant. As Arjo Klamer has pointed out to me, “the dogma of doubt” is bourgeois. City air makes one free.

Bourgeois charity, again, if not the “charity,” meaning love, of the King James translation of the Bible, runs contrary to the caricature of greed. More than the peasant or aristocrat the bourgeois gives to the poor as in the ghettos of Eastern Europe or in the small towns of America. Acts of charity follow the bourgeois norm of reciprocity. The American Gospel of Wealth, founding hospitals, colleges, and libraries wherever little fortunes were made, is a bourgeois notion, paying back what was taken in profit. Middle class people in the nineteenth century habitually gave a Biblical tenth of their incomes to charity. The intrusion of the state into charity killed the impulse, remaking charity into a taille imposed on grumbling peasants: I gave at the office.
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Economists since Bentham have viewed talk as cheap and culture as insignificant. Yet humans are talking animals, and the animals talk a great deal in their forums, agoras, marketplaces. Of course the economist does not have to pay attention to everything that happens in an economy. That farmers chew tobacco or paint traditional designs on their barns while dealing in corn does not necessarily have to appear in the econometrics. What would have to appear is a large expenditure, since expenditure is the economist’s measuring rod.

Economics as presently constituted does not acknowledge the fact (if it is a fact: I repeat that the calculation would need much elaboration to be scientifically persuasive). The conversation of the economy is taken as irrelevant to economic science. As the late Don Lavoie put it, “economists seem to agree that the scientific discourse of economics should dissociate itself from the everyday discourse of the economy.” He observed dryly, “Economists are not so clear why they think this.”⁴⁸⁸

The economy, one might say from the statistics, “rests” on persuasive talk. Yet economists, to repeat a point of methodology obvious to economists but obscure to most of their critics, are not required to pay attention even to everything the economy “rests” on. It also rests, for example, on engineering, but in speaking of the economics of bridges and other social overhead capital an economist does not need to know about the equilibrium equations for three-dimensional rigid bodies.

In the present case, when economists can reduce some transaction to a silent physical action, they can properly ignore the talk, at least in its effects on the equilibrium price. Adam Smith, to continue the quotation from Lectures on Jurisprudence, said that persuasion, “being the constant employment of trade of every man, in the same manner as artisans invent simple methods of doing their work, so will each one here endeavor to do his work in the simplest manner. That is bartering, by which they address themselves to the self interest of the person and seldom fail immediately to gain their end.”

Of course, a sociologist would point out that the institutions of a bartering grocery store “rest” on all manner of talk, such as the giving of orders to the junior grocery clerk to spend the next hour fronting the stock in aisles 6 through 8. The anthropologist reminds economists that “behind” their market lies a culture, which is another talking matter. But given the culture and the institutions (a big given, admittedly), and confining attention to the immediate result, if the clerk does not like the assignment he can silently walk, exercising his option of what Albert Hirschman calls “exit.”⁴⁸⁹ He is not a slave. Likewise, a man who tries to haggle with his local grocery store about the price of a quart of milk is wasting his breath and wasting the grocer’s time. If he thinks he can get a better price down the street, he can walk. If the grocer thinks the next customer will pay the price, he can ignore the haggler. The talk in such cases is not essential for the economics.

Walk or talk. To put it another way, that many transactions involve talk may be interesting but need not be a criticism of economics. The physical walking may still set tight limits on what can be charged. People bargain over houses and automobiles, talking a lot, yet no one will be talked into selling a four bedroom apartment overlooking Central Park for $3.57 or into buying a ‘77 Chevy with a little rust and 220,000 miles for $500,000. The customer will walk away from such offers. What matters is the size of the “gold points” within which silent trade confines the price. If the gold points are narrow, the talking does not change the deal. If they are wide, however, it may well change it.

A case of wide gold points, by definition, is pure bargaining. Two people meet in the middle of the Sahara, alone. One person has plenty of water but no food; the other plenty of food but no water. At what price will the deal take place? Obviously, it depends on the bargaining skills of the two. Economists, truth be known, have not made much progress in understanding situations of pure bargaining. Game theory for all its wonders has not gotten far on the matter.⁴⁹⁰

The theoretical impasse arises because bargaining is talk, all the way down. As the food owner in the Saharan encounter, Arjo claims forcefully that he has a physical ailment requiring an unusual amount of both water and food. Deirdre detects a ruse, and offers little of her water in exchange for his pound of food. Arjo weeps affectingly; Deirdre’s heart softens, and she hands over half her water. Or she laughs sardonically (she is a hard lady) and portions out to Arjo a tiny swig in exchange for most of his food. It depends on talk.

This unsatisfactory conclusion relates to a basic feature of speech, that it can apparently be trumped, cheaply, in a way that sweaty physical action cannot. Suppose you devised a rule that would predict the bargaining speech of lonely owners of water in the middle of Sahara. Would this permit you to extract the water at a low price? No. As economists have pointed out repeatedly, if one person is predictable, the other can exploit the predictability, which will suggest to the exploited one that he had better randomize. If you’re so smart about bargaining, why ain’t you rich?

A limit on calculability is a feature of any speaking. If anyone could get their way by shouting, for example, then everyone would shout, as at a cocktail party, arriving by the end of the party hoarse but without having gotten their way. The philosopher H. P. Grice affixed an economic tag to the trumping of speech conventions, “exploitation.” The linguist Stephen Levinson puts his finger on the limits of formalization when language is involved: “[T]here is a fundamental way in which a full account of the communicative power of language can never be reduced to a set of conventions for the use of language. The reason is that wherever some convention or expectation about the use of language arises. there will also therewith arise the possibility of the non-conventional exploitation of that convention or expectation. It follows that a purely . . . rule-based account of natural language usage can never be complete.”⁴⁹¹

A joke among linguists makes the point (the story is said to be true). A pompous linguist was giving a seminar in which he claimed that while there were languages in which two negatives made a positive (as in Received Standard English: “I did not see nobody” = “I saw somebody”) or two negatives made a negative (standard Italian: “Non ho visto nessuno” = “I did not see nobody” = “I did not see anybody”), there are no languages in which two positives made a negative. Pause. Then a smart aleck in the back row says loudly, with a sneer in his voice, “Yeah, yeah.” Any rule of language can be trumped for effect.

The game theorist Joseph Farrell has made a similar point in a paper of his called “Meaning and Credibility in Cheap-Talk Games.”⁴⁹² What I call “trumping” he calls “neologism,” and finds that games are sensitive to its use. “We could conclude that we have no satisfactory positive theory in a one-shot game [a conclusion which may explain the unpopularity of the paper with referees]. . . . Games should be taken in context, especially when analyzing the effects of communication. Language that could not survive in equilibrium if the world were nothing but a particular game, can nevertheless affect the outcome of the game.”⁴⁹³

Economists specialize in knowing about costs and benefits. But someone—maybe even a specialized economist—might want to learn about the speech by which people construct their stories the cost and benefit. Maybe some useful economics can be done, or the existing economics modified. Adam Smith, as usual, put the issue well. The division of labor is the “consequence of a certain propensity . . . to truck, barter, and exchange. . . . Whether this propensity be one of those original principles in human nature, of which no further account can be given; or whether, as seems more probable, it be the necessary consequence of the faculties of reason and speech.”⁴⁹⁴ Smith, who began his career as a teacher of rhetoric, remarked frequently on how business people and politicians talked together. Half of his foundational formula, the faculty of reason, became in time the characteristic obsession of economists. Smith himself did not much pursue it. Economic Man, whether speaking or seeking, I have noted, is not a Smithian character.

Speaking Man has never figured much in economics, even among institutionalist economists. A man acts, by and for himself. That is what utility functions or institutions or social classes or property rights are about. No need to speak. Smith would have disagreed. Towards the end of The Theory of Moral Sentiments he dug behind the faculty of speech (which led to the propensity to exchange, which led to the division of labor, which led to the wealth of nations). He connected it to persuasion, which is to say, speech meant to influence others: “The desire of being believed, the desire of persuading, of leading and directing other people, seems to be one of the strongest of all our natural desires.”⁴⁹⁵ Compare his Lectures on Jurisprudence, in the passage quoted: “Men always endeavor to persuade others . . . [and] in this manner every one is practicing oratory through the whole of his life.” Though always Smith, and his contemporaries, admitted payment as a form of persuasion: “Sir, you may make the experiment,” said Johnson to Boswell. “Go into the street, and give one man a lecture on morality, and another a shilling, and see which will respect you the most.”⁴⁹⁶
Here maybe an empirical measurement of contacts increasing in 18^th century. Three stages. Self-sufficiency  silence. Handicraft  chat. Industry (what Frank Knight called an "enterprise" economy, with his wheel of wealth)  conversation. Complex speech, signaling, many stages of production, millions of interactions implied.