Deirdre McCloskey describes her project:
I have been trying for thirty years to revive the rhetorical tradition, and lately to introduce language into the economists’ models in which talk is cheap and therefore of no consequence. On the contrary, sweet talk, persuasion, is one quarter of national income, earned by managers and teachers, police and lawyers. Ignoring it would be like ignoring private investment — which is is fact a smaller sector than sweet talk.
When economists describe signaling behaviors, they’re usually trying to reduce the inefficiencies they produce. But signaling, “sweet talk,” is how we coordinate. We’re not “just” wasting time and energy signaling, we’re working together on shared projects. Many of the signals necessary for that collaboration must be costly or else they’ll be dishonest and our shared projects will be dissolved. For instance, when you could buy a bachelor’s degree and good grades, it no longer serves as a useful signal for allowing intelligent and conscientious workers to organize. Of course, many of my own complaints about the growth of “administration” are prone to the same criticism: paying bureaucrats to run retreats when there’s productive work to be done looks wasteful, but perhaps the alternative is a less-well-coordinated world. Maybe PowerPoint slides are all that stand between us and chaos.