Why Should Economists Study Economic History? After-Action 210a Note

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I'm Brad DeLong, and this is my morning coffee.

Jan de Vries ran our first Econ 210a class yesterday--"Introduction to Economnic History" for the first-year Ph.D. students in economics. He spent more time than I had in the past on what he called "apologetics"--outlining why we were requiring first-year Ph.D. students in economics to take an economic history course--and he gave a historian's answer to that question: a narrative, a particular individual story, a talk about the formation of the social sciences and the rise and fall of positivism and the subsequent vicissitudes of economic history as a subdiscipline within economics.

It struck me after the class that I should have taken up a bit of time to give the economist's answer to the question of why we make first-year Ph.D. students take economic history. I think it goes roughly as follows:

Economics is the hyper-positivist of social science disciplines: believing that everything of interest can be reduced to law-like theoretical and empirical propositions modeled after classical mechanics; that what cannot be reliably, repeatedly, quantitatively, and empirically demonstrated does not really exist as knowledge; that the only good social science is a deductive, analytical, model-based, general, experimental science.

But this misses a lot. Because we are people like those whom we study, we have psychological access to our subjects' internal decision-making processes and motivations at a level that we cannot obtain from market price-quantity data. There is lots of interest that happens once and only once. Natural experiments are rare, and so if we restrict ourselves to positivist tools alone much is underidentified. The individuals' preferences--the "tastes" part of "tastes and technologies" are not primitive but are themselves the result of long and complex historical, sociological, psychological, and--yes--economic processes. You need thickly-described case studies and anecdotes looking out from people's insides before you can tell if your statistical results mean what you assert they mean.

Most important, every piece of economic theory is ultimately a piece of crystalized history. And you have a much deeper and more sophisticated knowledge if you know the history that led people to think that elaborating these particular theories was worth doing. If you just do the crystalized stuff--well, there is a sense in which your thought processes are then on crack, unable to properly process and reflect on the systems of analysis you are using.

Of course, there is a parallel answer to the question of why historians should be forced to take economic history courses. It has, I think, two parts. First, certainly since 1800 and perhaps since 1500, what is most extraordinary and salient about our global society is primarily economic and scientific, so you cannot do post-1500 history without knowing economics anymore than you can do early Byzantine history without knowing theology.

Second, just as every piece of theory is ultimately crystalized history, so every individual historical narrative or judgment is based on a web of implicit social science theories. And your knowledge of the past is inadequate if you do not understand your implicit social science theories critically enough to be expert users of them.

I'm Brad DeLong, and this is my morning coffee, drunk this morning out of my Revelation of Saint John the Divine mug, it happens.

Comments

[PQuincy]

Hear, hear! (on both sides)

I confess that as a non-economic historian (though now I wonder if there could really be such a thing), I have often appreciated economic historians for doing the mountains of work that give rise to succinct empirical results that are useful to me...."grain prices experienced inflation in the later sixteenth century", or "the silverization of the Chinese economy in the late sixteenth and early seventeenth century drove global trade flows and reshaped Europe's political economy, too, thanks in part to Peruvian silver." These are really useful kinds of framing information for the more anthropological kind of stuff I do myself.

But if Brad is right, that's not enough: historians should not only consume economic history, but practice it, at least a little.

Hmmm....maybe I can sit in on his seminar, some time? After all one can hardly imagine a more inspiring and competent economic historian than Jan de Vries, and if he's willing to team teach with Brad, I'm convinced!

[Colin Danby]

Great; any chance for a fuller version of the de Vries talk below? Thanks too for the Maloney link.

I like the "web of implicit social science theories" point, especially if we can loop it back into the thick tastes and preferences bit 3 paragraphs earlier: that is, people act in thick social contexts guided by particular conceptualizations of those contexts, by particular social and cultural projects. Family businesses are obvious examples.

Or take the irony-jammed headline "Bill Gates Issues Call For Kinder Capitalism" in this morning's WSJ. He's working in an ideological field that makes "capitalism" resonate differently from say 20 years ago, though the term still has all kinds of interesting baggage.

[STS]

You Go, Brad! You can take the economist out of politics and history but you can't take the history and politics out of economics.

One minor quibble: economics owes a lot more to thermodynamics (specifically statistical thermodynamics) than it does to mechanics. Walras probably fostered this misunderstanding (he did use the title "Economique et Mechanique" after all).

This paper articulates a more precise analogy and diagnoses some of the confusion:
http://cepa.newschool.edu/~foleyd/econthermo.pdf

Amusing tidbit: Did you know that Irving Fisher was a doctoral student of J.W. Gibbs?

http://en.wikipedia.org/wiki/Willard_Gibbs

[ljkas]

Oh, Brad. If only we could get you some acting or voice lessons, you would be 100% riveting.

[jerry]

Okay, just what the hell did you do with Brad DeLong?

First, DeLong apparently only wears suits and ties. Second, there is no "W" in Berkeley or in Harvard.

Next, how do you feel about free trade vs. fair trade? If you're more for fair trade than DeLong, than okay, you can stay and I won't say a word.

[Gwailo]

Well said. *Very* well said.

[Tobias]

Great, finally the morning coffee is back. Excellent start.

[Miracle Max]

Heresy!

You'd never get an academic job that way.

[albrt]

How about:

Progess always and everywhere depends on where you've been.

[Nick Kaufman]

"certainly since 1800 and perhaps since 1500, what is most extraordinary and salient about our global society is primarily economic and scientific, so you cannot do post-1500 history without knowing economics anymore than you can do early Byzantine history without knowing theology."

That is very true. You cannot study early Byzantine history without delving into theology.

I just wanted to say that this kind of references are a major reason I enjoy this blog so much. The blog is not just about dry economics, filled with charts and formulas. Brad has a genuine wide breadth interest in history and all kinds of knowledge one could deem unnecessary. And yet this sort of unnecessary knowledge is what make social sciences fascinating to me; not to mention that on more than one occasion this sort of knowledge provides the deep-textured understanding one needs to fully appreciate an idea or an argument in the present day.

So kudos.

PS. Another reason is the Marxism and Chomsky bashing! let's have some more of that too!

[Joe S.]

I'll take Nick Kaufman's preferred text, and try another exegesis:

"First, certainly since 1800 and perhaps since 1500, what is most extraordinary and salient about our global society is primarily economic and scientific"

Machiavelli
Hobbes
Montesquieu
Locke
Adam Smith (okay, Brad has half a point)
Madison-Hamilton-Jay
Burke
Marx (another half for Brad)
Gandhi
Djilas (a personal quirk)
Galbraith
Rawls

Agreed, technocratic democratic liberalism requires a certain economic and technological infrastructure. But much of it worked for an eighteenth-century mercantile culture. And the same modern economic-technological infrastructure that supports technocratic democratic liberalism also supports technocratic autocracy. In other words, pace Marx, modern politics is no mere extension of modern technology and economics. There has been a huge amount of autonomous intellectual and practical development of our polity, which I happen to think is extremely important. I don't want to live in Singapore, thank you very much.

[wood turtle]

You get the prize for the most stacked books in an office.

As an economic decision, I would not have chosen the mug, but I can see why you would.

[Lilly Evans]

Excellent post. The link between economics and narrative at present seems to be best shown in the work of Grameen Bank and described by Dr Yunus in his book CREATING A WORLD WITHOUT POVERTY, Social Business and the Future of Capitalism. Incidentally, it was largely due to Dr Yunus's influence that Bill Gates decided to get involved with the social business.

Being neither an economist nor a historian, I find this fascinating. It is also intriguing to contemplate how could the economics classes be enriched by the type of thinking Richard Feynman brought to physics? Though, if anyone could pull this off, I am sure Brad can - with some speaking coaching, for sure.

Out of interest, was the text generated using Macspeech? If so how much extra work did that require?