Economics 210a: Introduction to Economic History: U.C. Berkeley: Spring 2008

Brad DeLong's Notes of Jan de Vries's Talk on the Purpose of Economic History

Econ 210a, January 23, 2008. Jan de Vries Speaks:

Here to present apologetics--a response to the question "why are we here, in this class, studying this material?" And this talk is going to give a historian's answer, a narrative, in response to this question...

History and Economics:

The emergence of the social sciences' out of moral philosophy in the 19th century. Positivism--seek truth from facts. resisted positivism; economics embraced it... "Historicism": you can't test, you have to understand... "Historicism": it's an illusion to suppose that we van reduce social science to natural science-like laws like those of mechanical physics... History: Inductive, descriptive, narrative, unique, example... As opposed Economics: Deductive, analytical, model-based, general, experiment...

Robert Solow: embedding of economy in society

All data are historical data... All theory is crystalized history... All history is based on an implicit theory...

Classical Economics:* 

CE is a historically-based inquiry into the nature and causes of the wealth of nations--to see through the accidents of history to the natural laws of social organization... For the CEs, "natural" is good

Moses Finley: Aristotle was a really smart guy, but Aristotle the economist is not very impressive. Finley claims this was the fault of ancient society--organized in such a different way so that Arostotle's categories make no sense. Wealth should flow to virtue...

So how eternal are the theoretical insights of Adam Smith? Do they apply to Athens in 350 BC?

The reaction against CE--German and Austrian reaction. Between 1860 and 1890: Jevons, Walras, Marshall and the rise of NE; institutional and historical critique--economics should recognize that different eras and different regions have different economicses. German Historical School vs. Austrians in the streets of Vienna: methodenstreit. Who won this battle? NE. But should we recover something of the losing side? Cunningham's review of Marshall and his Principles of Economics

Schumpeter, Gerschenkrom, Solow: economic history has a civilizing function when applied to economists... Marx: What's going down in Manchester tells us what will go down in Bombay... Gerschenkron: modified stage theory Return of institutionalism via DE...

Cliometrics: the New Economic History: economic history as a branch of applied NE... The New Institutional Economics, the Annales School, and Paul David's call for a historical economics

Doug North: NIE: price theory is not enough. Transaction costs as the only thing worth thinking about. The old institutionalist agenda in new clothes...

Annales: Braudel, Le Roy Ladurie... Longue duree... The different paces of time... The interplay of event and structure... 

Paul David: The demand for a Historical Economics: make up your own mind for how valuable Paul David's project is... Replace mechanical with biological metaphors, complexity instead of linearity. Are episodes of path-dependence trivial? Does qwerty matter? Is qwerty typical? Decreasing/constant/increasing returns? How long and how large a shadow does the past cast? If you have ever seen a typewriter in a museum...

How much does the path of historical development matter?

Big Questions:

Is capitalism "natural" in a Smithian sense, or a unique historical individual process?

Does the market system allows us to partake "of the common heritage of mankind", or is it a particular--and passing--phase?

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Reference: John Maloney (1976), "Marshall, Cunningham, and the Emerging Economics Profession," The Economic History Review New Series, 29:3 (August), pp. 440-451.

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.

Weekly Memo Questions for Econ 210a, Spring 2008

The grading policy for memos will be:

14 memos. 2 points each. As follows:

0 - not handed in 1 - handed in, but could have been written without thinking about the reading 2 - reflects upon the reading 3 - teaches us professors something

Weekly pre-class memo questions

January 30: Was it in fact the case--as UCLA's Jared Diamond maintains-that the invention of agriculture was the worst mistake in the history of the human race? What can we say about the causes of the fact that in some human societies technological and organizational progress appears relatively slow and in others relatively fast? And is there a relationship between these two questions?

February 6: malthus

February 13: industrious revolution

February 20: Judging by the readings, how much of a difference does "good government"--that is, a government that cares about commerce and enforces contracts more-or-less honestly--appear to have made in the centuries before the industrial revolution in Britain?

February 27: early modern globalization

March 5: wars, colonies, et cetera

March 12: Maxine Berg and Pat Hudson write that the "historiography of the industrial revolution in England has moved away from viewing the late eighteenth and early nineteenth centuries as a unique turning point in economic and social development." Do you agree with their conclusion that the literature has moved too far in this direction? Why or why not?

March 19:

April 2:

April 9: An influential literature cites the scarcity of labor as a key factor in the emergence of the "American System of Production." How much of this argument (if any) survives Peter Temin's 1966 critique?

April 16: Textbooks say that the gold standard had internal mechanisms that worked automatically to maintain both price and balance-of-payments stability. On what grounds do Arthur Bloomfield and Hugh Rockoff challenge this textbook view? Are their points convincing?

April 23: Great Depression

April 30: A growing literature develops explanations for 'Europe's golden age' (the European economy's fast growth in the third quarter of the 20th century). Is this effort misguided? In other words, do we really need fancy explanations for a straightforward phenomenon that is easily explained in terms of convergence and delayed structural change?

May 7: The economic history of the world both in the post-WWII period 1945-1990 and, in broader perspective, over the past two centuries has been one in which the world has shrunken enormously in distance along every conceivable measurement, and yet in which income and productivity differences between societies have grown enormously. What, in your judgment, are the possible big-picture theories for explaining this phenomenon that are worth investigating?

Basics for Economics 210a, Spring 2008

University of California at Berkeley, Berkeley, CA 94720

Economics 210a: Introduction to Economic History: Spring 2008

Jan de Vries: devries@berkeley.edu office hours Th 2-4 Dwinelle 3117
Brad DeLong: jbdelong@berkeley.edu office hours W 2-4 Evans 601
W 12-2 Evans 608-7

Course: Economics 210a is required of Ph.D. students in Economics, and is taken in the first year of the graduate program. Graduate students in other degree programs may enroll subject to the availability of space and with the instructors' approval. The course is designed to introduce a selection of themes from the contemporary economic history literature. While themes are presented chronologically, the purpose of the course is not to present a narrative account of world economic history. Instead, emphasis is placed on the uses of economic theory and quantitative methods in history and on the insights a knowledge of history can give to the practicing economist.

It is naturally required that you do the reading and attend class. Informed participation in the latter is encouraged. Class meetings will consist of a mixture of lecture and discussion. When the course goes well, it is primarily discussion; when the course goes badly, it is primarily lecture. Because discussion will focus on the issues raised, resolved, and left unanswered by the assigned readings, readings should be completed before class.

Readings: Readings are either available on the web or on reserve in a folder at the Haas Library. Access to readings available through JSTOR and other proprietary sources may require you to log on through a university-recognized computer and/or enter your Calnet ID to authenticate your proxy server. In past years, students have found it useful to purchase some of the books from which material is assigned through their favorite online book seller and to assemble the materials for reproduction at a local copy shop.

Grades: Your grade will be an equally-weighted average of two components: your weekly memos and the Economics 210a research paper.

Weekly memos: Each week your instructors will post an Economics 210a question on their websites. You will then write a memo of two pages (double-spaced, 12-pitch, 450 words) on that question, which is due at the beginning of lecture the following Wednesday. Two page memos cannot be exhaustive, nor can they provide definitive answers on the basis of what may still be unfamiliar material. But they can explain why the question is important, summarize what the articles assigned for the upcoming lecture have to say about it, and provide a provisional assessment of their conclusions.

Research paper: Your research paper is due on the last class meeting. We take the word research seriously: the paper should provide new information or evidence on a topic in economic history. It should not merely summarize an existing literature in the field. The writing and submission process requires that you meet an intermediate benchmark: submit approximately ten pages' worth of a literature review and a statement of your hypotheses by the last day of the fall semester.

Aim for roughly 20 pages for the final paper.

This paper should go beyond summarizing or synthesizing a literature: students should use the tools of economic theory and empirical analysis to pose and answer an historical question. Warning: the paper must have historical substance. This is not a requirement in applied economics or econometrics that can be satisfied by relabeling the variables in theoretical models taught elsewhere or by mechanically applying modern statistical techniques to old data.

This webpage: http://delong.typepad.com/teaching_spring_2006/2008/01/draft-basics-fo.html