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.
Jared Diamond (1987) argument that agriculture was the worst mistake of human history is based on the comparison between the standards of living in hunter-gatherer societies and in societies which have adopted agriculture. He concludes that hunter-gatherer societies had a much better standard of living when this is measured by leisure time, quality of diet, average height, etc. The passage from hunter-gatherer societies to agricultural societies was a trade of quality for quantity of human lives. Even making the average human being relatively worse, the agricultural society could prevail because it could sustain much larger societies which were able to impose themselves in conflicts with its hunter-gatherer counterparts. Also, Jared Diamond point out that agricultural society gave rise to gender discrimination and elites who could live in better conditions at the expenses of the work undertaken by the larger part of the population.
Finley (1965) seeks to explain why “Greeks and Romans together added little to the world’s store of technical knowledge and equipment.” He noted that although these societies have considerable intellectual development and a good consideration for wealth there were little improvements in methods of production. He poses several explanations for this. A separation between science and practice probably channeled the scientific effort to areas other than those related to production. Also, physical work was not considered a virtue and then inventions which led to reduction of necessary physical labor were not sought with a lot of enthusiasm. Finley then shows how relevant technical innovations took long periods to spread in contiguous areas and argues that it is a consequence of the low consideration people had for savings of physical labor. Moreover, although these societies had the capital necessary to engage in a virtuous process of innovation the governors were not interest in it. Connected to the arguments above is the fact that commerce and industry in general did not give rise to much interest from society and the work in them was considered something as a second class work. Even in agriculture Finley noted that the psychology of the owners was also one of a renter, extracting their rents from slaves, and then not favorable to innovation.
Temin shows evidence of the existence of a market economy in the Roman Empire. This market, he argues, was more integrated along the cost of the Mediterranean since the transport costs by land were much higher than by the sea. Temin supports that, among the main forms of integration in the human economies described by Polanyi (1977) (reciprocity, redistribution and exchange) only exchange could permit some of the complex relations observed in this period. Finally, he showed that during the Roman Empire there were relations which occurred by market exchanges and a considerable usage of monetary transactions.
Baumol (1990) argues that, although entrepreneurs’ efforts were present in all societies, their allocation in different possible activities were determined by the possibilities of gain that each of these activities provided. The gains here considered in a broad sense, including from pure monetary gains to increased reputation. He expanded the Schumpeter’s analyses of the innovation process in the society and analyzes different societies in order to give evidence in favor of his extensions. He shows that ancient economies did not provide the incentives (material or psychological) necessary for the entrepreneur to engage in technological innovations. The Baumol’s paper allows us also to make a reinterpretation of the Jared Diamond’s argument; in particular, the hunter-gatherer societies gave incentives to the adoption of agriculture since by doing so they could expand.
Posted by: Pedro Castro | January 30, 2008 at 11:49 AM
The question though, Brad, is why do we have to sit through all those (worthless) first year theory courses? Is quick algebra that critical for research? How come there's never any apologia for that?
Posted by: Thorstein Veblen | February 02, 2008 at 08:28 PM