In 2009, the European Journal of the History of Economic Thought (EJHET) and the European Society for the History of Economic Thought (ESHET) launched the initiative to publish a special annual issue of EJHET with a selection of papers presented at the ESHET conference of the year before. This is the ninth time that such an issue is produced. It testifies that the collaboration between the society and the journal is solid and that both remain firmly committed to encourage and to disseminate the results of original and innovative research on the history of economic thought.
The 21st annual ESHET conference was organized at the University of Antwerp (Belgium) from 18 to 20 May 2017. The theme of the conference was “Rationality in Economics”. The assumption that economic agents behave rationally has been of crucial importance for the development of economics. However, the assumption has been and is challenged, by economists and others. As mentioned in the call for papers, “there is a role for historians of economic thought to illuminate the central but changing place of the concept of rationality in the history of economics. Since the debates on rationality are far from over and continue to influence the way economics and related disciplines evolve today, the topic is of interest to more than just historians of thought. The theme of the 2017 conference, therefore, confirms ESHET’s belief that the study of the history of economic thought should in no way be disconnected from current issues in economics and beyond, and could in fact help provide historical perspectives on standard views about the subject.”
As in the past, the sessions were not confined to the conference theme. Many of the papers dealt with other topics. A total of 187 papers were presented in 59 parallel sessions. In addition, there were plenary sessions with talks on concepts of rationality in economics, given by invited speakers Peter J. Hammond and Esther-Mirjam Sent, a speech on “the origins of the modern economy” given by honorary member, Joel Mokyr and the Blanqui lecture on ”Russian economic thought for a better world” by François Allisson.
The papers selected for this issue reflect the wide range of subjects covered and methods used by the participants of the conference. The call for papers had led to the submission of 28 individual papers plus a set of five shorter papers on Joel Mokyr’s book A Culture of Growth: The Origins of the Modern Economy (2016). After the completion of the reviewing process, nine individual papers and the Mokyr set were accepted for publication.
The first paper, “33 economic bestsellers before 1750” by Erik S. Reinert, Kenneth Carpenter, Fernanda A. Reinert and Sophus A. Reinert, is part of a larger project initiated at the Kress Library of Harvard Business School and aimed at producing a list of bestselling books in economics through the centuries. In their contribution for this issue, the authors identify and focus on 33 bestsellers that were published before 1750 and went through ten or more editions before 1850. After explaining their methodology and main findings, the authors provide an annotated bibliography of each of the 33 bestselling titles. This is not a “normal” research paper, but a fine example of meticulous, “slow” scholarship offering valuable services to all researchers interested in the history and pre-history of the discipline of economics.
The next three papers deal with policy-related issues. In “Adam Smith on Portuguese Wine and English Cloth”, Robert Dimand revisits Smith’s writings on international trade, and in particular, his criticism of the Methuen Treaty of 1703, which regulated the trade relations between England and Portugal. While that treaty is often seen as the historical background of Ricardo’s theory of comparative advantage (even though Ricardo does not mention it in his Principles), Smith’s critical remarks on the treaty have not received much attention in the literature. According to Smith, the treaty would lead to trade diversion, with more expensive Portuguese wines of lower quality replacing the wines Britain used to import from France. Arguing that a commercial treaty with France would be more beneficial, Smith supported Eden’s Treaty (1786). He disagreed with Cantillon and the mercantilists, who maintained that the exchange of English cloth for Portuguese cloth was beneficial for Britain by bringing in gold and silver.
Under the heading “Economists, social scientists, and the reconstruction of the world order in interwar Britain”, Carlos Eduardo Suprinyak and Thiago Dumont Oliveira focus on the tension between positive and normative economic analysis in interwar discussions on international politics. The London School of Economics and Political Science was a hotspot for these discussions, involving scholars from different disciplinary backgrounds. The authors pay particular attention to the work of Lionel Robbins, who drew a sharp boundary between positive and normative studies. They point out that Robbins acknowledged that his contributions to these discussions required value judgments and therefore, considered his writings on this topic as belonging to political economy rather than to economics.
In their “restatement of evidence from economists’ papers presented to the Radcliffe Committee”, Carlo Cristiano and Paolo Paesani set the focus on monetary policy and price stability in British post-war debate. Based on an analysis of the memoranda and oral evidence of the economists involved in the committee, Cristiano and Paesani argue that the views on monetary policy expressed in the Radcliffe Report were not as much in line with Keynesian thinking as conventional history has it. With respect to monetary transmission, excess demand and liquidity, the report deviated from the Keynesian orthodoxy developed in Keynes’s General Theory and in the work of Keynesian economists such as Richard Kahn and Nicholas Kaldor. The authors suggest that this happened partly for political reasons and under the influence of Richard Sayers, but to an even greater extent as a result of differences of opinion among Keynesians and of the strong opposition from economists affiliated to the LSE. Cristiano and Paesani interpret the Radcliffe doctrine as an important step towards the eventual acceptance of the principle that the main aim of monetary policy is stabilization and not stimulation of investment, as many prominent Keynesians would have it.
Angela Ambrosino and Stefano Fiori examine the interaction of “ideologies and beliefs in Douglass North’s theory”. They make a distinction between bottom-up and top-down processes, arguing that North fails to adequately take into account the difference between the function of beliefs in these two processes. They contrast poorly structured ideologies, sustained by bottom-up processes from shared mental models, with ideologies in terms of systematic views that stimulate top-down institutional processes and serve to re-orient informal norms and existing beliefs. According to Ambrosino and Fiori, North’s theory falls short of allowing for the assessment of reciprocal influences between organizations and institutions and between informal and formal norms, in terms of a continuous alternation of bottom-up and top-down processes.
Thereafter, follow four papers that all deal with aspects of rationality in economics, the conference theme. Based on her invited talk, Esther-Mirjam Sent explores the relation between the concepts of rationality and bounded rationality and argues that “you can not have one without the other”. After providing an overview and comparison of the ways in which the two concepts have been perceived in economics, she illustrates their mutual dependence by examples from game theory, rational expectations economics, and other branches of economics. She draws parallels with debates in philosophy concerning the definition of concepts in terms of their opposites. In the final part of the paper, she inquires more deeply into the intricate link between the (bounded) rationality of economists and the (bounded) rationality of the agents they study.
Carlo Zappia examines “classic and current criticisms of the Bayesian viewpoint” on “rationality under uncertainty”. He compares Daniel Ellsberg’s classic critic of Savage’s theory of rationality to the current critic, formulated by Itzhak Gilboa and others, of the Bayesian concept of rationality. He argues that Ellsberg’s position, which for a long time remained somewhat hidden in his doctoral thesis, consists of a generalization of the Bayesian viewpoint, aimed at proposing a normative theory suitable under uncertainty. In this sense, Ellsberg’s analysis and criticism of Savage’s theory anticipated Gilboa’s criticism of Bayesianism. More specifically, Gilboa’s suggested definition of rationality as well as the related procedure to test it against empirical evidence can already be found in the writings of Savage and Ellsberg.
Bayesianism is also the topic of Guilhem Lecouteux’s contribution on “Bayesian game theorists and non-Bayesian players”. Starting from the observation that Bayesian game theorists tend to represent players as Bayesian rational agents, who maximize their expected utility given their beliefs about the choices of other players, Lecouteux argues that this assumption is inconsistent with the formal structure of Bayesian game theory. Based on insights from the field of interactive epistemology, he asserts that the prior beliefs modelled by game theorists are nothing but a mathematical artefact. They cannot be interpreted as beliefs actually held by the players. According to Lecouteux, this means that Bayesian game theory contains surprisingly little Bayesianism and that it remains in essence close to the tradition of classical game theory.
Nicolas Vallois and Dorian Jullien provide “A history of statistical methods in experimental economics”, from the beginnings in the 1940s to the present, setting the focus on the role of these methods in estimating economic rationality. Their study relies on a qualitative analysis of papers published in the early period and a quantitative analysis of papers published more recently. They point to a significant change in statistical methods, from purely descriptive methods to more sophisticated and standardized techniques. In spite of the decisive role that the statistical methods play in estimating whether individuals or markets are rational, they are generally perceived as involving only purely technical issues. By means of their historical analysis, Vallois and Jullien suggest that such technical interpretation is the result of a long-run process of scientific legitimization, allowing experimental economists to distance themselves from the way psychologists use statistics.
The final contribution to this special issue is a set of shorter papers on Joel Mokyr’s book A Culture of Growth. The Origins of the Modern Economy, to which a roundtable was devoted during the conference. Christian Gehrke’s introduction summarizes the aims and results of the roundtable. Erik Buyst, Heinz Kurz, Bertram Schefold, and Richard Sturn offer different perspectives on the originality of the book, followed by a response from Joel Mokyr.
All in all, the articles published in this special issue highlight the broad scope of research topics covered and methods used by the members of the European Society for the History of Economic Thought.