The last generalists

Abstract

The general trend of research specialisation in economics has contributed to the marginalisation of the history of economic thought. However, it has also led to a state of fragmentation in the profession and thereby increased the costs of neglecting the history of economic thought. This paper argues that historians of thought can help to counteract fragmentation because they are special generalists that fulfil multiple functions, for example, in the education of economists, the detection of blind spots in modern theories and the identification of routes for innovation by backtracking.

Keywords:

• Specialisation
• fragmentation
• history of economic thought

Acknowledgements

This paper is based on the presidential address given at the annual conference of the European Society for the History of Economic Thought (ESHET) at the Université Paris – Panthéon-Sorbonne, 27 May 2016. I have greatly benefitted from comments provided by José Luís Cardoso, Annie Cot, Pedro Duarte, Gilbert Faccarello, Harald Hagemann, Lars Jonung, Heinz D. Kurz, David Laidler, Cristina Marcuzzo, Annalisa Rosselli, Bo Sandelin, Agnar Sandmo, Bertram Schefold and two anonymous referees. Since the society (ESHET) will not assume responsibility for any remaining errors and shortcomings, it remains with me.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. I have this from Charles McCann who remembered the decision to divide HET into pre- and post-1925 from conversations with Mark Perlman, the first editor of JEL. Cherrier (2017) offers a detailed history of the JEL codes, including information about the migration of HET in the classification systems over time. Marcuzzo (2008) used the Econlit descriptors in her presidential address at the ESHET 2008 conference to survey HET output in 1991–2008; see Marcuzzo and Zacchia (2016) for an elaborate update and Duarte and Giraud (2016) for a bibliographic survey with a different design.

2. There is a code for “Neoclassical”, but only “through 1925”, not “since” – as if neoclassical economics had vanished or become ubiquitous in all JEL categories beyond B that year.

3. The journal version of this paper is Cedrini and Fontana (2017), but it comes without this elegant formulation of specialisation as a cost-minimizing strategy in researchers’ careers.

4. Many of the anthropological observations on “life among the Econ” made by Leijonhufvud (1981a) are still valid. Yet, quantitative turns have been taken in other social sciences, too. A driving factor is technical progress; computerization has greatly facilitated and transformed the collection and processing of data. For a post-war history of the social sciences, see Backhouse and Fontaine (2010).

5. As expressed by Agnar Sandmo (2011, p. 11): “[T]he history of economic thought is a special special field. It encourages one to reflect on the contents and development of the subject” (his emphasis).

6. Commenters have suggested mentioning John Hicks, Kenneth Arrow, William Baumol or Harry Johnson as well. To my knowledge, they did not claim to have their fingers in as many pies.

7. Paul Krugman and Hans–Werner Sinn may serve as leading examples, at different ends of the range. See the contributions to Mata and Medema (2013) for a selection of American and British opinion leaders and other economists who acted as public intellectuals in the past.

8. One need not go as far as Adam Smith ([1776] 1904, p. I.10.82) who argued that “[p]eople of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public”. The codes of ethics and disclosure principles recently introduced by the American Economics Association (2012), the Verein für Socialpolitik (2012) and other professional associations attest to the potential for conflicts of interest. The introduction of the codes was prompted by public attention to such conflicts in the wake of the global financial crisis.

9. For a description and relative assessment of HET skills see, for example, Marcuzzo (2008).

10. Going by the resonance in general interest journals and wider circles I would mention, for example, Robert Heilbroner's Worldly Philosophers ([1953] 1999), George Stigler's Essays in the History of Economics (1965), the Keynes biographies by Robert Skidelsky (1983–2000) and Donald Moggridge (1992), and Perry Mehrling's Fischer Black and the Revolutionary Idea of Finance (2005).

11. Take, for example, the reviews of twentieth century macroeconomics by two great names in the field, Michael Woodford (1999) and Olivier Blanchard (2000), or Paul Krugman's Ohlin lecture on Geography Lost and Found (Krugman 1995, pp. 37–59). Together with my coauthors I have discussed the merits and the Whiggishness of these contributions in Ehnts & Trautwein (2012) and Tamborini et al. (2014).

12. Samuelson (1987, p. 52) observed about his own graduate education in the 1930s: “Graduate students need at least 4 hours a night of sleep: that is a universal constant. So something had to give in the economics curriculum. What gave, and gave out, was history of thought.” Considering that the marginalisation of HET began so early, it is somewhat surprising that it is still alive.

13. Pouring some cold water on the matter, it should be noted that students’ interest in HET tends to grow only in times of crisis (Caldwell 2013, p. 755 n 2) and to wane when students realize that serious studies in the history of ideas require deep and wide reading (anecdotal evidence).

14. Axel Leijonhufvud (2003) describes the “long swings in economic understanding” since the Great Depression. In his presidential address given at the ESHET 2014 conference, Cardoso (2015) discusses the emergence of political economy as a scientific discipline. In an another presidential address, given at the ESHET 2010 conference, Hagemann (2011) delineates the influence of European emigrés on the “Americanization” of economics. For a discussion of national traditions and the other questions, see the essays collected in Coats (2000) and Lanteri & Vromen (2014).

15. Examples for progress by historical analysis follow below. Note that it is not my intention to argue that all research amounts to recycling or rediscovery.

16. As Stephen – not George – Stigler (1980, p. 147) put it: “I suspect that most historians of science, both amateur and professional, have had their interest fuelled early in their studies by the discovery (usually accompanied by an undisguised chortle) that some famous named result was known (and better understood) by a worker a generation before the result's namesake.”

17. Since this article started with international trade theory, a befitting example is the close re-reading of Ricardo's Principles on international trade, by which Faccarello (2015) shows that Ricardo's arguments about comparative advantage differ substantially from their popular interpretations.

18. David Laidler (2003, pp. 12–19) criticises, in particular, the rhetorical abuse of classical writings by Robert Lucas and associates from the “New Classical” camp.

19. The passage is taken from the invited lecture on “The Uses of the Past” that Axel Leijonhufvud gave at the ESHET 2006 conference in Porto.

20. It should be noted, though, that Blanchard (2016: 1) has recently argued that “DSGE models… have to become less imperialistic and accept to share the scene with other approaches to modelization.” Caballero (2010) describes a variety of other approaches in his critique of the “pretense-of-knowledge syndrome” that characterised pre-crisis (DSGE-style) macroeconomics.

21. The Keynesian flavour results essentially from relative speeds of adjustments to shocks, with aggregate output reacting before the price level, and the Wicksellian flavour is in the determination of aggregate demand by gaps between ‘the natural rate’ of interest and the rate set by monetary policy. However, there was no backtracking involved in the construction of the New Neoclassical Synthesis, as it branched off from the New Classical approach of Real Business Cycle theory. Blanchard (2000, p. 2) regards the progress made in 20th century macroeconomics as “a surprisingly steady accumulation of knowledge”.

22. For a post-crisis critique, see Leijonhufvud (2011). Further pre-crisis critique was articulated in an exchange with Woodford at a History of Economics Society (HES) symposium in Toronto 2004; see Hoover (2006), Laidler (2006), Mehrling (2006), Boianovsky & Trautwein (2006), and Woodford (2006).

23. See, for example, the works of Peter Howitt, Domenico Delli Gatti and their co-authors (Howitt 2008, Delli Gatti et al. 2011, Ashraf et al. 2011, 2016). For a demonstration that replacing the Blanchard triangle with a Wicksell–Keynes triangle leads to different results even with minimal deviations from other DSGE standards, see Tamborini et al. (2014).

24. Kurz made this argument in his presidential address at the ESHET 2006 conference, in which he also illustrated the HET functions of (a) spotting blind spots and (b) innovating by backtracking with two examples. For (a) he compared Paul Romer's growth-theoretical treatment of the diversity of capital goods to older theories, and for (b) he discussed Piero Sraffa's redevelopment of the classical surplus approach to the theory of value and distribution (Kurz 2006, pp. 478–82).

25. A referee has pointed out that history is more readily acknowledged to be of great pertinence for the course of affairs in the realm of money and banking than in other fields. It is therefore logical that central banks (at least some of them) employ specialists in the history of economic thought and monetary theorists with an interest in history. A prominent example is Charles Goodhart, appointed Honorary Member of ESHET at the Paris 2016 conference. Among his many excellent recourses to monetary history and theories of the past his debunking of “Myths about the Lender of Last Resort” (Goodhart 1999) may serve as an exemplification of the uses of HET in that area.

26. This is not say that the understanding of formal methods of economic analysis (“the science leg”) is as high as it should be in the HET community; there is certainly much room for improvement.

27. Examples abound, but I suppose I ought not to name them here.

28. The SHOE mailing list of the societies of the history of economics (https://listserv.yorku.ca/archives/shoe.html) is an example for a long-standing intra-HET information system. In spring 2017, ESHET and HES opened a Twitter account named “SHoET (@Societies_HET)”.

29. For Wicksell's intensive recourses to Ricardo and other classical writers, see Trautwein (2015 and 2016).

30. I owe this point to Pedro Duarte.

31. All this comes at a cost in terms of time and money. Some formats will be more efficient than others. David Laidler has pointed out (in private correspondence with me) that blogging can be effective in reaching “modern economists”: “In the monetary area, people with a real interest in history seem to be very well represented as authors, and I have heard more than one ‘modern’ economist who would not be caught dead in a department that took history seriously confess to spending almost as much time reading blogs as journals - so maybe we shall make a little progress by stealth here.”

32. This observation was made by an anonymous referee who drew my attention to the integrative role of surveys in the past.

33. As a precondition for improving the terms of our trade, I continue to naïvely presume that the general interests of the HET community, the economics profession and society in general coincide.

34. Michael Woodford made that point at the HES 2004 symposium mentioned in footnote 22. Note that historians of thought also need to be fast and good enough to get the obituaries into the top journals.