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Robert Leeson wrote: 
 
>Tony, 
> 
>Isn't there an implicit view of history (Whiggish or cynical?) in 
>contemporary economics ... 
 
I would totally agree with this, except I would simply call it 
Whiggish history -- we are always "improving", always getting 
better because with each generation we KNOW how to do it 
better. 
 
Originally, Whiggish history focused on institutional improvement 
(hence the emphasis on the Magna Carta, the Glorious Revolution, 
etc.) -- but neoclassical economics (not neo-institutional or 
new institutional, of course) takes institutions OUT of history 
entirely.  So it becomes merely the improvement of THEORY, of 
HOW to do things. 
 
But why shouldn't this be so?  Economists unquestioningly 
learned history as it was taught in the culture in which they 
were raised.  American culture has always been strongly influenced 
by Whig history. 
 
American history also is highly colored by the concept of 
"American exceptionalism" -- the belief that WE are somehow 
different -- that only the middle class made it to our shores 
(now that's a convenient memory) and that hence we were spared 
the inevitable conflicts of Europe caused by a rotting upper 
class and a desperate lower class. 
 
In the American exceptionalist version of Whig history, we are 
able to solve the problems that lead to others' downfall -- 
for example, our party system is supposed to release whatever 
conflict might cause political violence.  The "genius" of the 
American political system was supposed to be "compromise". 
 
Many contemporary economists' view of history was strongly 
shaped by the Cold War and "American exceptionalism".  Where 
this shows up is in the belief that America is the most 
MARKET-centered of market economies, the most capitalist of 
the capitalist.  During  the Cold War, these sentiments were 
expressed openly -- and indeed a new popularity for economic 
history rose from the effort to find the "secret" to 
"economic growth" and the transition from a "traditional" to 
a "market economy", to share with the "underdeveloped" Third 
World (before they turned to Communism ...). 
 
If you combine the political version of American exceptionalism 
and Whig history with the economic version, here is what you 
get for economic policy: 
 
You get the belief that ECONOMISTS have evolved the highest 
state of knowledge available as to how to make a government 
work to the improvement of society as a whole, leaving the 
MARKET (which means in this language "America") as free as 
possible.  "Economic growth" is the goal that allows us all 
to remain "middle class", which was the "nature" of America 
from its inception (again, conveniently forgetting that, oh, 
about 1/5 of Americans at the time of the Revolution were 
condemned to heriditary slavery, so propertyless that they 
did not even possess themselves or their progeny.) 
 
Now, one does not have to turn this totally on its HEAD -- 
I think that's a version of "American exceptionalism" too -- 
when the innocents raised in the 1940s and 1950s found out that 
America and its economy had many serious flaws, then America 
became exceptionally wicked with its materialist ways and 
powerful multinational institutions.  America was STILL the 
epitome of the market and capitalism, only now these were 
the ultimate villains (yes yes of course I'm oversimplifying, 
just ride with me this a while, okay?) 
 
My history training is in early America, and an enormous 
outburst of high quality research resulted from the realization 
that we needed to look at early America AS IT WAS -- not as it 
wasn't.  For starters, it was not "pre-Revolutionary" because 
until there was a Revolution, no one knew there would be! 
 
The point was to see people in early America -- and the early 
modern world -- as they saw themselves.  And part of that came 
in a big push to learn to "read" their texts correctly, to 
gain the meanings that were supposed to be in them. 
 
Hence the discovery that the word "democracy" just was not 
used at ALL in early America.  And I was (until my illness) 
on a similar campaign to get historians to realize that the word 
"capitalism" was not used in early America -- (17th and 18th 
centuries) -- that if we were not "pre-Revolutionary" in the 
colonial era, but rather early modern like the rest of the 
western world -- so, too, we were never "pre-capitalist". 
We WERE what we WERE. 
 
What is the point of this? 
 
If you believe in WHIG history -- if you believe in "American 
exceptionalism" -- then you do not HAVE to go back and look, 
because you know the outcome.  Everything in the past is 
important only as it sheds light on how we got to the present. 
There is no sense of alternate outcomes, of other paths, 
of multiple paths even right now. 
 
We cannot talk about government as just one kind of institution. 
We cannot talk about the goals we as a society share, and 
come to agreement on the goals we might have for government, 
then see what we are willing to pay for with what else. 
 
Formal macro policy says you can't do THIS because it will 
cause THAT -- with a flatfooted conviction.  Yet you look at 
all of the different fields of applied micro -- look at all 
of the lumps, lags,  frictions, interdependencies, multiple 
outcomes, inseparable packages of attributes in supply and 
demand -- how can macro be so CERTAIN with so little 
flexibility? 
 
The economist with little formal training in historiography 
is a sitting duck for this fallacy -- the fallacy of 
Whig history -- and the economist who hasn't read anytyhing 
in American history since 1970 is probably a sitting 
duck for the fallacy of "American exceptionalism" as well. 
 
Not to mention all of the younger economists who have little 
knowledge of historiography at all -- worse, little under- 
standing of what historiography is all about, of what it 
means to read contending interpretations not to decide which 
one is "right" and which "wrong", but to try to learn from 
the different perspectives of the interpreters. 
 
To what extent does current MACRO POLICY depend upon assumptions 
about government, about history, about American history, that 
are derived from grossly outdated models of WHAT HISTORY IS, 
and what actually happened over time? 
 
And to what degree is economic policy influenced by the 
inability of most economists to understand that theory is 
situated in time and place? 
 
Mary Schweitzer, Dept. of History, Villanova University 
(on leave 1995-97) <[log in to unmask]> 
 
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