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From:
[log in to unmask] (Steve Kates)
Date:
Tue Aug 5 06:24:36 2008
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The relationship between HET and the mainstream is tenuous but crucial.
On this I will make two brief points. 

The attempt by the Australian Bureau of Statistics to relegate HET to
the history of the sciences caused an astonishing reaction by historians
of economics across Australia because once the question had been put, it
was clear that any answer that left us outside of economics itself would
have led to the almost instantaneous death of this subject within our
university system both conceptually and in fact. Moreover, the only
answer to the ABS in getting its decision reversed was to demonstrate
unequivocally that economics requires HET if it is to be a complete and
rounded study of how economies actually work. Anyone interested in a
fuller understanding of the issues at stake and the way it which these
issues were resolved, see, firstly, ?The History Wars of Economics?
in the Winter 2008 (No 47) issue of the History of Economics Review.
Then secondly, see the forthcoming issue of the journal History of
Economic Ideas where there is a symposium: A Canary in the Coalmine: the
Near Death Experience of History of Economics in Australia. In both
there is a full scale defence of HET as economics and not as some
peripheral study of no consequence to economists. The sad reality,
however, is that most economists of the present generation do not
understand this, although I do think the tide is slowly turning. 

The second matter I would raise is that I have spent quite a bit of
effort trying to use HET to persuade my fellow economists that something
went seriously wrong in 1936. Like others who have posted, I have tried
to use HET for contemporary purposes, in my case to demonstrate that the
loss of Say?s Law with the publication of the General Theory
introduced into the mainstream what virtually every classical economist
of the time understood was an economic fallacy, that being the
possibility of aggregate demand failure. Till 1936, close on every
introductory textbook warned against using overproduction as an
explanation for recession. Now it is at the core of macroeconomics. I
have tried to use HET to point this out under the assumption that
someone else might actually recognise ? based on this historical
account ? how damaged macroeconomic theory has become because of the
Keynesian Revolution. I now see that this is a forlorn hope since
historians of economics seldom deal with mainstream issues while
mainstream economists seldom pay attention to historians of economics. 

Nevertheless, HET does have quite a bit to offer mainstream economics.
Making sure this is understood by both sides of this divide is something
we ought to take seriously and try to do something about. 

Steven Kates

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