In support of others who see theory as a reflection of contemporary
policy needs, and therefore see policy as an integral part of HET, I
offer this exchange of correspondence I have recently had with an old
friend of mine in Canada. First the letter he sent me, which was in
reply to a letter I sent him. He wrote:

______
"In the past I have no doubt bored you with the story of how in my last
year
at Waterloo I was "forced' to take a course on the History of Economic
thought. It was being offered by the newly arrived Head of the
Department,
Sidney Weintraub (an enthusiastic Keynesian as well as a devoted
economic
historian) and my profs twisted my arm to take the course. I was
reluctant
as I already had 5 economics courses in my schedule enough to get my
honours
degree and this would be an unnecessary and unwanted 6th.  Under duress
I
took the course. With the possible exception of Economic 101, it was the
most enlightening and educational economics course I took throughout my
5
years of formal economics study.  

"We only read original texts (allowing of course for translations from
other
languages) and the first readings were from the bible.  Weintraub's
approach
was to have us read the text and then discuss the central economic
ideas.
Every author was treated with great respect as we explored and tried to
understand what was the state of the economic theory at their point in
time,
the problems that the new theory was trying to address, and the weakness
or
flaws that subsequent practitioners identified and sought rectify.  I
don't
recall if Sidney used the Einstein quote, "if I see further it is
because I
stand on the shoulders of giants" but that was certainly the underlying
theme of that course. 

"Much to my surprise this course on the history of economic thought
turned
out to be one of the most useful courses that I ever took, precisely
because
so many of the economic ideas we encountered on daily basis in the
popular
press, politics and public policy debates have their origins in economic
theories that originated years, decades or centuries ago. Weintraub's
pedagogical approach trained us to understand the ideas, to assess their
utility, and critically their limitations, but to do so with respect for
the
genius of those who have gone before us." 
______ 


This was my reply. I have slightly edited, and have replace actual names
with letters to protect the innocent. But he ande I are in complete
agreement about the role of HET. It is, I think, a minority position but
not necessarily wrong for that reason. 

______
"I wish I could think back on HET as one of the great courses I took at
university. WX and YZ shared the subject but YZ’s was the only course I
ever fell asleep in at my desk. I remember getting caught in a sunbeam
and from then on there was no fighting the sandman off. I came across
its value late and think the problem with it has been the way it is
taught. In fact, the way I think it ought to be taught is the way you
were taught. I was taught HET utterly detached from contemporary debate.
Adam Smith said this and David Ricardo said that, but nothing was
plugged into the policy side. Occasionally we would find out about
mercantilists or the existence of a Great Depression but little else.
Quite quite arid and so we would just be forced to learn a lot of
additional theory without even the benefit of being told they were
applicable to anything. 

"The HET I am interested in can only be embedded within the policy
debates of the time. This is how I teach it myself. In my book, every
shift in theory is based on a desire to prove some political point or
solve some specific economic problem. And so when you get to the
monetary debates of the early nineteenth century, you are in the midst
of a discussion that has not been resolved till this day. But if you are
looking for clarity and force of argument, going back to what they said
then not only brings you closer to today's issues but also provides
insight that is unavailable"That non-economists might benefit from a properly structured HET I do
not doubt but most books on economics for the non-specialist,
Freakonomics say, really don't help you understand the underlying
principles. To me, the crisis in economics is partly because of the lack
of an historical background in theory. Most economists would not even
know there is an ancient classical tradition worth reading and if they
did wouldn't know how to even understand its basics. The Marxists study
Marx; the New Keynesians study Keynes; the Austrians study Hayek and
Mises; we classicals, of which I about the only one, study Mill and
McCulloch. Only the mainstream makes a point of studying none of them at
all, because, I think, they are rightly afraid it will put large holes
in the side of the theories they teach." 




Dr Steven Kates
School of Economics, Finance
    and Marketing
RMIT University
Level 12 / 239 Bourke Street
Melbourne Vic 3000

Phone: (03) 9925 5878
Mobile: 042 7297 529