Dear George,

There is also a literature on using counterfactuals to explain the role 
of contingencies that lead to path dependence in economic history. 
Examples: Thorstein B. Veblen’s work on Imperial Germany; Robert Fogel’s 
work on American railroads. If you are interested in reading a 
theoretical work, you may want to take a look at Paul David’s “Path 
dependence, its critics and the quest for ‘historical economics’” 
(search within the paper for “counterfactual”). The paper is available 
here: http://www-siepr.stanford.edu/workp/swp00011.pdf .

You may also want to take a look at the role of counterfactuals in 
economic methodology. In my *Intellectual Path Dependence in Economics* 
(Routledge, 2016), I claim that replication is a form of counterfactual 
reasoning that assesses the validity of applied research. The question 
is: “what if” such and such an error had not taken place in the history 
of economics? Replications / counterfactuals are often useful to account 
for the prevalence of errors that are uncorrected in the history of 
economics.

See: *Intellectual Path Dependence in Economics: Why Economics Do Not 
Reject Refuted Theories*, pp. 57-61.)

I hope this is helpful. Best wishes, Altug Yalcintas