================= HES POSTING ================= 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]> ============ FOOTER TO HES POSTING ============ For information, send the message "info HES" to [log in to unmask]