HETSA symposium on the future of the history of economic thought

We’ve just had a symposium on my book, Defending the History of Economic Thought, at the History of Economic Thought Society of Australia meeting here in Auckland. I’m no fan of economics in the form of running a line through a set of dots, although I’m not an enemy either. But the astonishing transformation of economic theory from a philosophical study to social physics may be all right for the academic world – may be – but it’s not so all right for those who need to understand what’s going on if they’re trying to make policy.

Economics has a vast store house of approaches that are different from the mainstream, some bundled into different schools, such as Austrian economics, and some just part of an array of models that had been part of the mainstream in the past but have been sidelined for one reason or another. No natural science, for example, has ever had some concept from the past return in the way that Malthus’s early nineteenth century theory of over-saving and demand deficiency was resurrected as Keynesian economics and remains embedded in Y=C+I+G. The challenge to today’s mainstream provided by discarded theories and different schools has seen an effort made to push HET out of the economics classification and, as was attempted in Australia in 2007, to blend it into a category that was to be called, History, Archaeology, Religion and Philosophy, as far as possible from economics itself. My book is about that attempt, and a similar one in Europe in 2011. And the interesting part for me, during this symposium, was to find how many even here in Australia, want to make that transformation.

Why that is, I still cannot fully understand. There’s plenty of sociology in HET even as it stands, but there is also a good deal of rethinking old ideas as well. In the present structure you can do both. If HET became history and philosophy of science, the traditional form of HET would disappear, even as it is already shrinking in North America.

The contrast between our meeting in Auckland and the American HET meeting in Montreal at the end of last month was incredible. You would think that with economic theory at such a low ebb, that there would be many papers looking at the pre-Keynesian theory of the cycle, as just one example. As it happens, there was not a single paper in Montreal on either Keynes (or Marx for that matter), and very few that dealt with economic theory as in what did economist A say about issue B. There instead remains a systematic effort to reward sociology of knowledge. Here in Auckland, however, there have been just the kinds of papers that interest me, on both sides of these debates, and there are knowledgable people who can offer truly in-depth analyses and critiques.

It is, in fact, my wish that HET become in part what it never quite has been able to be, become a proving ground for older ideas that are tested in a pit of criticisms by people who are interested in these issues and know an immense amount about these ancient theories. It now happens in a haphazard way, but I think it should become institutionalised. There is, in fact, a new on-line journal that has opened called “History of Economics and Policy” which in my view is the direction things should go.

At the symposium, there were many things said from the floor that I found very useful and interesting, but amongst them was that MIT is about to make a history of economic thought course compulsory for its PhD candidates. If that is actually true, HET will be back within a decade.

Why economics needs the history of economic thought

My reason for being on the road and in Montreal is to attend the American History of Economic Society meetings. I wrote my Defending the History of Economic Thought in response to attempts to remove HET from within the economics classification and place it in some remote category as far from economics itself as they could arrange. In Australia (2007) it was to be, “History, Archaeology, Religion and Philosophy” while it Europe (2011) it would have been, “The Study of the Human Past: Archaeology, History of Memory”. If you had therefore been studying HET, you would not have been studying economics. Your papers also would not have been HET. As near death as HET already is, over the precipice it would have gone.

For HET has enemies everywhere. For the makers of the Classification Codes at the OECD, because the history of economic thought was “history”, neatness demanded HET be included as part of the humanities with other types of history, not with economics in the social sciences. But the more I became involved, the more it turned out that the mainstream of the profession wants HET out of economics because, so far as they are concerned, it gives legitimacy to alternative approaches to economic theory, approaches such as my own, which is seen as part of the “heterodox” tradition rather than the orthodox, orthodox like Y=C+I+G. For the mainstream, this is one way to get rid of the competition. Competition may be fine in theory, but not so much in practice.

But the odd part turned out to be that the elite of the HET establishment were also actively seeking this change. Because so much of HET is made up of people who think the mainstream is useless – uninteresting questions, badly answered – there is a push at the very top of the HET executive (its current president, for one) to turn HET into the history and philosophy of science. No more of these Austrians, or post-Keynesians, or Institutionalists, or Sraffians, or John Stuart Mill classicals. Out with the lot and HET can be a study of the sociology of knowledge. The American Society is at the centre of this attempted shift, and my efforts to preserve HET within economics and then write a book about it is resented in a way you would not believe, or at least I would not have. Just think of them as the equivalent of global warmists and you will get some sense of what they think about what I wrote. If you think my sweet little book on defending HET has had a series of lovely reviews within HET journals, you would not be right. Astonishing for me. I suppose I should not have been surprised but I have been.

So today I will present in defence of my book. Will let you know how it went later.

Defending the History of Economic Thought on e-books

You can get my Defending the History of Economic Thought as an e-book at this link. It is the first ever book length defence of HET and was written because the History of Economic Thought was, and still is, under threat of exile from amongst economists to the History and Philosophy of Science. It thus is not just an examination of why economists must study HET to become better economists, but why economists must preserve HET if economics is itself to become a better study of how economies work. This is from the link to the e-book:

This book explains the importance of the history of economic thought in the curriculum of economists, whereas most discussions of this kind are devoted only to explaining why such study is of value simply to the individual economist. Steven Kates reaches out past the individual to explain the crucial importance of the history of economic thought in the study of economics itself; without its history at the core of the curriculum, he contends, economics is a lesser subject, less penetrating, less interesting and of much less social value.

The book has had a number of reviews which reminded me just how useful this book is, not because they agreed with me, but because they didn’t. Not that any of them disagreed with me over the importance of the subject itself, only about whether my approach to teaching HET was a sensible one or whether I had overstated the opposition to HET amongst the profession in general. But twice in five years, major societies were faced by attempts to remove HET from within the economics classification and only rearguard action by a handful of historians of economics was able to reverse these already taken decisions.

I will be speaking about the book at the History of Economic Society meeting in Montreal in June and then, at the Australian Society meeting in Auckland, there will be a symposium on the book and its message. Economists have shifted away from being part of the humanities into becoming, not just a social science but social-physics. It is mathematics and pseudo-rigour that now drive the way in which economic theory is designed. Economics cannot be mathematical since there are no data for most of the important questions economics tries to answer. One of the reasons Keynesian economics will not die is that there is a belief that you can measure the things that need to be measured since the national accounts – a set of identities, for heaven’s sake – can be used as a proxy for economic relations. The History of Economic Thought at least reminds economists that their subject once was part of the humanities and some even begin to realise it still needs to be if it is to be any use to society.

A reply to a reviewer of my DHT

My comment to a friend who sent me his forthcoming review of Defending the History of Economic Thought. The Feyerabend quote I refer to below is “the history of a science becomes an inseparable part of the science itself . . . essential for its further development a well as giving content to the theories it contains at any particular moment” (Against Method p 21).

Dear Anthony

It’s good to see the book being reviewed and it could not be in better hands than yours. And I have learned quite a number of things about my own book by reading your review. But perhaps because of the battles I have been through I see this differently from you and in the end you do not answer the one question that matters: should HET remain within the economics classification and be counted as a social science or should it be removed to the history and philosophy of science and become part of the humanities? And I also do not know whether you think I have made a useful case for studying HET by an individual or for ensuring that there are historians of economics dotted throughout the discipline to keep the others on their toes.

Economics as we teach it is the shifting outcomes of research agenda with the latest manifestations rising to mainstream textbook level, with all of its history embedded in even these answers, but with many other answers given over the entire history of economic thought still in contention amongst some blocs of economists. You cannot make a physicist or a chemist a better physicist or chemist by teaching them the history of their subject but as your own testimony of your own students shows, you can with economics. The sentence you quote on p viii, for example – that HET is economics in and of itself – is a sentence that is explained in the rest of the para which seems perfectly true to me. Having watched the failure of the stimulus over the past five years, and especially in the United States, you may be sure that every aspect of John Stuart Mill’s statement, that “demand for commodities is not demand for labour”, has been more than confirmed for me. Mill to me is not HET but live theory with genuine real world implications you cannot find in your average textbook although you will find it in mine (Free Market Economics: an Introduction for the General Reader whose title I took from Henry Clay (1916) – have you seen it?).

That HET is both history of economic ideas (HEA) and intellectual history (IH) is clear enough to me but Winch’s example, which I haven’t read so don’t know, would be part of that history and philosophy aspect which is no more than half of HET and probably less. But it is the other half and more – which you capture with the lovely Feyerabend quote which I’d never come across but will use ever after – is also HET and it is that that needs to be preserved and recognised for what it is. So in your terms, I am trying to preserve HEA as a subset of economics but recognise that IH is also part of HET. And if you think Samuelson is part of IH, then what to do with that killer quote, that to be an academic success “you must read the works of the great economists”. This seems completely to be making the point I am making. Indeed, your conclusion on Heyne, which you state that my view is “not incompatible” with his, but what difference does it make for me here since the book is aimed at another issue, which is the need to study HET if one is to be a better economist and the need to keep HET within the economics curriculum if the economic theory itself is to thrive.

In trying to deal with this issue, a major problem I have found with the academic world is that for all the departmental politics that goes on, academics are politically in the wilderness. My days as a lobbyist really did matter. I am trying to put together a book that defends the position of HET which will wither and die if it is relegated to history and philosophy of science. We have the disdain of the mainstream to contend with while even some of our own stellar lights – Margaret Schabas and Roy Weintraub for example – are trying to remove HET in just that direction. What your review has said is that there are two kinds of HET, this one and that one, and that I did not make this distinction well enough. But since you agree that HET is important to the study of economics, which is the first sentence of the intro, why are you not supporting this? Why are you not saying somewhere that Kates is onto something important and even while it might have been better if it had been done in some other way, at least it has been done, and imperfect though it may be, is a welcome addition to the literature. In real politics, finding agreement is the most important part of what we do. In the academic world, unfortunately, finding disagreement is our bread and butter.

Anyway, I am thinking of having a session on my book at the HES in Montreal which I am going to, funding permitting. If you are going to be there as well, would you be interested in being part of a session that discusses the book? It is a funny thing that we in Australia have been so on this issue from the start, which I attribute to John Lodewijks, who has continually stirred us into action. And funny again, there have been enough genuinely politically minded people who have been able to work together to achieve common objectives on a few occasions. I will copy my reply to you to Robert Leonard who is organising the conference. I’m usually quite happy to stand at the back of the room – a speciality for lobbyists – but on the question of the preservation of HET I can see that if I don’t do it there is no one else who will. Maybe there’s no danger and I am over-reacting, but if you look at the story of the European Research Council, which was as recent as 2011, I would not be all that certain that these same troubles might not arise again.

Anyway, I thank you for the review, and specially for the Feyerabend and Samuelson quotes which are perfect for me. Had I known of them, each would have been at the front of some chapter. And I do hope to see you in Montreal.

With kindest best wishes.


Is the history of economics economics?

There is a review of my just published Defending the History of Economic Thought on the History of Economics website written by Marie Duggan. She didn’t quite get it but she got much of what matters. But I cannot help myself so have written this response:

I am grateful for Marie Duggan’s timely review of my Defending the History of Economic Thought and while I don’t think she quite conveys the urgency that went into its writing I think she conveys much of what the book is about. But if I may, I would like to supplement what she wrote.

The central question addressed by the book is this: should the history of economic thought be classified as part of economics? That is, when someone is undertaking research into some aspect of HET, is their work part of the study of economics or is it something else?

Here is the supposed parallel. When someone studies the history of physics, they are not classified as physicists. When someone studies the history of chemistry, they are not classified as chemists. So the argument has been, that when someone studies or writes on the history of economics, they are not economists, but are perhaps philosophers of science or historians. Therefore the history of economic thought should be removed from the economics classification and be placed somewhere else amongst the humanities for example.

Does this matter? I posted a note a few months back on the OECD’s redesign of its Frascati Manual which must seem to most people on this site as of absolutely no relevance to them in any way. In the manual at present, economics is classified as a social science while the history of economics is classified as part of the humanities. That is, the two areas are completely distinct with no overlap of any significance. Does that sound right to you? It doesn’t to me.

We here in Australia wrote a submission to the OECD, a submission which was endorsed by a number of other societies. We have in this way established a position that will need to be taken into account by those who are redesigning the manual and which will also provide the basis for a response if the new manual continues with the same structural division found at present.

I therefore wrote the book to explain just how precarious the History of Economic Thought is. The review only discusses our lobbying efforts with the Australian Bureau in 2007. It surprisingly ignores the more important of these lobbying efforts which was with the European Research Council in 2011. In Australia we were able to persuade the ABS not to make the change. In Europe, the change was made. The ERC removed HET from the economics classification. The effort was therefore devoted to asking the ERC to reverse a decision that had already been made which was ultimately successful.

This is from the original ERC decision. The concern referred to – our concern – is that HET would be removed from the economics classification:

“Addressing your concern, “history of economics” is divided between SH1 and SH6 (“The study of the human past: archaeology, history and memory”).”

If you would like to know what happened both before and after that decision, you will have to read the book. But if you think that you, as a historian of economic thought, are an economist undertaking economics work, try explaining that to your head of department when the official classification has you listed as working in an area described as “the study of the human past: archaeology, history and memory” (and in Australia the classification would have been, “History, Archaeology, Religion and Philosophy”). And to the extent that you could get funding for your work, these would be the panels you would need to apply to.

These, moreover, are not battles won. These are battles we remain in the midst of. Right now, even as I write, there is an attempt being made here in Australia to reclassify History of Political Economy from its current position as an A*-journal, which is our highest classification, to B-level, which is our third tier. The Journal of the History of Economic Thought has already gone from an A to B. This is not happenstance, this is deliberate and there are economists who favour this change. But the effect is obvious. There is a restricted academic reward in pursuing the study of HET. Do something else instead. You are wasting your time with these historical studies of dead economists of the past.

The reviewer says that I have invented straw men opponents of HET. Would that were the case. The history of economic thought has enemies. If HET is removed from the economics classification, it won’t be by accident.

The intent of the book was therefore to explain, as I had done in submissions to the ABS and ERC, why historians of economics are intimately involved in the development of economic theory. It’s not a subject undertaken by or read by non-economists. This is a specialist area in which economists write for other economists. We as economists orient ourselves and our theories through its historical development. That’s why the book is unlike any other on the subject. Most discussions on why study HET are about why individual economists might benefit individually. This book is about why economic theory is improved where economists know their subject’s history and where there are historians of economics to bring economists of the past into contemporary debates.

Most importantly, what the reviewer noted was this: “if colleagues or deans start taking potshots at HET (or any subfield that you hold dear), take a deep breath, and read Chapter 5 for some sound tactical advice.” The book is about alerting historians of economic thought to our present dangers and providing just the tactical advice she discusses. We are at the cliff’s edge. This book is written both to alert historians of economics about the dangers we face and to provide some suggestions on how we deal with this very great problem.

And while this is slightly off topic, my own favourite chapter of the book, but the reviewer’s least favourite, was on how to teach the history of economic thought. Where she writes, “Kates suggests a student in HET compare Mankiw’s 2013 textbook with one written a hundred years ago (Taylor 1913)”, my point was not that they be compared – I wouldn’t read Mankiw or any modern text in an HET class – but that students be asked to read actual mainstream introductory texts of previous eras, such as Taylor (1913) or McCullogh (1825) or even Samuelson (1948). If you would like to get an accurate sense of how economists in the past thought about economic issues I cannot think of a better way to do it.