Is Economic History Too Late?
I am a fan of reading occasional economic histories. They are amazingly fascinating (really, just fascinating, but even I would expect them to be boring, yet they are not, thus the amazing). However, not a whole lot has been produced as of late. Nevertheless, there is talk that there will be a resurgence in economic history:
Economic History is the Future
Tyler Cowen argues that economic history, alongside neuroeconomics and personal psychology (I’m not sure I know what this is ) represent the frontiers of economic research. I agree entirely with respect to economic history. And in this post I attempt to explain why.
The subject has already been revolutionalised once before. In the 1960s and 1970s, economic historians trained in neoclassical economic theory like Robert Fogel, Stan Engerman, Douglass North, and Donald McCloskey transformed the subject. The insights they applied came directly from standard price theory but they completely changed the way economic historians used the evidence they had at their disposal.
By the 1990s however, many of the gains from trade between historians and economists had been exhausted. The cliometric revolution had been successful but it had run up against some of the limitations of the available evidence. Good data for the period prior to 1800 is pretty rate. England has much better and more accessible data than most other countries so much of the cliometric research focused on English economic history to the relative neglect of other areas. And there are many fascinating questions, particularly those concerning institutional developments that cannot be answered on the basis of the kind of price and wage data that has survived.
The next stage for economic history, and the reason why economic history is one the frontier of economic research is the application of the new economic methods developed in the 1970s and 1980s, game theory, mechanism design, monotone comparative statics, and new trade theory, to economic history. Avner Greif is obviously a pioneer here. But I believe that many important questions remain open for further research and the appropriate tools are now available. . .
However, if the ‘open source age’ transforms how our economies operate (flash video), will we be like Malthus and do a great job of summing up human history right up until his time, and then fail utterly to predict the future? I am probably chanelling Nassim Nicholas Taleb here.
