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Introduction: The History of Economic Thought and Its Role

To understand the others: this is the historian’s aim. It is not easy to have a more difficult task.

It is difficult to have a more interesting one.

(Kula 1958, p. 234)

Why the History of Economic Thought Is Considered Useless: The Cumulative View

The history of economic thought (HET) is essential for anyone interested in understanding how economies work. Thus - I maintain - economists, precisely as producers and users of economic theories, should study and practise the history of economic thought. This thesis is opposed to the now prevailing consensus. Most contemporary economists are convinced that HET is not necessary for the progress of research, which, rather, requires work on the theoretical frontier.

This anti-HET attitude relies on a cumulative view of the development of economic thought, according to which economic analysis displays a progressive rise to ever higher levels of understanding of economic reality. The provisional point of arrival of today’s economists - contemporary economic theory - incorporates all previous contributions.

The cumulative view is connected to positivism or, more specifically, to a simplified version of logical positivism, the so-called received view, which found a considerable following as from the 1920s: scientists work by applying the methods of logical analysis to the raw material provided by empirical experience. To evaluate their results, objective criteria for

1 An illustrious and indeed radical example of this position is offered by Pantaleoni 1898. According to him, the history of thought must be ‘history of economic truths’ (ibid.,p. 217): ‘its only purpose ... is to relate the origins of true doctrines’ (ibid., p. 234); a clear-cut criterion for judging the truth or falsehood of economic theories is available: ‘There has been a troublesome search for hypotheses that are both clear and in conformity with reality ... Facts and hypotheses have then been used, and what could be deduced from them has been deduced. The theorems have also been checked on empirical reality’ (ibid., p. 217). 1

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acceptance or rejection can be established. Analytic statements, concerning abstract theoretical reasoning, are either tautological, i.e. logically implied in the assumptions, or self-contradictory, i.e. they contain logical inconsistencies; in the former case, the analytic statement is accepted, in the latter rejected. Similarly, synthetic statements, concerning the empirical world, are either confirmed or contradicted by evidence and hence accepted or rejected for objective reasons. All other statements for which no analogous criteria of acceptance or rejection can be found are termed metaphysical and are considered external to the field of science.

This view has come in for severe criticism, discussed in the following section. Nevertheless it remains the basis for the cumulative view of economic science, namely the idea that successive generations of economists contribute new analytic or synthetic propositions to the common treasure of economic science, which - as a science - is univocally defined as the set of ‘true’ propositions concerning economic matters. New knowledge is thus added to that already available, and in many cases - whenever some defect is identified in previously accepted accounts - is substituted for it. Hence, the study of economics must be conducted on the theoretical frontier, taking into consideration the most up-to-date version and not the theories of the past. However, the latter may deserve some attention: as Schumpeter (1954, p. 4) says, studying economists of the past is pedagogically helpful, may prompt new ideas and affords useful material on the methods of scientific research in such a complex and thought-provoking field as economics, on the borderline between natural and social sciences.

Among adherents of the cumulative view, Viner (1991, pp. 385 and 390) proposes a subtle defence of the history of economic thought, pointing to the importance of ‘scholarship’, defined as ‘the pursuit of broad and exact knowledge of the history of the working of the human mind as revealed in written records’. Scholarship, although considered inferior to theoretical activity, contributes to the education ofresearchers, being ‘a commitment to the pursuit of knowledge and understanding’: ‘once the taste for it has been aroused, it gives a sense of largeness even to one’s small quests, and a sense of fullness even to the small answers ... a sense which can never in any other way be attained’. Education in research thus appears to be a prerequisite for informed application of analytical tools.[1] Thus, even if the history of economic thought is considered to be of little use in learning modern economic theory, an important role is attributed to it in the education of the researcher.

  • [1] Schumpeter (1954, p. 4; italics in the original) says something similar when stating thatthe history of economic thought ‘will prevent a sense of lacking direction and meaning fromspreading among the students’.
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