Questioning and Understanding Economic History in Society Today
I don't think we should change our name, but I thought it was a clever way to preempt my post (though I tend to think I am more clever then I really am....you decide...)
Knowing history is very important. The historical evolution of man - including the physiological, social, institutional, material, and philosophical changes - tells a rich and fantastic story about what we were, what we are, and what we may become. We can look at where society is today, but to abstract that from history can lead to innumerable misunderstandings and inaccurate assumptions.
This is especially applicable in our current discussion on economic theories. Economics has a long history full of differing and diverse theories. We need to look at history to understand the development of the theories in hopes of understanding the current situation today, where one theory has come to predominate our understanding of economics.
The PAE website has a section laying out what they believe to be the foundation of the development of neoclassical theory. Due to "physics envy" economists in the mid to late 19th century set out to create an economic theory which was more scientific and mechanical (in the Newtonian physics sense). They didn't see individuals as interconnected in a complex set of social interactions and influenced by a multitude of endogenous as well as exogenous forces (no physics pun intended), but rather as homogeneous actors, which were even given a cool scientific sounding name: Homo economicus! Add that to a few decades of intensely mathematical (a.k.a. intensely abstract (a.k.a. maybe not to intensely applicable to reality)) theorizing and, voila! You have the current incarnation of neoclassical economic theory!
This brief summery lays out very nicely what may be the origins of neoclassical theory but is limited in its analysis in the theory's development of hegemony over all other theories. That needs to be a major focus, and we must begin to ask questions like: Why did one theory rise up and above all other theories to dominate all research in this field? Why didn't those other theories rise to prominence? Was the neoclassical rise to prominence due to the validity of the theory's content or were there underlying social or political forces that aided in the theories diffusion? What social and political forces exist now to uphold this theory's dominance?
These are some questions that need to be looked at if we want to change the direction of economic research and education.
Sean
2 comments:
I agree that history has had an impact on the shaping of economic thought. However, I don't know if it is normatively bad that economics seeks to develop accurate and workable models of the world. What is positively bad is if it develops models that, because of assumptive simplicity or other flaws, incorrectly model the world. At least with the neo-classical synthesis, it does seem that things at least move in the right direction. The development upon the classical model was a necessary complexification of economics. Obviously, though, there is more work to be done- and hopefully, it will be dictated by truth, not by the whims of neo-liberalists seeking to justify their market standing.
I think your point about history is a relevant and good one. Like you said, history is essential to understanding why NC theory has become the dominant theory, why others theories have been pushed aside, and what must be done to change what's considered relevant in the field of economics.
History is also really important, in my opinion, not only to show HOW to change what's economically relevant but also what SHOULD be economically relevant. History can help us examine what parts of NC theory are valid and which parts need to be revised as well as illuminating which alternative theories make valid points.
Post a Comment