History matters!

1 Jun, 2019 at 11:16 | Posted in Economics | 3 Comments

History-Matters-logoWe can all come up with cringeworthy clichés for why history matters to society at large – as well as policy-makers and perhaps more infuriatingly, to hubris-prone economists:

— to understand the present, we need to know where we came from
— history doesn’t repeat itself, but it rhymes!
— “those who cannot remember the past are condemned to repeat it”
— it broadens your horizon, allows you to “zoom out“, “see the bigger picture” and draw parallels to what came before.

And we could add the opposite position, where historical analysis is altogether irrelevant for our current ills, where This Time Is completely Different and where we naively disregard all that came before us …

We can also point to some more substantive reasons for why history matters to the present:

— Discontinuities: by studying longer time period, in many different settings, we get more used to – and more comfortable with – the fact that institutions, routines, traditions and technologies that we take from granted may change. And does change. Sometimes slowly, sometimes frequently.

— Selection: in combination with emphasizing history to understand the path dependence of development, delving down into economic history ought to strengthen our appreciation for chance and randomness. The history we observed was but one outcome of many that could have happened. The point is neatly captured in an obscure​ article of one of last year’s Nobel Prize laureates, Paul Romer: “the world as we know it is the result of a long string of chance outcomes.” Appropriately limiting this appreciation for randomness is Matt Ridley’s rejection of the Great Man Theory: a lot of historical innovations seems to have been inevitable …

— Check On Hubris: history gives us ample examples of similar events to what we’re experiencing or contemplating in the present. As my Glasgow and Oxford professor Catherine Schenk once remarked in a conference I organized: “if this policy didn’t work in the past, what makes you think it’ll work this time?”

Notes On Liberty

As a famous British economist​ — guess who … — once said: “If only economists could manage to get themselves thought of as humble, competent people, on a level with dentists, that would be splendid!” 


  1. It seems curiously revealing to imagine that history matters implies an appreciation randomness, as if history matters as a drunken, random walk.
    Maybe, history matters because the accumulation of memory and experience matter and there is no substitute for knowledge embedded in their accumulation.

    • You make a good point Bruce.

  2. Textbook economics, like textbook science more generally, implies a finality which is belied by the value placed on research. If you don’t know that theory in the past was different, it is hard to imagine that future theory will be different as well. A modest implication of the present study, and of the history of economic thought, is to show how much variety there continues to be. The discipline might take more guidance from earth sciences and biology, both of which deal with irreversible movement through time. In the discipline of historical narrative, a system of causes rarely persists for long, changes follow a unique and unrepeatable course, and the future is unlike the past. To mine history for samples of regularity may have its uses, but to exclude the intellectual discipline of history is to exclude a vast amount of knowledge. (The Nobel Factor: The Prize in Economics, Social Democracy, and the Market Turn by Avner Offer, Gabriel Söderberg –  Read)

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