Economic history
Arnold Toynbee stood before a lecture hall in 1884 and declared that economics had become too dissociated from history. He argued that while Adam Smith and Thomas Malthus possessed historical minds, David Ricardo set a pattern for modern textbooks with an entirely unhistorical mind. This separation meant abstract propositions remained cold until placed within the light of historical facts. Toynbee believed combining these fields improved economic understanding by making propositions more vivid and truthful. He also claimed that studying history through economics made complex matters like enclosures or machinery intelligible to students. The habits of deductive reasoning instilled by economics were even more valuable than the knowledge of principles it gave. Without these habits, the mass of historical materials could overwhelm students of facts.
In late-nineteenth-century Germany, scholars led by Gustav von Schmoller developed the historical school of economic history. They argued there were no universal truths in history and emphasized the importance of historical context without quantitative analysis. This approach dominated German and French scholarship for most of the twentieth century. Max Weber and Joseph Schumpeter joined this movement, reasoning that careful analysis of human actions, cultural norms, and mathematical support was key to historical analysis. William Ashley spread this approach to Great Britain at the University of Oxford. George Unwin became Britain's first professor in the subject at the University of Manchester. In France, the Annales School heavily influenced economic history from the early 20th century to the present.
Economic history departments across the United States largely subsumed their field into other areas of economics following the cliometric revolution of the 1960s. To many observers, the discipline became seen as a form of applied economics rather than a stand-alone field. Cliometrics refers to the systematic use of economic theory and econometric techniques to study economic history. Jonathan R. T. Hughes and Stanley Reiter coined the term Clio, referencing the muse of history and heroic poetry in Greek mythology. Douglass North emerged as one of the most famous cliometric economic historians. He argued it is the task of economic history to elucidate the historical dimensions of economies through time.
Cliometricians claimed their approach was necessary because applying theory was crucial for writing solid economic history. Historians generally opposed this view, warning against the risk of generating anachronisms. Early cliometrics combined neoclassical economics with quantitative methods to explain human choices based on constraints. Some argued that cliometrics had its heyday in the 1960s and 1970s before becoming neglected by economists and historians. In response to the Nobel Memorial Prize awarded to North and Robert Fogel in 1993, Claudia Goldin stated that economic history was not merely a handmaiden of economics but a distinct field of scholarship. She noted that practitioners were economists and historians studying the histories of economies long before cliometrics formalized the field.
Part of the growth in economic history is driven by continued interest in big policy-relevant questions on the history of economic growth and development. MIT economist Peter Temin noted that development economics is intricately connected with economic history as it explores the growth of economies with different technologies, innovations, and institutions. Walt Whitman Rostow published The Stages of Economic Growth: A Non-Communist Manifesto in 1971 to describe how advanced economies grow after overcoming certain hurdles. Alexander Gerschenkron complicated this theory with works on how economies develop in non-Western countries.
Daron Acemoglu and James A. Robinson published Why Nations Fail: The Origins of Power, Prosperity, and Poverty in 2012, pioneering a new field of persistence studies emphasizing path-dependent stages of growth. Kenneth Pomeranz released The Great Divergence: China, Europe, and the Making of the Modern World Economy in 2000. David S. Landes wrote The Wealth and Poverty of Nations: Why Some are So Rich and Some So Poor in 1998. These texts sought to understand why some economies have grown faster than others over time.
Since the 2008 financial crisis, scholars have become more interested in what may be called new 'new economic history'. Thomas Piketty published Capital in the Twenty-First Century in 2013, describing the rise in wealth and income inequality since the 18th century. He argued that large concentrations of wealth lead to social and economic instability. Piketty advocated for a system of global progressive wealth taxes to correct rising inequality. The book became a New York Times best seller and received numerous awards from major economists including Paul Krugman, Robert Solow, and Ben Bernanke.
Books responding to Piketty included After Piketty by Heather Boushey, J. Bradford DeLong, and Marshall Steinbaum edited in 2017. Pocket Piketty appeared in 2017 by Jesper Roine. Anti-Piketty: Capital for the 21st Century was written by Jean-Philippe Delsol, Nicolas Lecaussin, and Emmanuel Martin in 2017. One economist argued that Piketty's book was Nobel-Prize worthy and noted it had changed the global discussion on how economic historians study inequality. It sparked new conversations in public policy disciplines.
The first journal specializing in the field of economic history was The Economic History Review, founded in 1927 as the main publication of the Economic History Society. Professor Sir William Ashley published an article describing the emerging field in its inaugural issue. He stated that economic history primarily concerned the history of actual human practice with respect to the material basis of life. The visible happenings regarding production, distribution, and consumption formed their wide enough field.
Later, the Economic History Association established another academic journal, The Journal of Economic History, in 1941 to expand the discipline in the United States. Edwin F. Gay served as the first president of the association. He described the aim of economic history as providing new perspectives in economics and history disciplines. Other related journals broadened the lens including Business History Review, European Review of Economic History, Enterprise and Society, and Financial History Review. The International Economic History Association recognizes major organizations like the Business History Conference and the Economic History Society.
Several economists have won Nobel prizes for contributions to economic history or contributions commonly applied within it. Simon Kuznets won the Nobel Memorial Prize in Economic Sciences in 1971 for his empirically founded interpretation of economic growth leading to deepened insight into social structure and development processes. John Hicks won the Nobel Memorial Prize in 1972 due to contributions to general equilibrium theory and welfare theory despite early writing on economic history. Arthur Lewis won the Nobel Memorial Prize in 1979 for contributions in economic development through historical context.
Milton Friedman received the Nobel Memorial Prize in 1976 for achievements in consumption analysis, monetary history and theory, and demonstrating complexity of stabilization policy. Robert Fogel and Douglass North shared the 1993 prize for renewing research by applying economic theory and quantitative methods to explain institutional change. Claudia Goldin won the Nobel in 2023 for advancing understanding of women's labor market outcomes after beginning her career researching the US southern economy. She served as President of the Economic History Association during 1999 and 2000.
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Common questions
What did Arnold Toynbee argue about the relationship between economics and history in 1884?
Arnold Toynbee argued that economics had become too dissociated from history and needed to be combined with historical facts. He believed this combination made abstract propositions more vivid and truthful while making complex matters like enclosures intelligible.
When was The Economic History Review founded and who published its inaugural article?
The Economic History Review was founded in 1927 as the main publication of the Economic History Society. Professor Sir William Ashley published an article describing the emerging field in its inaugural issue.
Who won the Nobel Memorial Prize in Economic Sciences for contributions to economic history in 1993?
Robert Fogel and Douglass North shared the 1993 prize for renewing research by applying economic theory and quantitative methods to explain institutional change. They are recognized as famous cliometric economic historians.
Which university retains a separate economic history department in the United Kingdom today?
Only the London School of Economics retains a separate economic history department and stand-alone undergraduate and graduate program. Other institutions like Cambridge, Glasgow, Oxford, Queen's, and Warwick now train economic historians within other degrees.
What year did Thomas Piketty publish Capital in the Twenty-First Century and what did he argue about wealth concentration?
Thomas Piketty published Capital in the Twenty-First Century in 2013. He argued that large concentrations of wealth lead to social and economic instability and advocated for global progressive wealth taxes.