In the shadow of economics

I will get on to my point shortly, but here a sort of prologue for you:

When you leave a career to return to academia as a student, your friends and colleagues want to know why.

A few weeks ago I met up with a colleague who i havent seen for about a year, he had heard that I was leaving and wanted to know why. Over the last Bank Holiday weekend, I was at a wedding which acted as a mini-ten year reunion for my University friends – who also wanted to know why.

The problem with the question why, is that the person asking it often feels the need to follow-up your answer. inevitably when you tell them you are studying History, then Economic History and then explain your interest in the Elizabethan period, specifically monopolies and economic institutions; your friends follow up question often remains: why?

To boil down the variety of responses into a few of bullet points my friends are:

  • Generally supportive – not one has said don’t do it
  • of a belief that the world has ‘moved’ on from an earlier period
  • of a view that there is little to learn about an earlier stage in the economy

now, I have great friends but the responses have reinforced to me that expectation that research has to have some pre-ordained purpose, it must intend to fix things. The problem with that is that it undermines the brilliance of discovery.

When I undertook an PG Dip in Finance, i was taught Macroeconomics, International Finance and Public Finance, these where the basic building blocks of my diploma and i wanted to receive a basic grounding in how the economy works. I was taught about the price system, allocation of resources, the debate around fixed vs flexible exchange rates etc. All of it from a fixed canon that had evolved and yet hardly changed. I read Keynes, Greenspan and Friedman among others and at each stage learnt models which allowed me to ‘predict’ the economy.

Except it didn’t, learning this in 2011-13, in the shadow of 2008 crash seemed less of an enlightenment and more of regurgitation. However, it taught me a lot namely that there is always an orthodoxy of some extent and part of the problem is that expect too much from it. Now as i prepare for my MRes, I find that since 2013, when i finished the Diploma, the field of economics is enduring something of a reformation. Now, i know that using a historical event to explain a contemporary event is perhaps not quite of the standard i should use, but i really have no other way of explaining what appears to be happening.

This reformation will not lead to bloodshed, may lead to some (academic) persecutions but is unlikely to radically alter anything other than the practice of economics. But, economics is being challenged from within, its orthodoxy is facing its heterodox challengers face to face and new ideas and debates are happening.

To give a selective snapshot, the heterodox (or New Economics) position is summarised best by Eric Beinhocker giving an outline of what the position means and how its has developed. So far, I havent found a suitable overview from the orthodox position, however this article from Project Syndicate has had me read it time and again. Both pieces have me intrigued, but also slightly disappointed, the reason i keep using the term ‘reformation’ is because the authors on both sides appear to have the same dislike of the other. Both want to cast the other in a particular light and espouse the virtues of their ‘true path’.

Much like the Reformation this will be a battle of zealots and converts, with everyone just simply getting on with life; but it does seem to be an opportunity for me one day (hopefully) as a historian to make a contribution. This point was made perfectly in a BBC Radio 4 piece from April, one of the key points is the need to look at the role of economic history, there is a real need for historians to engage here – we shouldnt pick a side, but contribute to the debate.


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