Economists, in contrast, work more with general models than with concrete historical situations, and those models emphasize underlying structural forces. Economies have fairly set populations, birth rates, natural resources, capital stocks, savings rates, trading partners, and so on. So to an economist, the final outcomes are closer to necessary than contingent.
1. Tyler claims that historians are much bigger on contingency. Well, maybe in comparison with economists. But there are plenty of historians who look for underlying structural causes. Ask to explain why the North won the Civil War, and my bet is that a historian will have more to say than just “one darn thing after another.” Closer to the topic of Tyler’s essay, the question of whether a political leader makes his movement or a movement makes its leader is vigorously contested among historians.
2. But Tyler is right to characterize economists as working with deterministic models. I have an essay in the works that argues that this is so much the worse for economists. The short version of the essay is that the real world has characteristics that invalidate the deterministic models, and instead outcomes are much more contingent.
I believe that there is a sense in which economics is history. Economic outcomes are affected not just by the configuration of households and firms but by the path that got us here. Unfortunately the typical economic model operates purely in the present, or even outside of time altogether. The economist acts like a man who comes from Mars and thinks he can predict what firms and households will do tomorrow based on what he can observe today, without having to ask anything about what was going on yesterday.
But the short version cannot do justice to the topic. There’s a reason to spell it out in a essay.
In some sense, history and economics (and most human endeavors) are similar in using models – extracting from the myriad of complexities in the “real world” to describe some essential facet of reality. Art, science, history, the social sciences all follow this, well, model in some form. History, poltical science and sociology (usually) use verbal stories. Economics uses stories then usually turns them into mathematics or empirics. Fine art uses visuals. Music works more purely on an emotional level. Science focuses on the physical world rather than human society.
P.S. Looking forward to your essay, Arnold. Bound to be quite thoughtful and thought provoking.
“If economists wished to study the horse, they wouldn’t go and look at horses. They’d sit in their studies and say to themselves, ‘What would I do if I were a horse?’” And they would soon discover that they would maximize their utilities.”
-Ronald Coase
Sounds like an essay not to be missed. Going back to your earlier works, the word “history” shows up 70 times in Invisible Wealth: The Hidden Story of How Markets Work, as one might expect from a work featuring interviews with North and Ford. It would be interesting to hear your views on how economic history has since influenced the rest of the field and whether your description of Economics 2.0 has changed since then.
Keep people from their history, and they are easily controlled.
-Karl Marx
reading this blog has made it clear in my mind that economics is a branch of the study of history and not an empirical or semi empirical science.
history (and economics) are not about creating predictive models they are about using the past to demonstrate aspects of human nature and society.
studying past depressions and recessions will NOT yield a mathematical model (even a qualitative one) capable of detecting and/or fixing a slowdown but it can give you interesting insights into how people behave when money is tight.
btw
if you accept this pov it makes the modern habit of putting economists in charge of independent central banks really strange.
no on would put military historians in charge of an independent military