The Past Speaks

Mark Koyama, an economic historian at George Mason University, has published an excellent piece on counterfactual history. He begins by pointing out that many history-department historians dislike counterfactual history and that this sentiment is particularly pronounced among historians who subscribe to Marxism or other teleological worldviews. Koyama points out that counterfactual thinking is an integral part of causal analysis in academic research, and indeed ordinary life.  He draws on David Hume’s observation that a counterfactual is implicit whenever we use the word “cause” or one of its synonyms. He points out that many historians who are against extended counterfactual analysis nevertheless engage in implicit counterfactual analysis of varying levels of quality. To provide an example of amateurish counterfactual analysis, Koyama mention Ed Baptist’s controversial book The Half Has Never Been Told, which argues that almost 50% of US GDP in 1836 was due to slavery. (For more about this book, see here).  Koyama notes that this statement is itself a counterfactual argument:

He is arguing that, in the absence of slavery, the American economy would have been roughly half the size that it was. This claim is certainly false based as it is on double-counting. But the problem with Baptist’s argument is not that he had made a counterfactual claim, but that he conducted the analysis ineptly. 

Koyama suggests  that within history departments, the best users of the counterfactual analysis are military and diplomatic historians and that their approach typically depends on reversing a single decision or event holding everything else constant.   The result is

that counterfactuals in diplomatic and military history shed light on the short term consequences of particular events. But the ceteris paribus assumption becomes harder to maintain as we consider events further removed from the initial counterfactual intervention. Thus, we have a reasonable idea of what Nazi rule of Britain in 1940 might have looked like — with the SS hunting down Jews, liberals, and intellectuals and restoring Edward VIII to the throne. But once we consider the outcomes of a Nazi ruled Britain into the 1950s and 1960s, we have much less guidance. Lacking any documentary evidence of the intentions of Britain’s Nazi rulers in the post-war era leaves us in the realm of historical fiction like Robert Harris’ Fatherland ... [a novel set in Nazi Berlin in the 1960s] Counterfactuals become problematic once we run out of facts to discipline our analysis.

Koyama concludes his excellent piece by stressing the complementary, inter-disciplinary nature of  History and Economics. He writes:

Historians need economic history (and this means economic theory and econometrics). And economists need historians. They need historians to make sense of the complexity of the world and because of their expertise and skill in handling evidence.

Amen to that! I hope that Mark turns this piece into a peer-reviewed paper I can cite!