Why History Should Replace Economics in the 21st Century

20 10 2014

Fifty years ago, historians advised politicians and policy-makers. They helped chart the future of nations, by helping leaders learn from past mistakes in history. But then something changed, and we began making decisions based on economic principles rather than historical ones. The results were catastrophic.

That’s from Annalee Newitz’s review of 2014. The History Manifesto (Cambridge: Cambridge University Press, 2014) by David Armitage and Jo Guldi.

Armitage and  Guldi are calling for a “historic turn” in the public-policy process. i’m certainly inclined to think that more input from academic historians would improve public policy (as would more input from psychologists, scientists, and other experts). Moreover, their efforts to promote a historic turn in policy is very interesting to me in light of the ongoing “historic turn” in management-school research: a small but growing number of management academics are turning to  the historical record and historical methods, rather than economics, to make sense of present. Management academics are concerned, primarily, with decision-making in the private sector, whereas policy academics are interested, primarily, with decision-making in government. In both areas of research, there is obviously some push back against perceived economic imperialism (i.e., the tendency of neo-classical economics to colonize subject matters that were not traditionally considered to be within the purview of economics). One interpretation of the historic turn in management and Armitage-Guldi book is that history is engaged in a form of counter-imperialism against economics, which was long the most imperialistic of the social sciences.

(I’ve posted a list of sources on the historic turn in management schools below).

There is, therefore, much to like about the History Manifesto. However, I’m disturbed by several arguments that the authors make.

First, while they do not equate historical writing with historical writing by academics, their book tends to overestimate the role of academic historians in the production of historical knowledge.

Second, they suggest that policy-making today is rarely informed by history. William Hague, a British politician who does consult with historians, is presented as a rare and honourable exception to the prevailing trend towards ahistorical modes of thinking about policy. Another interpretation is that policy is frequently informed by incorrect interpretations of history. Political scientists have shown that historical-analogous reasoning is actually quite common and influential. For instance, analogies to Munich 1938 are often made during US discussion of foreign policy. Indeed, this gave rise to the joke that for Senator John McCain, it’s always Munich, always 1938.

Third, I’m amused by the idea that there was once a golden era in which academic historians had a significant, and positive influence on public policy. Hmmm… I don’t know about the positive bit. David Armitage’s Guardian piece is accompanied by a picture of John K Kennedy with Arthur Schlesinger Jr. In the context of Armitage’s article, this choice of image suggests that Kennedy was a better president because he was advised by historians. First of all, Kennedy’s intellectual advisers included the economists John Kenneth Galbraith as well as Schlesinger. Moreover, I’m not certain if Kennedy’s presidency is an example of great public policy,given that JKF’s handling of the Cuban Missile Crisis nearly brought the world to the edge of nuclear Armageddon!!! Kennedy viewed the world through the lens of Britain’s appeasement of Hitler in the late 1930s, a historical analogy that likely influenced his decision to “get tough” with the Soviets. Note that during the Eisenhower Presidency, there was a partial thaw in relations with the USSR.

Economists have been accused of contributing the the climate of opinion that resulted in the 2008 financial crisis. Let’s assume that this claim is correct.  I think that we would all agree that while the social impact of the 2008 crisis was negative, it was less negative than than a nuclear exchange between the superpowers would have been. Ms Newitz’s writes that “we began making decisions based on economic principles rather than historical ones. The results were catastrophic.” Hmmm… I think that I would prefer a financial catastrophe to a thermonuclear catastrophe any day of the week!

Armitage writes:

The mid-1960s were the high-water mark for historians in public policy. In the US, Harvard historian Arthur Schlesinger Jr became the court historian of John F Kennedy’s Camelot as a presidential adviser, and the radical historian of American foreign relations William Appleman Williams turned down the chance to steer Latin American policy for the Kennedy administration. (At least he was asked.) The last historian seconded to the White House was Eric F Goldman, a professor of American history from Princeton, who was a special adviser to Lyndon Johnson in 1963-66. In 1965, a historical section was added to Britain’s Treasury but its operations were wound up in 1976, “after its early advocates moved on and the relevance of its work to the ‘man at the desk’ became subject to concerted challenge”, as the historian of public policy Alix Green has observed.

analogies at war

I think that David Armitage can find better data points to support his thesis that academic historians can have a positive influence on the making of foreign policy than the disastrous presidency of Lyndon Johnson.  It is pretty clear in retrospect that Johnson’s decision to escalate the war in Vietnam was the wrong choice and that this choice was influenced by a particular interpretation of history that his historian advisers did not challenge.

—————-

Sources on the historic turn in management research.

Clark, Peter, and Michael Rowlinson. “The treatment of history in organisation studies: towards an ‘historic turn’?.” Business History 46, no. 3 (2004): 331-352.

Rowlinson, Michael, Charles Booth, Peter Clark, Agnes Delahaye, and Stephen Procter. “Social remembering and organizational memory.” Organization Studies (2009).

Kipping, Matthias, and Behlül Üsdiken. “History in Organization and Management Theory: More Than Meets the Eye.” The Academy of Management Annals 8, no. 1 (2014): 535-588.

Burghausen, Mario, and John MT Balmer. “Repertoires of the corporate past: explanation and framework. Introducing an integrated and dynamic perspective.” Corporate Communications: An International Journal 19, no. 4 (2014).

Rowlinson, Michael, John Hassard, and Stephanie Decker. “Strategies for organizational history: A dialogue between historical theory and organization theory.” Academy of Management Review (2013): amr-2012.

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3 responses

21 10 2014
Stephanie Decker (@Deckersteph)

I agree Andrew – a bit disturbingly gung ho about the purported wisdom of historians… From what you write it does not sound like a considered piece of scholarship.

21 10 2014
Rory Miller

Thirty years ago most Anglo-American historians knew some economic history. Now, sadly, they don’t, as a result of the socio-cultural turn as well as the narrowing of research topics in most history departments. That makes them grossly unprepared to understand the modern world.

23 10 2014
andrewdsmith

A very good point indeed Rory! The last history department in Canada to teach business or economic history at the postgraduate level appears to be phasing out research and teaching on that field. That means there won’t be a single place in the whole country for someone to do a PhD on a business or economic history topic– unless they want to do it in an _economics_ or sociology department.

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