Economic history emerged in the late nineteenth century as an academic field devoted to the study of past economic phenomena and processes. Since then it has undergone significant changes in terms of its thematic and theoretical concerns, analytical methodologies and language, and the spatial and temporal scales in which it is framed. Distinctive national and regional approaches and traditions can be identified that reflect the different and changing social systems and ideologies across the world as well as the diverse forms of training and disciplinary affiliations of the economic historians themselves.
The Emergence of Economic History
As an academic discipline, economic history first emerged in Western Europe and North America, specifically, in Britain, Germany, and the United States. Although publications that, more or less, incorporated economic history go back to the eighteenth century, the phrase "economic history" apparently first appeared in a book title in the work of a German scholar, Von Inama-Sternegg, published in 1877 and 1879, Über die quellen der deutschen wirtschaftsgeschichte and Deutsche Wirtschaftsgeschichte, covering the Middle Ages. The first academic appointment in economic history was made at Harvard University in 1892 and went to a British scholar, William Ashley. The work of the early economic historians focused on either general economic development or specific sectors and processes, especially agriculture, commerce, and industrialization.
But the emerging field exhibited different regional and national tendencies. Although neoclassical models dominated, Marxist perspectives had a lot more appeal to European economic historians, especially in Germany, than to those in America. German historical economists mainly saw economic development in terms of stages and they emphasized the inductive rather than the deductive method. In Britain, the political economists who turned to economic history stressed issues of distribution, especially prices and wages. For their part, American economic historians showed a strong preference for quantitative approaches. Their studies increasingly focused on business history and business cycles, thanks in part to the relative abundance of statistics from census data and governmental and private agencies. In fact, the subsequent growth of economic history in these countries and elsewhere in the world was tied to the increasing capacity and needs of governments to produce and consume statistical data. Also critical was the expansion of, and rising disciplinary specialization in, the universities, the improvement of library collections and archives, the establishment of economic history societies and journals, and the production of large-scale surveys and other bibliographic resources.
Many of the pioneer economic historians were men, but the field also included some remarkable women, such as Eileen Power in Britain, who was at the center of the Economic History Society and the London School of Economics until her death in 1940, and Katherine Coman in the United States, who published an influential economic history text, Industrial History of the United States, in 1905. Unfortunately, the important contributions of these women were ignored as the discipline became more male dominated, particularly after World War II, as the concerns and constituencies of the discipline narrowed, although corrective studies have appeared in more recent years.
Economic History in Asia, Latin America, and Africa
By the 1940s economic history had become an established discipline not only in Western Europe and North America, but also in other parts of the world. In Japan, Tokuzo Fukuda, who studied in Germany and tried to apply the German theory of economic stages to Japan, published the first treatise on Japanese economic history in 1900. In the next few decades, besides economic stage theory, Japanese economic history was dominated by historical materialism. Analytical focus shifted from commercial activities to rural and local economic history, whereas externally much attention was paid to the economic history of England, seen as the classical homeland of capitalism (see, for example, Komatsu). In China, which became officially communist from 1949, the Marxist approaches became even more pervasive, although Marx's notion of the "Asiatic mode of production" was disavowed. Chinese economic historians were preoccupied with two issues: first, the question of transition from "feudalism" to "capitalism," and second, the contradictory but ultimately destructive impact of Western imperialism on China's economy.
For formerly colonized regions and countries the question of imperialism and the challenges of internalizing their economic history loomed large, affecting everything from periodization to the themes and theories selected for analysis. In India, for example, economic historiography, which began to flourish following independence in 1947, had to grapple with the validity of the division between "ancient India" and "modern India," designating the periods before and after European conquest, a periodization based largely on political events rather than on economic processes. In the early postindependence years, Indian economic historians, notwithstanding differences in the topics or periods of focus, displayed two main tendencies: first, a nationalist orientation in which the stable and productive character of early Indian economic and social institutions were emphasized and by implication at least the destructive impact of British rule was indicted, and second, a spatial concentration on the economic history of North India at the expense of other regions.
Periodization proved even more problematic for Latin American economic history, given the region's complex histories of European and African settlement and relations with the indigenous peoples. The region's economic historians, whether those influenced by neoclassical models of international trade, Marxist categories and stages of development, or dependency perspectives on underdevelopment and unequal exchange, largely took an external view of the region's economies as indicated by the preponderance of studies on the export sector. The emphasis on export rather than on the domestic economy began to shift in the mid-1950s, but there was continued concentration on the "modern" sector to the neglect of the "traditional" one.
The development of African economic history was a post-independence phenomenon, in which scholars grappled with various sets of generalizations made about African economic history. Geographically, the "Africa" discussed was largely confined to "sub-Saharan" Africa; thematically, there was excessive focus on trade and exchange systems, especially external trade, rather than on domestic production. Historically, the precolonial period was depicted as a static "traditional" backdrop to changes introduced by colonialism. Theoretically, there was the ubiquitous use of dichotomous models, in which change was often depicted as the abrupt substitution of one ideal type by its opposite—"traditional–modern" societies, "subsistence–market" economies, or "formal–informal" sectors. Various approaches vied for analytical preeminence, including neoclassical development theory, and dependency and Marxist paradigms.
The Rise of Cliometrics or the New Economic History
At the turn of the 1960s a "new economic history," sometimes referred to as cliometrics or econometric history, emerged in the United States. The new approach involved the systematic application of economic theory and quantitative methods to economic history. It was facilitated by the existence of a large stock of quantitative data produced by various agencies, advances in computer technology that fostered the collection of large historical samples, and a new generation of economic historians keen to apply statistical and mathematical models and counterfactual arguments for more precise measurements of economic developments and relationships. The need for economic and statistical skills meant that cliometricians were increasingly recruited from economics rather than from history departments, and they tended to concentrate on topics with measurable variables and more recent historical periods on which adequate quantitative data was available. One effect was that fewer economic historians were located in history departments, whereas in economics departments their distinctiveness apparently dwindled.
Prominent among the new economic historians were Robert Fogel and Douglas North, who won the Nobel Prize for Economics in 1993. Initially, they both focused on the effects of changes in the price of transportation—Fogel on the railroads and North on shipping—and on the economic impact of slavery on the American South. In both cases and on many other topics their results challenged and sometimes overturned conventional historiographical wisdom. For example, it was demonstrated that the economic impact of the railroads was minimal and the alleged stagnation of the antebellum South was a myth. Fogel later turned his attention to the complex connections between nutrition, health, and productivity, and North concentrated on studying the role of institutions and organizations in economic growth.
Cliometric history had its critics in the American academy. Some charged that because of its hypothetical models, which could not be verified, and "antiempiricistic" and "antipositivistic" methods, it was not history but "quasihistory" (Redlich). But unlike the situation in Europe, where Fogel lamented the new economic history was not initially practiced, it became increasingly dominant among American economic historians. However, the frontier of cliometrics did expand beyond the United States. Writing in 1978 Donald McCloskey enthused, "Cliometrics has at least begun in the histories of Canada, Mexico, Brazil, Australia, Japan, China, India, Russia, West Africa, Israel, Italy, France, Central Europe, the Low Countries, Scandinavia, Ireland, and England" (p. 25). In an extensive survey, Nicholas Crafts provided interested examples in cliometric history ranging from unemployment in interwar Britain to comparisons between Britain and the United States centered on the Habakkuk debate on technological progress, the Kuznets curve on patterns of income distribution, and demographic transitions.
Nevertheless, cliometrics moored firmly in neoclassical principles remained predominantly an American school and preoccupation. The distinguished British economic historian A. K. Cairncross implored the cliometricians to bear in mind constantly "the contrast between the sharp outlines of their concepts and the fuzziness of real life categories and between the certainties of their conceptual relationships and the uncertainties of the data" (p. 178). He concluded that in his view "there is scope for econometric methods of analysis, complete with models and counterfactuals, in some but not by any means all situations that economic historians encounter" (p. 180). From the 1990s, the call for a reunion between the old qualitative and the new quantitative economic history, between narrative and statistics, words and numbers, became louder. One prominent pioneer called for a "post–New Economic History" and urged his fellow economic historians to reintegrate themselves with other historians by changing their methods: "Historians are the synthesizers of social science. Our goal should be to help them to incorporate our insights into their developing syntheses. To do this we must make our models adaptable, more portable, and more human" (Sutch, pp. 277–278).
In an extensive review and prognosis of European economic and social history, Charles Tilly and colleagues proclaimed,
As we peer into the futures of economic and social history, our most general message is quite simple: it is time to de-economize economic history and re-economize social history. The de-economization of economic history should include the analysis of rights, power, coercion, state action, and related "institutional" factors; it does not entail the abandonment of economic analysis, but its broadening from a single-minded application of free-market models. The re-economization of social history should include new treatments of the interdependence among different forms of production and reproduction, both material, biological, and social. It should challenge the surprising recent tendency either to treat the three as separate spheres or to reduce all of them to artifacts of discourse. In this limited but crucial sense, we call for the revival of materialist social and economic history [italics in original]. (p. 647)
Late-Twentieth-Century Developments in Economic History
Economic theory and economic history have increasingly had to deal with new intellectual currents in economics, principally feminist economics, environmental economics, and the new institutional economics. Feminist economists have sought to liberate neoclassical economics from its positivist Cartesian trap, to broaden its analytical and thematic scope from a preoccupation with the rational choices of individual economic man, and to study how humans, both men and women, in interaction with each other and the environment, provide for their own needs and survival. They have tried to infuse gender in both macroeconomics and microeconomics, to strip neoclassical economics of its universalism and timelessness, as well as its normative and prescriptive certainties, to challenge stylized facts and dichotomies, and to make women and gender relations in all economic activities visible, by grounding economic analysis in concrete societies and histories that are invariably marked by inequalities, discrimination, exploitation, and struggle inscribed by the social and spatial constructions and hierarchies of gender, class, and place.
Environmental economics evolved out of diverse intellectual and ideological roots in the 1970s and 1980s in the context of growing concerns for sustainable development. Environmental economists seek to analyze the impact of economic activity on the environment and the influence of the environment on economic activity and human welfare by reformulating familiar neoclassical concepts, and occasionally inventing new, "greener" ones. And so they talk of the need to internalize externalities, that is, to account for the environmental effects of economic activity, to incorporate environmental factors in social cost–benefit analysis. They see environmental "resources" and "services" as "commodities" with consumptive, nonconsumptive, existence and bequest values, and discuss the preservation of natural environments in terms of their value as collective or public goods, and their expected utility or option value for future generations. A series of sophisticated methods and techniques has been devised to give monetary values to the environmental "commodities" and to measure the costs of environmental damage and degradation, and the impacts of market and policy failures and of investment projects and programs.
A key premise of the new institutional economics is that institutions matter, that economic change and development are products of both the institutional environment and the institutional arrangement. Studies inspired by the institutional perspective range from those that focus on the broad range of factors that have shaped the institutional environment, including the state, culture, and ideology, to those that concentrate on specific institutional arrangements, such as how changing regimes of property rights and transaction costs affect each other and economic performance. There is a lively debate on what constitutes an institution. Institutions are said to exist as a means to reduce transaction and information costs so that markets can operate efficiently, and markets themselves are regarded as institutions that interact with other social, political, and cultural institutions in the process of economic growth and change.
These new approaches offered opportunities for economic history to gain new analytical models and insights. They were welcomed by economic historians who believe that historical economic phenomena and processes are inseparable from cultural, political, social institutions, and the physical environments in which they occur, and the hierarchies and struggles inscribed by gender, class, and other social markers. Thus, economic history became increasingly more interdisciplinary.
Interdisciplinarity had long characterized economic history in the global South thanks to the paucity of statistical data and the pressing demands of development. According to Anthony Hopkins, a renowned economic historian of West Africa, African economic historians have always had a generous definition of economic history, one which embraces anthropology and political history as well as economics, which can be attributed to the youthfulness of the subject, the fortunate failure of any one school of thought to impose its dominance, and the diversity of evidence.
Economic historians of other regions appear to be moving in this direction. Readings on European economic history suggest growing interest in reconnecting economic, social, and political history. Before econometric history spread from the United States in the 1960s and specialization led to fragmentation of the discipline, one writer recalls, "few people then doubted that economic history included social history." (Barker, p. 25). Now the discipline seems to be returning to some of its roots and using new sources, including oral sources, which "can fill many gaps and much enrich our understanding of ordinary folk's social conditions and personal priorities" (Barker, p. 27).
The winds of change seem to be blowing even to the United States, as several commentators have noted. In a major intervention on the development of the American economy during the late nineteenth century, when corporate capitalism rose to prominence, James Livingston makes a compelling argument for bringing social analysis into American economic history:
At a higher level of argument it … follows that economic events are explicable only by reference to the social relations within which they appear—by reference, that is, to historically specific contexts of production and exchange.… We can see that the social and cultural context of economic change is not what the new economic historians have assumed it to be—an "exogenous factor" that can safely be ignored in building quantitative models of economic behavior and growth. (p.71)
Similar trends are apparent in Asian economic historiography. In China, for example, social and economic historians have been developing new paradigms, divorced from Western neoclassical models and communist models, both of which were based on simplistic dualisms and shared a vision of the benefits of commercialization (Huang, pp. 335–336).
A survey of the Eleventh International Economic History Congress held in 1994 confirms these developments toward the broadening of economic history. It shows that only one session was devoted to cliometrics and that the new economic history papers altogether accounted for about 20 percent of the whole congress program and were mainly given by North American scholars. Most of the papers took into account the role played by noneconomic factors and reflected "the influence of other kinds of histories, in particular social history, and other social sciences such as sociology, management and organization studies, and political science" (Subacchi, p. 607).
See also Capitalism ; Communism ; Economics ; Historiography ; Marxism .
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Sutch, Richard. "All Things Reconsidered: The Life-Cycle Perspective and the Third Task of Economic History." Journal of Economic History 51, no. 2 (1991): 271–288.
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"History, Economic." New Dictionary of the History of Ideas. . Encyclopedia.com. (August 17, 2017). http://www.encyclopedia.com/history/dictionaries-thesauruses-pictures-and-press-releases/history-economic
"History, Economic." New Dictionary of the History of Ideas. . Retrieved August 17, 2017 from Encyclopedia.com: http://www.encyclopedia.com/history/dictionaries-thesauruses-pictures-and-press-releases/history-economic
R. M. Hartwell identified three phases in the historiography of economic history: the pre-1914 era, when the discipline had a close relationship with economics; an interim period to the 1960s, which was heavily history-orientated, with much study of particular sectors and industries; and the post-1960s, when there was greater recognition of the value of interdisciplinary approaches and, at the same time, a reassertion of the value of economic theory. Of the early practitioners in Hartwell's first two phases, Toynbee, Tawney, Unwin, Seeley, and Clapham, among others, all made important contributions. Toynbee's study of the industrial revolution remained a classic for several generations and inspired many of his successors to explore in greater depth, locally and nationally, the impact of industrialization and economic development.
The relationship to theoretical and even to applied economics has always been ambiguous, though it has been greatly strengthened by ‘cliometrics’, which, introduced from the USA in the 1960s, applied economic modelling to historical problems. Perhaps the most successful instance by an American scholar, Mokyr, was a detailed analysis of the Irish Famine during the 1840s. An interesting spin-off, again imported from the USA, was the development of counter-factual history which derived its raison d'être from the concept of ‘social savings’ achieved in the economy had developments either been delayed or not taken place at all. Using this method, Hawke was able to show that railways had a more limited impact on the mid-19th-cent. economy than previously supposed, while Von Tunzelmann contradicted the view that the introduction of steam power greatly accelerated British industrialization much before the 1820s. Even the counter-factual horse, as conceived by F. M. L. Thompson, has featured in a debate about transport in the Victorian and Edwardian age.
Social history emerged powerfully in the 1960s with the work of E. J. Hobsbawm, E. P. Thompson, and G. Rudé, who, among others, articulated Marxist or quasi-Marxist views of both social and economic development. Thompson's Making of the English Working Class influenced a generation of social historians, not only of 18th- and 19th-cent. Britain, but also of the early modern period, and in much of this work the economic context of social change was closely addressed. There was also sustained interest in the 20th cent., notably in the impact of war and peace on social change. In the related fields of historical demography and historical sociology, quantification has played a more critical role. P. Laslett in his study of The World We Have Lost was one of the most influential of those adopting a sociological approach, while E. A. Wrigley and M. Anderson were among several pioneering computer analysis to produce important studies on the historical demography of Britain during the 18th and 19th cents.
Economic historians have generated and sustained many major debates about the nature and impact of economic change in Britain, including such issues as the origins and timing of agricultural change and of industrialization, the role of various sectors in generating and sustaining economic growth during the era of early industrialization, the impact of industrialization, the standard of living during the industrial revolution, the role of overseas investment and trade on the 19th-cent. economy, the failure of entrepreneurship in later Victorian Britain, the effects of the two world wars on the British economy, and problems of adjustment in the international economy since 1945.
The Economic History Society, established in 1926, is the leading learned society in the field. It publishes the Economic History Review, while Scottish and Irish societies produce journals covering the economic and social history of their respective countries.
"economic history." The Oxford Companion to British History. . Encyclopedia.com. (August 17, 2017). http://www.encyclopedia.com/history/encyclopedias-almanacs-transcripts-and-maps/economic-history
"economic history." The Oxford Companion to British History. . Retrieved August 17, 2017 from Encyclopedia.com: http://www.encyclopedia.com/history/encyclopedias-almanacs-transcripts-and-maps/economic-history