Thoughts on the New Economic History
- The Economic History of Britain since 1700. Vol. 1: 1700-1860 edited by Roderick Floud and Donald McCloskey
Cambridge, 323 pp, £25.00, October 1981, ISBN 0 521 23166 3
- The Economic History of Britain since 1700. Vol. II: 1860 to the 1970s edited by Roderick Floud and Donald McCloskey
Cambridge, 485 pp, £30.00, October 1981, ISBN 0 521 23167 1
- The Population History of England 1541-1871: A Reconstruction by E.A. Wrigley
Edward Arnold, 779 pp, £45.00, October 1982, ISBN 0 7131 6264 3
- The Decline of British Economic Power since 1870 by M.W. Kirby
Allen and Unwin, 211 pp, £15.00, June 1981, ISBN 0 04 942169 7
- The Coming of the Mass Market 1850-1914 by Hamish Fraser
Macmillan, 268 pp, £16.00, February 1982, ISBN 0 333 31034 9
The covers of two of these books display very similar views of Manchester, the ‘shock city’ of early 19th-century England. One is for 1836 and the other for 1851, and both embody a familiar picture of the Industrial Revolution: of factories pouring out goods, and chimneys belching forth smoke; of burgeoning exports, spiralling output and rising productivity; and of improved land, unceasing labour, accumulating capital and inspired enterprise. Here is an epic drama: Coketown in the making, the workshop of the world in operation, and the factors of production in fertile fusion. Taken together, these two illustrations project an image of the Industrial Revolution as an heroic happening, characterised by vigour, energy, inventiveness and courage, or (depending on your point of view) by exploitation, cruelty, avarice and shame. Either way, to look at these pictures, to visualise the events which they capture for a moment, and to imagine what is required to render such changes historically comprehensible, is to see at once why Floud and McCloskey claim that ‘economic history is an exciting subject.’
Or is it? Undeniably, in the years from the mid-1950s to the early 1970s, economic history was exciting, as an ever-expanding army of scholars, stirred by the theories of development economists, and buoyed up by the apparent successes of the post-war welfare state, turned with relish to Britain’s industrial past, partly to test and refine the grand generalisations of Toynbee, the Hammonds, Clapham and Ashton, and partly to see what (if any) guidelines that past might yield for those who wished to transform the Sahara Desert of the present into the Sunset Boulevard of the future. As a result, the Economic History Review scintillated with provocative, seminal and wide-ranging articles, many of them nurtured and inspired by that most creatively entrepreneurial of editors, M.M. Postan. Major controversies, such as the storm over the gentry and the standard of living debate, were fought within its pages, as the protagonists assailed each other like Punch and Judy – with a great deal of punching, if rather less judiciousness. And a wide variety of substantive problems – the growth of population, capital accumulation, home and overseas demand, technological change and innovation – were identified, investigated and then synthesised in a new generation of late Sixties textbooks which remained the last word for undergraduates until the appearance of Floud and McCloskey’s volumes.
Since then, the wheel has turned again, as these second-generation generalisations have themselves been further tested and refined. But the scrutiny to which they have been subjected has been fundamentally altered by the emergence of the ‘New Economic History’, which rose to prominence in the United States in the late 1960s, and which has profoundly shifted the subject’s status, from being a client of history to a vassal of economics. The two most famous works in this genre were both written by Robert Fogel, who was thus established as midwife and guru, entrepreneur and high priest, of this new cult. The first, Railroads and American Economic Growth, was an audaciously-conceived study which cut the iron horse so emphatically down to size, by exploring a hypothetical late 19th-century American economy without railways, that some critics wondered whether Professor Fogel himself was any longer on the rails. The second, Time on the Cross, was a co-authored, revisionist investigation into the economics of the American slave experience, which made many people angry at the time by suggesting that slaves did not fare as badly on the Ante-Bellum plantations as had generally been supposed. Both these books were bold and brash, trumpeting their new methodology with such messianic zeal and impassioned conviction that it seemed only a matter of time before old-fashioned economic historians became the hand-loom weavers of their generation – doomed to sad decline and slow extinction.
From the beginning, this ‘New Economic History’ was characterised by a distrust of literary and impressionistic evidence, by a heavy reliance on quantitative data elaborately manipulated and computed, by the explicit and widespread employment of economic theory, by the careful specification and testing of hypotheses, and by the use of the counterfactual technique, which required imagining how an economy would have evolved if certain specified ‘factors’ had not actually been there – a sophisticated version of the ‘If Napoleon had won the Battle of Waterloo’ school of history. Old-fashioned economic history was condemned for its unsystematic and unscientific marshalling of unreliable data; the new discipline ardently aspired simultaneously to bring economic standards of logic to history and historical standards of fact to economics; and its practitioners spoke with relish of having ‘captured’ the Journal of Economic History and moulded it to their new creed. The military metaphor well reflected the embattled and belligerent status of the ‘New Economic Historians’ who soon found themselves waging war on two fronts: crusading against the infidel without, and quarrelling among themselves within. And the weapons with which these battles were fought were fashioned in the white-hot heat of the Sixties technological revolution. The solitary scholar-gladiator of old, replete with lance and trident, was replaced by a new model army of research assistants, computer experts and applied economists who, under the guidance of a lab-coated field-marshal, launched massive bombardments with all the scholarly firepower (and some of the strategic futility) of a Somme offensive.
The full text of this book review is only available to subscribers of the London Review of Books.
Vol. 4 No. 9 · 20 May 1982
SIR: David Cannadine’s critique of the new economic history (LRB, 15 April) goes about its business in a style of which he clearly approves: that is, ‘with a great deal of punching, if rather less judiciousness’. His forthright praise of the ‘heroic’ picture of the industrial revolution has led him to ignore or misunderstand many of the bold new designs. Some misunderstanding is excusable: the language of new economic history is often needlessly dense and jargon-ridden, sometimes downright ungram-matical, and seldom approaches the prosaic heights of ‘good old-fashioned economic history at its best’, telling the dramatic story of the transition from sweet Auburn to Workshop of the World. Part of the reason for this is that the plot is now acknowledged to be rather more complex and much more pedestrian than was once thought. The plight of, say, the handloom weavers was sudden and vicious and fully reported in the textbooks of the ‘old’ economic history. But this easily romanticised story was romantic because it was an exception to a general pattern of gradual change and adjustment to that change. One achievement of the new economic history has been to question ideas of take-off and leading sector, of discontinuity and climacteric; it must be remembered that Britain experienced the first and the slowest of all industrial revolutions.
The density of its prose is also in part the result of encroachment by the language of economics. Dr Cannadine accepts that economic ideas must be expressed in a precise and perforce somewhat artificial language, yet he seems to resent the need to become conversant with this new tongue. He likes stories about the appearance in the late 19th century of fish and chips and New Zealand lamb, but not the analysis of consumption propensities, price differentials and demand elasticities that alone can give some explicatory basis to such stories. When a bad workman is lacking in skill, he should not rush to blame the new tools of his trade.
It is with these tools of new economic history that Dr Cannadine finds the greatest fault, objecting in particular to counterfactuals, cliometrics, and the rigidities of neoclassical economic theory. He has some sensible things to say, particularly on the futility of the sophisticated statistical manipulation of primitive and unreliable data, but he should not pretend that the be-all and end-all of new economic history lies in the application of the, tape-measure to Clio. Measurement is certainly important, and this has always been true of economic history: what is new is that the measurement is consistent, and the application of it is consistent, too. Instead of cameos of smoking chimneys and accumulating capitalists interspersed with the odd (sometimes very odd) fact or figure, we now have accounts explicitly based upon thoroughly researched statistical series. This statistical rigour cannot always provide concrete answers to such questions as ‘What happened? How did it happen? What is the dynamic interaction between the different factors of production?’, but without the details of population, employment, output, productivity, trade and growth there can be no answers at all.
Consistent statistics are an important element of the new economic history, but conclusions drawn from them depend crucially upon the questions asked, and it is in the formulation of questions that new economic history most clearly breaks with the old. Assumptions are made explicit and hypotheses are framed in ways that can be tested by the application of coherent economic models. The mysteries of en-trepreneurship are turned into theories of constrained profit-maximisation or cost-minimisation, by which success or failure can be measured. Naive assertions about the ‘necessity’ of railways for British economic development are tested by assessing the additional cost in any particular year of moving all rail passengers and freight by the next best available means of transport. The estimation of the indispensability or otherwise of any particular factor, which Dr Cannadine considers so ‘bizarre’, has been essential to the demythologising of ‘heroic’ economic history, to the fuller understanding of the intricate process of economic growth. Heroic events are not untrue, they, do provide glimpses of what happened, but they seldom serve to answer the question ‘How?’. The Jarrow hunger march should: have a place in any account of the British economy in the 1930s, but one event cannot be allowed to; dominate the study of consumption and saving, of; tax and exchange rates, of investment and the building cycle.
The deliberate conjunction of economic theories and historical data to answer clearly defined questions has given economic historians the problem of deciding how appropriate is any modern theory as an explicator of economic relationships in bygone times. As Dr Cannadine points out, neoclassical theory assumes much which for 18th and 19th-century Britain is demonstrably untrue, and though: these assumptions are not necessarily crucial, they I must induce some doubt about the results obtained. It is not true, however, that all new economic history ‘presupposes perfect competition, full utilisation of resources, rational and profit-maximising entrepreneurs, and non-interference by government’, as studies of oligopoly and cartelisation, of tariffs and subsidies, make clear.
There is a growing awareness among new economic historians that many of the analytical tools they borrow from the economist’s work-box are crude and blunt, and give a heavy-handed appearance even to the most skilful practitioner’s output. Economic history can play a part in sharpening and refining these tools, especially by questioning assumptions about tastes and preferences, about motivation and response to incentives, and about conformity across classes, cultures and centuries. This will not require any reduction in methodological rigour or statistical accuracy, though it will need a fuller appreciation of historical detail, a greater feeling for subject and period, than most of the new economic history has shown to date. We should not sacrifice the advances of the last twenty years just to return to ‘exciting’ stories and ‘heroic’ events. Economic history in the 1980s needs a little more Clio, perhaps, but no more heroes.
Nuffield College, Oxford
Vol. 4 No. 11 · 17 June 1982
SIR: Paul Johnson’s reply to my thoughts on the new economic history (Letters, 20 May) is a fine example of grudging and unintended agreement masquerading unconvincingly as belligerent and wayward disapproval. En passant, he admits that ‘the language of the new economic history is often needlessly dense and jargon-ridden, sometimes downright ungrammatical’; that I have ‘some sensible things to say’ about ‘the futility of the sophisticated statistical manipulation of primitive and unreliable data’; that ‘statistical rigour cannot always provide concrete answers’ to a variety of important questions; that ‘neoclassical theory assumes much which for 18th and 19th-century Britain is demonstrably untrue’; and that the subject needs ‘a fuller appreciation of historical detail, a greater feeling for subject and period, than most of the new economic history shown to date’. I am, of course, delighted that my punches should have encountered so judicious a target – although this does leave me wondering what is left of the subject’s supposed ‘bold new designs’ which I have, apparently, ignored or misunderstood.
Having conceded so much of my case, it is hardly surprising that Johnson makes heavy weather of defending the remnants of his scuppered citadel. ‘The mysteries of entrepreneurship,’ he writes, ‘are turned into theories of constrained profit-maximisation or cost-minimisation.’ But no such treatment is to be found in the first of Floud and McCloskey’s volumes. He seems to think that I ‘like’ stories of fish and chips, when I was merely trying to convey the flavour of the book in question and to compare it favourably with another work. He claims that I dislike ‘the analysis of consumption propensities, price differentials and demand elasticities’, when I expressed no opinion on these concepts one way or the other – except to suggest that Supple’s quantitative and Fraser’s impressionistic approaches to the study of late 19th-century consumer demand were complementary rather than mutually exclusive. ‘When a bad workman,’ Johnson continues, presumably with me in mind, ‘is lacking in skill, he should not rush to blame the skills of his trade.’ Agreed. But the real cause of Johnson’s anger emerges later in his letter, when he concedes, with understandable coyness, that there is also ‘a growing awareness among new economic historians that many of the analytical tools they borrow from the economist’s workbox are crude and blunt’ (my italics). How curious it is to be attacked for holding a view which one’s critics seem to share!
The remainder of Johnson’s remarks shows a regrettable ignorance of the historiography of economic history, which leads him to understate the accomplishments of the old-fashioned economic historians he so cavalierly derides, and so to overstate the originality of the new economic historians he so unconvincingly defends. ‘One achievement,’ he writes, ‘of the new economic history has been to question ideas of take-off and leading sector, of discontinuity and climacteric’ But this claim to novelty (and monopoly) is untenable: these ideas were being questioned by old-fashioned economic historians from the time they were first formulated. Likewise, he argues that the counterfactual has been ‘essential’ to the ‘demythologising’ of ‘heroic’ economic history. But this shows equal disregard for much pioneer work by old-fashioned economic historians, and displays a naive belief that overturning one mythology will not lead to the enthronement of another. (In any case, since his colleagues are so anxious to insist that nothing is indispensable, how can the counterfactual be ‘essential’ for anything?) Finally, he suggest that events such as the Jarrow hunger march should not be allowed to ‘dominate the study of consumption and saving, of tax and exchange rates, of investment and the building cycle’. But when have they ever done so: where are these unnamed studies of ‘consumption and saving, of tax and exchange rates, of investment and the building cycle’, dominated by the Jarrow hunger march?
As described and defended by Johnson, the new economic history emerges as a subject regrettably ignorant of the scholarly tradition to which it belongs, over-ambitious in the novelty and substance of its claims, better able to tilt at defunct windmills than to make constructive arguments – and therefore unsurprisingly vulnerable when over-extended into a two-volume textbook. Less time in the microchip factory and more in the fish shop might well prove salutary.
Christ’s College, Cambridge
Vol. 4 No. 12 · 1 July 1982
SIR: David Cannadine’s response to my comments on new economic history (Letters, 17 June) is yet another example of his injudicious punching. So eager is he to claim a victory on points that he has failed to see just where and why the fight is taking place. Because I find so many faults with the work of new economic historians, Dr Cannadine believes I concede his case and am left defending a ‘scuppered citadel’. If he had understood my letter, he would have realised my purpose was not to defend the works of wayward cliometricians, but to identify the methodological strength of new economic history.
The strength lies in the clear expression of ideas and underlying premises: to reiterate, ‘it is in the formulation of questions that new economic history most clearly breaks with the old. Assumptions are made explicit and hypotheses are framed in ways that can be tested by the application of coherent economic models.’ In other words, pictures and stories are not taken at their face value, the ‘facts’ are not allowed to speak for themselves, but, instead, they are consciously moulded into the analytical framework provided by the historian. So much is true of some old economic history: what the new does is boldly display this analytical framework, in the belief that only by revealing the inner workings of the subject can sense be made of the questions asked and answers gained. Instead of hiding their assumptions about ‘the really important historical questions’ like ‘What is the dynamic interaction between different factors of production?’ in a maze of ‘heroic’ and ‘exciting’ stories, these new practitioners make explicit the models of dynamic interaction they appeal to, and the elements of interpretation, extrapolation or guesswork they resort to in order to reconstruct missing links in the chain of causation. If the models or guesses are inappropriate and the links malformed, they deserve (and receive) detailed and trenchant criticism from those who possess the skills necessary to understand the subtlety of the original argument.
Dr Cannadine, of course, does not indulge in this skilful criticism of the specific form the links in the chain take: rather, he doubts that the chain leads anywhere. New economic history, he says, is ‘better able to tilt at defunct windmills than to make constructive arguments’. The reason for this is the ‘ominously ahistorical nature’ of an enterprise wedded to neoclassical theory. The problem with framing testable hypotheses is that the models used to test them are crass. Agreed, many economic models are so simple as to be impotent (and neoclassical models do not have a monopoly here), and this is why I suggested that economic historians should be much more questioning of the models they use. If new economic history is at times emasculated, not by its methodological awareness, but by the imperfection of the analytical tools it borrows from the economists’ work-box, then it needs to hone these tools to a finer point, not dismiss the methodology and return to the cosy and vague eclecticism of old economic history. But the weakness of the models is often overstated. Even simple demand theory, for instance, tells us a great deal about market behavious. Downward-sloping demand curves might be a starting-point for any assessment of changes in consumption patterns in the late 19th century, and would encourage a discussion of price and income effects. Did the chip shops spread across the country because the price of their goods fell, because real income rose, or because of a fundamental change in tastes? The questions are explicit, and the alternative hypotheses are testable with a simple economic theory that even historians have heard of. Yet there is not a hint of such analysis in the work of W. Hamish Fraser, whom Dr Cannadine strangely associates with Clapham, Ashton and Postan as a practitioner of ‘good old-fashioned economic history at its best’ (a rather cavalier approach to the historiography, surely?). The great weakness of so much old economic history is that it has no sense of the underlying processes that condition economic activity, and makes little attempt to gain an understanding. It is content to tell stories rather than ask questions.
Dr Cannadine seems happy to listen to these stories rather than explore the epistemological sophistication of new economic history. He finds the subject unexciting because he cannot or will not raise his sights above the level of chip-shop counters and smoking chimneys to recognise the intellectual challenges of this new approach to economic history. It is a subject for thinkers, not raconteurs.
Nuffield College, Oxford
Vol. 4 No. 13 · 15 July 1982
SIR: How thoughtful Paul Johnson is (Letters, 1 July). He thinks the old economic history is sometimes bad, sometimes good. I agree. He thinks the new economic history is sometimes good, sometimes bad. I agree. He may even find I said as much in my review. Meanwhile, he wishes to ‘explore the epistemological sophistication of the new economic history’. Good luck to him.
Christ’s College, Cambridge