PART1—ECONOMIC HISTORY OR HISTORICAL ECONOMICS?
Historical Economics a Bridge between Liberal Arts and Business Studies?
If one looks through the Directory of the American Economic Association for addresses, itwill become clear that some economics departments are located in business schools and somein schools of arts and sciences. My brother-in-law was very fond of a
cartoon inwhich a man returned home, happened to discover an unkempt bearded hippy in his wife’s boudoir closet, and elicited the remark “Like, man, everybody’s got to be someplace.” This, Isuppose, is true of economics departments as well as of hippies, but the fact that they chooseliberal arts on some occasions, or have it chosen for them, and business schools at other times, emphasizes the ambiguity embodied in the subject. One could perhaps distinguish between technical economics, heavy with mathematics and econometrics, models and
-dimensional diagrams, and literary or anecdotal or intuitive economics — the former alliedto operations research, statistical inference and sharp-pencil subjects like finance, and belonging really in a business school; the latter flirting with sociology, politics, perhaps even psychology, more comfortable with social science, and, to the extent that it is historical, perhaps with the liberal arts. I say “perhaps” because economic history itself has bifurcatedinto clinometric, manipulating statistics and models to try to prove contentions in history, or more generally disprove those of others, and traditional economic history, which is moreinductive.I happen to profess historical economics, rather than economic history, using historicalepisodes to test economic models for their generality. Many economic models are plausibleand will fit particular circumstances; the question is how general they are and how much onecan rely on them to provide understanding and wisdom in particular circumstances. I do notsay prediction: I am a non-believer in positive economics that permits prediction because Itake the view that in general-equilibrium models, with scores or perhaps even hundreds of variables, it is difficult to the point of impossibility — what literary people sometimes callinfinitely difficult — to be certain that the various arguments in a given function have beenaccurately specified the first time and replicated the second. Historical economics, as I viewit, believes in partial equilibrium,
, rather than
, and looksfor patterns of some uniformity but is wary of insisting on identity.I have moved into historical economics from international economics, and in this paper I propose to strike out in the directions of the international aspects of business, on the onehand, and the liberal arts on the other, meaning, I suppose, mostly history, politics, culturalanthropology, sociology, perhaps even a little geography. But first let me suggest that business schools may not have enough, and liberal arts too much, of ambiguity. Inmathematics and some business schools, the task is to prove theorems, relationships whichare universally true. In the real world, ambiguity is king.Should one look before one leaps, or is it true that he who hesitates is lost? If it ain’t brokedon’t fix it fits some occasions, but others demand a stitch in time that saves nine. When inRome do as the Romans do is one rule for the multinational corporation, but there areoccasions when it is better to follow Polonius and to thine own self be true. Good, better, best, never let it rest, until your good is better and your better best is the optimisticallyAmerican rule, but the French remind us that the best is the enemy of the good. Quit while