Chronicle of Higher Education December 1, 2014
The Fall and Rise of Economic History

By Jeremy Adelman and Jonathan Levy

"Irritated, one shoos it out the door, and almost immediately it climbs 
in through the window." Without the concept of capitalism, the late 
French historian Fernand Braudel once wrote, it was impossible to study 
economic history. But the reverse is equally true: We can’t understand 
capitalism without economic history.

Once a mainstay of history departments, economic history was, with 
historians’ complicity, seized in the mid-20th century by economists who 
sucked the culture and chronology out of it and turned it into an 
obscure province of mathematical formulas. There it languished. The 
field became increasingly uncool. By the 1990s, to be a materialist in 
the age of Michel Foucault and Pierre Bourdieu was to be 
"deterministic"—in other words, a dinosaur. So economic history further 
retreated to economics departments, where many self-described economic 
historians had already been gathering under the banner of the "new 
economic history."

The past decade has exposed some fundamental problems with that division 
of disciplinary labor. The now-old "new" economic history either fizzled 
or has become so technical, so unrecognizable to anyone who cannot wield 
its finely tuned analytics, that few historians can engage with it. 
Meanwhile, fewer and fewer economics departments now consider 
history—including the history of economics itself—a relevant domain of 
disciplinary inquiry, with many of the top departments having eliminated 
economic history from their programs altogether.

Lately historians have started to take it back, spurred by a demand to 
better understand the roller coaster of capitalist life, particularly 
how inequality and globalization factored into the recession. The 
economic crisis pushed courses on the "history of capitalism" to the top 
of the charts in history departments around the country, even making 
front-page news in The New York Times. With conferences, courses, and 
book series, the history of capitalism, one of the few areas of inquiry 
where job postings are growing, is on the verge of becoming an 
established subfield. The runaway success of Thomas Piketty’s Capital in 
the Twenty-First Century (Harvard University Press) raised even higher 
the political and intellectual profile of capitalism and its history.

In this way, a prodigal-son subfield has returned. Historians do not 
leave political history to political scientists, or social history to 
sociologists. Why should economic history be left to economists, 
especially when they ignore it? Besides, the humanities might well 
benefit from the revival of a field that once served as a bridge to the 
social sciences.

The history of capitalism performs heroic service, but bereft of a 
broader grasp of the history of economic life, it can’t provide deep 
insights into the makings of systems of production, circulation, and 
distribution. Capitalism is a latecomer in that story, and, like all 
latecomers, more reliant on its precursors and alternatives than its 
apostles and critics like to admit. There can be no history of 
capitalism without an economic history near its explanatory core.

Like democracy or modernity, capitalism is a historical problem, 
specific to time and place. If only because it eludes easy definition, 
it must be studied from different perspectives, with different 
historical methodologies. There are social histories of democracy, 
intellectual histories of democracy, and, of course, political histories 
of democracy. The economy could be the subject of similar multiple 
approaches. But it is not. It has been treated as a realm apart.

This is a surprising state of affairs. Looking back to 1960 or even 
1980, one would not have predicted the eclipse of economic history. From 
the Progressive Age (1900 to 1930) onward, it was almost de rigueur to 
proclaim the material roots of everything and to tie one’s research to 
the broad spirit of reform. Capitalism’s postwar "golden age" was good 
for economic history, as it was for the world economy. The pairing of 
"social and economic history" was the fallback working methodology of 
many professional historians. The works of Eric Hobsbawm, Thomas C. 
Cochran, and Braudel himself were touchstones. Even books by the first 
generation of new economic historians, such as Robert Fogel and Stanley 
Engerman’s Time on the Cross: The Economics of American Slavery (Little, 
Brown and Company, 1974), were read and reckoned with by noneconomic 
historians. Surely globalization, the ascendance of China, and the rise 
of Apple should have continued to fuel the field.

A confluence of several forces broke things up. By the 1960s, economic 
history was increasingly associated with development economics, at a 
time when that field was seen as running out of steam. It often took the 
likes of Alexander Gerschenkron and R.H. Tawney as departure points and 
was preoccupied with identifying (or debunking) catalytic factors in the 
"takeoff," as W.W. Rostow put it in The Stages of Economic Growth, to 
modern economic growth. Here the importance of the economy—while often 
disaggregated into various sectors, industry almost always the leading 
one—was taken as a given. Further, many economic historians concerned 
themselves with the economic growth of nation-states—bounded entities in 
space, which grew (or not) across a nation’s chronology. Postwar 
economic history became a modern enterprise aimed at explaining how to 
expand the pie.

Behind the scenes, though, the consensus was coming apart. Some say a 
change took place in 1960, when the editing of The Journal of Economic 
History passed to William Parker and Douglass North, two economists with 
deep interests in historical processes but also commitments to 
sophisticated statistical methods. The English Economic History Review, 
the French Annales d’histoire économique et sociale, and even Past & 
Present stayed true to their narrative roots but eventually suffered 
from dwindling readership, or chose to diversify or rebaptize themselves.

The features of what was dubbed "the new economic history" are well 
known. Chiefly there were three—an evidentiary style that preferred 
numbers to narratives, an effort to disaggregate variables to test 
causal claims about growth, and a reliance on the methodological 
individualism of neoclassical economics to make inferences about 
behavior, even of groups. William H. Sewell Jr. has charted the rise of 
quantitative styles and the demise of narratives in economic-history 
journals. In 1965-66, only 8 percent of Journal of Economic History 
articles boasted mathematical equations. By 2008 the count was 62 
percent, by which time 90 percent of the articles contained statistical 

The preference for numbers was less troublesome than the assumptions 
hitched to them. The neoclassical economics behind the new approach 
claimed to hold the keys to both current and future equilibrium states. 
But it did not have a theory about time, about how to move from one 
state to the next. That posed problems because grappling with time is 
what historians do. While the "cliometricians," as they dubbed 
themselves without irony, offered findings that fit an all-purpose 
economic theory, they collapsed history into a static formula, a global 
equilibrium for a world of possessive individualists. Coincidentally, if 
less consciously, the prospect of intervening for the purposes of reform 
faded away.

Economic history seceded from the study of history generally. After all, 
the point of going cliometric was to subject the study of the past to 
the more-rigorous scientific norms of economics and formal models. True, 
the occasional historian has dared venture into the domain of economic 
theory. But if Niall Ferguson’s recent pitfall into Keynesian economic 
theory is any indication, it’s not a game for the faint of heart. Or the 

A second consequence was less perceptible and took more time to play 
out. The rise of cultural history in particular, and the engagement with 
more-interpretive social sciences in general, turned more and more 
historians away from structures and statistics and toward meanings and 
mentalities. Among the meanings to be dissected using that interpretive 
approach were categories that economists used with happy abandon, like 
"labor," "credit," and "industry." Institutions and innovations, rather 
than the results of individual and group responses to incentives, were 
studied as social and cultural constructs. For some, especially those 
influenced by Foucault, the drive to modernity was less about a grand 
narrative of making plenty and more about micronarratives of power and 

So, one side went causal while the other went cultural. After Fogel and 
North won the 1993 Nobel Memorial Prize in Economic Sciences, the 
economic historian Claudia Goldin remarked on the extinction of economic 
history from history departments, worrying that the prize served as a 
kind of elegant epitaph for an alliance that once crossed disciplinary 
boundaries. "The new economic historians," she noted, "extinguished the 
other side"—a side that had moved on of its own accord. By the turn of 
the millennium, what we got was a de facto agreement for each side to 
bask in the glow of its unexamined assumptions about the other.

There is always, of course, more to the rise and fall of academic fields 
than their internal history. So much of what economic history had become 
was, in fact, attached to the capitalism question. Capitalism, in 
postwar economic history, was the present industrial stage in nations’ 
grand and irreversible march through time. It was also communism’s evil 
twin; the term "capitalism," after all, was coined by late-19th-century 
socialists to name the enemy. In a sense, economic history thrived as 
long as there were rivals to capitalism.

The question of the "origins of capitalism" was so hotly debated in part 
because so many historians—and not just the Marxists among them—were 
concerned with the threats it faced. Rostow’s Stages of Economic Growth, 
an unapologetic defense of capitalism, laid its cards on the table with 
its subtitle, A Non-Communist Manifesto. It was a manifesto precisely 
because it claimed to distill what we knew about how capitalism could 
(as befitted the jet age) "take off" and bring abundance to all. This 
was especially relevant in 1960, when much of the third world was up for 
ideological grabs and listening to the siren calls of socialism and 
revolution. Rostow himself would soon leave the halls of MIT for the 
White House, carrying his lessons from economic history to the defense 
of the free world.

As the romance with revolution wore off, so did the urgency to 
understand the mystique of capitalism. By the time Francis Fukuyama’s 
The End of History and the Last Man (Free Press, 1992) declared the 
triumph of liberal-capitalist democracy over all possible alternatives, 
many people had lost interest in capitalism’s origins and consequences. 
Questions gravitated to what kind of capitalism rather than how or why. 
Big books in post-Cold War economic history, like David Landes’s The 
Wealth and Poverty of Nations (W.W. Norton, 1999), read like the rise of 
the capitalist West and the travails of the catching-up rest. The story 
line had a moral: Nations that do not conform, whether to the narratives 
of economic historians or to the dictates of the 1990s Washington 
consensus, were doomed to misery.

It did not help that economics, the discipline tasked with giving us the 
clues to understand the economy, was moving further and further from 
reach, not just from historians but also from the rest of the social 
sciences, let alone the broader public. Many veteran economists today 
complain that they can’t fathom the math of their younger colleagues. 
Increasingly, technical economic history follows the cues (not to say 
the incentives) of its master discipline to simulate natural 
experiments, relying upon the narrowest of behavioral assumptions about 
homo economicus, mining data excavated and stylized from the past.

Without historians in their midst, the new new economic historians were 
unaccountable to those who shared different understandings of what a 
preference is. Political or personal choices were siphoned as the 
outcomes of a timeless economic calculus. Some have taken matters a step 
further to make the case for the application of game theory, as if 
traditional narratives were simply "facts arranged chronologically." 
Since this type of social scientist doesn’t write for historians, even 
if they wring them for data, historians’ basic assumptions about the 
contested nature of narratives, and the craft that must go into 
constructing them, do not get through. No wonder, then, that many 
historians take one look at what passes for cutting-edge economic 
history, shrug, and move on.

Then came 2008. With the crisis, pessimism about capitalism’s present 
and future came storming back, and the topic returned center stage to 
American history departments.

As the pie shrank, the publishing world was flooded with big, 
noise-making books. Histories of financial crises, like Carmen M. 
Reinhart and Kenneth Rogoff’s This Time Is Different (Princeton 
University Press, 2009), became best sellers. As the fate of the 
American middle class became more uncertain, as Europe entered fiscal 
crisis, as China took over the solar-panel business, and as some parts 
of the world seemed to fall into a tailspin, liberal capitalism seemed 
less assured and its history more confusing—or, as historians like to 
say, more "contingent."

Grand narratives of the rise of the West have continued to appear, Daron 
Acemoglu and James Robinson’s Why Nations Fail (Crown Publishers, 2012) 
chief among them. But the tone is altogether different. Divides, 
disparities, and divergences have elbowed aside miracles, takeoffs, and 
growth. Acemoglu and Robinson’s choice to swap out the 20th-century 
obsession with growth for the 21st’s fixation on failure is a giveaway.

As a couple of historians interested in the economy, we’re happy to see 
American history departments welcome the topic of capitalism back into 
the fold. (Outside the United States, subfields didn’t fork in such 
opposite directions, so the rift has been less of a problem.)

Our joy might seem out of place amid so much economic gloom, but the 
trend was evident even before the recession. Globalization and 
competition were already bringing to the fore economic factors in daily 
life. Consider Kenneth Pomeranz’s The Great Divergence: China, Europe, 
and the Making of the Modern World Economy (Princeton University Press, 
2000). Pomeranz asked an old question—why did the Industrial Revolution 
happen first in Europe and not Asia? To answer it, he appealed to 
multiple spatial scales, above and below nation-states, from regions to 
empires. He employed numbers, but for the purpose of old-fashioned 
counting, not modeling, and he made those figures part of the story. 
Furthermore, by pointing to the ecological windfall of New World 
frontiers, Pomeranz enlisted a sibling field, environmental history. 
Finally, while his account was primarily about causality, he nodded to 
an array of historical processes and showed sensitivity to the 
perspectives of the diverse participants in his tale. As Westerners grew 
nervous about the rise of China, and the hegemony of the West seemed 
less given, the global dimension of The Great Divergence struck a nerve.

While economic history’s stock rose with globalization, the new economic 
history’s stock fell because of doubts about its behavioral assumptions. 
Even before the recession, the heroic figure of the utility-maximizing 
homo economicus appeared less infallible. Rational actors? Not even the 
Federal Reserve’s chairman at the time, Alan Greenspan, could find them. 
Irrationality, passion, and greed stormed the stage. Subprime mortgage 
loans, hedge-fund quants’ calculations, moral hazards, tech start-up and 
IPO crazes made for much better drama.

To their credit, some economists and other social scientists had already 
recognized the problem, as evidenced in Amartya Sen’s 1977 paper 
"Rational Fools: A Critique of the Behavioral Foundations of Economic 
Theory" and Albert O. Hirschman’s "pendular" man, swinging between 
self-interest and concern for others.

But those were the exceptions. Daniel Kahneman, the behavioral 
psychologist known for his studies of decision making, was shocked to 
discover that "the agent of economic theory is rational, selfish, and 
his tastes do not change." He added: "My economic colleagues worked in 
the building next door, but I had not appreciated the profound 
difference between our intellectual worlds. To a psychologist, it is 
self-evident that people are neither fully rational nor completely 
selfish, and that their tastes are anything but stable."

Historians were no less shocked. Cultural historians for decades had 
been writing about "market cultures" and what they called 
"subjectivity." But because they no longer imagined themselves in 
conversation with economists in the building next door, they had no 
chance to be heard. Lately, though, historians have explored the 
cultures around money, statistics, and finance, to take just a few examples.

The production, distribution, and consumption of value are common 
descriptors of what constitutes the economy, with economists normally 
treating value as synonymous with prices. But market prices can’t be the 
only gauge of value, as demonstrated by a recent spate of philosophical 
books, among them Debra Satz’s Why Some Things Should Not Be for Sale 
(Oxford University Press, 2010) and Michael Sandel’s What Money Can’t 
Buy (Farrar, Straus and Giroux, 2012). Historians have a lot to 
contribute to such discussions—now that they realize they’re a part of them.

Even the very idea of "the economy" is the source of revitalized 
attention. Instead of isolating variables, we can tell the histories of 
variables and categories of economic life. We can give homo economicus a 
real, historically conditioned life. It’s the equivalent of turning a 
computer-modeled Pinocchio into a real boy. This does not mean being 
antiquantitative, or anticausal, but it does mean understanding that the 
numbers and agents live in time, and, by implication, that socioeconomic 
trends are open to intervention and change.

What’s the evidence behind our optimism? The first is the rekindled 
interest in the history of economic ideas. No longer a subset of 
intellectual history engrossed in controversies over, say, whether Adam 
Smith had a concept of marginal utility, the history of economics has 
found kinship with the history of science and politics. Albert Hirschman 
and Emma Rothschild have worked to place political economy back into the 
tapestry of discussions of human nature and the pursuits of power and 
wealth. More recently, historians like Mary Morgan have charted how 
political economy evolved from a verbal science, steeped in rhetorical 
traditions as a branch of literature, to a model science, grounded in 
reasoning tools that render the subject into a manipulable object that 
can be simulated, graphed, and spliced into separable equations. From a 
subject that could be understood through a few general, usually hidden 
laws, the economy, she argues, became an amalgamation of discrete, 
increasingly ornate, miniaturized models.

The work of Timothy Mitchell and others has already demonstrated that 
the economy is not a thing waiting out there to be measured by 
economists (or economic historians), but the result of a long historical 
struggle over warfare, empire, and welfare. Indeed, the idea of the 
calculable economy, like the offshoot capitalism, is a 
Johnny-come-lately, forged by national and international statecraft and 
polished only in the 20th century. Its origins extend at least as far 
back as William Petty’s attempt in 1665 to enumerate the incomes and 
expenditures of England and Wales, in preparation for war against the 
Netherlands. Petty anticipated the 20th-century quest for national 
accounting systems, which culminated in the invention of the statistical 
aggregate of gross domestic product in 1941, in the midst of another war.

The postwar world demonstrated that this intellectual history was 
inseparable from the manufacture of economic structures themselves. So 
much of the development-economics enterprise after 1945 was about 
creating an economy out of what was seen as a tapestry of loosely 
strung-together pre-market patches. This attitude saturated the World 
Bank’s catalog of "missions" (the evangelical tone is hard to miss) to 
the newly branded third world to forge a modern economy out of the 
fragments of "backwardness" and "inertia." Behind Rostow’s manifesto was 
a mental concept.

Now it is the economy that needs explaining. Economic concepts and tools 
appear less as a framework for analyzing history than the other way 
around. We might call this inverted relationship between the economy and 
history not economic history, but the history of economic life.

Rather than an economic history that takes for its object a timeless 
given, divorced from other domains of life, a history of economic life 
historicizes the economy itself, in part by attending to the fuzzy and 
shifting boundaries between the economic and noneconomic. Rather than 
confining our studies to market prices and production determined by 
assumptions about rationality, we can treat these activities across a 
variety of scales, from the intimate to the global, and through a 
variety of structures, from the contingent to the durable, and within a 
broader context of subjectivities and values.

The global dimension is crucial. The trajectories of the production of 
wealth and of social disparities were global long before capitalism; 
some might say they laid the groundwork for capitalism. The most recent 
and intense global turn has disrupted the history of capitalism in at 
least two ways. First, narratives about the triumph of the West now seem 
relics of a more confident era. That’s one reason Niall Ferguson’s 
recent Civilization: The West and the Rest (Penguin, 2011) struck many 
critics as, well, quaint. Seen over the long run, systems come and go; 
so do their geographic bearings.

Moreover, seen globally, the economy is the product of more than just 
the attributes of one particular place (the West) or time (the modern 
age). Recent and pipeline works will push historians of American 
capitalism to think in more global, transnational, and comparative 
terms, and to be mindful that what appear today to have been outdated, 
precapitalist formations—slavery, household economies, ennobled 
magnates—had essential places in the story and have not faded away so 
easily or tidily. In some cases, as anyone attentive to current social 
inequality can attest, they acquired a new lease on life.

The study of capitalism requires scope and imagination. It needs an 
economic history reconnected to the broad trunk of history and the 
humanities. Then, who knows—rather than historians imitating economists, 
perhaps we’ll see the reverse.

Jeremy Adelman is a professor of history and director of the Global 
History Lab at Princeton. His forthcoming book, Latin America: A Global 
History, will be published by Princeton University Press. Jonathan Levy 
is an associate professor of history at Princeton University and the 
author of the forthcoming book Ages of American Capitalism, to be 
published by Random House.

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