A major current of the discourse™ (of which, samples here, here and here) of economist twitter of late has been about whether academic economists do or should read the works of the great economists: Smith, Ricardo, Keynes, Marx, Hayek, Mill etc. I will refer to them as the dead white men.
Opinions range from the view that there is no advantage in reading these people if you have read a graduate textbook, to the view that anybody who has not read Marx cannot call themselves an economist. In my opinion, both of these extremes are silly. To some extent, it is a tautology that Mas-Colell, Whinston and Green cover modern microeconomic theory better than Ricardo. People do not read Ricardo because they want the answers to their micro prelim, but it should strike one as odd that economics is the only social science where a knowledge of its intellectual history is (often) positively sneered at. At the same time, the fact that there is so much informative policy work and theoretical development being done by academics who wouldn’t know the labour theory of value if it bit them suggests that reading the dead greats is not a pre-requisite for doing good research.
I am an economist. I understand that there is an opportunity cost to everything. I would never presume to tell anyone that they should drop Mostly Harmless and pick up Das Kaptial. All I want to do in this blog post is give 5 reasons why reading the dead white men can sometimes be helpful.
1. They contextualise the current paradigm
In the past, people thought very differently. Knowing exactly which ways they thought differently is vital to understanding the contribution to human understanding we are making today, and perhaps spotting our blind spots.
For example, people think Adam Smith was a hard-headed proponent of selfishness. This is because they have only read the Wealth of nations (or more accurately, they have read two quotes from the wealth of nations copied out at the start of chapters in a principles textbook). The truth is much more complex. Smith thought that there were many motives for human behaviour, of which profit was one. He has a whole book, Theory of Moral Sentiment on how people are motivated by altruism, and how this is partly innate but also cultivated by society.
This should interest economists. The idea that one can explain the behaviour of the economy primarily with reference to markets, taking existing preferences as given, is a historically aberration. Depending on your perspective, Smith would either have been impressed at the explanatory power of our models or would have thought we were crazy for neglecting huge aspects of human nature in our theories. Economic models are either hugely impressive or miss the point (or a bit of both). But unless we can see how unusual our current understanding of the economy is, it is likely we would not even notice this.
2. To train our economic thinking
Why does every undergrad real analysis class start with a proof of De Morgan’s laws? Because thinking like a mathematician does not come naturally and so we need to practise. It’s good to start to past problems that we know the answer to. It sharpens the mind.
Economics is slightly different. It is only (relatively) recently that we have discovered real facts about human behaviour can be ascertained using mathematical proofs from abstract principles. This, however, only increases the value of reading the greats.
A good economics paper, as my supervisor tells me, is a story. Well then the dead white men were poets. They had to be, because they didn’t have the maths. Take Ricardo’s An Essay on the Influence of a low Price of Corn on the Profits of Stock. It utilises all of the concepts a graduate micro class would be comfortable with: the law of one price, diminishing returns, marginal pricing. But there is not an equation to be seen. Ricardo leans entirely on his ability to exposit these concepts and their implications with words. Following along is a great exercise in developing one’s intuition. And if we are to learn to think like economists, we might as well learn from the best.
3. Sometimes they were wrong
The dead white men were often wrong, and sometimes, the reasons why they were wrong are informative.
I made exactly this argument at the political economy club this summer. Thomas Malthus thought we were doomed. He thought there was no way that growth in agricultural production could keep pace with population growth in the long run. Humanity was doomed to regular famines. He was dead wrong. He totally failed to appreciate how industrialisation would change incentives for fertility, and human ingenuity would change the technological constraints economies faced.
This is a lesson for us today! Whenever we are faced with technological possibilities we think are restrictive and model social behaviour as if it is stable, it is informative to know that the economists who came before us who made the same assumptions were wrong in a big way.
4. Just maybe, sometimes they were right
Historians of thought debate whether “progress” is a real concept. For those on the more optimistic end of the spectrum (myself included) it is sobering to think that attitudes to homosexuality were more tolerant in ancient Greece than for most of the twentieth century in the US and Europe, and that attitudes to torture and chemical weapons have taken a severe retrograde step in the twenty-first century. For a better argument from a more qualified person, see John Gray. Science, as Thomas Kuhn has taught us, is similarly non-linear in its progression.
All this points towards the possibility that much of what we currently do in economics is wrong. By its nature we cannot know which parts. But when our current paradigm collapses, it may be useful to know a little of our intellectual history to know where to go from here.
This has happened before. Classical economics, with its emphasis on market clearance, seemed implausible to the befuddled civil servants of the 1930s, and gave way to Keynesian economics. Imagine if the history of economic thought had been similarly neglected during this period. Imagine if macroeconomists had not only stopped using market clearing mechanisms to explain the movement of interest rates and unemployment, but also had stopped learning about the history of doing so. Would the rational choice revolution have happened in the same way, as the Keynesian consensus collapsed?
The point is, that even good science goes down dead ends for decades. Forgetting how you got there can make it harder to reverse out.
5. You’re not going to stop referring to them
At the end of the day, like it or not, economists cannot help referring to the dead white men. Often this takes the form of using Hume to motivate the Phillips curve, or Smith to talk about collusion in “smoke-filled rooms”. Our intellectual history pervades our textbooks, whether this is in “Ricardian” trade models, or the so-called “Keynesian” consumption function (which never appears in the General Theory).
And then, just occasionally, somebody says something like, “Marx didn’t use data”, “Keynes invented ISLM”, or “Economists used to believe in a stable Phillips curve”.(1)
If you’re not going to stop referring to them, you might as well get it right.
(1) On this point, see Maroeconomics and the Phillips Curve Myth by James Forder