Frederic Bastiat once wrote that we should never tear an artful critique of our position but always fear an inept defense. It is our responsibility to be the best scholars and teachers of classical liberal political economy that we can be--to think, speak, and write clearly and to tackle tough questions to take on, in the most rigorous and sophisticated way possible, the popular fallacies of our age that tend to cut against the argument for a society of free and responsible individuals.
With this task in mind, I want to examine the dilemma of our day in carrying out that task. There is, I contend, an intellectual crisis in both the fields of intellectual history and the discipline of history more generally. It is a crisis regarding the status of truth seeking in these disciplines. A new generation of critical theorists seek to poke holes in the history of economic theory and liberal political economy and to demonstrate the inherent inefficiency, instability, and immorality of the capitalist system. I argue that economic approaches that are not rooted in the Misesian and Hayekian economic way of thinking are decidedly ill equipped to face these new challenges. They instead lead to the abandoning of the disciplines of history and intellectual history. If we economists abandon history--in both senses--we leave our past to the kindness of our enemies. (1) This is an extremely vulnerable position to find ourselves.
What is truth in the social sciences and humanities? During the 1970s and 1980s, as the positivist philosophical program came under increasing scrutiny, among the postpositivist positions articulated was postmodernism, and among postmodernists were critical theorists and deconstructivists. It is one thing to claim that social scientists cannot hermetically seal themselves off from ethical values and various biases to pursue purely objective analysis, but it is quite another thing to claim that this means that the entire enterprise of "objective" analysis is a sham. To say knowledge of the social world--and knowledge of our efforts to understand the social world--is embedded in an intricate matrix of values, social meanings, and contextualization does not imply that there are no basic facts of the situation or that there are no ways to adjudicate between competing explanations or theoretical frameworks. Of course, facts do not speak for themselves, and thus all knowledge of the social world demands contextualization and recognition of its social construction. But not all interpretations of events are equally grounded, and not all arguments are equally valid. Progress in the social sciences and humanities can be made.
Most economists are trained to avoid such murky epistemological waters. But even in their practice they don't. Rather, they just avoid recognizing that they are drowning in them. The claim that if something is important we must measure it bleeds too quickly into the claim that whatever we can measure, we should say is important. It is not! Now is not the time to discuss in any detail the various shortcomings of the empirical project in the social sciences except to note that the substitution of sophisticated statistical analysis for more narrative history does not solve the problems that have plagued social science and history since their very beginning. The only way to "solve" these problems is to recognize them and to embrace multiple forms of evidence and multiple methods of analysis. However, many economic historians argue that this is precisely not the way to solve these problems. They instead insist we must simply count, count correctly and thoroughly. Let me be clear that nobody should be against counting. In fact, counting can fix much confusion in social sciences and history. When Friedrich Hayek edited Capitalism and the Historians (1954), basic counting was used to challenge the prevailing opinions about the immiseration of the working class during the Industrial Revolution. And more recently Deirdre McCloskey's (2006, 2010, 2016) history of the Great Enrichment stresses that you cannot answer empirical questions philosophically. She insists we have to count when doing responsible history. But she is still doing history.
In a recent paper, Robert Margo (2017) explores the place of economic historians within the economics profession over the past generation. He finds that economic historians looked in their work more and more like economists and less like historians. In other words, if you pick up an article in the Journal of Economic History and compare it to an article in the Journal of Political Economy, what do you see in terms of words, formulas, tables, and charts? By Margo's measure, over the past twenty years the form and substance of articles in the Journal of Economic History and the Journal of Political Economy have become increasingly indistinguishable from each other. Economists count, and economic historians count; the latter don't read as much as they once did, they don't contextualize as was once expected, and they certainly don't look for meanings associated with the human condition historically contemplated. Economic historians in essence have ceded history to the historians; they do economics but by counting and calculating with data from the deeper past rather than from the more recent past or present. But let's not get confused. These economic historians are economists, and thus they approach their research in the same way and produce results that look the same as their fellow economists. Margo argues that...