In a syndicated op-ed published in the Sydney Morning Herald, Matthew Lynn asked “Who are the winners and losers from the recession?”
“Historians,” Lynn concludes, “have triumphed over economists.” Economists didn’t foresee the financial crisis, couldn’t explain it, and couldn’t offer any solutions. People have “turned to lessons of history” because economics has “disappeared up a mathematical dead end.”
Laughed? I almost cried.
I was one of the last graduates of the Economic History Department at Sydney University — before it was abolished in the early 2000s. While my sentimental attachment to the obsolete discipline remains strong, many undergraduates have had no opportunity to grapple with essential concepts in economic history.
Where would today’s students find lessons in economic history? That’s not a simple question given the decline of the discipline.
“Investment banks,” Lynn suggests, “will be building small, dusty libraries in the basement.”
So what economic history readings would be in that library? Here are some of my suggestions…
Lynn suggests Niall Ferguson, who writes on financial history (see, for instance, “‘Chimerica’ and the Global Asset Market Boom” from 2007).
Lessons might also be drawn from the 1997 Asian Financial Crisis. A 1994 fore-warning penned by Paul Krugman (“The myth of Asia’s miracle”) opened with a history lesson on the 1989 demise of the USSR.
And then, of course, there are the classics. The labor historian Eric Hobsbawm produced a wonderful series of highly accessible historical overviews including The age of extremes which includes a good dose of the broader social context.
There are many more notable contributions from economic historians — certainly too many to mention here. I have included but a few readings in economic history pertinent to the current financial crisis.
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ON THE GREAT ECONOMIC UPHEAVALS
Bruner, Robert F. and Sean D. Carr. ‘Lessons from the Financial Crisis of 1907,’ Journal of Applied Corporate Finance 19, no. 4 (2007), pp. 115-124.
Chalongphob, Sussangkarn and Vichyanond Pakorn. ‘Ten Years after the Financial Crisis in Thailand: What Has Been Learned or Not Learned?‘ Asian Economic Policy Review 2, no. 1 (2007), pp. 100-118.
Crafts, Nicholas. ‘Asia’s Miracle: They Think It’s All over – It Need Not Be Yet,’ Economic Outlook 23, no. 1 (1998), pp. 11-21.
Ferguson, Niall and Schularick Moritz. ‘‘Chimerica’ and the Global Asset Market Boom,’ International Finance 10, no. 3 (2007), pp. 215-239.**
Haggard, Stephan. ‘Governance and Growth: Lessons from the Asian Economic Crisis,’ Asian-Pacific Economic Literature 13, no. 2 (1999), pp. 30-42.
Rosenberg, Hans. ‘Political and Social Consequences of the Great Depression of 1873-1896 in Central Europe,’ The Economic History Review 13, no. 1/2 (1943), pp. 58-73.
Rostow, Walt. ‘Investment and the Great Depression,’ The Economic History Review 8, no. 2 (1938), pp. 136-158.
WILEY BOOKS ON ECONOMIC HISTORY
Bruner, Robert F. and Markus Holzinger, The Panic of 1907: Lessons Learned from the Market’s Perfect Storm (Hoboken, N.J., 2007).
Geisst, Charles R., Wheels of Fortune: The History of Speculation from Scandal to Respectability (Hoboken, N.J., 2002).
Homer, Sidney and Richard Eugene Sylla, A History of Interest Rates (Hoboken, N.J., 4th edn, 2005).
King, Thomas A., More Than a Numbers Game: A Brief History of Accounting (Hoboken, NJ, 2006).
October 24, 2009 at 9:47 pm
The movement from the dead-end mathematical (neoclassical) economics to a more balanced economics education that compares the various forms of economic thought would be a positive outcome from the GFC. Many students in economics only receive the neoclassical world view without being made aware this or of alternatives. The website “Toxic textbooks” provides a venue for action to change economics education in universities: http://www.toxictextbooks.com