Is it professionally worthwhile–not just as a form of light intellectual entertainment–for a modern economist to read articles and books written long ago? Do old article contain within them the possibility of live insights for modern economists? Matthew McCaffrey, Joseph T. Salerno, and Carmen-Elena Dorobat make the case for an affirmative answer in “The History of Economic Thought as a Living Laboratory” Cambridge Journal of Economics, March 2025, pp. 235-253). They write:
We argue that the history of thought can be conceived as a living laboratory of economic theorising. It is living in that it is a vital and valuable part of economics rather than a dead branch of it. It is a laboratory in that it functions as a proving ground in which theories from many different times and contexts can be examined, compared, critiqued, combined and developed. In other words, history of thought can be conceived as a method of doing economics rather than an isolated or niche field within it. …
For example, Axel Leijonhufvud similarly conceived of economics as a vast decision tree with many branches, each of which can be traced back to earlier choices by economists in a sequence potentially centuries long (Leijonhufvud, 2006). This is consistent with our own approach in that it views modern economics (the topmost branches of the tree) as embodying and reflecting a rich, living history of past choices and paths not taken (the lower branches or bits of tree trunk). Our approach expands some elements of the tree metaphor. In particular, our view is that HET [history of economic thought] is the tree itself rather than one of its dead branches or forgotten roots: there is no arbitrary point at which a branch becomes historical and therefore separate from the rest. Even the most recent branches exist synchronously with older ones. The decision tree of economics is dynamic, and old or seemingly withered branches can grow healthily again even after years of neglect.
The authors trace the “laboratory” metaphor back to Frank A. Fetter (1863-1949), who wrote:
Something of worth to present thought is, therefore, often to be gained by a restudy of past opinions, even though the first result may seem to be merely to expose their error. Showing that a thing cannot be done in a way that looks promising is often a service of laboratory research second only in value to showing how it can be done. The history of economic thought is the experimental laboratory of economics, or as near to that enviable agency of the physical sciences as social students are able to come.
They quote from Joseph Schumpeter’s (1883-1950) magisterial History of Economic Analyis, published posthumously in 1954:
[O]ur minds are apt to derive new inspiration from the study of the history of science. Some do so more than others, but there are probably few that do not derive from it any benefit at all. A man’s mind must be indeed sluggish if, standing back from the work of his time and beholding the wide mountain ranges of past thought, he does not experience a widening of his own horizon… But, besides inspiration every one of us may glean lessons from the history of his science that are useful, even though sometimes discouraging. We learn about both the futility and the fertility of controversies; about detours, wasted efforts, and blind alleys; about spells of arrested growth, about our dependence on chance, about how not to do things, about leeways to make up for. We learn to understand why we are as far as we actually are and also why we are not further. And we learn what succeeds and how and why.
Mark Blaug (1927-2011) took the laboratory metaphor a step further in the final pages of his Economic Theory in Retrospect, using it to emphasise the need for humility in economics, and for acknowledging the inescapable influence of the history of ideas:
One justification for the study of the history of economics, but of course only one, is that it provides a more extensive ‘laboratory’ in which to acquire methodological humility about the actual accomplishments of economics. Furthermore, it is a laboratory that every economist carries with him, whether he is aware of it or not. When someone claims to explain the determination of wages without bringing in marginal productivity, or to measure capital in its own physical units, or to demonstrate the benefits of the Invisible Hand by purely objective [i.e., without resorting to subjective value judgments] criteria, the average economist reacts almost instinctively but it is an instinct acquired by the lingering echoes of the history of the subject.
As McCaffrey, Salerno, and Dorobat argue: “In this version, the laboratory functions as a way of keeping economists grounded and avoiding mistaken claims of originality or inflated assertions of significance. It is also noteworthy that Blaug describes the history of thought as a ‘more extensive’ laboratory, implying the existence of a less extensive version. That version most likely refers to contemporary theorising without the benefit of history. In other words, Blaug too is suggesting that the history of ideas provides a richer and more expansive range of knowledge and ‘tools’ for economists to use. It is a crucial part of the economic record that gives us far more material to work with when determining the successes and failures of economic theory.”
I’ve read more history of economic thought than a number of modern economists; indeed, back in graduate school I even ploughed through Schumpeter’s thoroughly intimidating 1000-plus pages of the History of Economic Analysis. My own revealed choices suggest that I find it worthwhile to read the work of dead economists. But of course, my own preferences are not dispositive.
On one side, it seems to me that in questions of economics, inspiration can come from many sources. For some, inspiration arrives in the act of writing down and spelling out a mathematical model. For others, it arrives in the form of observations about the world that don’t seem well-explained by standard theory. For others, it arrives a part of the effort to answer a real-world policy question. Among the many potential sources of inspiration, it’s not hard to imagine that for some people, reading the efforts of earlier economists trying to come to grips with an issue might touch off a spark of insight.
But time is the consummate scarce resource. If an economist is looking for inspiration and insight, is it more likely to be discovered by spending the marginal hour reading articles by dead economists or by live ones? The answer probably depends on an idiosyncratic mix of reader and topic. But there is an intermediate choice, which is to be willing, now and again, to dip into the writings by those who specialize in history of economic thought. Their work offers a pre-chewed and partially digested version of past writings, which in more than a few cases has pushed me to dig deeper.
One of my friends used to say that “I’ll think about history of economic thought when I’m doomed to repeat it.” In that spirit, I’ll point out that many modern policy nostrums have actually been the subject of considerable debate. The arguments and evidence on how price controls work, or don’t, goes back centuries, as do the arguments about the effects of tariffs. Arguments about specific applications of price controls, like rent control, or about specific applications of tariffs, like favoring cerain domestic industries for purposes of national economic development, go back decades. If, say, rent control was a useful and obvious method of providing affordable housing across a large metro area or a country, one might expect to find lots of examples in the history of economic thought explaining how well it worked, and why. For me, history of economic thought often is useful in teaching humility, because it’s often true that very smart people have thought deeply about similar questions in the past. There’s a centuries-old saying to the effect: “If I see further, it’s because I stand on the shoulders of giants.” A neglect of the history of thought is an apparent belief that it saves time not to stand on the shoulders of giants.
As an editor, I’ll offer one other thought: If you haven’t actually read the article or book by a dead economist, be very cautious about repeating a quotation that you saw or heard someplace. A random quotation might seem like just a bit of color to enliven dreary prose, but if the quotation does not actually capture the original argument, then for those who have read the original, it marks you as unreliable.
