Historical Economics in England
In conventional accounts of English historical economics two distinct stages may be discerned. In the first, between roughly 1870 and 1885, various individuals raised a protest against orthodox economic theory by way of an appeal to history.
Then, from around 1885 through to the early years of the twentieth century, historical economists became bound up, first in a battle over the professionalisation of economics, and then in the national political debate over tariff reform (becoming, as one historian has put it, “the house intellectuals of the Edwardian Conservative party”; Green 1996: 183). Both the political and academic battles are deemed to have ended in defeat. The victor on the academic front was Alfred Marshall, who is said to have established university economics as a neoclassical science in which economic theory retained its old deductive methodology albeit in a new marginal guise. Effectively retiring from the academic fray and resigning any claim to the economic crown, the historical economists now settled down as economic historians.The discussion that follows demonstrates the various ways in which this conventional account is not tenable. One problem that immediately presents itself is that many of the strands that are told of the second stage bear only an accidental or contingent relationship to historical thought. Edwardian arguments over tariff reform, for example, might have divided economists into two camps, but there was nothing inherently historical in the idea of increased state intervention in the interest of national or imperial preference. The grounds for including such arguments as part of an “English Methodenstreit” (Koot 1988: 4) are sociological rather than intellectual, relating, that is, to a contingent distribution of opinions among academic factions as opposed to anything inherently historical about those opinions themselves.
A more unsettling problem concerns the place of Alfred Marshall in the conventional narrative. Marshall usually appears only in the second stage, a star actor in the story of professionalisation, playing the role of hero or villain according to the sympathies of the audience. So cast as the leader of the new theoretical economics, Marshall is the arch-enemy of the historians who plays what proves to be a winning strategy of “conciliation without concessions” (Maloney 1976: 440). In so representing Marshall as the founder of a modern deductive and ahistorical neoclassical economics, students of historical economics have of course but reflected what, until very recently, has been the general consensus about Marshall held by historians of economics. Nevertheless, and as demonstrated below, Marshall, no less than (say) T.E. Cliffe Leslie or Arnold Toynbee, warrants inclusion among that handful of individuals who, in the 1870s, engaged with the historicist challenge to current economic orthodoxy.
Bringing to light Marshall’s place in the first stage of English historical economics undermines further the coherency of the standard account of the second stage. For once we recognise that Marshall’s own contributions to theoretical economics arose at least to some degree by way of his early encounter with historical thought, and that his conciliatory statements on method were more than mere rhetoric, then the standard binary framework that structures conventional interpretations of the “English Methodenstreit” falls apart. This is not to deny the reality of both academic and political controversy in the three decades after 1885; but it is to raise seemingly terminal doubts as to the value of interpreting such arguments within a single framework itself reducible to some profound clash between historicist and theoretical paradigms.
In what follows our primary concern is to illuminate the first stage of English historical economics, laying particular emphasis upon the place of the younger Marshall in the key intellectual developments. The conclusion to which we are led is that the intellectual momentum behind the drive to create a genuinely historical economics was pretty much spent in England by around 1890. If this conclusion is accepted, then it follows that, whatever the sound and fury generated by historically minded economists (or economically minded historians) after this date, its significance for historical thought was very limited, and that nothing warranting identification as a Methodenstreit ever occurred.