Recent advances and trends
We now consider the influence of the history of Scottish economic thought on the development of modern economics. We will see that this influence has been coloured by the way in which Scottish ideas were interpreted, in terms of the Scottish approach, or in terms of alternative approaches.
As the impetus for theoretical development shifted away from Scotland during the nineteenth century, the emergence of new ideas from Scotland diminished. Instead we saw a consolidation of applied economics using the Scottish approach, where applied economics continues to be misunderstood in the wider discipline as something distinct from theoretical economics. It is, in fact, the philosophical and methodological approach to economics of the Scottish enlightenment, rather than particular theoretical ideas, which arguably has the most potential to contribute to modern debate. Yet this rich resource has largely gone unrecognised.
From the 1960s a range of different views have emerged about economics as a discipline, much of it in reaction to the growing dominance of the objectivist, deductivist mathematical approach, but in general without reference to Scottish economic thought. Kuhn promoted a view of the history of science in terms of successive paradigms, each with their own approach, none of which could be demonstrated as best. Skinner (1979) pointed out the way in which the Scottish enlightenment had laid the foundations for such an approach. The rhetoric approach revived interest in the persuasive element of the presentation of theories which Smith (1762—3) had pioneered. Further, while critical realist theory has been presented in opposition to Scottish enlightenment ideas, Dow (2002b) shows that Hume in fact provides a rich foundation for critical realist argument. More generally the approach taken in much of heterodox economics could benefit from more explicit recourse to Scottish enlightenment thought (Dow, 2009b).