How Economics Forgot History: The Problem of Historical Specificity in Social Science (Economics as Social Theory) [Paperback]

Geoffrey M Hodgson (Author)

Book Description

ISBN-10: 0415257174 | ISBN-13: 978-0415257176 | Publication Date: October 14, 2001 | Edition: 1

In arguably his most important book to date, Hodgson calls into question the tendency of economic method to try and explain all economic phenomena by using the same catch-all theories and dealing in universal truths. He argues that you need different theories to analyze different economic phenomena and systems and that historical context must be taken into account.

Hodgson argues that the German Historical School was key in laying the foundations for the work of the pioneer institutional economists, who themselves are gaining currency today; and that the growing interest in this school of thought is contributing to a more complete understanding of socio-economic theory.

Editorial Reviews

Review

Hodgson has done a great job...a fascinating tale...an exciting history...this book is greatly stimulating and I can highly recommend it to anyone interested in economic history and methodology-Julian Reiss, centre for Philsophy of Natural and Social Science, London School of Economics.
An outstanding book... fun to read, in part because Hodgson is both an excellent writer and scholar... This is a five text - clearly an excellent choice for individual reading and use in graduate courses in both history of thought and institutional economics..
–Journal of Economic Issues

About the Author

Geoffrey M. Hodgson is a Research Professor in Business Studies at the University of Hertfordshire. He has published widely in the academic journals and his previous books include Economics and Utopia (Routledge, 1999)

Product Details

• Paperback: 448 pages
• Publisher: Routledge; 1 edition (October 14, 2001)
• Language: English
• ISBN-10: 0415257174
• ISBN-13: 978-0415257176
• Product Dimensions: 9.1 x 6.1 x 1 inches
• Shipping Weight: 1.4 pounds (View shipping rates and policies)
• Average Customer Review: 3.7 out of 5 stars  See all reviews (3 customer reviews)
• Amazon Best Sellers Rank: #1,512,743 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

18 of 19 people found the following review helpful:

5.0 out of 5 stars Excellent Treatment of Historical Ideas in Economics, January 23, 2005

By 

Jon B. Thomas - See all my reviews
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This review is from: How Economics Forgot History: The Problem of Historical Specificity in Social Science (Economics as Social Theory) (Hardcover)

This is a very good historical overview of economic thinkers of the 19th and 20th century. The author appears to believe that modern neoclassical economics has veered into a hopeless cul-de-sac of elaborate mathematical formulations. The underlying theory concerning human behavior in the "market" is a vast over-simplification--without reference to historical specificity and human institutions. The traditional underlying philosophical assumptions of neo-classicist thought about "economic man" appear to be extraordinarily naive.

The author, however, is not calling for the total overthrow of all neoclassical thought. Rather, its integration into a fuller, more realistic, and accurate accounting of what is involved in "economics"--defined as human provisioning activities. He also wants a more scientifically based economics to more carefully consider the legacy of German historicism and American "old" institutionalism. And to integrate those historical insights into a more effective body of economic thought. He would also glean that which is valuable from the work of Karl Marx as well.

The author is not a purely empiricist economic historian that has no use for theory of any sort. Far from it. He elaborates in a very systemic fashion precisely what is necessary to compose a logically coherent system of economic thought. No truly meaningful economic work can really be done without reference to overlying theory--in the author's view. He also makes the point that any meaningful systemic thought about the human condition has to make reference to some metaphysical assumptions. It's impossible--in his eyes--to create a system of thought that stands entirely on its own deductive logic. Ultimately, all writers make appeals to their readers' own experiences or beliefs. I thought his powers of reasoning were quite impressive and saw no evidence of fallacious reasoning in his arguments.

I was introduced to the works of Thorstein Veblen as a young college student over 30 years ago. It's nice to see some restoration of his reputation. Veblen made the wealthy of his era--and their toadys--very uncomfortable with his iconoclasm. He was, however, a brilliant American original and is--even with the shortcomings the author points out--extremely worthy of resurrecting.

Hodgson's breadth of learning is quite impressive. I would wholeheartedly recommend buying the book except for the price. Hopefully, it will deflate to a more reasonable level.

1 of 1 people found the following review helpful:

5.0 out of 5 stars Explaining power of history in the classicals, May 3, 2010

By 

Moises V. Balestro (Brasília, Brazil) - See all my reviews
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This review is from: How Economics Forgot History: The Problem of Historical Specificity in Social Science (Economics as Social Theory) (Paperback)

Reminding the role of history and its explaining power is paramount to face up to the challenge of reinvigorating social sciences. This book by Geoffrey Hodgson accomplishes a two-fold task. One is bringing back the wealth of history and its explaining power to understand institutions. Another is revealing us the enormous potential from classical authors to understand contemporary capitalism. The author shows a brilliant erudition which encourage us to go further ahead in the reading of creative, insightful, but often forgotten classicals. The book is very helpful for those, like me, who are interested in economics as a social science, beyond reductionist approaches.

9 of 36 people found the following review helpful:

1.0 out of 5 stars Another example of the Antinomian Fallacy, July 21, 2004

By 

Michael Emmett Brady "mandmbrady" (Bellflower, California ,United States) - See all my reviews
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This review is from: How Economics Forgot History: The Problem of Historical Specificity in Social Science (Economics as Social Theory) (Paperback)

Hodgson(H)bases his entire argument on a version of the Antinomian fallacy(see D H Fischer's Historian's Fallacies,1970,Harper and Row,pp.94-97).This fallacy infects all of H's work on the interface between macroeconomics and institutions.Briefly,the antinomian fallacy argues that all events in history are unique.All inductive generalizations are false.It is impossible to learn from experience.Thus,no general theories are possible in the social sciences or liberal arts since institutions are constantly evolving over time during each specific historical period.H's version of the antinomian fallacy is that all periods of history are unique(specific).Period replaces event.This type of fallacious argument is endemic among "Cambridge Keynesians"(Joan Robinson,G L S Shackle,Tony Lawson,Geoffrey Hodgson,Victoria Chick,etc.)and American Post Keynesians(P. Davidson,D.Vickers,etc.).H incorrectly claims that Keynes's correct analysis showing that,due to technological change,advance and innovation over time,the study of the determinates of fixed investment in long lived ,physical ,durable capital goods is not homogeneous over time means that"...Keynes is inconsistent since this implies that economic theory must be related to historically specific material."(Hodgson,p.223)This simply does not follow,which explains why Keynes correctly ignored the historicists and institutionalists when it came time to write his General Theory in 1936.This is because the problem of investing in costly, fixed ,industry specific capital(factories,plant and equipment,etc.),which is irreversible and irrevocable once it is in place,has been a major decision problem since the dawn of history.The threat of technological obsolescence to the presently existing stock of capital by future innovations has occurred in the past and present and will occur in the future.Of course,there will be similarities and dissimilarities in different periods of history.Keynes has a general theory that explains why the private capital stock in every period of history will be suboptimal.It is suboptimal because investment is suboptimal in the private sector due to the uncertainty,ambiguity(D. Ellsberg's term)or lack of evidential weight(Keynes's term)of a sufficient amount of information upon which to plan such projects over a multiperiod future.This insufficiency then leads to involuntary unemployment.Of course,all this is far beyond the intellectual grasp of H.A similar conclusion applies to V.Chick,who H approvingly cites:"Chick's argument underlines the fact that the General Theory was not,in truth,a general theory(since) it applied to a historically specific set of capitalistic institutions".(p.224).Chick's fallacious statement is a very good example of the antinomian fallacy .