ECONOMIC HISTORY AND THE HISTORY OF CAPITALISM

By Johnny Fulfer

THE NEW HISTORY OF CAPITALISM

The study of economic history emerged as an important area of inquiry after the Great Depression, when scholars began to examine the market system and the ways in which it emerged as a dominant economic system in Western society. Economic history remained primarily within economic departments until the early 2000s, when historians began to reconsider the nature of capitalism, a new field that examines the political nature of the markets system. “Its effort is to find new ways of exploring how institutions, political movements, and legal formations like debt, contract, and property come into being and inflect material and ideological life,” as historians Sven Beckert and Christine Desan write in their 2018 book, American Capitalism: New Histories.

Historians of the new history of capitalism have produced a wide range of scholarship, such as Walter Johnson’s 2013 book River of Dark Dreams: Slavery and Empire in the Cotton Kingdom and Edward Baptist’s 2014 book The Half Has Never Been Told: Slavery and the Making of American Capitalism that examine the role of slavery and the enduring legacy of racism in American capitalism. Still, historians face significant barriers in their effort to examine the American economy and the ways in which it has been influenced and legitimized by neoclassical economics, a highly mathematical field that has come to be associated with science.

THE NEW ECONOMIC HISTORY

In their essay, “The Fall and Rise of Economic History,” historians Jeremy Adelman and Jonathan Levy explain that economic history has become so technical that many historians that cannot engage with much of the literature. Historians study the social, intellectual, and political histories of democracy, while the study of economic history “has been treated as a realm apart.” The key characteristics of the “new economic history,” which gained influence in the 1960s, were the inclination toward numbers rather than narratives, the isolation of variables, and the dependence upon the narrow methodology of neoclassical economics—the dominant school of thought within economics departments. Economists take a quantitative perspective in examining economic history, often producing histories that are linear and universal.

Economist Eric Hilt offers a critique of the new history of capitalism in his recent essay, “Economic History, Historical Analysis, and the ‘New’ History of Capitalism.” Hilt examines ten books that are associated with the new history of capitalism, such as Kim Phillips-Fein’s 2010 book Invisible Hands: The Businessmen’s Crusade Against the New Deal, Lois Hyman’s 2011 book Debtor Nation: The History of America in Red Ink, Richard White’s 2011 book Railroaded: The Transcontinentals and the Making of Modern America, and Sven Beckert’s 2014 book Empire of Cotton: A Global Historyamong others. Using these ten books as a representation for the new history capitalism, Hilt argues that historians “have unwittingly revived debates that were resolved long ago.”

DIVERGENCE IN APPROACH

Hilt’s analysis takes a universalist tone that views historical interpretation as either right or wrong. Who should be the one that determines what counts as ‘correct’ and ‘incorrect’ history, or what counts as a ‘legitimate’ interpretation? There must be room for additional perspectives that consider the “ways in which the market and the state interact,” as historian Sven Beckert argues, and “how this interaction is influenced by the shifting power relations of various social groups, and how the rules of exchange are set politically.” Considering how the rules of the market system are produced, who they are produced by, and how they are sustained, is problematic for those who view history as linear progress, which involves a narrow perspective.

One of the primary issues here is the divergence in approach between the historian and economist. Some economic historians view historical experience through a lens of linear progress, while historians view history as a narrative, which is subject to the ideological predispositions of whomever writes it. It is a continual discussion that can be debated and rewritten over time. For the historian, it is essential that historical debates previously thought ‘resolved’ are continually reconsidered from other perspectives, who may have a different, but no less legitimate view. While the economist places greater value on data driven analyses more than the historical narrative, it is important to consider the notion that each yields its own reality.

By Johnny Fulfer

2 comments

  1. Steve Campbell

    I am glad to see this website up and running. It has been one of my goals in writing and publishing to try to explain economic concepts to other historians. How many historians can talk intelligibly about the causes of the Great Depression or the weaknesses of the gold standard and why no reputable economist wants to return to it? I also enjoyed Hilt’s essay by the way.

    Reply

  2. wawijewardena1

    History is how we interpret things that have happened in the past in terms of our own ethos, moral sense and logic of argument. Hence, it should differ from time to time depending on what we believe. History should therefore be looked at as a phenomenon that changes all the time. As the new scholars in history, quoted in the article, have found, what had been told in the past as history has now changed.

    But be warned: that is not the ultimate truth; it can also be changed when new ethos is established by society!

    Reply

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