Classic Books. The Great Transformation by Karl Polanyi

Karl Paul Polanyi (1886 – 1964)  is known for his opposition to traditional economic thought and his book, The Great Transformation.  The Great Transformation was written in the interwar year…

Source: Classic Books. The Great Transformation by Karl Polanyi


New Economic History

-Todd Burst

This is economic history after the metaphysics of markets

There has been a resurgence in economic history, from the age of Empires to modern capitalism. Economic history got passed-over and neglected during the various turns since the 1970s — cultural, linguistic, new imperial, etc. Even after the fall of the Soviet Union and the ascendancy of neoliberal global capitalism, a majority of scholars showed little interest in economics. There are many reasons, too many to address here, but it is worth noting a general trend in the social sciences and humanities since the 1970s through the globalizing 90s to our post 2008 present. Economic history started out as a broad(er) field. Early economic historians, for instance, did not limit themselves to quantitative analysis of markets — or economics quo economics — instead economic  history was very much part of social history. But with the rise of cliometrics, economic historians closed ranks and followed methodologies peculiar to their filed of interests i.e. economics. Economic history, in other words, became a handmaiden of economics.

Over the past few decades and especially after 2008, scholars sought to integrate (or re-integrate) social and economic phenomena. New Institutional Economics provided scholars with a means of doing just that. NIE, for instance, seeks to integrate social, legal, and political factors (institutions) into the framework of economics, which classical economists previously ignored.

Daniel Ankarloo, in “New Institutional Economics and Economic History,” argues that instability and poor economic growth in “third world” countries and the former soviet bloc, reveals that capitalism, if left to its own devices, is not enough to make positive changes for these areas.[1] The market alone is not enough for development. Institutions, according to NIE advocates, play a significant role in economic growth and the building of capitalists’ societies.

The 2008 stock market debacle caught the public’s attention and lead to growing interests in the history of capitalism. The scholars of the “new history of capitalism” treat their subject as a dynamic force , which manifests throughout history in different forms. Capitalism, in other words, is not simply the consequence of an industrial revolution, instead slavery other factors — which were often seen as antithetical to capitalism — such as ‘mercantilism’ and slavery are viewed as being just as important to the development of global capitalism as markets, banking, and mortgage securities.

For historians writing about the early modern economy (or the economy in the 17th and 18th centuries) contemporary norms, virtues, cross-cultural exchanges and other factors have provided insight in the political economy of Empires. Historians Steve Pincus, Philip Stern, and Karl Wennerlind, have published works encouraging scholars to rethink and reimagine mercantilism.[2] Pincus suggests that mercantilism has been used as a blanket-term obscuring early political economic debates among diverse theories; while Stern and Wennerlind encourage scholars to take a contemporary approach to the early modern economy by resisting the urge to distinguish institutions (politics and the economy) anachronistically.

Another work on eighteenth century economics is Sheryllyne Haggerty’s ‘“Merely for Money”? Business Culture in the British Atlantic, 1750–1815’ (2013).[3] Her work addresses slave merchants and their non-economic motives for becoming merchants. She argues that British commercial culture ascribed a positive status to merchants, which they upheld by following certain norms — “risk, trust, reputation, and obligation.”

For historians involved in this surge of “new economic history,” the economy is treated as just one more human institution among many. This is economic history after the metaphysics of markets, common to both Marxists and Liberal thinkers, have lost their religious appeal.

[1] Ankarloo, Daniel. 2002. “New Institutional Economics and economic history – This article examines the contribution of New Institutional Economics (NIE) to the economic history of capitalism. In a conceptual critique the author argues that the attempt of NIE to become more realistic, historical and social in its approach does not indicate a progressive research programme, but rather the degeneration of the tools of neoclassical economics”.
[2] Stern, Philip J., and Carl Wennerlind. 2013. Mercantilism reimagined: political economy in early modern Britain and its empire.  Pincus S. 2012. “Forum rethinking mercantilism: Political economy, the british empire, and the atlantic world in the seventeenth and eighteenth centuries”. William and Mary Quarterly. 69 (1): 3-34
[3] Haggerty, Sheryllynne. 2012. Merely for Money?: Business Culture in the British Atlantic, 1750-1815. Liverpool: Liverpool University Press.