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The Ordinary Business of Life: A History of Economics from the Ancient World to the Twenty-First Century
Published by EH.NET (August 2002)
Roger E. Backhouse, The Ordinary Business of Life: A History of Economics
from the Ancient World to the Twenty-First Century. Princeton, NJ:
Princeton University Press, 2002. x + 369 pp. $35.00 (hardcover), ISBN:
Reviewed for EH.NET by Warren J. Samuels, Department of Economics, Michigan
Roger Backhouse, who holds a chair in the History and Philosophy of Economics
at the University of Birmingham, is a leading, indeed virtuoso, historian of
economic thought. He has written three different histories of economic thought.
His A History of Modern Economic Analysis (New York: Basil Blackwell,
1985) focused on the history of economic theory, centering on the theories of
value and price. Theory exists somewhat in its own ethereal world. Backhouse's
Economists and the Economy: The Evolution of Economic Ideas, 1600 to the
Present Day (New York: Basil Blackwell, 1988) presented the context in
which economic theory developed along with the development of theory itself.
The context consisted of economic history, political economy and the history of
economic ideas. Theory, while not necessarily directly generated by context,
was closely related. Backhouse's The Ordinary Business of Life has a
differently designed combination: the economic-history context, so long as it
was important, then increasingly the development of economic theory as a
separate discipline. The title conveys the message, using Alfred Marshall's
definition of economics rather than Lionel Robbins's definition ostensibly
limiting economics to the analytics of pure resource allocation. (I say
"ostensibly" because it is the rare historian of economic thought who can
remain so narrow.) The intended reader is not the doctoral candidate seeking
deeper mastery of economic theory -- who has the textbooks of Mark Blaug or
Ingrid Rima, for example, for such purpose -- but the advanced undergraduate
and lay reader. The book also appears in the Penguin series.
Such a trio comports with a variety of conceptions of the discipline and its
history. It also gives effect to the Post Modernist view that different stories
can be told about the same putative subject -- though, of course, the subject
changes with the story (even this point Backhouse holds at arm's length; see p.
328). That Backhouse can author three such different accounts attests to his
skill and versatility, his non-dogmatic view of the history of economic
thought, and that while he is not wedded to Post Modernism he does go part way
with it. Not many historians of economic thought have the combined knowledge of
economic history, intellectual history and economic theory that Backhouse
offers to the world.
The historical coverage by chapter reflects the design strategy. The sequence
is as follows, after a Prologue: The Ancient World, The Middle Ages, The
Emergence of the Modern World View -- the Sixteenth Century; Science, Politics
and Trade in Seventeenth-Century England; Absolutism and Enlightenment in
Eighteenth-Century France; and The Scottish Enlightenment of the Eighteenth
Century. Through chapter 6 on the Scottish Enlightenment (including Adam
Smith), the emphasis is clearly on political, social, and broad intellectual
developments. Thereafter, the focus is on the development of economic theory,
almost as if the foregoing types of development were suspended, though the
message may instead be that modern economics is an emanation of the modern
(Western) economy and not the pure, a-institutional science its practitioners
tend to claim: Classical Political Economy, 1790-1870; The Split between
History and Theory in Europe, 1879-1914; The Rise of American Economics,
1870-1939; Money and the Business Cycle, 1898-1939; Econometrics and
Mathematical Economics, 1930 to the Present; Welfare Economics and Socialism,
1870 to the Present; Economists and Policy, 1939 to the Present; and Expanding
the Discipline, 1960 to the Present; concluding with an unnumbered epilogue,
"Economists and Their History."
Readers of this review may be particularly interested in Backhouse's treatment,
in Chapter 3, of the emergence of the modern worldview; and the split between
history and theory (Chapter 8). They may fault Backhouse for neglecting
economic thought in other cultures (if only to explore how culture-laden is
Western economics, just as one might study how theory-laden are facts); for not
being more critical; for neglecting American economic thought before 1870; and
Backhouse, to his credit, however, emphasizes the inevitable selectivity and
thereby limited coverage of his or anyone's story of the history of economic
thought. He also warns the reader of the danger of presentism, of treating
"past writers as though they were modern academic economists" (p. 3), while
insisting that we inevitably view the past through the lens of the present and
proposing that we identify and state our "preconceptions as explicitly as
possible" (p. 7). He emphasizes that different generations ask different
questions, "perhaps even questions we find it hard to understand," such that
the question of "progress" in economics is problematic (p. 8).
Notwithstanding these and perhaps other Post Modernist ideas, the domain
treated in this and Backhouse's other books is rather conventional. Not
surprisingly, the story turns from externalist to internalist: "As economics
developed ... into an academic subject, the problems economists tackled were
increasingly ones that arose within the discipline." Thus, "Given that my main
aim is to explain how the discipline reached its present state, developments
within its theoretical 'core' are clearly prominent" (p. 9). A critic might ask
how economic thought reached its (parlous) present state.
Backhouse thus increasingly narrows his domain as academic economists did
likewise; academic practice thus eclipses the other elements of the story.
Actually, therefore, Backhouse, like many other historians of economic thought,
tells two stories: the story of economic thought broadly considered and the
story of the technical ideas of a narrowly focused academic discipline. But he
alerts the reader that those "developments within its theoretical core ... are
not the whole story" (p. 9). If Backhouse had included something of the broader
work of, say, Vilfredo Pareto and Friedrich von Hayek, or Kenneth Boulding and
Herbert Simon, as he does with Smith, a different story might have been told.
Perhaps that is the design for a fourth book!
Part of the story Backhouse tells as follows: Histories that glowingly tell of
the technical progress of economics "conceal as much as they reveal. Behind the
façade of increased mathematical rigour and precision lie fundamental changes
in the meanings that have been attached to central conceptions and in the ways
in which economists have understood what they were doing" (p. 327). If
Backhouse can successfully convey to his reader an appreciation of some of the
linguistic problems in economics (and elsewhere), he will have raised the level
of historiographical understanding in practice. (See Warren J. Samuels, "Some
Problems in the Use of Language in Economics," Review of Political
Economy, Vol. 13, no. 1 (2001), pp. 91-100.) His other field is
methodology, and he is very good at it, too.
Warren Samuels is the author of numerous books and articles in the history of
economic thought and was named Distinguished Fellow of the History of Economics
Society in 1997. Among his recent books is Historians of Economics and
Economic Thought: The Construction of Disciplinary Memory, edited with
Steven Medema (Routledge, 2001).