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:

0-691-09626-0.

Reviewed for EH.NET by Warren J. Samuels, Department of Economics, Michigan

State University.

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

so on.

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

fa?ade 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).