WHAT IT MEANS TO BE AN HISTORIAN OF ECONOMIC IDEAS
August 18, 2001
What does it mean to be an historian of economic ideas? In this note, I try to answer this question by
defining the three specific terms in the definition. I define the first two terms -- "history," and "ideas"
-- by referring to the primitive notion of cause and effect. I argue first that the way that normal human
beings come to acquire this notion enables them to distinguish history from science. Then I show how
the same notion enables us to distinguish ideas according to whether they are or are not distinctly
human. The third definition -- "economic" -- is more arbitrary. I apply Ludwig von Mises's notion that
the aim of economics is to evaluate a specific class of ideologies. These are ideologies that advocate
the use of coercion to help provide what ordinary people regard as wealth. Because we have good
reason to believe that the use of coercion to establish the conditions of the market economy helps
provide wealth in this sense, the starting point is to understand why this is so.
1. History and Natural Science
Cause and Effect
The phrase "cause and effect" refers to the fundamental human experience from which the concepts of logic, reason, history, and ideas derive. To explain this statement, I must begin by making a distinction between two very different meanings of cause and effect that are common in everyday speech. The first is found in discussions about natural science. According to it, the aim of natural science is to find causes, the most fundamental cause being the cause of the universe. This way of describing what natural scientists do is misleading. The best scientists appear to approach natural science from a different perspective. They search for relationships, not causes or fundamental causes. They try to identify relationships among what are, to them, sense experiences. In this effort, they aim to bring into the realm of their comprehension an ever more inclusive set of sense experience. They ask: how is sense experience A related to sense experience B, C, etc.?
The second meaning of cause and effect is derived from the distinctly human experience of choice. A person causes a loud noise by choosing to clap his/her hands. Or he/she experiences what he/she regards as pleasure by choosing to recall a pleasurable moment from the past.
To see why the first meaning is misleading, we can refer to the experiences with cause and effect that we have in early childhood.(1) In early childhood, we experience cause and effect in two ways. First, after our physiological development gives us the maturity to link our behavior with our sense experience, we come to believe that our behavior causes the sense experience. For example, a baby comes to think that its kicking causes the sensation of sound as its foot strikes the side of a crib. Or, more accurately, after the more mature child acquires the ability to articulate its earlier experiences, it labels its experience "causing the sound by choosing to kick."
Second, again after our physiological development gives us a certain degree of maturity, we come to believe that our behavior causes other human beings like ourselves to act in a particular way. Consider the following example. At one stage in human development, the baby believes that its crying causes mom to come running in very much the same sense as its kicking causes the sensation of sound. However, at a later stage, the child becomes capable of distinguishing between (1) beings that behave in a way that is similar to what it knows intuitively about how it behaves and (2) beings that do not. There is, at first, some confusion over the position of animals and children who are smaller than ourselves. But eventually, we develop the ability to sort and classify along a continuum. We develop primitive theories of humanness and human development. At this stage, we are able to form a judgment of the following kind. We judge that like us, mom has the ability to cause us to come running with her choice.
As we reach this second stage, we come to distinguish three sources of changes in our sense experience: ourselves, other human beings, and non-human beings. For example, the mobile that swings above our bed at, say, age 1 may be set in motion by our touching it, by our mom touching it, or by the wind. It seems to us quite natural to assign the same term to the relationship between the wind and the mobile that we assign to the relationship between human choice and the mobile. However, it is precisely at this point that the foundation for our later confusion about the meaning of cause and effect begins.
It is essential in the discussion that follows that we keep these two ideas of cause and effect separate. I use the term cause to refer exclusively to the idea we associate with human action. Cause, in this usage, is relevant to natural science only by virtue of the fact that through one's action or imagination, one can cause a sense experience. In this usage, it is a mistake in language to say that the wind causes the mobile to sway or that changes in the solar wind cause a change in the weather.
History as the Antithesis of Natural Science
Our experiences in early childhood, as described above, naturally lead us to distinguish two general classes of phenomena: (1) distinctly human beings who can plan, judge, think, invent, and reason and (2) non-human phenomena that cannot. This distinction enables us to define HISTORY as the study of the first kind of phenomena. NATURAL SCIENCE is the study of the second kind.
Because these two kinds of phenomena are different, we must use different methods of studying them. When we study phenomena that are not distinctly human, we ask the question: How can we cause ourselves to feel particular physical sensations (to have particular sense experiences)? All of natural science, I think, can be described as the search for answers to the infinity of questions one might ask about how our actions might cause the various sense experiences we might have. Of course, human beings have the power of imagination. They can imagine having sense experiences and performing actions that are beyond their physical capacity to cause. This power enables them to construct a theoretical science of phenomena that they have never sensed and even that they may never have an opportunity to sense outside of their imagination. But the power of imagination does not alter the fact that the subject matter is the manipulation of objects with the aim of causing particular sense experience.
When we study phenomena that is distinctly human, we do something different. Once our developing minds acquire a clear distinction between human and non-human phenomena, we realize that not only is A able to cause B to act in a particular way, B is able to cause A to act in a particular way. The manifold variations of this realization are without limit. At age 10, when we cry, mom may laugh at us. Or she may cry. Assuming that our development has been normal, we know that she may be trying to influence our behavior or that she may merely be reacting with no such intention. Beyond this, she may be trying to teach us something without any specific idea of how it will influence or behavior in the future. Moreover, she may be aware that we are aware that her crying may fit into either of these classes. In other words, after we reach a particular stage of maturity, we come to recognize that when human beings interact, they may form judgments about the intentions and capacities of each other. When, as part of interaction, they plan; they try to take account of what they believe are the plans of others, including the possibility that the others are taking account of their plans. This interaction, based as it is on our fundamental knowledge -- i.e., on the knowledge that practically every normal human being acquires in learning to deal with their fellow human beings -- provides the basis for making a distinction between history and natural science. The natural scientist confines her study to the non-human causes of sense experience, like the effect of the wind on the mobile. The historian studies the human causes of sense experiences, like her own and her mom's effect on the mobile. At the most advanced stage of human development we know, she realizes the complexity of these causes and realizes that, to succeed, she must find a means of comprehending the intersubjective knowledge and plans of the people whose actions she claims causes the sense experiences. Such knowledge and plans have effects that can be sensed but they, themselves, are [in the present state of knowledge, at any rate] unobservable or even deliberately concealed from the view of the observer.
We define history as the study of sense experience that results from distinctly human interaction -- of i.e., choices to interact based on each actor's intersubjective knowledge and plan-making. It is true that the human body comprises, at one and the same time, (1) the mind that contains the intersubjective knowledge and the ability to plan and choose and (2) other behavior that the mind cannot control or that it finds difficult to control. All people have instincts and most have bad habits. In studying history, we cannot avoid also studying instincts, habits etc.; since the two are, in the present state of knowledge, inseparable. However, our focus is not on instincts or habits; it is on the distinctly human action.
I could go on to discuss the methods of studying distinctly human action and the necessary assumptions one must make to study history. Since an excellent discussion of this already exists, however, I shall move on. (See Ludwig von Mises, Theory and History, New Rochelle, New York: Arlington House, 1969.)
2. Distinctly Economic Ideas
The second step in this exercise is to define ideas. So far, I have described ideas about distinctly human phenomena and ideas about phenomena that are not distinctly human. The same childhood experiences that enable us to distinguish between the two types of phenomena also enable us to distinguish between ideas about those phenomena. I presume that the reader will allow me to take it for granted thateconomic ideas fall into the category of ideas about distinctly human phenomena. Given this, I doubt that anyone would disagree that when we study the history of economic ideas, our focus must be on ideas about intersubjective knowledge, plan making, and choice. In other words, we are interested in ideas about a form of distinctly human interaction that we call economic. The history of economic ideas, then, is at least concerned with ideas that distinctly human beings have about economic interaction among distinctly human beings.
The developing child has ideas about how its mother will respond if it chooses a particular action. At some stage in the development, it is able to recognize that its mother's response depends on its father's "mood." In other words, it forms ideas about the relationship between mother and father. These ideas become more intricate as brothers and sisters, neighbors, etc. are added. The child comes to make judgments about the knowledge, plan-making, and choices of all those who it believes are relevant to its own action.
Economic ideas fall into the broader class of ideas about human interaction. They are an extension of the developing child's ideas about its family, neighbors, and relevant others. The next step is to separate distinctly economic ideas from other ideas in this class. By so doing, we shall distinguish economic interaction from other, non-economic yet social, interaction. There are apparently a variety of ways to make the distinction. Scarcity is not, by itself, a sufficient distinguishing concept because scarcity is a defining characteristic of choice. Choice occurs in many contexts that we would not call "economic."
I believe that any choice to delineate one type of interaction from another must be arbitrary. Each actor is, in life, not only an "economic" actor. He acts and interacts along many dimensions. Although it would be worthwhile to try to describe these dimensions, I will not do so here. I will simply follow what I regard as a tradition in the history of economic thought of saying that "economic" means "under the conditions of the market economy." I define the latter to mean (1) private property rights, (2) specialization, and (3) the use of money. It is not necessary to be completely rigid here. Alternative definitions can be made. However, it is important to stick to whatever definitions we do make.
Let me give my reason for using this particular definition. It is that I believe that ordinary people (the average informed person, if you will) would like to live under these conditions yet he does not understand very well why he/she and his/her children are likely to be better off when these conditions are present than when they are not. I recognize that there are also many people who feel otherwise. But I also believe that logic and reason can show someone who has some experience with such conditions that the beliefs of the latter are wrong. Such people do not realize how much ordinary people would benefit from living under the conditions the market economy.
I aim to help the people in these two classes learn. So the ideas I study are those about distinctly human interaction under the conditions of the market economy. And the history of ideas that I define as economic are those that are concerned specifically with this kind of interaction.
Thus, for me, the history of economic ideas is the history of ideas about how normal human beings would act under the conditions of the market economy. This means it is about how human beings acquire and use intersubjective knowledge and about how they plan and choose in a market economy setting. By extension, since "private property rights" can never be complete and since resources must be used to establish and enforce them in any event; it includes ideas about how such individuals would act in the presence of market intervention (or under alternative specifications of property rights), including alternative monetary regimes.
It is important to realize that I am not claiming here that the market economy is superior to some alternative form of societal organization. My claim is more modest. It is that ideas about how the market economy contributes to what ordinary people regard as wealth are worthy of study and that the study of these is economics. This implies that the historian of economic ideas is someone who studies such ideas.
For those who object to this definition of economics, I have two demands: (1) that they present their own rival definition and (2) that they defend it by referring to ideas that make sense in terms of cause and effect, as I defined these terms above.
3. Are My Definitions Arbitrary?
I will readily admit that my definition of "economic" is arbitrary. One might want to define "economic" in some other way. However, my definitions of history and of the ideas that are relevant to economics are not arbitrary. I am not free to choose whether the ideas I study are ideas about distinctly human beings and their intersubjective knowledge, plans and choices. And I am not free to choose whether to study phenomena that are distinctly human or whether to study other phenomena. My intellectual foundation in cause and effect (i.e., "logic" or "reason") and my interest in history dictates that I study distinctly human beings and their interaction. My arbitrariness lies in the fact that if in my studies of the dead economists, I encounter ideas that mainly apply to phenomena that are not distinctly human or that are not about the market economy as I define it here, I will neglect them (unless I can myself connect them in a relevant and important way to phenomena that are distinctly human).
References to Piaget
Furth, Hans G., Piaget and Knowledge, Second Edition, Chicago, IL: University of Chicago Press, 1981.
Inhelder, Barbel and Harold Chipman, Piaget and His School: A Reader in Developmental Psychology, New York: Springer-Verlag, 1976.
Inhelder, Barbel and Jean Piaget, The Growth of Logical Thinking from Childhood to Adolescence, Basic Books, Inc., 1958.
Piaget, Jean, The Child's Conception of Physical Causality, New York: Harcourt, Brace and Company, 1930.
Piaget, Jean. 1932. The Moral Judgment of the Child. Glencoe, Illinois. Free Press.
Piaget, Jean, Logic and Psychology, New York: Basic Books, 1957.
Piaget, Jean, "Explanation in Psychology and Psychophysiological Parallelism," chapter 3 in Paul Fraisse and Jean Piaget (ed.), Experimental Psychology and Its Scope and Method, Volume I, History and Method, translated by Judith Chambers, London: Routledge and Kegan Paul, 1968.
Piaget, Jean, Insights and Illusions of Philosophy, translated by Wolfe Mays, New York: The World Publishing Company, 1971.
Piaget, Jean, Genetic Epistemology, translated by Eleanor Duckworth, New York: W. W. Norton & Company, 1971.
Piaget, Jean, Understanding Causality, New York: W. W. Norton & Company, 1974.
Piaget, Jean, Intelligence and Affectivity, translated and edited by T.A. Brown and C.G. Kaegi, Palo Alto, CA: Annual Reviews Inc., 1981.
Piaget, Jean, and Barbel Inhelder, The Growth of Logical Thinking, New York: Basic Books, 1958.
Copyright © 2001 by James Patrick Gunning
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J. Patrick Gunning
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U.S. Coast Guard Academy
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