Research in the History of Economic Thought and Methodology: A Research Annual: Volume 30 Part 1

Warren J. Samuels, who died on August 17, 2011 at his home in Gainesville, Florida, was the founding editor of Research in the History of Economic Thought and Methodology. The current editors had planned to include a note regarding Samuels’ initiation of the research annual in the first volume that did not include his name among the editors on the masthead. Unfortunately, that volume is also the one in which we must memorialize him. The history of economics community has lost one of its leaders; the editors of this research annual have lost the sure hand of their mentor and guide.

Major concern over monopolies and trusts was one of the distinguishing marks of the American Economic Association from its foundation and lasted well into the early 1900s (Coats, 1960). The failed merger attempt of the Northern Securities Company and the subsequent panic of 1902–1903, the 1907 financial crisis and its aftermath, as well as the ostensibly illegal financial practices of many conglomerates, all contributed to keep the trusts issue alive on academic circles. But it was only after the 1911 Court decisions that the debate on the trust problem and the necessary measures to amend the existing antitrust legislation acquired new vigor and incisiveness.³

There are the interesting words of Myrdal in respect of the universality and commonness of what a scientific problem means:From then on more definitely I came to see that in reality there are no economic, sociological, psychological problems, but just problems and they are all mixed and composite. In research the only permissible demarcation is between relevant and irrelevant conditions. The problems are regularly also political and have moreover to be seen in historical perspective. (Myrdal, 1979, p. 106)

Choudhury claims to have developed a distinct methodology based on specific Islamic principles. This methodology, if adopted, will transform the worldview of socioeconomic inquiry, alter the assumptions of economic theory, and transform policy recommendations and implications. The Islamic principle at the center of this methodology is the concept of Tawhid (unity of God). In addition to defining it properly, he is correct to use the concept as the starting block for a distinctive Islamic methodology, as it represents the foundation of Islamic doctrine. In other words, any purported Islamic methodology that does not encompass within its foundation the concept of Tawhid will hardly qualify to be characterized as Islamic. The critical question then is how to apply the concept in the context of socio-scientific inquiry.

The section in the main paper entitled, “What is the Idea of the Worldview of Epistemic Oneness versus the Contrasting Socio-Scientific Paradigm?” elaborate on the nature of the worldview. A comparative study of the theme is included.

Samuels always saw the history of economics as intellectual history (Samuels, 1974). The history of economics could not be confined to a record of doctrines economists have advanced, particularly as found in a handful of key written texts, since these doctrines had to be understood in their historical context along with many other types of historical evidence and materials. That is, economic doctrines do not stand on their own, however plausible and well-argued they may appear to be, but have their meaning and credibility according to how well they along with many other historical materials speak to the issues of their time. While this seems an obvious and correct point to make about how to understand the history of economics, Samuels argued that it turns out to be more far-reaching than it initially appears when one considers the character of the world which economic doctrines must somehow explain together with the problem of representation.First, social reality is itself heterogeneous and ambiguous … [which] permits a complex and heterogeneous body of knowledge thereof. Second, our modes of intellectualizing and interpreting social reality are complex and heterogeneous: there are diverse epistemological credentials, diverse modes of thought, and diverse systems of rationality. (Samuels, 1974, p. 306)

Like language, the law is an instrument – a tool – for the accomplishment of certain purposes. The idealized understanding insisted that the law is, if not divinely inspired, the empirical manifestation of received wisdom and truth. On this view the law is crafted to produce ideal outcomes. Richard Posner once insisted that the law was purposefully crafted to achieve economic efficiency (1973).¹ Warren Samuels reminded us that the law is an instrument to get one's way. The interesting question, therefore, concerns who is able to control this valuable instrument? Sometimes good and noble people wield the tool. At other times nefarious forces prevail. Samuels presented his vision of the law by means of a Virginia statute concerning an obscure pest known as Cedar Rust (Samuels, 1971). As it happens, Virginia apple growers were able to wield the tool – saws and axes – against red cedar trees which serve as an intermediate host for a fungus detrimental to apple trees. Small spores make for large debates.

Normally, one approaches a book review with a fairly fixed framework in mind. First, explain what the book is about. Second, explain how the book fits into the existing literature. Third, explain what would have made the book better. With a book this rich, however, the standard format will not do complete justice to the achievement of the book.

Review essay on Rutherford, M. (2011), The Institutionalist Movement in American Economics, 1918–1947: Science and Social Control, Cambridge University Press, Cambridge, UK, 410 pp. ISBN: 9781107006997. $95.00.

After a long hiatus, psychology and economics today are back in conversation with each other: active research programs in behavioral economics, neuro-economics, and the economics of happiness bespeak a thriving cross-disciplinary discussion. Yet for most of the twentieth century, economists distanced themselves from psychology; when they spoke of science, they referred, in the first instance, to the physical sciences, then perhaps to the biological sciences. A hundred years ago, however, American intellectuals viewed psychology as a progressive science and economics as traditionalist – mired in the antiquated notions of laissez-faire and individualism. A social science that assumed individuals knew their preferences, directed their actions toward fulfilling them in a rational manner, and in the process engaged others in dispassionate exchange, was clearly not speaking to the issues of the modern world. The death of progressivism in the wake of WW I only reinforced the rise of psychology: good intentions weren’t enough, motives were suspect, rational individuals went mad in the midst of conflict and turmoil, complex emotions ruled. Careful psychological analysis could, however, enable society to gain some degree of control over the fundamental irrationality of human action.

The structure of the book is straightforward: we are introduced to the founding group and its students, and we are given compelling portraits of some neglected but important figures, Walton Hamilton and Morris Copeland, who stand in for the first and second generations. Next we proceed to the core of the book, the professional milieu of the institutionalist economists, the “personal, institutional, and programmatic bases” of the movement in the institutionalist academic strongholds – Chicago, Wisconsin, Columbia, Amherst, Brookings, and the National Bureau. Lastly, we get an account of the decline of institutionalism in the late 1930s and early to mid-1940s. Institutionalist economics was undone, Rutherford argues, by the failure of movement economists to reproduce themselves (partly caused by migration to law schools and other disciplines), by the Keynesian revolution's successful co-opting of the under-consumption hypothesis, and by the formalist turn of American economics in the late 1930s, hastened by the arrival of mathematically oriented European intellectuals fleeing Nazi Germany, and by European philosophies of science that reconceived what it meant to be scientific in the sciences of society.

Review of O’Brien, D. P., & Creedy, J. (Eds.). (2010). Darwin's clever neighbor: George Warde Norman and his circle. Cheltenham: Edward Elgar. ISBN: 978-1848445574. $165.00.

Review of Keppler, J. H. (2010). Adam Smith and the economy of the passions. London: Routledge. ISBN: 978-0415 569866. $155.00.

Review essay on Farrant, A. (Ed.). (2011). Hayek, Mill, and the liberal tradition. Routledge: London. ISBN: 978-0415779340. $130.00.

Review essay on Finn, D. K. (Ed.). (2010). The true wealth of nations. Catholic social thought and economic life. Oxford/New York, NY: Oxford University Press.

Review of Snyder, L. J. (2011). The Philosophical Breakfast Club: Four remarkable friends who transformed science and changed the world. New York, NY: Broadway Books. ISBN: 978-0767930482. $27.00.

Books that are intended as supplements to standard courses are always a bit idiosyncratic. The author or editor teaches the course a particular way, and the supplement usually supports the particularity of that person's pedagogical purposes, as well as the person's general outlook on the discipline of economics as a science. Reckoning with Markets is no exception, as my summary in the first section indicates. Halteman, who conceived the volume, teaches in a liberal arts college that expects its faculty to concern themselves with the intersections of their shared religious commitments and their various disciplines (2007). He regularly taught history of economic thought – liberal arts colleges remain one of the last bastions for the regular teaching of those courses – and like many others used the course as a way to help students set their economic studies in a larger philosophical context. The course also became a vehicle for introducing students to alternative economic paradigms, especially institutionalism. Noell teaches history of economic thought in a similar liberal arts college; their collaboration is shaped by their shared pedagogical environments and their common interests in the connections between moral philosophy and economics.