A Companion to the History of Economic Thought - Chapter 39 ppt

RESEARCH IN THE HISTORY OF ECONOMIC THOUGHT 655
CHAPTER THIRTY- NINE
Research in the
History of Economic
Thought as a Vehicle
for the Defense and
Criticism of Orthodox
Economics
John Lodewijks
It is almost impossible to attend a gathering of North American historians of eco-
nomic thought without getting the uncomfortable feeling that many are there to
grieve over the corpse. Many come to lament a time when economics was different,
when it was better, and when it had not been perverted by formalism and higher
mathematics. Many grieve for John Maynard Keynes and Commons, for Friedrich
Hayek and Mitchell and Ludwig von Mises.
Bradley W. Bateman (in Morgan and Rutherford, 1998, p. 29)
It is a striking fact that conferences in history of economic thought attract Austrians,
Marxists, Radical political economists, Sraffians, institutionalists and post-Keynesians
in disproportionate numbers, all non-neoclassicals or even anti-neoclassicals who
have no place else to go to talk to scholars outside their narrow intellectual circles.
Mark Blaug (2001, p. 147)
39.1 BALANCING THE HISTORY OF ECONOMICS
Many students throughout the world were introduced to the history of eco-
nomics through Robert Heilbroner’s immensely popular The Worldly Philosophers,
656 J. LODEWIJKS
originally published in 1953 and now in its seventh edition, with over four million
copies sold to date. Geoffrey Harcourt (2001, p. 167) claims that it is the best
introduction to the lives and contributions of the great economists ever written.
The chapters on Marx and Veblen are delightfully entertaining and beautifully
crafted. But is it a “balanced” history of economics? It was written by an author
who, in this work and in numerous other publications, displays a highly critical

stance toward mainstream economics. Heilbroner (1979, p. 197) alleges that
modern economics “is shallow and poor rather than deep and rich” and disap-
pointing in comparison with the economics of earlier periods. Modern economics
“has nothing to compare with the ‘magnificent dynamics’ of the Classicists” and
Heilbroner cannot discover in modern economics a depth or breadth comparable
with earlier periods, or any great overall vision that illuminates issues. Critics
maintain that his history is biased, focusing too heavily on the economics of
socialists, Marxists, and the “Underworld of Economics.”
Mark Skousen (2001) wrote The Making of Modern Economics specifically to
“right” this imbalance. Like Heilbroner, this text is also provocative and entertain-
ing, with scandals of various sorts embellishing the lives of the great thinkers.
Yet it would be difficult to call this a balanced history either. It is an Austrian
history of economics, where Adam Smith’s self-regulating system of natural
liberty and competition triumphs against the forces of socialist interventionism.
Each episode in the history of economics is evaluated in terms of what was
added or subtracted from Smith’s system, and in so doing the “power of neo-
classical analysis” is revealed. The title of chapter six is “Marx madness plunges
economics into a new dark age,” and there Marx is chastised as a “demonic
genius,” an “anti-semitic Jew” who wrote “satanic verses,” and ultimately a
“dismal failure.” In chapter seven, “Menger and the Austrians reverse the tide”
and resurrect Smith’s system of natural liberty. In chapter thirteen, “The Keynes
mutiny: capitalism faces its greatest challenge,” one might be excused for pre-
suming that capitalism’s greatest challenge was the Great Depression. Not so. It
is Keynes. Skousen begins the chapter with a quote that claims that “Keynesian
economics is . . . the most serious blow that the authority of orthodox economics
has yet suffered.” It was then left to Milton Friedman “to reverse the Keynesian
tide and reestablish the virtues of neoclassical economics” (Skousen, 2001, p. 397).
Should we be concerned about the way in which these histories of thought are
written? For example, there is not even a mention of the seminal research of
either Samuel Hollander or Philip Mirowski in the Skousen book. Nor is the

intellectual history of Adam Smith, written by Jacob Viner and Donald Winch,
acknowledged. Winch’s work is explicitly against attempts to recruit Smith retro-
actively into some ideological category and association with extreme laissez-faire
and libertarianism. One response is to note that Heilbroner and Skousen provide
introductions to the subject, written in provocative ways, to entice students toward
further study where they then go on to do “real” history of economics. Skousen
(2001, p. 5) freely admits that his “book is not a normal history. It is candidly, an
irreverent, passionate, sometimes humorous, and often highly opinionated account
of the lives and theories of famous economists.” A related point is that these texts
relate to the teaching of the history of economics, not research at the frontier of
the sub-discipline. Alternatively, our friends from literary criticism might also
RESEARCH IN THE HISTORY OF ECONOMIC THOUGHT 657
argue that all history is socially constructed and there is no objective truth out
there to be discovered. The writing of histories is a creative enterprise and the
texts above presumably satisfy the needs of their interpretive communities. Finally,
perhaps the concern about balance and objectivity is a storm in a teacup. Will not
students easily discern the biases of these texts and take them with a grain of
salt? Students of Warren Samuels’s history of thought class could clearly discern
the ideological agenda behind texts by E. K. Hunt and Ray Canterbery. These
texts were intentionally and explicitly critical of the way in which economic
thought has developed. In contrast, Henry Spiegel’s The Growth of Economic Thought
was perceived to have no agenda to push and no intention to promote any
particular school of thought (Medema and Samuels, 2001, p. 295).
39.2 RESEARCH IN THE HISTORY OF ECONOMICS
One could tell a story of how research in the history of economics has been
colored by the stance that various scholars have taken toward orthodox eco-
nomics. The written history could then be regarded as a vehicle for the defense
or criticism of orthodoxy. The work of Terence Hutchison seems a natural place
to start. Since The Significance and Basic Postulates of Economic Theory first appeared
in 1938, the central methodological themes of Hutchison’s research has remained

essentially unchanged (Hands, 2001, pp. 536–40). For example, part I of his 1953
Review of Economic Doctrines, 1870–1929, was entitled “The architects of equilib-
rium economics and their main critics” and in the Preface he was again alluding
to “a lessening in the realism and relevance” of economic analysis. Hutchison has
long complained of the failure of economics to conform to the canons of positive
science. Economic theory rests on weak epistemological foundations, employs
highly unrealistic assumptions, and is therefore incapable of generating empiric-
ally falsifiable predictions. Practitioners are too preoccupied with refinements
and elaborations of abstract general theories. These themes were highlighted in
his 1977 Knowledge and Ignorance in Economics and in numerous other publica-
tions. Hutchison, an outsider to the profession, has been intensely critical of
economics.
Mark Blaug has followed in Hutchison’s footsteps. Blaug had two supervisors
– George Stigler and Terence Hutchison – at Columbia and both were mentors of
sorts. Blaug is highly critical of the current state of economic knowledge, and
emphasizes the need for more determined efforts to produce theories that yield
unambiguously refutable implications and then to confront those implications
with the facts. He rails against the disease of formalism in modern economics,
where the form of an argument dominates substance and content. Modern theory
then ceases to make any descriptive claim about actual economic systems, and
becomes a purely formal apparatus, a mathematical thought-experiment. Blaug
(2001, p. 160) alleges that Debreu’s Theory of Value is “probably the most arid and
pointless book in the entire literature of economics” and that the “history of
general equilibrium theory from Walras to Arrow–Debreu has been a journey
down a blind alley, and it is historians of economic thought who seem to have
finally hammered down the nails in this coffin.”
658 J. LODEWIJKS
Two aspects of Blaug’s work in this context are interesting to observe. First,
while Blaug is critical of orthodoxy, he has very limited sympathy with heterodox
critics. His damning critique of the Marxian and Sraffian research programs is

well known. He also has little time for post-modernist approaches. Secondly,
Roger Backhouse (in Medema and Samuels, 2001, p. 21) has charted Blaug’s
intellectual journey through the various editions of his Economic Theory in Retro-
spect. What is interesting is Blaug’s “change of mind” over the years on Ricardo,
Sraffa’s interpretation of Ricardo, macroeconomics, and the value of general
equilibrium analysis. Blaug on general equilibrium, for example, has moved
from supporter to critic. (A similar “change of mind” over Ricardo happened to
Samuel Hollander. At one time he subscribed to Sraffa’s reading of Ricardo,
but the “weight of evidence” led him to abandon this interpretation.)
Philip Mirowski’s More Heat than Light (1990) has generated enormous interest
in the field and considerable controversy (see De Marchi, 1993). Mirowski high-
lights deep conceptual problems in the foundations of economic science through
its perverse attempts to emulate physics. His account of the marginal revolution
is one of the delayed and distorted adoption of ideas from the physical sciences.
His book is a severe historical critique of neoclassical economics, which claims
that economics today is outdated physics and that economics should abandon
physics (see Leonard, in De Marchi, 1993). Rizvi has outlined what he calls
Mirowski’s “palpable and very personal opposition to mainstream economics”
(p. 215). The almost mocking attitude to Paul Samuelson is a clear example of
this. Mirowski notes that he “fully anticipated the wrath of the orthodox neo-
classical economics profession. Had I been trying to ingratiate myself with that
crew, I should have done things differently . . .” (De Marchi, 1993, p. 306).
In sharp contrast to the above critiques of economics, but no less controversial,
stands the work of Samuel Hollander. Hollander’s thesis is that the history
of economics shows strong continuity. Classical and neoclassical economists
both share essentially the same approach to pricing, distribution, and allocation
theory. Hollander claims, for example, that Ricardo’s “cost-price analysis is pre-
eminently an analysis of the allocation of scarce resources, proceeding in terms
of general equilibrium, with allowance for final demand, and the interdepend-
ence of factor and commodity markets.” Hollander’s interpretation of classical

economics has irked reviewers from the Sraffian camp and from the anti-Neo-
Ricardians, such as Denis O’Brien, Terry Peach, and Terence Hutchison, the latter
commenting on Hollander’s “extraordinary capacity . . . for dismissing, disregard-
ing, or devaluing evidence, however plain and unambiguous, that conflicts with
the Hollander interpretation” (Lodewijks, 1995, p. 143).
A large part of the furor over Hollander’s approach is its identification with
“Whig” history. The clearest exponent of this is Paul Samuelson (1987, p. 52),
who proposes “that history of economics more purposefully reorient itself toward
studying the past from the standpoint of the present state of economic science.”
He alleges that “within any classical economist there is to be discerned a mod-
ern economist trying to be born.” The implicit assumption is that knowledge is
cumulative, and you judge past scholars in terms of how much they contributed
to the present state of understanding. Others who adopt this framework are
RESEARCH IN THE HISTORY OF ECONOMIC THOUGHT 659
George Stigler, Donald Walker, and A. M. C. Waterman. Critics of Whig history
say that it is a distorted historical reconstruction, where thinkers are examined
out of context. Moreover, it serves to justify and legitimize modern economics
with a search for pedigrees and precursors.
The research in the history of economics undertaken by Hutchison, Blaug,
Mirowski, and Hollander has been pathbreaking. These scholars also have estab-
lished very strong positions as either defenders or critics of modern economics.
If our craft is identified with attacks on mainstream economics, this may partly
explain our declining fortunes in the profession. It may generate an overall negat-
ive impression of our research and confirm suspicions about the field. The end
result is that it reduces the chances of graduate students gaining some acquaint-
ance with the history of their discipline as an essential component of their train-
ing and some familiarity with exemplary work in the field. Also, if one comes to
the history of economics with a view that economics is fundamentally misguided
or, alternatively, that we can find a supply-and-demand model in every past
thinker if we look hard enough, then that colors the historical interpretation. In

the next section, we deal with schools of thought where these concerns have
added importance.
39.3 HETERODOXY AND THE HISTORY OF THOUGHT
Roy Weintraub has taken a strong position that work in the Austrian, Marxian,
institutionalist, or post-Keynesian tradition cannot be regarded as legitimate
history of economic thought. In his view, citing long-dead economists and em-
ploying historical references does not generate historical scholarship. Weintraub
notes that the history of the discipline is being increasingly told by those who are
hostile to the discipline and its major contributors, and is being used to justify or
criticize the role of individuals or schools. The history of economics has become
a home for heterodox traditions that are antithetical to the mainstream. Many
of these issues were explored in a conference on “The future of the history of
economics” held at Duke University in April 2001 (Weintraub, 2002).
A survey of British historians of economic thought undertaken by Roger
Backhouse for the conference revealed that 54 percent identified themselves
as heterodox, but only 11 percent identified themselves as neoclassical. Many
entered the history of economics due to dissatisfaction with conventional eco-
nomics. One implication is that university funding in Britain, which depends on
a research assessment exercise that ranks research, will discriminate against his-
torians of thought and heterodox economists who do not publish in mainstream
“top” journals.
Aiko Ikeo delivered a paper that showed that the majority of historians of
thought in Japan were also critical of mainstream economics, while in many
Eastern European countries the history of economics was taught in the Marxist
tradition. Anthony Brewer examined the Marxist tradition and concluded that
“Much, perhaps most, of the literature on Marx’s economics . . . is therefore of
little use to the historian of economics.” Ronald Meek and Maurice Dobb are
660 J. LODEWIJKS
two well-known Marxist historians of thought. Meek was initially an uncritical
Marxist and a supporter of Joseph Stalin, who later was skeptical of Marxism, and

became more an intellectual historian, albeit one strongly influenced by Marxian
themes and approaches. The transformation can be documented in the various
editions of his Studies in the Labour Theory of Value. Dobb regarded economics “as
a tool of the working people in their struggle for social liberation” (Medema
and Samuels, 2001, p. 83). His Theories of Value and Distribution since Adam Smith
was the first history-of-thought text in the light of the Sraffian revolution.
Sraffa’s “corn model” interpretation of Ricardo led to a rational reconstruction of
the history of economics to demonstrate that there was a “surplus” tradition, in
sharp contrast to mainstream economics. Among Sraffians, this interpretation
of Ricardo is an integral part of their attempt to overthrow neoclassical value,
distribution, and growth theory.
The Sraffian approach to classical economics, often labeled neo-Ricardian, has
elicited much debate, and this continues in trenchant claims of bias in The New
Palgrave Dictionary of Economics and, more recently, in the Elgar Companion to
Classical Economics (Blaug, 1999; Peach, 1999; Hollander, 2000). The conference
paper by Christina Marcuzzo and Annalisa Rosselli illustrated how Italian his-
tory of thought from the late 1960s to the early 1980s was strongly influenced by
Marx and Sraffa. History of thought in Italy became synonymous with doing
nonmainstream economics. Indeed, it is alleged that the neo-Ricardians have
cornered some of the leading European academic journals in the field.
Malcolm Rutherford (1994) has written extensively on old and new American
institutionalism. Post-Keynesian approaches, broadly interpreted, have long been
popular in many other countries. Sheila Dow takes a more upbeat perspective on
the use of history by post-Keynesians and on heterodox economics generally. She
notes that some heterodox economists may use history of thought as a vehicle
for supporting their views, but most use it to understand historical ideas better
and to assist the development of theory. Post-Keynesians embed the history of
economics in their theoretical and policy discussions. Sraffians more than post-
Keynesians make contributions to the history of economics; the latter rarely go
back earlier in time than the contributions of Keynes and Kalecki. Harcourt (2001)

contains various intellectual biographies, tributes, and eulogies in the post-
Keynesian tradition. Post-Keynesianism, he says, “is an extremely broad church.
The overlaps at each end of a long spectrum of views are marginal, reflecting
little more than a shared hostility towards mainstream neoclassical economics
and methodology” (2001, p. 263). Harcourt provides glimpses of the intellectual
history of Joan Robinson and her circle – Austin Robinson, Richard Kahn, Piero
Sraffa, Nicholas Kaldor, Michal Kalecki, Dick Goodwin, Maurice Dobb, Luigi
Pasinetti, and, of course, John Maynard Keynes. Yet in the essays one finds very
few critical comments on the contributions of this “circle.” Indeed, it is quite a
challenge to find any. Whereas for the orthodox economist the research frontier
is clearly being advanced in the near present, for some heterodox schools the
research frontier is still largely discernible in the works of the founders or their
immediate followers. At some point, as the approach becomes less popular, the
profession’s attention moves away from developing and elaborating the key
RESEARCH IN THE HISTORY OF ECONOMIC THOUGHT 661
insights of the founders. Scholars sympathetic to heterodoxy then have to go
back in time to “pick up the torch” and run with it.
Peter Boettke has been quite critical of the use made by Austrians of the history
of economics. He thinks that it is often used for ideological purposes and hagio-
graphy, and that it is too passionate and committed. Murray Rothbard’s treat-
ment of Adam Smith is best viewed as a libertarian diatribe, rather than a careful
examination of Smith’s system. However, he also gives examples of where Aus-
trians have produced high-quality history of thought, and mentions the work
of Karen Vaughn, Bruce Caldwell, and Laurence Moss. Boettke calculates that
5 percent of History of Political Economy articles and 6.8 percent of Journal of
the History of Economic Thought articles have been written by or about Austrian
economists. He also estimates that around one in four to one in five articles in
specialist Austrian economics journals are works in the history of economics.
Many of the books written by Austrian school economists contain substantial
historical material (Medema and Samuels, 2001, pp. 117–28).

Mark Blaug (2001) argues that the history of economics appeals to a different
type of mind from that of the average mainstream economist. It attracts the more
philosophic, less mathematically inclined mind and the more policy-relevant
economist, who feels that the discipline has a rationale of improving society.
In other words, the sub-discipline is a haven for heterodoxy! Is this inherently
undesirable? Certainly, in an increasingly homogenized discipline, it provides
an avenue through which dissent can be expressed. Perhaps it is one role of his-
torians of thought to provide discomfiture: “The task of the historian of social
theory is not . . . either to celebrate, to bury – or even merely to understand – the
past; its task is to discomfort the present” (Lowry, 1991, p. 136). Historians of
thought present the work of a Nobel Laureate in an historical perspective that is
at variance with the (self-serving) recollections of the Nobelist himself. Or they
outline the historical antecedents and developments that have been hidden, or
rewritten in more palatable forms, in textbooks that show a basic continuity of
research endeavor that leads to the present. Or they raise uncomfortable questions
about the military origins of game theory.
Criticism may help to reform the discipline, but if the history of the subject is
being increasingly told by those who are hostile to the discipline and its major
contributors, then it should come as no surprise that the history of economic
thought will be increasingly marginalized in the profession. Conversely, the
smaller number of historians of thought who are sympathetic to modern eco-
nomics seem to have a greater proclivity at placing their research in mainstream
journals. John Creedy, who works on technical issues relating to the historical
development of neoclassical economics, is a case in point. Samuel Hollander is
another obvious example. Overall, the erosion of the position of the history of
economics in the larger discipline of economics is clear. The subject is no longer
taught at many institutions. However, there is a tricky issue of causality here. Is
the history of economic thought marginalized because it is dominated by hetero-
dox economists, or are heterodox economists naturally attracted to nonorthodox,
and hence marginalized, research endeavors? Indeed, some could argue that

we should be making more overtures to heterodox economists, as they at least
662 J. LODEWIJKS
appreciate our craft while the profession as a whole turns away from any historical
interest. Since orthodox scholars tend to be more Whiggish, perhaps those with a
heterodox approach have a comparative advantage in our field, as better-quality
history of thought results from those who do not begin with Whig history. One
could ask why there are not more orthodox scholars in the sub-discipline.
One hypothesis, yet to be fully explored, relates to the nature of Ph.D. research.
Is it the case that those who completed a mainstream thesis topic, and who
were relatively successful in terms of publications and citations in mainstream
journals, are more likely to defend orthodoxy when they later are persuaded to
work in the history-of-thought field? I can think of a few counter-examples, but
not that many.
The issues of objectivity and bias still remain. Look at Groenewegen and
McFarlane (1990). The strength of the book is undoubtedly its emphasis on the
diversity of sources and dissent in Australian economics. Australian economics
sprang from a varied mixture of sources – academics, public servants, gifted
amateurs, and cranks. The book covers in detail heterodox and other contributions
to the subject from outside academe. Yet this coverage comes at a cost. One
complaint is that the authors have overemphasized the work of “radicals, out-
siders, cranks, and heretics” and in the process omitted major themes in the
development of economic analysis in Australia. The neglected contributions
include the development of the computable general equilibrium models to ana-
lyze commercial policy, Australia’s system of centralized wage-fixing, and the
contributions of agricultural economists.
The counsel of perfection is that an author should be frank about (or at least
implicitly conscious of ) the way in which his or her ideological position colors
the analysis, or try to be as objective as possible. Warren Samuels says that we
should attempt to explain and interpret history with minimal ideological content,
and without any intention to advance a political agenda, or without legitimizing

and privileging any particular school of thought. Irrespective of these good
intentions, others such as Martin Bronfenbrenner saw Samuels as an unmitigated
critic of neoclassicism!
Is quality history of thought produced by heterodox economists? History of
thought has always been used by economists (either trained in history of thought
or not) in theoretical debates about mainstream economics. Blaug (2001, pp. 154–
5) documents the examples of J. M. Keynes and Robert Lucas. Persuasion in-
volves appeal to historical argument. But is an article on how Hayek would have
analyzed the process of Eastern European transition, or how Minsky would have
explained the Asian Crisis, a contribution to historical scholarship? Roy Weintraub
would say no. Donald Walker (1988) would agree, but for different reasons. For
Walker, the factor that determines whether or not economic writings are treated
as part of the history of thought is not how long ago they were written but the
approach of the person who is dealing with them. Walker proceeds to explain
that an economist treats either present-day writings or older ones as history of
thought when he examines them in order to establish their characteristics, inter-
prets them, and evaluates them. He may or may not relate current doctrine to
past doctrine, or examine past doctrine to see how it evolved into a subsequent
RESEARCH IN THE HISTORY OF ECONOMIC THOUGHT 663
state. But the historian “does not attack the doctrine as part of a debate over what
current economic theory should be. Nor does he incorporate the doctrine into a
new theory or modify it. The historian of economic thought cannot add to the
unalterable body of past writings with which he deals. In contrast the contributor
to current theory changes the subject on which he is writing so as to produce a
new body of theory” (Walker, 1988, pp. 99–100). The issues raised in this section
are not straightforward and often bewitched by terminological minefields, which
we now enter.
39.4 A TORTUOUS MAZE OF TERMINOLOGY
Let us start with the term “orthodox” economics. This term is often used inter-
changeably with mainstream, modern, or neoclassical economics. It is question-

able how useful these terms are, especially the latter one. Colander (2000) argues
that neoclassical economics is not synonymous with modern mainstream eco-
nomics. Even when Veblen coined the term, “it was not meant as a description
of mainstream economics” (p. 131). Certain aspects of neoclassical economics
remain as part of modern economics, but “modern economics is fundamentally
different from neoclassical economics” (p. 133). Arguably, neoclassicism has the
following characteristics: methodological individualism, subjective utility, rational
economic man, efficient resource allocation, a general equilibrium conception
of the economy, and a focus on the margin. Modern economics, says Colander,
has departed from strict adherence to these modeling attributes. Hence we should
stop using the term “neoclassical.” Even more recently, John Davis (2002) has
foreshadowed the “death” of “mainstream” economics. The mainstream is not a
unified research program: many strands exist within the mainstream, such as
game theory, and experimental and evolutionary economics. Unlike the neo-
classical program of old, these are fragmented research programs. What holds these
programs together is a shared methodology. Furthermore, the mainstream only
achieves its prominence in a small set of North American hierarchical institutions.
If we leave the maze of the present, even in earlier times it is sometimes
difficult to locate a ruling orthodoxy. Morgan and Rutherford (1998) show this
clearly for the interwar period in America. Pluralism was the order of the day.
There was no hegemony of method. Furthermore, a school or individual may be
orthodox at one point in history and heterodox the next, and eventually return to
the fold. Take Hayek, for example (Cockett, 1994).
The definition of heterodox economics is another bugbear. Colander (2000) again
treads where angels fear to go. He lists several leading economists who have
worked outside the orthodox framework, but they would not be regarded as
“heterodox.” He suggests that “If the term heterodox is to be considered mean-
ingful, it should be defined as an approach to problems that is not accepted as
legitimate. Thus, my litmus test of heterodox economists is their ability to get jobs
at major graduate schools. Marxists and Institutionalist economists are heterodox

economists” (p. 137). Note how centered on North American and how ahistorical
this demarcation principle is. It apparently means that almost all historians of
664 J. LODEWIJKS
thought are heterodox. In fact, most of the economics profession would be
heterodox, as there are only a small number of top graduate schools – perhaps
20, or as many as 50? Warren Samuels at Michigan State would not be classified
as heterodox, even though he was long-time editor of the Journal of Economic
Issues. What about Joan Robinson, Piero Sraffa, or Geoffrey Harcourt at Cam-
bridge, or Hayek at the London School of Economics. Were they not heterodox?
Colander further confuses issues by attempting to characterize the central attri-
butes of modern economics. We are told that content does not define modern
economics. The modeling approach to problems is the central element of modern
economics. So far, so good. Then he states that the “modelling is not seen as an
end in itself; there is a continual discussion of the need to empirically test, and
the formal modelling is undertaken in large part to make the models empirically
testable, and applicable to policy, with formal statistical techniques” so that “the
major thrust of modern economics is on formal empirical testing of the models”
(Colander, 2000, pp. 137, 140). Hutchison, Stigler, Blaug, and a host of comment-
ators would take issue with these statements.
In the very next article in the same journal issue in which Colander published
his piece, we have a distinguished historian of thought, A. W. Coats, leading a
round table on heterodox economics. Coats (2000) says that economics is such a
heterogeneous discipline that, alongside the formalist uniformity, “there is also
within the subject a number of dissenting or deviant doctrinal schools, rival
methodological approaches, and innovative developments designed to remedy
its defects and/or overcome its limitations” (p. 145). Many of the criticisms and
remedies come from prominent economists with impeccable professional cred-
entials. Their criticisms threaten the discipline’s foundations and are a species of
“orthodox subversion” (p. 146), and many are compatible with heterodoxy. He
broadly defines heterodox as encompassing all nonorthodox ideas and approaches,

including experimental, behavioral, social, and evolutionary economists. Coats
lists the following as heterodox (that is, idiosyncratic, maverick, or deviant, but
not necessarily dissident): George Akerlof, Robert Frank, Albert Hirschman,
Mancur Olson, James Buchanan, Harvey Leibenstein, Thomas Schelling, Amartya
Sen, Vernon Smith, Richard Thaler, and Oliver Williamson. Note that these eco-
nomists are or were associated with “top” graduate schools!
Roger Backhouse’s contribution to the round table is to provide a dividing line
between dissent within orthodoxy and dissent from orthodoxy. He offers a very
strict definition of heterodoxy. Economists are heterodox if they “self-consciously
claim to be working in a way that does not fit in with the dominant way of doing
economics, or to be offering an alternative that is incompatible with this.” They
have different core beliefs about the economy, publish in their own journals,
go to their own conferences, and cite fellow travelers. Backhouse says that real
business cycle and new institutional economics fails at least some of these
criteria, and that only Marxian, post-Keynesian, old institutionalist, radical, and
Austrian economics satisfy all of the criteria (p. 149).
Clearly, who is and who is not “heterodox” is a tricky issue, and will vary over
time and space. Much of the discussion seems to implicitly assume that what
now goes on in the “top” North American graduate schools defines orthodoxy.
RESEARCH IN THE HISTORY OF ECONOMIC THOUGHT 665
This offends historians of thought in other countries and is simply ahistorical.
What is surprising is that commentators who otherwise fiercely oppose Whig
history will strongly oppose heterodoxy from modern economics – as if the present
orthodoxy will last forever! Craufurd Goodwin thinks that we should abandon
the orthodox and heterodox labels, as they “belong almost to another age.”
Malcolm Rutherford believes that modern orthodoxy has become more diverse
and that it will discuss almost anything, as long as it is presented using a formal-
ist modeling approach. Furthermore, much of the “progress in orthodox eco-
nomics has come from taking over problems and issues originally explored within
heterodox traditions” (p. 185). Again, perhaps the issue of heterodoxy is another

storm in a teacup. Rutherford notes the decline in membership of the Association
for Evolutionary Economics. The Sraffians in Italy are fighting a rearguard action.
The Marxists are very thin on the ground. Heterodoxy can become moribund;
very inward-looking, defensive, and not open to new ideas. The heterodox
“bubble” in the history of economics may not last long. As for the Austrian school,
some of its members do not even regard themselves as heterodox, but as part of
the neoclassical tradition, because of shared aspects of a research program that is
striving for universal explanation on the basis of marginal utility analysis.
Finally, one might think that the phrase “research in the history of economic
thought” would be clear-cut. But is it research in economic thought or the history
of economics? The latter is preferred by Mirowski, Weintraub, and those inter-
ested in history-of-science approaches. Leaving this squabble aside, we take it
that research means publications in book form and in academic journals. This
does raise issues about the relative quality of book publishers and whether certain
outlets, such as Edward Elgar, are more sympathetic to criticisms of orthodoxy. It
does appear that those with sizeable history-of-thought lists also have substantial
heterodox listings or are aimed at a market (Japanese) that is more receptive to
heterodoxy. With respect to journals, do we consider refereed journal publication
in the leading journals and the specialist history-of-thought journals, or do we
also include the Cambridge Journal of Economics, the Journal of Economic Issues, the
Journal of Austrian Economics, and other outlets associated with heterodox schools
of thought?
These conceptual muddles are compounded when the philosophers of science
enter the scene.
39.5 METHODOLOGICAL INTERLUDE
One contentious area in the history of economics relates to economic methodo-
logy and the history and philosophy of science. Methodologists such as Bruce
Caldwell, Wade Hands, and Larry Boland are prominent at the American history-
of-thought meetings. The methodologists have journals of their own – Economics
and Philosophy and the Journal of Economic Methodology – and publish their work

in quality mainstream journals. The relevance of this approach for our craft is
that there have been numerous attempts to apply ideas from the philosophy of
science to the history of economics. We can be brief here, as John Davis (ch. 34,
666 J. LODEWIJKS
this volume) explores these issues in detail. What is clear is that many economic
methodologists have been critical of modern economics. Roy Weintraub is one
of the very few who has taken the methodologists on at their own game and
developed a sophisticated methodological defense of the neoclassical general
equilibrium research program. Even he, though, has come around to the view
that the issue of what constitutes a good theory is not a matter of comparing the
theory to some standard of scientific goodness (derived from the philosophy of
science). He suggests that it makes no sense to view the history of economic
thought through methodological spectacles. Historians should lose their interest
in methodology, in terms of falsificationism, and in terms of general philosophy-
of-science methods of appraisal.
Orthodox general equilibrium theory brought forth a barrage of philosophic
attacks (as did marginal productivity distribution theory). General equilibrium
theory was seen as the fullest culmination of neoclassical economics. As such,
it attracted the ire of Hutchison, Blaug, and numerous other critics. There is now
a feeling that this war is over and that the general equilibrium research program
has ultimately failed. Rizvi (in Davis, 1997) outlines how the microfoundations
of systematic aggregate phenomena could not be found in general equilibrium
models. On a positive note, the failure of the program unleashed a greater diver-
sity of approaches in microeconomics, including game theory, experimental eco-
nomics, organizational theory, and evolutionary modeling. The critics may now
have less of a central target to focus on. The heterodox schools will feel vindicated,
although each school will have a different account of why the program failed.
39.6 CONCLUDING REMARKS
The history of economics can be used as defensive, critical, or neutral with refer-
ence to mainstream economics. The influx of critics of modern economics into the

craft reflects broader currents in the profession that relate to research funding
and corporatization of universities. History of thought is seen as an escape route
from an increasingly abstract and technical profession, or one increasingly shaped
by free market ideology. In earlier times, these refugees would have migrated to
economic history (before cliometrics), to public finance (before public choice,
Stiglitz and Atkinson, and the optimal tax literature), to development economics
(before it became applied microeconomics), to industrial organization (before
game theory), or finally to labor (before Chicago triumphed over institutionalism).
But this movement to our sub-discipline may decline with time as these groups
are further marginalized. To the extent that this intermingling continues, historians
of thought are further isolating themselves from developments in the profession.
Should there be a purge that only leaves “legitimate” historians of thought to
pursue intellectual history and historical reconstruction according to the standards
of historians? Should we abandon current debates and rational reconstructions?
This would narrow participation in the field; membership would be less open.
Barriers to entry would inhibit many heterodox and other economists – although
some wear multiple hats and can “do” quality history of thought as well as
RESEARCH IN THE HISTORY OF ECONOMIC THOUGHT 667
policy papers using historical argument. John Davis and Steve Medema have
said that we need openness and inclusion, perhaps at some sacrifice to quality.
They would rather celebrate diversity than homogenize the field. There is a place
for all approaches – Mirowski, Blaug, Walker, and even Samuelson.
A key issue is whether there is a systematic bias in the way in which a large
number of historians of economics pursue their craft. Is it ideologically based? Is
the research motivated by a broader agenda of criticism of orthodoxy? Criticism
may be used to reform the discipline or as a means to support alternative schools
of thought. To the extent that we do not work in the dominant mathematical
discourse of the profession, what we do will have little effect on economics as
currently practiced. Indeed, the few North American Ph.D. programs that place
greater emphasis on history of thought – the New School, Amherst, Colorado

State, and Riverside – do it within the context of a focus on heterodoxy. One
could argue that the field as a whole is not biased, but that there are many
contributing to the field with explicit or implicit purposes that might lead to
results that are arguably “biased.” History done for the purpose of defending
or criticizing some approach to economics is likely to be, as history, less reliable
than, or inferior to, the work of an author who at least tries to maintain an
objective or disinterested stance toward the material. We would like to think that
historians of thought would quickly pounce on any bias or lack of objectivity,
as they have in the past. To paraphrase Joan Robinson, we study the history of
economics so as not to be fooled by historians of economic thought.
Note
I would like to acknowledge the helpful comments made by Warren Samuels, John Davis,
and Jeff Biddle on an earlier draft of this chapter.
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