History of Economic History
Economic History rose as antithesis to classical capitalist economics and particularly to the theory of economics, which became abstract with Ricardo and is related to the deductive theory. As a matter of fact, it could be uttered that the studies on social history in Europe in XVIIIth century were effective in the rise of the economic history apart from such social sciences as sociology. The fundamental of this sort of historical studies indicating diversion from social philosophy is a universal concept of historiography. The principal subject in the studies led by Voltaire is the factual concept of history along with universalism, i.e. that humankind has developed from primitiveness and barbarianism to civilization. Yet, it has been stressed that various factors have been effective in this progression.
As is seen, the Economic History arose as a reaction to abstract studies or economics that originated in the West from such a historical tradition and then intensified at a certain phase of the Industrial Revolution (in the first quarter of XlXth century). In fact, in contrast to that theory of economics that was made abstract and deductive by Ricardo, the German School of History would defend the thesis that "the theory is ever to be supported with events and examples from history" with the rationale that "unless the related theory of economics is based upon facts, it fails to go beyond being a Utopia". Again, the concept of historical materialism that had been accelerated by Marx also supported this thesis. The Marxist School, which took history -commensurate to the new methods of the Historian School - as the fundamental point of its analysis, may be defined as another heterodox school that emphasizes the unity of history and economics with its factual historical approach and through 'historical materialism'. With this genre of studies the Economic History began to be an independent branch of science.
The German Historian School could be studied in two groups as 'Old' and 'New' Schools. While the Old School accepted the existence of economic laws and took to the way of changing the method required for the acquisition thereof, the New School exerted a harsher attitude that overlooked such laws as were not based upon historical events. The fundamental arguments of the German Historian School, which was composed of such representatives as Roscher, Hildebrand, Knies (The Old School) and Schmoller, Sombart, Weber, Piethoff (The New School) might be defined as follows:
* The relation of economics with other sciences is to be established, history is to be included within the coverage of analysis, and societies must be studied in comparison to each other (Roscher).
* Economic behaviours were not abstract. Religion was interactive with moral customs and traditions; and economics should have been evaluated together with other social sciences. The adaptation of economic laws to all times and geographies was wrong, whereas the individual was a social being whose relations and desires altered (in the course of history) (Hildebrand).
* Economics was composed of the economic history. Success and true theories will be attained only when sufficient historical data has been collected to make a theory and when history has been duly studied.
* An analysis ought to have been made by unifying the historical approach and the theoretical approach (Sombart). * Beliefs have efficient role in the formation of the economic behaviour and the economic system (Weber).:
From the second half of the XlXth century onwards a great number of English and American economists became the pupils - in Germany itself - of those economists that were members of the German Historian School. Thus, through the intensive effect of the German Historian School the 'English Historian School', which was represented by such economists as Rogers, Toynbee, Cunningham, Jones, Ashley, came into being. Thus, the German Historian School ensured the foundation of the British Historian School towards the end of XlXth century.
From the point of the methods and results of the Classical Economics, which started in XlXth century with Ricardo and was based upon abstract generalizations, the following points have been criticized by some members of the British Historian School such as Whewell, Jones, Toynbee, Bagehot, Leslie, Rogers and Ingram, who defended the idea of induction, empirical approach and the use of history:
* Ricardo's method is very abstract and is based upon generalizations. In place thereof a method should be followed which covers both the past experiences like 'look and see' and future experiences (Whewell).
* The Classical Economics has erred by accepting that becoming rich has such rules as are valid in the whole society, by being abstract and by alleging that competition always yields positive results for humankind. To the contrary, the truth is to be comprehended and abstract speculations must be tested and concordance has to be ensured with the historical method (Bagehot).
* The method of the Classical Economics is far from facts and abstract. The concepts it uses are imaginary ones that bring about confusion (such as salary fund). Besides, in terms of hedonistic utilitarianism felicity can not be a final criterion. The world is full of problems that change every day and are hard to solve; and yet it is incorrect to suggest prototypes and prescriptions to these with abstract generalizations (Leslie).
History of Economic History