Teaching & Learning History of Economic Thought (HET): Some Observations

The following is a short reflection and response to the lectures, questions, and conversations at the recently concluded 3-day HET workshop at MIDS, Chennai. In personal conversations, many people thought that HET is about economic ideas that originated in a particular context. 

That is, Smith’s economics is a response to his sociopolitical context. And therefore, the implication is that Smith’s political economy be placed in a museum—an archaeological site that we visit occasionally. Another implication to this appears to be that HET is not relevant to contemporary thought because our context is different from that of Smith’s. 

Such an approach to HET, to me, makes it a rather dead subject. Consequently, in the economics curriculum, it serves other core papers such as micro and macro by providing it with context/history and thereby improving student learning/understanding. Yes, this is important, but it makes HET an instrumental subject. However, that, per se, is not an issue because all knowledge in one way or the other are instrumental. 

I see 3 problems with such a view. 

One, it is a reductionist approach because it reduces ideas to the context, be it intellectual (i.e., texts, speeches) or sociopolitical (i.e., laws, wars, conflict). How do we then account for human ingenuity and creativity? Also, how do we understand classics—that have a timeless quality? Or, are we saying that there is nothing in economics that may be applicable across time and space? [On the question of applicability of economic theory, see the discussion in Chapter 6 of my macro book.] 

The second problem is that such a reductionist view of HET inevitably succumbs to the linear view of intellectual progress. Wherein the ideas of Solow are better than Smith objectively speaking and that the ideas of Solow are more relevant to us because, in terms of calendar time, Solow’s work is closer to us than Smith’s. 

The third problem is that we are okay about marginalized ideas remaining forgotten. Studying ideas—texts written by women (and folks whose texts were not popular)—remain invaluable for contemporary thought and action. This perhaps depends on how comfortable we are about ignoring the ideas of our ancestors. (I am currently reading The Penguin Book of Feminist Writing edited by Hannah Dawson; the first text belongs to 1405 and the last one to 2020.)

HET: Understanding Economics

HET allows us to organize past ideas in a meaningful manner. The simplest organizer is that of calendar time. But ideas are forgotten, revived, exhumed, bolstered, expelled, popularized for a variety of reasons and so a simple chronological account cannot provide a sufficient historical account of economic ideas. 

We need to have other ways of organizing so that we understand not only the past better but also the present. Another organizing principle among historians of economic thought is that of ‘school of thought’ or ‘paradigms’. For instance, HET books discuss ‘classical’ and ‘neoclassical’ general equilibrium (Harvey & Gram 1980); ‘neoclassical’, ‘Keynesian’ and ‘Marxian’ (Wolff & Resnick 2012); ‘classical political economy’ and ‘supply and demand theories’ (Bharadwaj 1986). 

Many historians of economic thought, including me, reject the ‘neoclassical’ label. This is because it suggests that there is continuity between ‘classical’ (associated with economists such as Quesnay, Smith, Ricardo) and ‘neoclassical’ (associated with economists such as Say, Walras, Marshall). The analytically satisfactory label is ‘marginalist’—because of their reliance on concepts such as marginal utility, marginal cost, etc. 

HET tells us that competing ideas have always existed; we often only learn about those that have been popular/dominant. For instance, Ricardo disagreed with Say that exchange value is determined by use value. And today’s microeconomics textbooks teach us that commodity prices are determined by cardinal/ordinal utilities. When Keynes and Sraffa were writing, the economic ideas of Marshall were dominant and those of Smith and Ricardo were forgotten. HET allows us to understand that the evolution of ideas has been anything but linear. 

And today as well, research happens in all schools of thought—contrary to what is implied in mainstream textbooks on micro, macro, econometrics, labour. 

The study of HET

We study the world by dividing it into different parts; for instance, the physical and social worlds. Or the natural sciences and human sciences. Or physics and economics. Economics may be further sub-divided into micro and macro. Or labour and ecological economics. 

Within HET, scholars sometimes distinguish between ‘history of economic analysis’ and ‘history of economic thought’ where the former is a subset of the latter. We can find economic thought in Arthashastra but there is no evidence of any theorizing/analysis. 

Another division in HET is that between the internalists and externalists although I think that most of us operate somewhere in that spectrum. The internalists study economic ideas by focusing on previous economic ideas and on the logical framework of that ideas. For example, when studying Ricardo, we read his texts and the texts he was influenced by such as Smith’s Wealth of Nations. My 2021 article ‘On “effectual demand” and the “extent of the market” in Adam Smith and David Ricardo’ is an example of this. When an externalist studies Ricardo, they include his social and political context and interpret his ideas as responses to them. A good example of this is Timothy Davis’s Ricardo’s Macroeconomics: Money, Trade Cycles, and Growth (2005). A good biography warrants a synthesis of the externalist and internalist approaches. 


HET allows us to understand the ebb and flow in dominant paradigms. It makes us aware that history is replete with debates across as well as within paradigms. Indeed, debates spur knowledge production. While most economics textbooks suggest consensus, economics journals (both orthodox and heterodox) suggest dissensus. There are conceptual debates, refinements, revivals and contextual critiques, challenges, applications. Furthermore, adopting an HET perspective in the teaching of microeconomics and econometrics will provide the learner with a critical grounding in history, politics and philosophy. 

I thank Thair Ahmed for helpful comments.

Author: Alex M Thomas

A passionate student of economics!

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