Aid Thoughts

When I was an undergraduate, I took a course called Approaches to History. The idea was to study the intersection between history and other disciplines, how they interact and what the historian can learn from and can offer them. This was essentially a course in historiography, the study of how history is studied. One of the best things about the discipline is that different ways of collecting evidence, analysing it, and understanding the past are catalogued and kept alive by constant reference, continuing study and interaction with new modes of study. This includes the knowledge, approaches and concepts they take from other disciplines. Historians very rarely completely reject approaches. Rather, they take what is useful from each and use it in contemporary study. They’re not perfect in this by any means, and in particular the relationship between history and modern economics is weak, but there is a greater regard for other disciplines and other ways of thinking than one finds elsewhere.

By contrast economics, which dominates the development profession, doesn’t engage with other disciplines very well, including history. Part of this arises from one of the very good things about economics: it looks relentlessly forwards and seeks to apply its knowledge to solve problems and change the predicted future. However, a lot of it of it also relates to the methodology that economics has embraced. Methodological Individualism is not well suited to dealing with the social and groupish phenomena that are so important to history, anthropology, and branches of sociology and psychology (unsurprisingly, the ridiculously well-read Tyler Cowen is one of the few economists in the mainstream who has addressed this question directly). As a result, it tends to transform information from other disciplines into formats that fit within the individual-based modelling approach that dominates economics, rather than engage with them on their own terms.

When this translates to a weak grasp of history, development thinking suffers. There is a huge amount of literature out there looking in great depth and with a remarkable breadth of vision at the process of economic development that is rarely or never referenced in the development profession. These studies primarily look at the process of development of the currently developed countries; they take into account changing cultural conceptions of work, changing political and legal frameworks, demographic factors, evolving trading relationships and the political and physical violence that accompanied the birth of capitalism in the West. There are a number of lessons here that are simply missed out altogether. When was the last time anyone in development referenced Jan de Vries’ seminal pieces on the Industrious Revolution, a cultural change in working patterns that he claimed was a necessary precursor to industrialisation? Some studies or books even look precisely at the question of why some countries developed while others stagnated or fell behind, such as Kenneth Pomeranz’s The Great Divergence, or The Birth of the Modern World – neither of which feature on most development workers’ bookshelves.

Equally importantly, historical analysis looks at the sequencing and motivation of the changes underlying development processes. Economists have the bad habit of looking at a successful system and assuming that the key characteristics of this system should be replicated elsewhere. They think far more about the appearance of the working system than they do about the evolution of it. This can lead to policy proposals that are based on modern systems but do not conform to how those systems emerged. The argument for democracy is a classic example of this: too often it is tied to developmental outcomes as a key component of economic development. The problem with this approach is that this simply doesn’t mesh with how developed states have emerged historically – almost all of them have become economically developed far earlier than they become politically democratic (consider for a moment that it was only in 1918 that women were allowed to vote in the UK and the 1960s that blacks gained equal rights in the US). This doesn’t mean that democracy isn’t important, or that there isn't a possible path to economic development that starts with political equality, but it does mean that there is no necessary relationship between it and economic progress.

This issue of sequencing is related to another preoccupation of historians that has, strangely, passed by most in the development profession: transformation. Economists tend to think of all economies as basically similar. In particular, virtually all modern economics makes the unspoken assumption that the economy is a fully capitalist one. This is fine for economics of the developed world, but it’s a much bigger assumption for developing countries. Most developing countries present a mix of capitalist, feudal and other pre-capitalist economic forms. Development is in large part the process of changing from this mixed economy into a fully modern capitalist economy. This is something that economists are very bad at dealing with, but which historians have held as a central concern for a very long time. Indeed, many economists still don’t have a clear conception of what capitalism actually is.

The emergence of a fully capitalist economy is more than the adoption of the ‘rules’ of a capitalist economy. These rules can be applied to pre-capitalist economic forms and will not have the incredibly dynamic effects they have in modern economies. Capitalism is defined by relations of production; once they obtain, there is no set of tools better suited to understanding it than those of the modern economist. However, when it does not yet obtain, it’s history and not economics that has spent the most time looking at how the process of change occurs. It’s a central concern of most historians of Europe for the period from about 1800 until the First World War, and most Marxist historians – many of whom have great insights, though some caution is needed in reading them.

I’m not for a second suggesting that economics be abandoned, or that history is the only discipline that has something to teach us. But there is a heavy imbalance in the profile of the major development policymakers and academics: economics and political science are heavily represented, and this makes it all the more important to make sure that we have a good reading of the lessons other disciplines provide.