Historians Versus Economists

Tyler Cowen rarely disappoints in either the quality or quality of information and commentary that he generates. The man is a machine. And his recent post on the difference between how historians and economists view dangerous world events certainly made me think.

It’s an oversimplification but the argument appears to be that historians are likely to be far more negative than economists when it comes to assessing the importance of current events. Partly that’s because economists always have a belief in the ability of the economy to bounce back. Regardless of which shade of armageddon may be visited on a country or society, the power of financial incentives and the human desire to improve on any situation is such that, given a sufficiently long timescale, most economic disasters can be recovered from in full. For most, boom will inevitably follow bust and innovation is often forged out of necessity in the direst of circumstances.

But historians? These are people whose job it is to research topics in which the overwhelming evidence proves just how random (and often senseless) life can be. It is not difficult to imagine that the very same events that left a permanent scar on the course of world history may, with only the slightest of variation in circumstances, resulted in a completely different (and by implication, more positive) outcome. Think of an assassination: a missed shot, the early arrest of a suspect, inclement weather conditions, getting lost en route, a final change of a politician’s plans……the list goes on forever.

The revolutions started with such sudden violence could just as easily been avoided. As Cowen writes about historians:

“If you think about these questions enough, you can end up very nervous indeed. Historians have seen too many modest mistakes spiral out of control and turn into disasters.”
So which viewpoint is more likely to be the valid and/or useful one to take onboard?

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