Monday, May 21, 2007

Leijonhufvud is Great ... Woodford and Blanchard Are Not (amv)

I really, really admire Prof. Leijonhufvud. I just re-read his The Uses of the Past (2006) and even though he now regrets his temper it is one of the most insightful pieces ever written on the usefulness of the history of economic thought. This part I like most:

"All history writing demands the exercise of selectivity among events, but the user's retrospective selection on the basis of presumed relevance to current work will seem outright ahistorical with its barely disguised anachronisms and its counterfactual speculations about the possible truths that "never happened." But there is, I would argue, at least one accepted and much practiced genre of the history of economic thought that is worse, even though it maintains the outward decency of recounting the past chronologically rather than diving into it retrospectively. This is the history of economics told as "progress," as a story of the right decisions, from the earliest days to our own times, each decision tagged with the name of the hero who made it - and all of it leading straight to the branch of the decision-tree on which the author has been comfortably perched all along. Superficial appearances to the contrary, this kind of Whig history writing is just as teleological as the backtracking from some current impasse which theorists might undertake. It may have a certain propaganda value, perhaps, because it suggests that economics has grown as a redwood after all. But it is a useless genre because it is predicated on the view that the present state of the art is unproblematic. This makes it useless for, as we have seen, it is when the present is unproblematic that the past is interesting. History of thought told as a progress is history from which the usable past has been deleted" (p. 7; emphasis mine).

How right you are, Prof. Leijonhufvud! Now I understand why Woodford's (2000) and Blanchard's (2000) quite recent attempts to do some history of economic thought have been the most uninteresting experience I have ever made in this field. Both try to tell the history of macroeconomics anew, as a story of perpetual improvement from Keynes to themselves. It is exactly what Leijonhufvud suggests not to do!