The Importance of History

Theory isn't enough.


Back in the classroom after a year-long sabbatical, I’m realizing how much I missed the direct interaction with students.  For me, nothing compares to those moments when the light of understanding comes on in my students or when they face a challenge to things long taken for granted. Their faces almost proclaim that they are seeing the world in a fundamentally different way.  One of the most powerful ways we can elicit those reactions — and call into question the largely statist worldview they bring to college — is to challenge what they think they know about history.  There may be no more important thing for classical liberals to do than to offer counter-narratives to standard historical stories.

I’m doing this in two different classes this semester.  The more historical of the two is a senior seminar on the Great Depression, which I’m teaching for the second time.  (The syllabus is here).  We started the class last week by walking through what I like to call the “High School History” version of the Great Depression.  This is the version in which laissez-faire capitalism caused the stock market crash and Herbert Hoover stood around doing nothing (committed lover of laissez-faire that he was), allowing the crash to become a depression.  Of course this version also tells us that FDR and the New Deal saved us from utter chaos and that our entry into World War II finally pulled us out of the Depression.

The students nod quietly as I repeat this narrative, only to look a little shocked when I then say, “Every piece of that story is wrong and we’re going to explore why over the course of the semester.”

In the world of liberal arts we like to talk about throwing students out of their comfort zones.  That feeling of disequilibrium is the first step toward learning.  And it’s one of the most powerful moments one can have in the classroom.  But it’s also crucial for helping anyone, not just students, understand the classical-liberal framework.

Understanding the Present

Getting a better understanding of the history, especially of major events like the Great Depression, is so important because historical narratives and interpretations fuel our understanding of current events and how to respond to them.  Just think of the ways in which the High School History version of the Great Depression has informed the national discussion of the current recession.  If one really believes that story, it’s a small step to applying the same narrative to today’s situation and to believing that capitalism failed and more government is the answer.

The other course is comparative economics.  We started by talking about how the West grew rich (and reading Nathan Rosenberg and L. E. Birdzell’s wonderful book by that name).  In the opening chapter, Rosenberg and Birdzell offer nine different commonly believed reasons the West grew rich, including three that are staples of the contemporary college curriculum:  exploitation, colonialism/imperialism, and slavery.

My students who have studied First-Third World relationships in other courses nod their heads quietly until I start to explore the counterevidence Rosenberg and Birdzell offer.  It’s hard to argue exploitation, they point out, when the real wages of labor have steadily risen over the last 200 years and capitalists have more or less willingly paid them.  As for the other two, they offer examples of western countries that were colonial powers but did not get rich and other countries that had no colonies but did get rich.  As for slavery, they make the same point: Some slave societies did not get rich, and some rich countries did not have slaves.  The bottom line of their first chapter is that none of these “standard” explanations seem reliable.  They argue instead that it was the unique institutions of the West (private property, limited government, freedom of thought and exchange) that generated our prosperity.

This unmasking of history is not just powerful in the college classroom; it should be one of the key ways we classical liberals make our arguments and try to persuade anyone of our views.  Arguing theory is fine, but many who disagree with us often trot out historical examples they believe undermine the theory.  Those examples are usually wrong, but to show it, classical liberals must have a good command of history and be prepared to offer a different narrative of the event in question.  I submit that at the bottom of most disagreements with classical liberalism lies a bad reading of history.

If we want to change people’s minds, we’re going to have to start by challenging their reading of history.  Learning that history is among the most important things classical liberals can do.



Steven Horwitz is the Charles A. Dana Professor of Economics at St. Lawrence University and the author of Microfoundations and Macroeconomics: An Austrian Perspective, now in paperback.

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December 2014

Unfortunately, educating people about phenomena that are counterintuitive, not-so-easy to remember, and suggest our individual lack of human control (for starters) can seem like an uphill battle in the war of ideas. So we sally forth into a kind of wilderness, an economic fairyland. We are myth busters in a world where people crave myths more than reality. Why do they so readily embrace untruth? Primarily because the immediate costs of doing so are so low and the psychic benefits are so high.
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