The Poverty of Clio: Resurrecting Economic History by Francesco Boldizzoni (review)

Francesco Boldizzoni is unhappy with economic history derived from economics. He dislikes both Cliometrics and the New Institutional Economics. In fact, he doesn’t like the work of most of the leading economic historians from the “Anglo-American” school of research. What doesn’t he like? The fact that economic historians and a great deal of modern economic history research is influenced and shaped by standard work in economics, statistics, and econometrics. In his view, economic history is better done when it pays little attention to economic theory (indeed, when it seeks to ignore or even deny it) or to econometric analysis and pays more attention to historical induction and draws its social science theory from sociology and social anthropology more than from economics.

In this somewhat intemperate and rather scattershot diatribe, the author jumps from debates about historical interpretation to attacks on individual scholars, who seem to have given too much attention to economic reasoning. Among his targets are the entire Cliometrics movement and the Chicago School of economics, with the latter sometimes used as a stand-in for mainstream economics in general. He directs a lot his criticism at Douglass North, while holding up scholars such as Karl Polanyi, Moses Finley, Mary Douglas, Clifford Geertz, and Paul Bairoch as heroes. What do the latter have in common? Apparently a hostility to or indifference to neoclassical economics. Of course, from that standpoint North is an odd stand-in for the field as North (as the book’s discussions make clear) wants economics and economic history to take into account behavioral biases, human cognitive constraints, norms, culture, and historical path dependence to escape the limits of standard theory. So why does North seem to irk the author so? It is apparently a heresy to wish to acknowledge that economics and standard reasoning still have a lot to say despite their inherent limits and despite the biases and shortcomings of many of economics’ leading figures. For North, no useful social science will arise—especially in economic history—unless one deals foursquare with economics as it exists, and as it is practiced. The goal is to learn what we can and to persuade the dominant core of the field to appreciate what is lacking.

Boldizzoni will have none of this. His call for economic historians to “choose their friends” from disciplines like anthropology or social psychology that entail a “holistic” perspective or to make “creative” use of theory in history or to use statistics in an inductive, creative, and subjective fashion is nothing less than a wholesale rejection of economics and a great deal of modern political science and political economy.

But why is that?

Early on, it becomes clear that he confuses the use of description and analysis in economics when he says:

Historical knowledge shows that whether societies are based on market or nonmarket allocation systems does not generally depend on opportunistic calculation, nor is it a matter of choice … In certain countries, public services could never become private because their culture abhors it.

(23)

This suggests a fundamental misunderstanding of economic reasoning. For better or worse, economics and rational choice theory do not require that societies be market economies for market forces to be at work. Opportunity cost is everywhere and even where societal regulations are specifically designed to subvert or deny markets (as in Stalinist Russia or North Korea) the core insights of supply and demand will still be useful guides to behavior as long as one makes the appropriate analytical adjustments. Even more important is that people in the real world do not have to consciously make choices in the manner dictated by the simple formal models for the models to be useful. This is both a strength and a weakness of neoclassical theory as modern economists readily acknowledge. We only need to see that people behave “as if” they were maximizing.

Of course modern work in the field has begun to focus on the limits...