December 8, 2015

A historical misunderstanding

Comment on ‘Expanding heterodoxy in economic analysis’


The theory of fire explains fire as an interaction of certain materials and oxygen and the laws of energy transformation. And it tells us, for example, that there is no fire on the moon.

In contradistinction, the history of fire tells us which cities burned down at which point on the time line and what the casualties were and perhaps who set the fire. From these events we can derive some truisms about fire but no matter how many fires the historian studies he will not arrive at the theory of fire.

Science is not concerned with individual historical events except as a singular manifestation of a general law. A concrete historical event can either corroborate or refute a general law. But the historical fact that Nero burned down Rome (if it is indeed a fact and not propaganda) is irrelevant for the theory of fire.

In particular, the information in which the historian and the general public are most interested in — who burned down Rome, and why, and how was it done — are completely irrelevant for the theory of fire.

The relationship between history and economic theory is not different from the relationship between history and physics: “We are very far from being able to predict, even in physics, the precise results of a concrete situation, such as a thunderstorm, or a fire. (Popper, 1960, p. 139)

Heterodox history should therefore not be confounded with heterodox economics. Heterodox economics can tell historians for example that they have no idea of the fundamental Law of Profit as they have no idea of the Laws of energy transformation.

Economics is neither psychology, nor sociology, nor history. Economics is the science which studies how the monetary economy works.* Science looks for what remains unchanged in time, i.e. ‘eternal’ laws, history looks at what changes over time. “That is why Descartes said that history was not a science — because there were no general laws which could be applied to history.” (Berlin, 2002, p. 76)

Historical facts can be important for corroboration/refutation of a theory but history is not a substitute for theory. Because of this, Robert Locke and Asad Zaman are methodologically on the wrong track. For the correct synthesis of theory and history see (2014).

Egmont Kakarot-Handtke

Berlin, I. (2002). Freedom and Its Betrayal. London: Chatto Windus.
Kakarot-Handtke, E. (2014). The Synthesis of Economic Law, Evolution, and History. SSRN Working Paper Series, 2500696: 1–22. URL
Popper, K. R. (1960). The Poverty of Historicism. London, Henley: Routledge and Kegan Paul.

* See ‘The ur-blunder of economics and its rectification

Related 'Predictably confused' and 'The universal Profit Law and the multitude of unique historical circumstances' and 'History and methodology: no trouble of any sort' and 'Historians don't get it'