Exploring Economic History

with Palgrave Macmillan

Why Economic History is so Diverse

Professor Kent Deng writes about the diversity of economic history and exciting developments in the field.

Economic history is an interdisciplinary study that combines economics and history. Some practitioners view themselves as ‘economic historians’; and others as ‘historical economists’. Whatever the label, the tools and methods used in economic history are wide ranging from economics to mathematics, statistics, sociology, demography, geography, and philosophy, which makes the discipline advantageously open and flexible. Consequently, practitioners are divided into ‘qualitative economic historians’ or ‘quantitative economic historians’ (also known as cliometricians), each command their unique set of research skills and demonstrate their publication propensities.

Topic wise, economic history sees no limit so long as the subject area is in the past. That means that practitioners can choose any historical period, any geographic region, any age, social or ethnic group, any socio-political system and any economic sector as long as the necessary and reliable data are available. Typically, economic historians research into economic performance (allocation of capital, land, labour and technology), economic exchange (commerce and trade), economic shocks (wars and epidemics), growth and development (market, entrepreneurship, proto-industrialisation, industrious revolution and industrial revolution), income and equality (typically age, gender and ethnic), social mobility (education, urbanisation, and migration) and governance (taxation, spending, law and order, property rights), to name but a few.

Exciting Developments in the Field

Over the last century, there have been many prominent debates, including those on the ‘Industrial Revolution’, ‘property rights’, ‘intensive and extensive growth patterns’, fiscal states, empires and ‘World-Systems’. After the turn of this century, the main debate has been the ‘Great Divergence’ in a long-term and global context. This debate originated in California and has hence been associated with the ‘California School’ of comparative economic historians, whose approach moves from East Asia to Western Europe in space, and crosses one millennium in time.

What is so brilliant about the California School is that it abandons the old Eurocentric benchmark of productivity/efficiency, which is the supply-side of the story and adopts a range of alternative parameters such as quality of governance, networks and commodity flows, and material life (or living standards), which are either the demand-side of the story or demand and supply combined. In other words, the old Eurocentric benchmark is a production-based judgment with a vertical hierarchy of productivity/efficiency in the world. The California School leans towards consumption with an emphasis on horizontal connections and comparisons. Such a change in parameters is very innovative and sheds some new light on the old issue of growth and development in China over the very long run. The essence of the California School’s approach is ‘PPP (Purchasing Power Parity) for final consumption’.

Soon, the Californians faced powerful opposition from what is known as the ‘Real Wages’ School’ based in Oxford, UK. Instead of living standards such as food intake, the real wage historians compared differences in the monetary compensation for labour spent per unit of working time. In nature, this is the continuation of the Marshallian marginal analysis tradition of production costs including wages. It allows the debate to go back to the old framework of production-based judgment with a vertical hierarchy of productivity/efficiency. So, not surprisingly, the Real Wage School has reached the conclusion that real wages (which are about production costs and production efficiency) in Western Europe were persistently higher than those in China from very early on. With the help of historical national income reconstruction, the Real Wage School has gained a great deal of millage in the last decade, despite the thorny issues of mistaking modern estimates for real data.

Economic history is a colourful and exciting discipline. It is our mission to promote it to enhance our understanding of our past at local, regional, national and global levels.

Professor Kent Deng, FRHistS, is full professor in Economic History at the London School of Economics. He is a member of the Asian Research Centre and has been Secretary of the History and Economic Development Group UK since 2000. Kent Deng is Series Editor of Palgrave Studies in Economic History.