Erik W. Matson has a defense of reading Adam Smith and other past thinkers. His article is titled, appropriately, “Why We Read Adam Smith.” He admits that he is biased, writing:

In the spirit of self-disclosure, I admit I have a vested interest in people reading Smith. I am part of a cottage industry of academics and educators devoted to the study and teaching of Smith’s ideas—I’m the deputy director of a program named for Smith in the Department of Economics at George Mason University. A declining interest in Smith would probably not bode well for me professionally.

I won’t repeat his argument. I will note, though, that he cites Richard Hanania’s argument against reading Smith and others. He quotes this from Hanania:

[T]he idea that someone writing more than say four hundred years ago could have deep insights into modern issues strikes me as farcical. If old thinkers do have insights, the same points have likely been made more recently and better by others who have had the advantage of coming after them.

You can’t dismiss Hanania’s argument; it’s an empirical one. What I will say is that people often miss the insights from a few generations back. Talk to young economists nowadays and tell them that from the mid-1930s to about 1980, the federal Interstate Commerce Commission insisted that trucks be licensed to carry whatever goods they carried in interstate commerce. So, for example, they might be licensed to take good A from city X to city Y, but that didn’t mean they could legally carry good B back from city Y to city X. So trucks were often forced to come back empty. There’s a good chance that those economists won’t believe you. That’s because they’re not reading any of the very good studies of the effects of trucking regulation from the late 1950s to the mid-1970s.

Of course you might argue that this is a failure to read works that are 50 years old, not 250 years old. True, but that’s a matter of degree. You might also argue that it’s a failure to read empirical studies, not the classics. But what were the classics? When Adam Smith claimed that the cost of Britain holding on to the 13 colonies exceeded the benefits to Brits, he was doing a back-of-the-envelope empirical study.

My favorite example of someone not knowing the history of a policy idea comes from Ron Hoffman, an economist in the U.S. Treasury in the late 1970s and early 1980s and a senior economist colleague of mine when I was a summer intern at the Council of Economic Advisers in 1973. (Parenthetically, I’m still grateful to Ron for telling me about a first-rate immigration lawyer whom I hired that summer when I got in trouble for working illegally, unbeknownst to me, at the CEA. Ron, by the way, is Dustin Hoffman’s brother.)

When I became the senior economist for health policy with the Reagan/Feldstein CEA in 1982, I looked up Ron, who told me the following story. During President Carter’s one term as president, Ron was heavily involved in health economics policy at the Treasury. The Secretary of Health, Education, and Welfare (HEW) from 1977 to 1979 was Joseph Califano. Califano had the idea of imposing a special federal tax on cigarettes and (I think) alcohol to finance part of Medicare. Ron went over to HEW to discuss the idea with one of Califano’s guys. Ron took along a Treasury veteran who had been in the Treasury from the late 1930s on. Califano’s guy had a gee-whiz, isn’t this a great idea tone, and expressed his thought that this was a new idea. The grizzled Treasury vet then proceeded to tell him about past similar proposals in the 1930s that had gone nowhere for various reasons. Ron was impressed and the HEW guy was stunned.

Postscript: Here’s the Concise Encyclopedia of Economics entry on freight transportation regulation and deregulation.