Resource for Pete Boettke, Why Read the Classics in Economics?

Letters to the Editor

February 24, 2000
To the Editor:

    I am in agreement with the substance and spirit of Professor Boettke’s essay (“Why Read
    the Classics in Economics?,” Library of Economics and Liberty). The Classics are
    indispensable, not only for their own sake or a richer historical understanding (although
    either of these would be enough to warrant inclusion in the curriculum), but for
    addressing the challenges of the contemporary political economy.

    There is, however, an additional question that I would like to see addressed. What is to
    be done about the exclusion of the Classics–or analyses inspired by the Classics–from
    the curriculum, the most prestigious journals, and AEA-sponsored conference sessions?
    Must we be content with positions in “heterodox” departments, publishing in
    “heterodox” journals, and presenting papers in sessions sponsored by “heterodox”
    professional organizations? With all due respect to and appreciation for these outlets
    for our intellectual production, are we not bound to demand more than this, for the sake
    of our students, our junior colleagues, and even our economy? After all, ignoring the
    Classics must have some effect on policy, if we are correct that there are theories and
    methodologies to be found there that are relevant to today, and that are missing from the
    current mainstream literature.

    One minor quibble with Professor Boettke’s essay: compared to most of the current
    econo-gliterati, Samuelson is a pretty neat historian of thought. I may not agree with him
    on most things, but he appears to have read–and has written quite a bit about–the

    Congratulations to the Library of Economics and Liberty for a great web site and a nice

Mathew Forstater
Assistant Professor
Department of Economics
University of Missouri-Kansas City

February 26, 2000
From the Editor:

    I’m going to take off my Editor’s hat for a moment here because Boettke’s clear summary of the issues inspired me.

    I think it is entirely consistent with even the strongest version of an efficient market for ideas to argue that over the course of time, and certainly over the course of a century or more, technology and understanding improve so greatly that what may have been completely inefficient to explore at the time a work is written may in fact become feasible and efficient a century later.

    It seems perfectly possible that a rereading of an older work could uncover such “lost” ideas. The ideas were not lost in any sense of being overlooked at the time, but were simply not pursued or incorporated into the growing body of received economics because they were infeasible to pursue given the technology and state of knowledge at the time the work was written. That fine thinkers and authors do have ideas that are ahead of their times is well known: DaVinci certainly sketched inventions that were entirely impossible during his era. There is no doubt that our knowledge of mathematics, of evidence, plus what has become technologically and politically feasible since the days of Adam Smith has increased radically. A new look at great classics could uncover ideas that were put forth by the authors but not explored further during their era or since—ideas that have perhaps become “lost” precisely because the market for information is efficient and uses available information and technology, without wantonly wasting resources on pie in the sky.

    That said, I have to admit that when I read the works of older economists, I am not struck by vast numbers of such intriguing ideas that can now be explored but that somehow got “lost” in this manner. So, I would argue that though what I am describing is both feasible and consistent with even the most extreme “Whig” theory, the empirical evidence does not argue strongly that the older works constitute a prime unplumbed ground for new young economists to find exciting topics. Such ideas may well be there, but it is clear that there are not dozens of unexploited profit opportunities for a graduate student seeking inspiration for a thesis. It’s always hard work to find a worthy idea, however; and the fact that unexplored great ideas do not always leap off the pages does not mean that the fresh eyes of an eager reader might not be inspired by something said between the lines in one of the fine classics of economics.

Lauren F. Landsburg
Editor and occasional economist

February 27, 2000
To the Editor:

    As is typically the case with his ruminations, Pete Boettke’s
    essay on “Why
    Read the Classics in Economics?” is stimulating and full of wisdom.
    especially like his point that reading the classics allows us to
    trace back
    from the present intellectual paths that generated today’s theories.
    “Following this path,” Boettke says, “we may find dead-ends in
    trends of thought which force us to reconsider the earlier moment of
    and then imagine the path that could have been followed instead.”

    This is a powerful case for reading economic classics. It
    prompted me to
    think further.

    A justification, complementary to Pete’s, for reading
    economic classics is
    that only by doing so are we able to discern just what problems
    economists set out to solve. And by better understanding just what
    earlier economists aimed to solve we, today, are better able to
    the limitations of our own theories that grow from the work of

    Consider just one example: the theory of perfect competition.
    This theory
    is bread-and-butter to most economists – its structure and
    accepted with few second thoughts. But from where did it come? Is
    it the
    end result of a long quest by economists to describe how competition
    actually works in markets? Is it the end result of economists’ quest
    describe the ultimate competitive ideal, even if this ideal is
    in reality? Or is it something else altogether?

    If it is the first (the result of an attempt to describe
    reality), then we
    have big questions to ask today – foremost of which is why does the
    today look nothing like the economy must have looked when the theory
    perfect competition was in its formative stages. If it is the latter
    result of an attempt to focus analytical attention on ‘frictionless’
    competition), we have even bigger questions to ask – for example, why
    exclusive focus on price and quantity as the relevant competitive
    why were phenomena such as quality changes ruled out by assumption as
    competitive responses of firms?

    And, perhaps, the origins of the theory of perfect
    competition had nothing
    to do with any effort by economists to describe either the reality or
    ideal of capitalist competition. Perhaps, for example, the origins
    of this
    theory are found in economists’ attempt to understand the formation
    prices in highly decentralized markets – markets that these
    understood to be just one among many types of markets, and prices
    by these economists to be merely one among many means of competing.
    If this
    latter speculation is the case (which I suspect, although do not
    know), then
    economists’ current and almost-universal practice of holding up
    Competition as the ultimate ideal is mistaken.

    Whatever is the case, the general point is that understanding
    the problems
    that our forbears sought to solve is critical for our understanding
    fully the meaning and limitations of today’s theories that spring
    from these
    earlier works. And to understand these problems requires reading the
    original works.

Don J. Boudreaux
Foundation for Economic Education (FEE)

March 1, 2000
To the Editor:

    Pete Boettke has the ability to raise very interesting and stimulating
    problems, and even in this context he did not contradict himself.
    Pete ask why read the classics. Part of his answer and of the answers
    posed here focus on the problem of lost and found knowledge. There is
    truth in both arguments. It is true that today economics has
    incorporated some of the most important knowledge of the past. Reading
    the classics becomes therefore “boring”. Today we ask better questions
    and get better answers. I have to underline, though, the some. This is
    true for some problems. On the other hand, it is also true that the
    classics asked some different questions from ours. This in itself is a
    good reason to read them.

    My major point of interest, though, is not this, but the argument that
    today our profession is highly specialized, therefore the opportunity
    cost of reading the oldies is suicidally high, especially for young
    scholars. I believe this may be unfortunately true. And I believe
    this is the major difference between, say, Adam Smith, and ourselves.
    Adam Smith had an impressive multiform education. From the classics
    (Greeks and Romans), to history, from the law to philosophy, from ethics
    to economics (as it was then). If he could come back today, he could get
    tenure in basically all the humanistic disciplines (but not in
    economics). Why? Because the human behavior is a vector, with many
    aspects present simultaneously. And the classics knew it, and studied
    them all, and all together.

    Today instead we decompose human behavior in its various components, and
    we specialize in only one of them (a couple in the luckiest cases).
    Nothing wrong in it: economists are the first to preach the beauties of
    specialization. But, this is a case in which we do not do what we
    preach in toto. The gains from specialization come only if there is
    trade. Economists specialize in one aspect of human behavior, but they
    tend not to trade, they tend not to talk to scholars of other
    disciplines, at least a large majority of the profession (not the other
    disciplines do better…). Yes, ok, we have a mountain of pins, but
    what are we going to do with it?

    Reading the classics may be a luxury, but it is a phenomenally useful
    toy that forces us to keep in mind the big picture within which we are
    working, that otherwise tends to be lost, and get us lost also.

Maria Pia Paganelli