Why Historians Worry More About Trump Than Economists Do
(Bloomberg Opinion) -- The dangers of the current political moment in the West — with its polarization, harsh rhetoric and growing hostility toward cosmopolitanism — are evident to historians and economists alike. But which group sees the situation as more grave? I suspect it is historians, and it is worth considering why.
To be sure, some of the disgruntlement of historians stems from their political orientation. Historians are relatively left-wing, so it is no surprise that they are hostile to an “alt-right” shift in the political discourse. During the 2016 campaign, the group Historians Against Trump received widespread publicity.
More fundamentally, however, historians stress the importance of contingency, that things really could have gone another way. The decisions of a solitary assassin or the outcome of a single battle can shift the course of history. Particular leadership decisions might have avoided or limited World War I. Or what if the Germans had not, in 1917, put Lenin on a train back into Russia? The Bolshevik Revolution might have been avoided and probably the entire course of history would have been different. A shrewder President Paul von Hindenburg might have prevented the rise of Adolf Hitler.
If you think about these questions enough, you can end up very nervous indeed. Historians have seen too many modest mistakes spiral out of control and turn into disasters.
Economists, in contrast, work more with general models than with concrete historical situations, and those models emphasize underlying structural forces. Economies have fairly set populations, birth rates, natural resources, capital stocks, savings rates, trading partners, and so on. So to an economist, the final outcomes are closer to necessary than contingent.
Economists also study “catch-up growth,” which holds that systems tend to be self-repairing. So if some resources are destroyed, GDP will fall but the system will produce new replacement resources more rapidly, just as a lobster might regrow a lopped-off arm. Catch-up growth tends to make economists less nervous about natural disasters or wartime losses, although of course we think it is better to avoid the resource destruction in the first place. Many of Japan’s major cities were bombed to oblivion in World War II, but in time they regained their former prominence.
Some economic models do emphasize contingency — for instance, how a small force could induce an economy to make a major shift from one equilibrium to another. To give an example, some amount of defense contracting in Silicon Valley later caused the area to blossom into a major technology center. But perhaps the same could have happened in some other regions of the U.S. And these economic models remain the exception rather than the rule, often criticized for the fact that, under some circumstances, they can predict almost anything.
Paul Krugman is the economist who has mounted probably the most consistent and virulent attack on President Donald Trump’s administration, even going so far as to suggest that it might destroy U.S. democracy. But Krugman is an avid reader of history, and he took his early inspiration from history and also science fiction, in particular Isaac Asimov’s “Foundation” trilogy, a tale of long-scale world history and the degree of its contingency. The notion that “history matters” also is an underlying theme of Krugman’s contributions to economic theory.
A more typical economist’s view is that Trump is promoting some bad policies with respect to trade and immigration and fiscal policy, but that most essential features of America are likely to persist. And when it comes to politics, economists of the “public choice” variety tend to see outcomes as controlled by a fairly tight structure of voter preferences and interest groups, variables which a president can change only at the margin and with great effort.
So which perspective is correct — the historian’s or the economist’s? It is hard to counter the historian’s contention that contingent events can shift the course of a nation or the world. That said, the underlying fundamentals seem to have greater predictive power. The U.S. economy seems fairly robust, the investigation into Russian interference in the election is proceeding, and the courts have repeatedly stood up to Trump. The system seems to be holding up.
I’m not going to deny that the world is sustaining damage from some recent electoral results, including Brexit. But as an economist, I’m still going to say that progress mostly remains on track.
Nonetheless, I find it striking that the number of people studying history in American colleges is plummeting, even more than in the other humanities and indeed all of the other measured fields of study (the fastest-growing major: exercise studies). Perhaps in a time of Instagram and Snapchat, history doesn’t have the allure it once did.
One can be a loyal economist and still find this concerning. In the language of my chosen profession, there is a need for a marginal increase of interest in historical reasoning.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Tyler Cowen is a Bloomberg Opinion columnist. He is a professor of economics at George Mason University and writes for the blog Marginal Revolution. His books include “The Complacent Class: The Self-Defeating Quest for the American Dream.”
©2018 Bloomberg L.P.