Show Hide image

Pale, male but far from stale: what can the economists of history teach us?

In an age of science and statistics, thinkers such as Marx and Adam Smith may hold the answer to capitalism’s crisis.

Is economics a science? It’s an old question – and in my view, not a terribly useful one. Yet there is a reason why it never stops being asked. Physicists have discovered the universal laws governing energy and motion, and as a result can tell us with scarcely credible precision how to land a man on the moon. Economists, by contrast, can’t even agree on why the last financial crisis happened, let alone what we should do to prevent the next one – and that’s despite the fact that we wrote the rules of finance ourselves. Real sciences make progress. Economics, on the other hand, seems to go round and round in circles.

Needless to say, this embarrassing situation irritates economists more than anyone else. As a result, over the past several decades mainstream economics has attempted to assimilate itself ever more closely to the culture and methods of
the natural sciences. These days, self-respecting economists express their theories as mathematical models, rather than in words. Advanced statistical techniques are deployed to test hypotheses and so resolve the answers to empirical questions. If possible, experiments are designed and conducted. A few avant-garde researchers have even gone so far as to rebrand their research groups as “labs”. Whether these developments represent a long-overdue reform of the methodology of economics, or just the symptoms of a chronic inferiority complex, they have certainly dealt a mortal blow to one formerly central area of the economics curriculum: the history of economic thought. If economics is a science, there is as little point in reading the economists of prior ages as there is in engaging with Aristotle on biology or mugging up on the theory of phlogiston.

The publication of Linda Yueh’s The Great Economists: How Their Ideas Can Help Us Today is therefore a fascinating event for anyone interested in economics. For this is a book which, as its title suggests, champions the value of studying the leading economic thinkers of the past.

It sounds like swimming against the tide of history. Is it really possible to reclaim a role for the scientifically backward theorising of a canon of Dead White Men (and, to Yueh’s credit, one Dead White Woman)? Well, there can hardly be anyone better qualified to try. As an Oxford don and a professor at London Business School, Yueh undoubtedly knows her stuff; and as a former chief  business correspondent for the BBC and economics editor at Bloomberg TV, she is a well-known and skilful communicator.

The challenge Professor Yueh has set herself is even bigger than it first appears, however. For looming like Muhammad Ali in his pomp over any modern attempt at an overview of history’s great economists is a classic so enduringly popular as to make most challengers throw in the towel before the starting bell: Robert Heilbroner’s The Worldly Philosophers: The Lives, Times and Ideas of the Great Economic Thinkers.

I first read this multimillion best-seller, published in 1953, 25 years ago. There can hardly be an economist in the English-speaking world who wasn’t assigned it as the first text on their undergraduate reading list – and for not a few of them, I suspect, it is about the only thing they can remember from their course. And with good reason: for Heilbroner – a student of Joseph Schumpeter at Harvard who later became a professor at the New School for Social Research in New York – was a talented writer in command of his subject matter and with a gift for leavening abstract ideas with earthy biography. Yet the real reason that The Worldly Philosophers has reigned for so long as the heavyweight champion of the genre is that it is organised around a clear and compelling vision of what, historically speaking, economics actually is.

The book’s underlying argument is that economics is nothing more nor less than the project of trying to understand, evaluate, and then control capitalism – the historically unprecedented system of organising society though the operation of markets and money that began to evolve in Europe in the late Middle Ages.

Before the capitalist revolution, there was no need for a discipline devoted to explaining why production, distribution and exchange are structured as they are, because, as Heilbroner says: “[who] would look for abstract laws of supply and demand, or cost, or value, when the explanation lay like an open book in the laws of the manor and the church and the city, along with the customs of a lifetime? Adam Smith might have been a great moral philosopher in that earlier age, but he could never have been a great economist; there would have been nothing for him to do.”

Once capitalism began its relentless rise, however, people felt an imperative to clarify its unwritten rules, to pass judgement on whether they were good or bad, and to strive to rewrite its constitution accordingly. The project that answered that call was economics – an enterprise as value-laden and politically fraught as constitution writing always is. In Heilbroner’s scheme, in other words, economics is unashamedly not a science – and, in striking contrast to the natural sciences, there is no real distinction between the history of economic thought and the history of the economy itself. The former is a reaction to the latter; and as economic thought began to pervade the modern mindset, the latter was just as often a reaction to the former.

Hence the plan of The Worldly Philosophers: a parallel history of the capitalist revolution and of the theories that have been developed to make sense of it. In Heilbroner’s scheme, in order to understand the rules we live by today, we need to understand who invented them, and why. The history of economic thought is therefore one of the keystones of economics – and economics itself is, to an important extent, intellectual history.


On the face of it, Yueh’s book follows the format of The Worldly Philosophers. It too devotes a series of separate chapters to a pantheon of historical economic thinkers (and six of them – Adam Smith, David Ricardo, Karl Marx, Alfred Marshall, John Maynard Keynes and Joseph Schumpeter – are covered by both books). It, too, aims to extract contemporary guidance from study of their theories. The resemblance is only superficial, however, because the conception of economics that underpins Heilbroner’s work is not one that would be recognised by most economists today.

Heilbroner himself, in an epilogue to the 1999 edition of The Worldly Philosophers entitled “The End of the Worldly Philosophy?”, explained that economics had even then almost completed its transition to a new sense of its essence and purpose. “The new vision,” he wrote, “is Science; the disappearing one, Capitalism.”

The Great Economists reflects this dramatic change in how economics conceives its methods and its aims. For Yueh, as for most contemporary practitioners, economics is not about reconstructing the historical mind-map of capitalism, but
about the discovery of objective economic laws through the scientific study of the social world.

Her rationale for exploring the history of economic thought is accordingly quite different from Heilbroner’s. It is not so much to understand the era in which the great economists lived, still less to grasp any role their theories may have played in shaping the conventions that govern the modern economy. It is rather because each of her  subjects was the first to explain some fundamental economic principle or discover some economic law applicable to our contemporary dilemmas. It is in this direct sense that their ideas can help us today.

One chapter, for example, recruits the 19th century English economist David Ricardo to help answer the timely question “Do trade deficits matter?” Ricardo was the first to formalise the principle of comparative advantage – the idea that all nations gain if each one specialises in producing the things at which it is relatively more efficient and then freely trades its output. The truth of this principle, Yueh explains, is more important than ever as the US seems headed for protectionism.

Another chapter summarises the life and work of Irving Fisher, the greatest American economist of the first half of the 20th century, in order to answer the question “Are we at risk of repeating the 1930s?” Fisher’s most celebrated contribution was his book The Debt-Deflation Theory of Great Depressions, which explained how a recession-induced drop in prices can raise the real burden of debt, leading to further deflation and so yet heavier debt, in a vicious circle. That led him to advocate reflationary monetary policy as the correct response to debt crises – a conclusion which, as the past decade has shown, modern central bankers have taken warmly to heart.

Yueh acknowledges that the validity of such principles is not unchallenged today and she is scrupulous in stressing ongoing debates. Nevertheless, the general idea is that they represented major advances in our knowledge of how the economy works, and that these economists are, to paraphrase Newton, giants on whose shoulders modern economists stand.

Hence the plan of The Great Economists reflects a distinct conception of the purpose of studying the history of economic thought, and indeed of economics itself. In this view, the history of economic thought is primarily a pedagogical device – a harmless cosmetic aid, as useful for adding some much-needed colour as, and no less scientific than, teaching physics by referring to Boyle’s Law, or biology by studying Charles Darwin’s theory of natural selection. Economics itself, however, is definitely a science.


As I said, I don’t think the question of whether economics is a science is a very useful one. The inconvenient truth is that in some respects it is, and in others it isn’t. As a result, the different approaches to the history of economic thought taken by Yueh and Heilbroner both have their merits.

 Nevertheless, if I was forced to recommend only one of them to a budding student of economics, I would have to plump for Heilbroner’s classic. In my view, the challenges facing Western economies in the post-2008 era are existential, as well as normal – and over all of them hovers the master question that haunts the writings of every one of Heilbroner’s worldly philosophers, from Smith to Schumpeter: whether or not capitalism is ultimately sustainable as a way of organising society.

The achievements of modern, scientific economics are significant, and the reader who wants a slick and well-curated tour of its current policy recommendations will profit greatly from Yueh’s enjoyable and up-to-date book. But if you want to know whether capitalism can survive its current crisis, and what might replace it if it doesn’t, then Heilbroner’s study of those great thinkers, who explored these questions free from our contemporary prejudices and vested interests, remains the place to start. 

Felix Martin is the author of “Money: the Unauthorised Biography” (Vintage)

The Great Economists: How Their Ideas Can Help Us Today
Linda Yueh
Viking, 368pp, £20

Felix Martin is a macroeconomist, bond trader and the author of Money: the Unauthorised Biography

This article first appeared in the 13 March 2018 issue of the New Statesman, Putin’s spy game

A 1907 painting of Spinoza, who was excommunicated from Judaism in 1656. Credit: SAMUEL HIRSZENBERG
Show Hide image

Why atheists are true believers too

How atheisms are imitating the religions they claim to reject.

In 1995 Richard Dawkins became the first ever “professor for the public understanding of science” at Oxford University. By the time he retired, 13 years later, it looked as if he had privately renegotiated his contract; for he was now functioning as Oxford’s very own professor for the public misunderstanding of religion.

In The God Delusion (2006) he argued that the existence of God was a scientific hypothesis which was almost – almost – demonstrably false. Miracles were scientifically impossible (yes, professor, I think we knew that: the clue was in the word “miracles”). And the creation story in the Book of Genesis was very bad science indeed. Opposing the stupidities of modern “creationism”, and all the other pseudo-scientific or anti-scientific dogmas of the fundamentalists, is one thing. Criticising the moral evils committed by religious fanatics is another, and no less worthwhile. Yet to treat religion itself as merely a defective form of science is a strangely crude error, rather like thinking that poetry is just a way of conveying factual statements that are to be tested for their truth or falsehood.

In his new book, Seven Types of Atheism, John Gray – who, I should mention, is no more a religious believer than I am – has little time for the so-called New Atheism of Dawkins and Co. The confusion of religion with science is only one of the points he objects to. Even if it can be shown that religion involves the creation of illusions, he argues, that does not mean that religion can or should be dispensed with; for “there is nothing in science that says illusion may not be useful, even indispensable, in life”. As for the idea of the American New Atheist Sam Harris that we can develop “a science of good and evil” which will contain all the correct liberal values: Gray sees this as a piece of astonishing and culpable naivety, ignoring nearly two centuries’ worth of evidence that scientism in ethics and illiberalism go happily hand-in-hand.

If this short book were just another intervention in the Dawkinsian “God debate”, it would be very short indeed. In fact it would get no further than page 23 where, at the end of his brief opening chapter, Gray concludes damningly that “the organised atheism of the present century is mostly a media phenomenon, and best appreciated as a type of entertainment”.

But the New Atheism is the least of the seven varieties that make up the subject-matter of this book. The others are all much more interesting, being connected with significant elements in our culture. And if the phrase “our culture” sounds parochial, well, that is an issue Gray deals with explicitly, pointing out that what we call “atheism” is something much more specific than just a rejection or absence of religion as such. It is a rejection of certain religious beliefs – and that narrows the field already, as many religions of the world are not primarily belief-systems at all. In particular, Gray argues, it is a rejection of belief in an omnipotent creator-god, which means that while atheism is Christianity’s close relative, it bears no relation to Hinduism or Buddhism at all.

So this is a book about post-Christian thinking – most of it, in Gray’s view, pretty bad thinking, too. One of his targets is secular humanism, which he describes as “a hollowed-out version of the Christian belief in salvation through history”. Another is what he calls “making a religion from science”, a delusion which he traces all the way from Mesmerism in the late 18th century, via dialectical materialism in the 19th and 20th, to those futurist thinkers today who dream of uploading a human being’s consciousness to computer circuits, thereby rendering it immortal. And another is political religion, “from Jacobinism through communism and Nazism to contemporary evangelical liberalism”.

Obviously there are overlaps between these three varieties of modern atheism; dialectical materialism, for instance, has also formed part of the creed of Marxist political religion. The one fundamental thing they have in common, on Gray’s account, is that they are all doctrines of progress, of an onwards and upwards march of humanity through history. Whether he is right to say that secular humanism is committed to this view, I am not so sure; doubtless, those who believe in humanist ethics will also think that if more and more people adopt their ethical system the world will become a better place, yet it’s not clear why they should regard that as inevitable.

But one thing at least is clear: John Gray regards all belief in human progress as the most pernicious of delusions. Despite all his eloquence on this subject, some readers may feel that his argument runs away with him, taking him further than he needs to go. It would be enough, surely, to say that the basic moral qualities of human beings have not changed over time, and that there’s no reason to think that any improvements in human behaviour that have taken place are part of a pattern of inevitable progress. Yet Gray goes further, claiming that there has been no real improvement at all.

The abolition of slavery? Slave auctions in “Islamic State” territory have been advertised on Facebook. The abandonment of torture? It has persisted at Guantanamo Bay. Well, yes; but having pockets of slavery here and there in the world is not the same as the situation 200 years ago, when it was a huge and entrenched institution, questioned only by a small minority. Yes, torture continues, but not as a standard judicial procedure. And in many countries there have been substantial, long-term changes in attitude and treatment where female subjugation, child labour and the criminalisation of homosexuality are concerned. Surely there must be some way of acknowledging this, without relapsing into Pollyannaish Steven Pinkerism?

One reason for Gray’s emphasis on the theme of temporal progress is that it fits these various secular atheisms into a larger pattern – that of salvation through history. And this brings us to the core of his argument: out of the whole range of major religions, only Christianity works in a historical dimension like this, which means that the secular atheisms are imitating, or unconsciously reproducing, a central feature of the very religion they claim to reject.

He makes this point again and again. These modern atheists’ view of the world is “inherited” from Christianity. Their belief in progress is “a secular avatar of a religious idea of redemption”. Jacobinism and Bolshevism were “channels” for the millenarian myths of Christianity. Bolshevism was in a “lineage” going back to medieval millenarianism. The apocalyptic myths of radical Christian movements “renewed themselves” in secular, political forms.

Having watched Gray wield his scalpel so effectively on other writers’ arguments, I can’t help thinking that this one deserves a few incisions. What does it mean to say that a communist who yearns for the coming of the classless society is really expressing just the same view as a millenarian looking to the reign of Christ on earth? The form of the belief may be roughly similar, but the content is entirely different. And if these are “inherited” ideas standing in a “lineage”, what is the evidence of a continuous chain of transmission – from, say, the 16th-century radical Anabaptists of Münster (whose chaotic quasi-communist experiment Gray describes in graphic detail) to the Bolsheviks of Petrograd and Moscow? As for the religious myths “renewing themselves” in a secular guise: this seems perilously close to the mindset of Dawkins’s theory of “memes”, which Gray has scornfully dismissed as hardly a theory at all.

Gray also mentions a Gnostic “impulse” that has recurred, unchanged, over two millennia. But if the same impulse can produce a religious idea in one period and a secular one in another, it seems that the impulse is something that stands behind both, itself neither secular nor religious. In which case, the modern atheisms may be not so much reproducing religious beliefs as expressing some basic yearnings that are pre-religious or non-religious in themselves. These are dark theoretical waters, and I am not convinced that Gray has got to the bottom of them.

Yet what he has done is to produce a marvellously stimulating account of some major currents of post-Christian thought, in which ideas and arguments leap constantly off the page like white-hot sparks from an anvil. The dismissals are concise and often devastating; but there are also wonderfully funny details, lovingly accumulated by a wry observer of human foolishness. It is nice to learn, for example, that Auguste Comte’s secular religion of Positivism imposed on its followers “special types of clothing, with buttons placed on the back so that they could not be worn without the help of others – thereby promoting altruism”. And I would challenge anyone to read Gray’s account of the cult of Ayn Rand, with its compulsory cigarette-smoking and rational tap-dancing, and not laugh out loud.

But what of Gray’s own post-religious beliefs? He certainly does not belong in the fifth category discussed here, that of “misotheists” – the Marquis de Sade, Dostoevsky and William Empson – whose views were shaped by a positive hatred of God. (Here, at least, he has no difficulty in showing that some kinds of atheism are dependent intimately and inseparably on Christian theology.) Gray’s own sympathies are divided between his two final varieties: the naturalistic, undogmatic and guaranteed progress-free atheism of the philosopher George Santayana; and the philosophico-theological theories of Spinoza and Schopenhauer, which argued obscurely both that a greater reality, possibly to be identified as Spirit or God, existed, and that to talk about it as a god who created the world, or intervened in it, or issued commands to humans, was to misunderstand it entirely.

Santayana was himself an admirer of Spinoza, and towards the end of the book, Gray quotes his characterisation of the Dutch-Jewish philosopher as follows: “By overcoming all human weaknesses, even when they seem kindly or noble, and by honouring power and truth, even if they should slay him, he entered the sanctuary of an unruffled superhuman wisdom.” I am not sure that this is quite the image that readers should take away of Gray, whose tolerance of human weaknesses – at the personal level, if not the intellectual one – seems admirably generous. Nor can it be guaranteed that people will acquire unruffled superhuman wisdom by reading this book. More likely they will find themselves tremendously, even painfully, ruffled. And I mean that as high praise, for an author who is one of the greatest intellectual provocateurs of our time. 

Noel Malcolm is editor of the Clarendon Edition of the Works of Thomas Hobbes and a fellow of All Souls, Oxford

John Gray will appear in conversation with Jason Cowley at Waterstones Trafalgar Square, London WC2, on 2 May (newstatesman.com/events)

Seven Types of Atheism
John Gray
Allen Lane, 176pp, £17.99

This article first appeared in the 13 March 2018 issue of the New Statesman, Putin’s spy game