History like you never learned it

Steven Horowitz at The Freeman on The Importance of History:

I’m doing this in two different classes this semester. The more historical of the two is a senior seminar on the Great Depression, which I’m teaching for the second time. (The syllabus is here). We started the class last week by walking through what I like to call the “High School History” version of the Great Depression. This is the version in which laissez-faire capitalism caused the stock market crash and Herbert Hoover stood around doing nothing (committed lover of laissez-faire that he was), allowing the crash to become a depression. Of course this version also tells us that FDR and the New Deal saved us from utter chaos and that our entry into World War II finally pulled us out of the Depression.

The students nod quietly as I repeat this narrative, only to look a little shocked when I then say, “Every piece of that story is wrong and we’re going to explore why over the course of the semester.”

The other course is comparative economics. We started by talking about how the West grew rich (and reading Nathan Rosenberg and L. E. Birdzell’s wonderful book by that name). In the opening chapter, Rosenberg and Birdzell offer nine different commonly believed reasons the West grew rich, including three that are staples of the contemporary college curriculum: exploitation, colonialism/imperialism, and slavery.

My students who have studied First-Third World relationships in other courses nod their heads quietly until I start to explore the counterevidence Rosenberg and Birdzell offer. It’s hard to argue exploitation, they point out, when the real wages of labor have steadily risen over the last 200 years and capitalists have more or less willingly paid them. As for the other two, they offer examples of western countries that were colonial powers but did not get rich and other countries that had no colonies but did get rich. As for slavery, they make the same point: Some slave societies did not get rich, and some rich countries did not have slaves. The bottom line of their first chapter is that none of these “standard” explanations seem reliable. They argue instead that it was the unique institutions of the West (private property, limited government, freedom of thought and exchange) that generated our prosperity.

This unmasking of history is not just powerful in the college classroom; it should be one of the key ways we classical liberals make our arguments and try to persuade anyone of our views. Arguing theory is fine, but many who disagree with us often trot out historical examples they believe undermine the theory. Those examples are usually wrong, but to show it, classical liberals must have a good command of history and be prepared to offer a different narrative of the event in question. I submit that at the bottom of most disagreements with classical liberalism lies a bad reading of history.