Economists' History
MY feelings about this book have gone through several fluctuations— depressions precipitated by its use of a mechanical statistical technique, -:. recoveries stimulated by its original insights and luminous generalisa- tions. A major depression—the only one, it is fair to say—was set off by the disappointment of expectations derived from the title that it would contain a discussion of the problems of economic growth. For the most part the authors take the underlying economic progress of their period for granted, and concentrate on the fluctua- tions in activity. There are, it is true, two substantial chapters on "secular trends," but this title covers a discussion of a particular Sort of fluctuation, the long waves which are alleged to last about half a century, and anyone who wants to know why Britain was wealthier and more populous in 1850 than in 1790 had better look elsewhere. This work then is almost exclusively about fluctuations, and it is notable as the first attempt to apply to an extended period of English history some of the economic and statistical tools which were developed between the wars in the analysis of the modern business cycle. It is thus an example, perhaps the most ambitious that has yet appeared, of what it ig now fashionable to call economists' history. - But what exactly are the objects under study? Are they fluctua- tions, the term used in the historical chapters, with its suggestion of irregular risings and fallings, or cycles, the term used in the chapters of economic interpretation and statistical analysis, with its assertion of the recurrence, at regular intervals, of a uniform series of events? At the heart of the work there is an indecision which is never fully resolved. The belief that there are cycles is most in evidence in the statistical section, which applies the well-known techniques of the NItional Bureau of Economic Research to every- thing from depositrin the Bank of England to the production of goat-skins. To those who are, from temperament or experience, impressed by the multiplicity of ways in which economic events can be related, this section will certainly be the least congenial, and I cannot suppress the suspicion that there are few observations of importance, either in the narrative' or the analySis, which could not have been made without the help of this laborious exercise in historical arithmetic. The detailed narrative of fluctuations which fills the greater part of Volume I belongs to a different world; in good sense, shrewdness of judgement and grasp of the institutional background it is a lineal successor to Tooke's History of Prices. For those professionally engaged in the study of a period it will not put Tooke out of work, but it has the advantage, not only of the immense amount of monograph material that has since appeared, but of two valuable indexes compiled for this work, one of commodity prices, the other of share prices. - But the economist, if not the historian, wants, besides an intelligent account of what happened, a systematic and generalised explanation of why it happened, and the attempt by Professor Rostow to provide - such an explanation is probably the most interesting part of the book. This is no place for a detailed account, but its central theme is that the recurrent expansions of domestic investment were precipitated by increases in export demand. The mechanism is worked out in considerable detail, and tested in an admirably candid fashion against the actual course of the fluctuations of this period. The explanation is loose and flexible, and, beside the elegant models which economic theory now provides, looks a little like Bleriot's plane beside the latest jet. Many of the latest and most streamlined devices have not proved adaptable. This is almost inevitable. The historian is precluded by the nature of his material from verifying the force, or even the existence, of several of the connections which the pure theory of the subject suggests may have existed. And economists, who are apt to assume that those forces were most significant in ../. practice which are most important in the logic of their models, must not be impatient with historians, who can hardly help behaving as if only those factors were important for which some evidence survives, Even within this range, it would be possible, as Professor Rostow points out, to construct alternative explanations around factors which play a relatively minor role in his version, and on the evidence available it would not be possible conclusively to prove or disprove any of them, The most that anyone can claim for any explanation, and all that Professor Rostow claims for his, is that it explains more of the evidence than do the alternatives. This is a fair claim, though I believe he allows too small a role to the income-redistribution effect of harvest fluctuations. In my feelings about this book I detect a rising long. term trend of respect, and of gratitude to the late Professor Gayer and his collaborators for their immense labours.
H. J. HABAKKUK.
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