Reviewed by Christopher J. Napier London School of Economics
This book contains both a critique and a demonstration. The critique is aimed at what Snooks identifies as the absence of realism in modern deductive economics, manifested particularly by a downgrading of any historical perspective. To Snooks, modern economic theory ignores the dimension of time, so that even attempts to represent an economy dynamically often manifest themselves as a series of static equilibria with little attempt to explain how the economy moves from one equilibrium to the next. The demonstration of the relevance of a historical perspective draws on past research by Snooks into the medieval English economy, particularly as revealed by Domesday Book. Snooks argues that European economies during the last millennium have been subject to great waves of economic change lasting between 150 and 300 years. By demonstrating these waves, Snooks attempts to persuade us not only that economic theory, lacking a historical dimension, is unable to deal with important long run forces in the economy, but also that the waves continue and imply a danger of economic stagnation and instability in the very near future similar to that identified by Snooks as characterising the end of the Middle Ages.
Bashing theoretical economics has become rather fashion-able in recent years, and accusations of the irrelevance of much economic theory (particularly the more abstruse mathematical approaches) to real-world problems can be found not just in the literature of economic methodology but also spill over into ac-counting (as exemplified by the attacks on positive accounting theory). Critics such as Donald McCloskey have questioned the foundations of modern economic theory, ironically in the opin-ion of Snooks, who regards the cliometric school of economic history for which McCloskey is “the main apologist” [p. 137] as being more about deduction from theory than the analysis of historical data. Snooks develops his critique of deductive eco-nomics in the first part of the book by discussing the struggles between the deductivists and the historicists in nineteenth cen-tury Britain, leading to the triumph of Alfred Marshall’s “scien-tific economics” over the historical approaches of such as Cunningham and Ashley. He compares different traditions of economic history — the “custodians of real time” [p. 117] — in order to determine whether any of these traditions is capable of putting time back into economics. The British social and eco-nomic tradition leading to writers such as J. H. Clapham, and the American cliometric tradition characterised by Nobel laureates Robert Fogel and Douglass North, are both found inferior to an Australian tradition combining analytical and quantitative approaches to economic history, which Snooks identifies with Timothy Coghlan and his successors Edward Shann and Sydney and Noel Butlin. Snooks sees the work of Coghlan in particular as pioneering national accounting two generations before its reinvention in Britain and the U.S.A. in the 1930s.
In the second part of the book, Snooks is consciously writ-ing in the Coghlan tradition. This part of the book begins with a discussion of the usefulness of Domesday Book as a source of economic data about Norman England, and attempts to construct a macroeconomic model of the feudal system. Underlying this interest in the economy of 900 years ago is a central methodological question: is it helpful to analyse the behaviour of individuals in feudal society in terms of the “economic man” of the deductive theorists? In other words, were feudal barons and others economically rational? Snooks concludes that his statistical analysis based on Domesday Book suggests that the primary motivation of decision-makers was material self interest, so that “human motivation throughout time is basically unchanging” [p. 229].
Overall, this is an interesting and stimulating book. While at first sight it is not of direct relevance to the work of accounting historians, both the critique of a timeless deductive economics and the emphasis on the careful analysis of historical data are worthy of attention, even if we are sceptical of Snooks’s own belief in a timeless notion of “rational economic man”.
