Reviewed by Alistair M. Preston Boston University

Roger Backhouse’s book, “Economists and the Economy”, is concerned with both the history of economic thought and of the economy. His main concern is that present day economic thinking and analysis are too divorced from reality. The book examines how economic and political events from the seven-teenth century until the present day have impacted upon, and have been shaped by, the economic thought of the time. His main aim is to provide students of economics with some of the historical and contextual background they need in order to better understand the subject they are studying.

The book is divided up both chronologically and by eco-nomic subject. In this respect, it is a series of histories. Chapter 2 is concerned with “Growth and Development”, Chapter 3 with “Regulation of Trade and Industry”, Chapter 4 with “Money and Inflation” and Chapter 5 with “Employment and Economic Fluctuations”. In each of these chapters Backhouse illustrates the intertwining or reciprocal relationship between economic thought and economic and political events. The final two chapters switch the emphasis to a more theoretical posture where he explores the “Theory of a Market Economy” in Chapter 6 before concluding with a more general overview of the “Discipline of Economics” in Chapter 7. These final two chapters include a critical examination of the contributions made by, and the strengths and weaknesses of, economic theory.

By concentrating upon specific subjects, for example, economic growth, the reader is exposed to the intricacies and interrelationships of thought and practice over the centuries, as well as how the economists of a period often differed in their economic interpretations and prescriptions. The manner in which the book is structured means that a number of economists are visited again and again (most notably Adam Smith), vividly revealing their contribution to a wide range of economic theory and practice. The structure also allows the material to be expressed as a lively narrative rather than in a technical style.

Given the length of time covered (from 1600 to the present day), Backhouse introduces the reader to a number of lesser known and neglected seventeenth and early eighteenth century economists such as Quensay, Boisguilbert, Cantillon and Locke. He reveals how these and other scholars grappled with, and made sense of, the newly emerging and increasingly complex economic order of their time, as well as revealing how their work subsequently informed those of the better known classical economists. What is surprising, however, is the omission of some of the economic greats such as J. R. Hicks and George Stigler. The latter has been one of the central opponents of the regulation which Backhouse writes about in Chapter 3. The volume also brings the reader up to the present date, considering such issues as the EEC, privatization in the U.K. and deregulation in the U.S.A., all of which are important to the reader’s understanding of contemporary economic thought and the economy. Obviously with such a time frame, the book is very much an overview, however, given the thrust and intention of the book, this is a very valid position to adopt and one which is executed with consummate skill.

One of the author’s purposes in writing this book is to demonstrate that our understanding of contemporary economic thought and practice, and to some extent the economy itself, must be situated both historically and contextually. This book, therefore, not only considers how past economic thought and practice preconditions, or at least shapes and influences, the future, but also examines the specific economic conditions within which particular economic theories and practices emerge. I believe that this approach to a history of thought and practice offers a number of advantages. Grounding theories and practice in their economic as well as historical context not only breathes life into the narrative, making it more real and intelligible, it also reveals the very important intertwining of systems of economic thought and practice with other contemporary events and discourses. In this respect; much economic thought and practice over the centuries is seen to be constituted within, or informed by, events taking place in the real world. The book also reveals how such theories are then often tested against, and sometimes contradicted by, subsequent events. My only real criticism of this book is that the “other” events and discourses are largely restricted to the economic and political realm. Contemporary social, and indeed philosophical discursive practices, which may also be observed to impact upon economic thought, practice and the economy, received scant attention. This, however, is possibly too much to expect from a single volume.

Roger Backhouse weaves into his history a number of stated positions, which he refers to as recurring themes. These are that “there are very serious limits to what economics can achieve” and that “there are certain problems that economists have never managed to tackle successfully and which are unlikely to be tackled much better in the foreseeable future” (see preface). While I have some sympathy with the positions adopted, others may not. Nevertheless, their presence is refreshing and valuable. Too often histories eulogize their disciplines rather than critically reflecting upon them. In contrast, the “recurrent themes” in Backhouse’s book serve as a challenge to the reader. The reader is required to consider what the author is saying and whether or not he or she agrees with his position rather than uncritically accepting the material as a given fact.

Although never specifically referring to accounting thought and practice, the orientation of the book may serve as a useful model for similar historical studies in accounting. As with economics, accounting thought should be situated in its histori-cal, economic, political and, if I may add, social context. The book may also provide useful source material for historical studies in our own discipline. For example, accounting historians may wish to explore whether economic growth, regulation of trade and industry, money and inflation, employment and economic fluctuations over the centuries have impacted upon accounting thought and practice.