2015 Balzan Prize for Economic History
Acceptance Speech – Bern, 13.11.2015 (video + text)
Ladies and Gentlemen,
I am deeply honored and humbled to stand before you today to receive the Balzan Prize. The Foundation wisely has decided to give the prize in different fields every year, and my own area of expertise, economic history, has been the beneficiary of the Balzan Prize just once before. The winner at that time was a great scholar and intellectual, Carlo M. Cipolla. The very idea that I am standing here at the same place that this intellectual giant stood twenty years ago fills me with pride and trepidation in about equal measures.
Economic history is, by its very definition, an interdisciplinary field. It is, in reality, even more interdisciplinary than it sounds. Economic historians have to know, of course, economic theory and econometrics, and be able to read original historical documents and primary archival sources, as well as foreign languages. Other areas in the social sciences such as sociology and political science are almost always relevant. They also have to be very good in quantitative methods and advanced data analysis, and many of them know a lot about various other areas that relate to their specific research such as human biology, nutritional science, engineering, agronomy, archaeology, and many other areas. The best economic historians are jacks of all trades and the masters of many. Carlo Cipolla surely fell into that category. He wrote with unfailing mastery about diseases and public health in Renaissance Europe as well as money, ships, and clocks in times past.
Why should one study economic history? For the historians, the answer should be obvious. Economic history is about the material fabric of life: it is about how humans coped with the biblical retribution that in the sweat of thy brow thou shalt eat bread. It is how people struggled with a recalcitrant and niggardly environment, trying to get their families to survive hunger, cold, and disease. It is about taxes and rents and the many other forms by which the strong and the powerful extracted resources from the poor and the weak. But it is also about the miracles of human cooperation and ingenuity. It is about how markets worked, lubricated by human inventions such as money, contracts, and corporations. It is about how slowly but certainly humans came to understand the laws of physics, chemistry, and biology and harnessed them to their needs to produce engines, antibiotics, and sausages.
For the economist, economic history should be studied for the same reason that evolutionary biologists should study paleontology. As every biologist knows, 99% or more of all species that ever existed are extinct. Excluding the past limits the scope of inquiry to small part of available information, and this holds especially for economics. The historical record of economies over all times is vastly richer and more diverse than the present alone. An economist studying today’s world will not encounter many institutions prevalent in the past, such as feudalism, formal and open slave markets, and blatant colonialism. Today you cannot find many examples of systems that obey the dismal and gloomy rules of Malthusian dynamics, when any economic advance was negated by relentless population growth. Demographic experiments such as the Black Death, which in a few years wiped out a third of Europe’s population, mercifully will not be repeated. Or so we hope. But their study sheds light on how economies operated in conditions that our own world cannot replicate.
Finally, economic history should be taught in order to remind intelligent and thoughtful people, once and for all, that the best time in history to be born on our planet is today. The Good Old days may have been old, but they were never good. Daily material life in premodern societies, as Carlo Cipolla stressed in his classic Before the Industrial Revolution, was harsh and bleak. The vast majority of people in the past were poor, not in the sense we think of poverty today, but through a deep absence of the basic necessities of survival, the poverty of homeless and starving beggars, of peasants for whom backbreaking toil still often ended in harvest failure and famine. Of course, there were some well-to-do people in our past, those who could live in stone houses, eat meat, and buy paintings. But in today’s industrialized countries the lower middle-class citizen enjoys a standard of living far better than the popes and emperors during the Renaissance: they are healthier and more secure, they eat and drink better, are warmer in the winter and cooler in the summer, and have vastly greater access to culture, information and entertainment.
Economic history is a dynamic discipline. Our age is the era of big data, advanced models, and sophisticated estimation methods in economics; economic history is part of that movement. My students have more observations and fancier techniques than my generation ever dreamed of. They will continue to study the economic past with those tools, for all the reasons I mentioned, and one more. The last one is the best of all: we humans study our past because it is alive around us. As William Faulkner said, “the past is never dead. It’s not even past.”