The New Economic History (a term proposed by J. Hughes) or Cliometrics (coined by S. Reiter), meaning literally the measurement of history, is of very recent origin. The first to claim involvement in it were Conrad and Meyer in 1957 and 1958.[1] Fogel’s [2] seminal research work (1964) is, in extension, a true revolution in the history of economics, even a complete break with the tradition.[3] It has re-established a role for history in economics, by expressing it in the language of the discipline. Today one can even say that it is an expanding domain in economics, contributing to new debates or challenging old conventional wisdom. The use of econometric techniques and economic theory has not solely contributed to rejuvenating economic history debates and made quantitative arguments unavoidable; it has also contributed to the slow emergence of a new historical awareness among economists.[4]
The quantitative projection of social sciences in the past
Cliometrics does not concern economic history in the limited, technical meaning of the term. It modifies historical research in general. It represents the quantitative projection of social sciences in the past. The question of knowing whether slavery benefited or not the United States before the Civil War or whether the railways had substantial effects on the development of the US economy [5] is as important for general history as for economic history and will necessarily weigh on any interpretation or appraisal (anthropological, legal, political, sociological, psychological, etc.) of the course of American history.
Furthermore, cliometrics challenges one of the basic hypotheses of the idealistic school that consists of holding that history can never provide scientific proof as it is never possible to subject to experiment historical events that are by definition unique. It replies that on the contrary, it is possible—at least in suitable cases—to construct a fictitious (counterfactual) situation that can be used to measure the deviation between what actually happened and what could have happened under different circumstances.[6] This methodological principle, that is to say the measurement of the influence of a factor on a development by using the difference between the development actually observed and the hypothetical development that would have been observed if the factor in question had not existed, is perhaps, along with historical time series econometrics [7], the most important contribution of cliometrics for researchers in social science in general and historians in particular.
The methodological features
Fogel defined the methodological features of cliometrics. He considers it fundamental that cliometrics should lay stress on measurements and that it should recognise the existence of close links between measurement and theory. Indeed, unless it is accompanied by statistical and/or econometric processing and systematic quantitative analysis, measurement is just another form of narrative history. It is true that it replaces words by figures but it does not bring in any new factors. In contrast, cliometrics is innovative when it is used to attempt to formulate all the explanations of past economic development in terms of valid hypothetico-deductive models. In other words, the main characteristics of cliometrics is the use of these hypothetico-deductive models that call on the closest econometric techniques with the aim of establishing the interaction between variables in a given situation in mathematical form.
This generally consists of constructing a model—of general or partial equilibrium—that represents the various components of the economic evolution in question and showing the way in which they interact.[8] Correlations and/or causalities can thus be established to measure the relative importance of each over a given period of time.
The final ingredient of the cliometric approach concerns the concepts of a market and price. Even in areas where there is not an explicit market, the cliometric approach will often study the subject by analogy with the market concepts of supply, demand and price.[9]
So far, hypothetico-deductive models have mainly been used to determine the effects of innovations [10], institutions [11] and industrial processes on growth [12], cycles [13], democracy [14] etc. As there are no records saying what would have happened if the innovations in question had not occurred or if the factors involved had not been present, this can only be found out by drawing up a hypothetical model used for deducing a fictitious situation, that it to say the situation as it would have been in the absence of the circumstances in question. It is true that the use of propositions contrasting with the facts is not new in itself. Such propositions are implicitly involved in a whole series of judgements, some economic and others not. What would have happened, for example, if there had been opposition to Hitler’s remilitarisation in 1936?
The use of propositions contrary to the facts has not escaped criticism. Many scientists still consider today that the use of hypotheses that cannot be verified does not produce history but quasi-history. Furthermore, the results obtained by the most elaborate cliometric applications have been less decisive than many cliometrics specialists had hoped for. Critics are doubtless right to conclude that economic analysis in itself, with the use of econometric tools, is unable to provide causal explanations for the process and structure of change and development. There appear to be non-systematic breaks in normal economic life (wars, bad harvests, collective hysteria during stock market crashes, etc.) that require overall analysis but that are too frequently considered as extrinsic and abandoned to the benefit of an a priori formulation of theoretical suppositions.
Nevertheless, in spite of the disappointments resulting from some of its more extreme demonstrations, cliometrics also has its successes, together with continuous theoretical progress. The risk would obviously be that of allowing economic theory to neglect a whole body of empirical documentation that can enrich our knowledge of the reality of economic life. Conversely, theory can help to bring out certain constants and only mastery of theory makes it possible to distinguish between the regular and the irregular, between the foreseeable and the unforeseeable.[15]
The main achievements
At the present stage, the main achievements of cliometrics has been to slowly but surely establish, in the Fogel tradition, a solid set of economic analyses of historical evolution by means of measurement and theory. Nothing can now replace rigorous statistical and econometric analysis based on systematically ordered data. Impressionistic judgements supported by doubtful figures and fallacious methods and whose inadequacies are padded by subjective impressions have now lost all credit. Economic history in particular should cease to be a "simple" story illustrating with facts the material life during different periods and become a systematic attempt to provide answers to specific questions. The ambition should be to move from the verstehen or understanding side to the erklären or explaining side (or mixing both approaches).[16]
By extension, the more the quest for facts is dominated by the conception of the problems, the more research work will address what forms the true function of economic history in the social sciences. This change of intellectual orientation, of cliometric reformulation can thus reach other human and social sciences disciplines (law, sociology, political science, geography, etc.) and engender similar changes.
Indeed, the most vigorous new trend in the social sciences is without a doubt the preoccupation with quantitative and theoretical aspects. It is the feature that best distinguishes the concepts of our generation from those current from after World War 2 until the 1990s. Everybody is ready to agree to this—even the most literary of our colleagues. There is nothing surprising about this interest. One of the characteristic features of today’s younger generation is most certainly that its intellectual training is much more deeply marked by science and the technical spirit than that of the generations that preceded us. It is therefore not surprising that young scientists should have lost patience with regard to the tentative approach of traditional historiography and have sought to build their work on foundations that are less "artisanal".
Human and social sciences are thus becoming much more elaborate in the technical respect and it is difficult to believe that a reversal of the trend might occur. However, it is also clear that a significant proportion of human and social scientists have not yet accepted the new trends aimed at using more elaborate methodology and clear concepts conforming to new norms in order to develop, in a fogelian tradition, a truly scientific human and social science.
A branch of history?
For many authors — and many of its protagonists — cliometrics appears to be first of all a branch of history, using economic tools, techniques and theories to provide answers to historical debates rather than to economic debates per se.
The meaning of the word "empirical" for (American) economic historians has varied considerably with the passing of time. One can observe a shift from a concept of empirical fact as understood by the "classical historian" (for whom anything retrieved from archives can be used in his demonstration and not only—initially not at all—quantitative data and figures) to one as understood by (applied) economists (the empirical aspect consists of analysing numerical time series) and a convergence of theoretical viewpoints of historians and economists thanks to a common interest in the building of theories of development. Here, Kuznets [17] seems to have played a key role by emphasising the importance of performing at the onset a serious macroeconomic analysis of the major quantitative macro-changes in the past economic history before possibly identifying certain sectors that are deemed central for economic development. One should note that even in his concern to combine history with economic analysis, he thought of a theory of development that remained inductively based upon the observation of the major past evolution enlightened by the analysis of long run time series patiently accumulated by the economic historian. This (inductive) view is therefore intimately linked with the historical current in economics (see, for example, the German Historical School [18]) despite of the use of more sophisticated techniques. It could be said that the two disciplines became closer, but probably within the frame of ‘inductive’ economics. On top of that, despite those early interests in building a kind of development economics historically (i.e. inductively) grounded, cliometrics mainly tried to provide answers to historiographical questions—and therefore spoke more to the historian than to the standard economist. Econometric techniques may be used, with the reconstitution of time series and identification of missing figures by interpolation or extrapolation—something by the way that annoys professional historians—but these cliometric procedures have nonetheless a historical vocation, that of shedding light on historical questions—considering economic theory or econometrics as auxiliary disciplines of history. And when cliometric approach was mobilised to build a development theory based upon clearly measured facts, it developed an economics more akin to the objectives of the German Historical School than one participating to the movement towards highly abstract and deductive theory that characterised the development of the neo-classical school of the time. The conflict between Kuznets and Rostow, for example, regarding the stages in economic development, was actually based upon the empirical foundations of Rostow’s theory [19] and not at all on a debate concerning the shortcomings of a very inductive and aggregate perspective lacking formal rigor (no use of growth theories) or microfoundations, which would doubtless be the main subject of criticism today. In short, either cliometrics is still a (modernised) branch of (economic) history—in the same way as the modernisation of methods in archaeology, from carbon-14 measurement to the use of statistical techniques such as discriminant analysis, does not turn the discipline into a branch of natural science—or the cliometric approach is mobilised to obtain theoretical results grounded more on induction from collected time series than from a deductive explicit modelling exercise, i.e. to build an economic theory that must be primarily founded on facts and a generalisation of empirical. By this way it contributes to an economic science that is more related to the German Historical School than to the neo-classical perspective.
An auxiliary discipline of economics?
But this is not the end of the story. Some recent work in cliometrics performed by economists (stricto sensu) reveals the possibility of a cliometrics that could also be an auxiliary discipline of economics per se. As such it should be part of the toolkit and competencies of all economists. However, as the term auxiliary discipline indicates, it could only fulfil its proper role for economics if it remains slightly (not too much) outside the realm of standard neoclassical economics. It must be a compound of the application of the newest econometric techniques and economic theory with the old institutional and factual culture characterising the old economic history. History is indeed always a discipline of synthesis. It should also be the case for cliometrics. If not, if cliometrics was deprived of all its "historical dimensions", it would simply cease to exist (it would only be economics applied to the past, or mere retrospective econometric exercises). To be helpful for the economic profession at large, its main job should be to mobilise all the relevant information that can be gathered from history to enrich or even challenge economic theory (or theories).[20] And this relevant information should also include cultural or institutional development, provided that they can be properly presented as useful for the economic profession. A conventional belief among economists (in fact, that of Lord Kelvin) is that "qualitative is poor quantitative". But could it not be possible that "quantitative is also poor qualitative" sometimes be true? A big difference between economists and historians is the sense of so-called historical criticism and the desire to avoid any anachronism. In addition to close examination of the historical sources, this involves the close examination of the institutional, social and cultural context that forms the framework constraining the players’ behaviour. It is true that the (new) economic history will not build a general theory — it shares too strongly the belief in the necessity of examining economic phenomena in their context — but it could suggest a few useful ideas and insights, based upon solid investigations and correctly estimated stylised facts, to economists who are attempting to develop laws of economic behaviour (unlike history, economics is still a nomological science). Economists and cliometricians can also cooperate and write jointly pieces of research. This is a view shared among others by Acemoglu, Johnson and Robinson [21], Galor [22] and by myself [23], trying to use the material derived from traditional history to build new ideas useful for economic theorists.
A full-fledged field of economic theory?
Last but not least, cliometrics could one day (or is perhaps slowly becoming) be more than just an ancillary discipline of economics to become a full-fledged field of economic theory. There is indeed a last possibility, viewing cliometrics as the science of the emergence of institutional and organisational structures [24], and that of path dependence.[25] Economic history would use the old techniques of the discipline coupled with the state of the art arsenal of econometrics in order to reveal stylised facts about the efficiency of various institutional arrangements as well as on the causes and consequences of institutional change. It would help the theorist in developing a true theory of institutional change, i.e. one that at the same time would be general (serving the needs of policy makers today for example), theoretically solid (grounded on economic principles) while solidly grounded on empirical regularities as put forward by a joint economic and historical analyses. This analysis of institutional morphogenesis [26] would be the true theoretical part of a cliometric science that would emancipate itself from its apparently purely empirical fate - being the playing ground of long run econometricians. It is clear that economists’ desire for generality and their fascination for the mathematical science does not encourage them to pay too much attention to contextualisation. However, neo-institutionalist economists like North warn us to take institutional (including cultural) contexts seriously into account.
Our conclusion for this article is thus also aimed at encouraging economists to examine more systematically these theories grounded upon history and nevertheless aiming at the determining general laws on the creation of institutions or of institutional changes.
Beyond the construction and the study of long run quantitative data sets [27], a branch of cliometrics is more and more focused on the role and evolution of institutions by aiming at combining both the desire for generality of the economists and the concern for the precise context in which economic players act that characterise both historians and other social scientists. This middle road between pure empiricism and disincarnate theory might perhaps open the door to a better economic theory, enabling economists to interpret current economic issues in the light of the past and, in doing so, to understand more deeply the historical working of economies and societies and by the way offering better policy advises for today.
Cliometrica - Journal of Historical Economics and Econometric History is an original illustration of the validity of this belief. As the Founding Managing Editor of the journal, I try to animate the debate by providing a leading forum for the exchange of ideas and research in historical economics, covering all facets, all historical periods, and all parts of the world. I encourage the methodological debate, the use of economic theory, model building, and the reliance upon quantification to support models with historical data. Moreover, I stress the use of standard historical knowledge to broaden understanding and to suggest new avenues of research as well as the use of statistical theory and econometrics to combine models with data into a single consistent explanation.
Claude DIEBOLT
[1] The step was taken in 1958 with the publication of the famous article on the profitability of slavery. This called into question the commonly accepted interpretation of slavery in the United States. Academics had hitherto held that slavery was an irrational institution with no links with the economy and that was already collapsing because of its own weight before the 1861-1865 Civil War. They mentioned in particular the increase in the cost of slaves for the southern planters. Conrad and Meyer first of all demonstrated that previous writings have underestimated the importance of the direct quantitative evidence that show that in fact that the plantations using slaves were profitable. They then stressed the fact that the economic theory showed that the rise in the price of slaves did not reflect the collapse of an unprofitable system but rather the increased profits that planters hoped to earn from their capital. Far from collapsing, the economy based on slavery was growing strongly. Conrad A., Meyer J.: "Economic Theory, Statistical Inference and Economic History", Journal of Economic History, 17, 1957, pp. 524-544, Conrad A., Meyer, J.: "The Economics of Slavery in the Ante Bellum South", Journal of Political Economy, 66, 1958, pp. 95-130.
[2] Winner of the Nobel Prize for Economics in 1993, with Douglass North, "for having renewed research in economic history by applying economic theory and quantitative methods in order to explain economic and institutional change".
[3] Fogel R.: Railroads and American Economic Growth: Essays in Econometric History, The Johns Hopkins University Press, Baltimore, 1964, Fogel R.: "The Reunification of Economic History with Economic Theory", American Economic Review, 55, 1965, pp. 92-98, Fogel R.: "Economic Growth, Population Theory, and Physiology: The Bearing of Long-Term Processes on the Making of Economic Policy", American Economic Review, 84, 1994, pp. 369-395.
[4] Carlos A.: "Reflection on Reflections: Review Essay on Reflections on the Cliometric Revolution: Conversations with Economic Historians", Cliometrica, 4, 2010, pp. 97-111, Costa D., Demeulemeester J.-L., Diebolt C.: "What is ‘Cliometrica’", Cliometrica, 1, 2007, pp. 1-6, Crafts N.: "Cliometrics, 1971-1986: A Survey", Journal of Applied Econometrics, 2, 1987, pp. 171-192, Demeulemeester J.-L., Diebolt C.: "How Much Could Economics Gain From History: the Contribution of Cliometrics", Cliometrica, 1, 2007, pp. 7-17, Goldin C.: "Cliometrics and the Nobel", Journal of Economic Perspectives, 9, 1995, pp. 191-208, Lyons J.S., Cain L.P., Williamson S.H.: Reflections on the Cliometrics Revolution. Conversations with Economic Historians, Routledge, London, McCloskey D.: "Does the Past Have Useful Economics?", Journal of Economic Literature, 14, 1976, pp. 434-461, McCloskey D.: Econometric History, Macmillan, London, 1987, Meyer J.: "Notes on Cliometrics’ Fortieth", American Economic Review, 87, 1997, pp. 409-411, Temin P. (Ed.): New Economic History, Penguin Books Ltd, Harmondsworth, 1973, Wright G.: "Econometric Studies of History", in: Intriligator M. (Ed.): Frontiers of Quantitative Economics, North-Holland, Amsterdam, 1971, pp. 412-459.
[5] Fogel called into question the commonly accepted interpretation of economic growth in the United States at the end of the nineteenth century. It had previously been claimed that the railways had been the determinant factor as they had opened up new territories and provided large scope for investment. Fogel contested this and developed a complex statistical model showing what the US economy would have been like in 1890 without the railways. He reached the conclusion that the national income would have been 5 percent less at the worst. Far from being indispensable, the railways were a secondary factor in the overall growth process in the US. Fogel R.: Railroads and American Economic Growth: Essays in Econometric History, The Johns Hopkins University Press, Baltimore, 1964. See also Fogel R., Engerman S.: Time of the Cross. The Economics of American Negro Slavery, Little, Brown and Company, Boston, 1974.
[6] Diebolt C., Parent A., Trabelsi J.: "Comment la croissance américaine aurait-elle réagi à une politique monétaire expansionniste en 1929 ? Les enseignements cliométriques d’une simulation SVAR", Revue Economique, 62 (6), 2011, pp. 1081-1093.
[7] Darné O., Diebolt C.: "Unit Roots and Infrequent Large Shocks: New International Evidence on Output", Journal of Monetary Economics, 51, 2004, pp. 1449-1465. See also Diebolt C., Doliger C.: "New International Evidence on the Cyclical Behaviour of Output: Kuznets Swings Reconsidered", Quality & Quantity. International Journal of Methodology, 42 (6), 2008, pp. 719-737.
[8]Williamson J.: Late Nineteenth-Century American Development: A General Equilibrium History, CambridgeUniversity Press, London, 1974.
[9] Diebolt C.: "The Stakes of Cliometrics in Ancient History", Historical Social Research. An International Journal for the Application of Formal Methods to History, 36, 2011, pp. 350-361.
[10] Diebolt C., Pellier K.: "400 ans de protection par les brevets : une contribution de cliométrie comparative", Revue Economique, 63 (3), 2012, pp. 611-621.
[11] Diebolt C., Jaoul M., San Martino G.: "Le mythe de Ferry : une analyse cliométrique", Revue d’Economie Politique, 115 (4), 2005, pp. 471-497.
[12] Diebolt C., Guiraud V., Monteils M.: Education, Knowledge and Economic Growth. France and Germany in the Nineteenth and Twentieth Centuries, Peter Lang, Collection "Comparative Studies Series", Frankfurt am Main, 2003, 141 pages.
[13] Aimar T., Bismans F., Diebolt C. (Eds.): "Le cycle économique", Revue Française d’Economie, 24 (4), 2010, pp. 1-235.
[14] Diebolt C., Mishra T., Ouattara B., Parhi: "Democracy and Economic Growth in an Interdependent World", Review of International Economics, forthcoming.
[15] Diebolt C., Parent A.: Essais cliométriques. Capital humain, monnaie et finance, croissance et cycles, Peter Lang, Frankfurt am Main, 2011, 227 pages. See also Diebolt C., Demeulemeester J.-L.: "Quo vadis ? Quel futur pour l’histoire économique en France. Réflexions et recommandations par deux économistes", in: Daumas J.-C. (Eds.) : L’histoire économique en mouvement : entre héritages et renouvellements, Presses universitaires du Septentrion, Collection "Histoire et civilisations", Villeneuve d’Ascq, 2012, pp. 219-240.
[16] Diebolt C., Palivos T. (Eds.): "Advances in Historical Macroeconomics", Journal of Macroeconomics, 31, 2009, pp. 1-216.
[17] Kuznets S.: Modern Economic Growth: Rate, Structure and Spread, YaleUniversity Press, New Haven, 1966.
[18] Alcouffe A., Diebolt C. (Eds.): La pensée économique allemande, Economica, Paris, 2009, 462 pages.
[19] Rostow W.W.: The Stages of Economic Growth: A Non-Communist Manifesto, CambridgeUniversity Press, Cambridge, 1960.
[20] Diebolt C., Parent A.: "Bimetallism: the ‘Rules of the Game’", Explorations in Economic History, 45, 2008, pp. 288-302. See also Diebolt C., Parent A.: "A Note on Juglar, Bonnet and the Intuition of the Interest Parity Relation", European Journal of the History of Economic Thought, 15 (4), 2008, pp. 595-609.
[21] Acemoglu D., Johnson S., Robinson J.: "Institutions as a Fundamental Cause of Long-Run Growth", in: P. Aghion & S. Durlauf (Eds.), Handbook of Economic Growth, Edition 1, Volume 1, Chapter 6, 2005, pp. 385-472.
[22] Galor O.: "The Demographic Transition: Causes and Consequences", Cliometrica, 6, 2012, pp. 1-28.
[23] Diebolt C., Perrin F.: "From Stagnation to Sustained Growth: the Role of Female Empowerment", American Economic Review, forthcoming. See also Diebolt C., Kyrtsou C. (Eds.) with the collaboration of Darné O.: New Trends in Macroeconomics, Springer, Berlin, 2005, 238 pages.
[24] North D.: Institutions, Institutional Change and Economic Performance, Cambridge University Press, Cambridge, 1990, North D (1994): "Economic Performance Through Time", American Economic Review, 84, 1994, pp. 359-368.
[25] David, P.: "Path Dependence: A Foundational Concept for Historical Social Science", Cliometrica, 1, 2007, pp. 91-114.
[26] To use the term of the French mathematician René Thom, i.e. the origin(s) of the various aspects of the form of an organism.
[27] Diebolt C.: "L’évolution de longue période du système éducatif allemand : 19ème et 20ème siècles", Economies et Sociétés, Cahiers de l’ISMEA - Institut de Sciences Mathématiques et Economiques Appliquées, Série AF, 23, 1997, pp. 1-370.