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This chapter begins with a discussion of the roots of economic history. It then turns to the identity crisis faced by economic history today, brought about by the development of a movement founded in the United States at the end of the 1950s known as “new economic history” or “cliometrics.” History is normally expected to improve our understanding of the past. It is probably agreed that what distinguishes good historical research is its capacity to throw light on the workings of societies that differ to varying degrees from our own. However, the aim of cliometrics is not to increase our knowledge of the past. It is to create narratives of the past compatible with neoliberal economics, and often it is a highly ideological exercise to endorse specific worldviews, theories, and policy recommendations.

The major misunderstanding about cliometrics comes from the subsequent spread of Douglass North's new institutional approach. North claims to have challenged traditional economic theory, which he found inadequate. This chapter shows how this approach, besides being patently unhistorical, rests on flimsy foundations. In order to do so, it draws on a variety of evidence from the social and historical sciences. It also compares North's synthesis with the example of social science history offered by Moses Finley, the eminent ancient economic historian. Finley made a powerful argument against the application of modern economic theory to the past. Furthermore, he developed an alternative interpretation for the origin of institutions, rigorously demonstrating the logical precedence of society over the economy. The chapter begins by considering the criticism that Karl Polanyi made against neoclassical economics in the mid-twentieth century. In fact, both North's and Finley's works can be read as a response to Polanyi.

Cliometrics has evolved into a literary genre having little to do with numbers in the sense of econometric testing, though a lot to do with the deductive stance of the new institutional economics and of rational choice theory. At times these two approaches, which are not completely compatible, coexist even in the same author's work, giving rise to a sort of analytic schizophrenia. This chapter analyzes the recent developments in economic history. From the standpoint of methodology, it shows the confusion between history and path dependence or presence of “multiple equilibria” in a predetermined deductive schema. It argues that underlying these trends is an ideological slant, whether conscious or unconscious, aimed at exalting values such as individualism and materialism, which are typical of certain segments of contemporary Western society, and at projecting them unduly onto the past.

This chapter is the first of two that intends to show that it is possible to practice a different type of economic history from cliometrics, without lapsing into narrative history. It involves approaches that were molded in continental Europe but were not exclusive to Europe, and had the Annales school as their catalyst but were not coincident with it. The chapter discusses the model that Polish historian Witold Kula introduced in his An Economic Theory of the Feudal System (1962). In fewer than two hundred pages, it demolishes the claims of neoclassical microeconomics to universality and shows how its theorems are not applicable to preindustrial eastern Europe. Starting from an investigation of this context, it creates appropriate alternative theoretical tools for explaining it. But the usefulness of this type of history also extends to the present, suggesting that the workings of each particular economic system needs to be understood on its own.

This chapter covers macroeconomic issues, including economic cycles, money, price levels, the nature of growth, and the historical roots of underdevelopment. It shows how the micro level is logically linked to the macro level. It also argues that the crisis of the French-style economic history in the past twenty years is due more to French historians transferring their interest to cultural history. However, abandoning quantitative history in favor of the histoire des mentalités does not imply there is no room for economic history alongside the new political history and other aspects such as the history of the body and the history of death that were once considered eccentric.

This chapter is a manifesto for the reconstruction of economic history and calls for a new pact between history and the social sciences in order to counter the way economists have abused the past. The chapter cites the need for European economic historians to organize themselves with greater awareness and regain the courage to construct the type of historical models of past generations. It claims that economic history is in the midst of an intellectual crisis faced, as evidenced by the growing marginalization of the discipline in the universities. It further argues that economic history has to lift itself out of the difficult situation it is now in by becoming involved with the genuinely “social” sciences and with all those scholars who are interested in an innovative interaction with historians without imposing any particular point of view.

Economic history has always been quite a peculiar department both in the domain of history and that of economics; dealing with change, institutions, collective rationality, and conflicting strategies of economic agents, privileging descriptive and non‐formal analytical tools, economic history remained for long outside the scope of formal neoclassical economics.

This chapter describes and discusses the story of the incorporation of economic history into the mainstream of economic theory through the cliometric revolution, a powerful intellectual movement emerging by the late fifties, which encapsulated this reconstruction of economic history from the point of view of marginalist price theory and the postulates of individual rationality; Meyer and Conrad were the major drivers of this radical vision, and challenged the ‘old historians’ school’, today best represented by the response of David Landes.

Yet the coherence of the cliometric movement was soon jeopardized by internal contradictions: Paul David issued the most powerful challenge to the seminal building block of the new approach, Fogel's ‘Time on the Cross’, a revision of the traditional approach to the economics of slavery in the pre‐Civil War USA.

Douglass North is another example of a dissident from cliometrics, and Alfred Chandler provided alternative arguments for a reasoned history approach to societal change.

The cliometric analysis of the British Industrial Revolution, using counterfactuals, namely by Crafts and Hawke, is discussed and contradicted in the chapter.

This chapter discusses the geographical expansion of cotton cultivation in the antebellum South. It describes the interregional differences in production and productivity growth and the extent of the interregional slave trade, and compares plantation and nonplantation efficiency. First, the chapter reviews evidence for a biological revolution in cotton production in 1806, and then analyzes how cliometrics explains the growth in cotton output and treats the issues of plantation and slave productivity.

This chapter traces the history of the counterfactual premise that the Confederacy might have successfully seceded from the union. Beginning at the time of the war itself and continuing into our own century, the USA has often been imagined as the loser. The writers who explored the possibility in the late nineteenth and early twentieth centuries were generally Northerners (like H. L. Mencken) or foreigners (like Winston Churchill), who imagined that racial violence might have been averted if the South had freed its own slaves. Early twentieth-century scholars of American history legitimized that opinion by promulgating the counterfactual opinion that if the war had not been fought, slavery would soon have failed economically and thus ended peacefully. All this was refuted at midcentury with the help of a new breed of economic historians, practicing “cliometrics”, who revolutionized academic counterfactual history. Later in the century, attempts to use tort-law style counterfactual arguments in affirmative action policies also called the efficacy of the war and Reconstruction into question, as have continuing arguments for slavery reparations. Tracing these visions of what else might have been helps us to understand why our remembrance of the Civil War is still steeped in regret.

The introduction acquaints the reader with what is already known about bankruptcy in the twentieth century, describes the methods used in the book, and previews the central argument. The chapter begins with a broad overview of the laws and procedures governing the collection of unpaid debt at the state and describes federal bankruptcy. The text highlights the interplay between state and federal law. It introduces the interdisciplinary literature on bankruptcy, emphasizing the need for an analytic framework that integrates the story of changes in the bankruptcy law with the story of changes in the bankruptcy rate. It places the framework and methods within the contexts of New Institutional and cliometric traditions.