I believe an understanding of economics is essential for any leader in any field today.  Without the freedom of action in the economic field, there is a subsequent loss of freedom in any leadership endeavor as well.  Chief Justice Marshall stated, “The power to tax is the power to destroy.”  When governments covet power more than they value liberties, the citizens lose their freedoms, money, and dignity.  If you are a leader or future leader then read the following thoughts by Murray Rothbard in his introduction to his study of Economic History.  Rothbard’s thoughts will start the education process to learn why the American and World Economy is in its current mess.  Do we honestly still believe that government can solve our problems when they cannot even solve their own?  We need a new paradigm that accurately predicted the results of the latest Statist interventions in our economies.  The Austrian Economists are the only school that studies the interventions and accurately predicts the dismal results.  Modern economics is in a dead end street and must admit failure before it can break free of it prevailing Keynesian paradigm.  Every promise by Big Government to solve your problems is actually a power grab to take more of your money and freedoms.  Wake up America before it’s too late!  God Bless, Orrin Woodward

The continual progress, onward-and-upward approach was demolished for me, and should have been for everyone, by Thomas Kuhn’s famed Structure of Scientific Revolutions. Kuhn paid no attention to economics, but instead, in the standard manner of philosophers and historians of science, focused on such ineluctably ‘hard’ sciences as physics, chemistry, and astronomy. Bringing the word ‘paradigm’ into intellectual discourse, Kuhn demolished what I like to call the ‘Whig theory of the history of science’. The Whig theory, subscribed to by almost all historians of science, including economics, is that scientific thought progresses patiently, one year after another developing, sifting, and testing theories, so that science marches onward and upward, each year, decade or generation learning more and possessing ever more correct scientific theories. On analogy with the Whig theory of history, coined in mid-nineteenth century England, which maintained that things are always getting (and therefore must get) better and better, the Whig historian of science, seemingly on firmer grounds than the regular Whig historian, implicitly or explicitly asserts that ‘later is always better’ in any particular scientific discipline.

The Whig historian (whether of science or of history proper) really maintains that, for any point of historical time, ‘whatever was, was right’, or at least better than ‘whatever was earlier’. The inevitable result is a complacent and infuriating Panglossian optimism. In the historiography of economic thought, the consequence is the firm if implicit position that every individual economist, or at least every school of economists, contributed their important mite to the inexorable upward march. There can, then, be no such thing as gross systemic error that deeply flawed, or even invalidated, an entire school of economic thought, much less sent the world of economics permanently astray.

Kuhn, however, shocked the philosophic world by demonstrating that this is simply not the way that science has developed. Once a central paradigm is selected, there is no testing or sifting, and tests of basic assumptions only take place after a series of failures and anomalies in the ruling paradigm has plunged the science into a ‘crisis situation’. One need not adopt Kuhn’s nihilistic philosophic outlook, his implication that no one paradigm is or can be better than any other, to realize that his less than starry-eyed view of science rings true both as history and as sociology.

But if the standard romantic or Panglossian view does not work even in the hard sciences, a fortiori it must be totally off the mark in such a ‘soft science’ as economics, in a discipline where there can be no laboratory testing, and where numerous even softer disciplines such as politics, religion, and ethics necessarily impinge on one’s economic outlook.

There can therefore be no presumption whatever in economics that later thought is better than earlier, or even that all well-known economists have contributed their sturdy mite to the developing discipline. For it becomes very likely that, rather than everyone contributing to an ever-progressing edifice, economics can and has proceeded in contentious, even zig-zag fashion, with later systemic fallacy sometimes elbowing aside earlier but sounder paradigms, thereby redirecting economic thought down a total erroneous or even tragic path. The overall path of economics may be up, or it may be down, over any give time period.

In recent years, economics, under the dominant influence of formalism, positivism and econometrics, and preening itself on being a hard science, has displayed little interest in its own past. It has been intent, as in any ‘real’ science, on the latest textbook or journal article rather than on exploring its own history. After all, do contemporary physicists spend much time poring over eighteenth century optics?

In the last decade or two, however, the reigning Walrasian–Keynesian neoclassical formalist paradigm has been called ever more into question, and a veritable Kuhnian ‘crisis situation’ has developed in various areas of economics, including worry over its methodology. Amidst this situation, the study of the history of thought has made a significant comeback, one which we hope and expect will expand in coming years. For if knowledge buried in paradigms lost can disappear and be forgotten over time, then studying older economists and schools of thought need not be done merely for antiquarian purposes or to examine how intellectual life proceeded in the past. Earlier economists can be studied for their important contributions to forgotten and therefore new knowledge today. Valuable truths can be learned about the content of economics, not only from the latest journals, but from the texts of long-deceased economic thinkers.