How to do Economic History: Historical Hypothesis Testing
Providing guidelines to develop and test historical hypotheses
Within the realm of Austrian economics, luminaries such as Ludwig von Mises and Murray Rothbard have articulated a clear distinction between economic theory and historical analysis. Mises, in works like "Human Action," "Theory and History," and "The Ultimate Foundation of Economic Science," delineated the conceptual boundaries between these domains. Economic theory elucidates the fundamental causal principles underlying human action and the functioning of markets. On the other hand, history applies economic theory to the analysis and interpretation of past events and societal developments. In other words, history never tests economic theory, but is understood by it.
Economic theory transcends mere empirical observations or historical accounts. Mises emphasizes the timeless nature of economic laws, rejecting historical determinism and highlighting the role of individual choices driven by subjective valuations. He distinguishes between economic theory and history, asserting the primacy of theoretical comprehension in economic analysis, as economic laws stem from the inherent logic of human action rather than historical circumstances. Consequently, while historical narratives may provide insights into applying economic principles, they do not alter the immutable laws of economics.
Despite the lucid exposition of this theoretical framework, Austrians, including Mises and Rothbard, did not offer a comprehensive manual for applying economic theory to historical inquiry. While they furnished exemplary demonstrations in works such as Rothbard's "America's Great Depression" and Mises' "Omnipotent Government," the absence of explicit guidance leaves room for interpretation, especially for those seeking a systematic approach. For individuals grappling with the intricacies of economic theory and its application to historical analysis, a more explicit roadmap would undoubtedly prove beneficial.
Testing Historical Hypotheses
In his book "Justifying Historical Descriptions," C. Behan McCullagh outlines factors that historians typically consider when evaluating a historical hypothesis. Historians test their hypotheses by assessing their logical coherence and their ability to account for the available evidence. Unlike scientists who experiment in labs, historians evaluate hypotheses based on how well they explain the evidence at hand. When new evidence emerges, historians adjust their hypotheses accordingly. For instance, if historians uncover that two months before Tom's death—initially ruled an accident—his wife purchased a life insurance policy and conspired with her lover, they may need to revise their explanation.
It's important to note that a historical hypothesis isn't testing economic theory. Instead, it utilizes economic theory as a lens through which to understand the evidence and subsequently tests that evidence. The application of economic theory aids in making sense of the evidence, guiding historians in formulating hypotheses that align with economic reasoning.
Several guidelines exist to determine which historical hypothesis is better than an alternative:
A good historical hypothesis, when combined with established facts, should lead to further statements or predictions about observable data. It emphasizes the importance of coherence and consistency in historical explanations.
For instance, if historians propose that political tensions led to the outbreak of a war, their hypothesis should imply observable evidence such as diplomatic exchanges, military buildup, or ideological conflicts prior to the war's onset. This aligns with the guideline that a good historical hypothesis, when combined with established facts, should lead to further statements or predictions about observable data.
The hypothesis must have greater explanator power.
In simpler terms, when historians propose a hypothesis to explain a historical event or phenomenon, it should offer a more comprehensive and convincing explanation than other possible interpretations. The hypothesis should not only account for the known facts and evidence but also provide insights into the underlying causes, dynamics, and complexities of the historical context.
For example, if historians are examining the causes of a particular revolution, a hypothesis that considers a combination of economic, social, and political factors may have greater explanatory power than one that focuses solely on one aspect, such as political discontent. By considering multiple factors and their interactions, the hypothesis with greater explanatory power offers a more nuanced understanding of the historical event.
Ultimately, this guideline promotes the importance of critically evaluating the strength and coherence of historical hypotheses in relation to alternative interpretations. Historians strive to identify the hypothesis that best elucidates the complexities of the past and provides meaningful insights into historical phenomena.
The hypothesis must be more plausible that alternative hypotheses.
A historical hypothesis must be more believable and realistic compared to alternative hypotheses in order to be considered valid and credible.
In essence, when historians propose a hypothesis to explain a historical event or phenomenon, it should be logically coherent and consistent with the available evidence. The hypothesis should align with the known facts, context, and circumstances surrounding the event or phenomenon.
For example, if historians are investigating the causes of a particular historical conflict, a hypothesis that considers geopolitical tensions, economic rivalries, and cultural differences may be more plausible than one that attributes the conflict to a single simplistic cause. Plausibility is determined by how well the hypothesis fits with the historical context and whether it offers a reasonable explanation for the events in question.
Historians critically evaluate the plausibility of hypotheses by considering factors such as historical precedents, human behavior, and the dynamics of the time period. They seek to identify the hypothesis that provides the most convincing and believable explanation for the historical phenomenon under scrutiny.
This guideline underscores the importance of assessing the credibility and coherence of historical hypotheses in relation to alternative interpretations. Historians aim to identify the hypothesis that offers the most plausible and persuasive explanation for the complexities of the past.
The hypothesis must be less ad hoc.
Being "less ad hoc" in historical hypotheses emphasizes the importance of avoiding explanations that rely on unnecessary assumptions or special pleading to account for evidence or events.
In simpler terms, when historians propose a hypothesis to explain a historical event or phenomenon, it should not introduce additional, arbitrary elements solely to fit the evidence. Instead, the hypothesis should be based on the most straightforward and parsimonious explanation that aligns with the available evidence and Occam's Razor principle, which suggests that simpler explanations are generally preferable.
For example, if historians are examining the decline of a civilization, a hypothesis that attributes it to a complex conspiracy involving multiple secret societies might be considered ad hoc if there is little evidence to support such a claim. On the other hand, a hypothesis that identifies environmental degradation, economic instability, and external invasions as contributing factors would be considered less ad hoc because it relies on more plausible and widely supported explanations.
By adhering to the principle of being less ad hoc, historians aim to construct hypotheses that are grounded in empirical evidence and logical reasoning, thereby enhancing the credibility and reliability of their interpretations of the past. They strive to avoid overly complex or contrived explanations in favor of those that offer the most straightforward and coherent account of historical events and phenomena.
The hypothesis must be disconfirmed by fewer accepted beliefs.
A strong historical hypothesis should conflict with fewer established beliefs or accepted truths. In other words, when combined with well-established facts, the hypothesis should lead to fewer false statements or contradictions.
For instance, if historians propose a hypothesis about the causes of a historical event, it should not contradict widely accepted historical facts or principles. Instead, it should integrate smoothly with existing knowledge, supporting and enriching our understanding of the past.
Consider a scenario where historians are exploring the reasons for the fall of an ancient civilization. A hypothesis that blames the collapse solely on alien intervention would conflict with numerous accepted beliefs about the socio-political, economic, and environmental factors that typically contribute to the decline of civilizations. Conversely, a hypothesis that emphasizes internal strife, environmental degradation, and external invasions would align more closely with accepted truths and lead to fewer false statements when combined with established historical knowledge.
In summary, by minimizing conflicts with accepted beliefs and truths, historians strive to construct hypotheses that enrich our understanding of the past without introducing unnecessary contradictions or falsehoods.
The hypothesis must so exceed its rivals in fulfilling the conditions above.
This guideline emphasizes that a strong historical hypothesis should outperform its competitors in meeting the criteria mentioned earlier. In other words, it should excel in logical consistency, explanatory power, plausibility, and coherence while minimizing ad hoc assumptions and conflicts with established beliefs.
When historians evaluate competing hypotheses to explain a historical event or phenomenon, they assess which hypothesis provides the most comprehensive, convincing, and internally consistent explanation. The hypothesis that surpasses its rivals in fulfilling these conditions is considered stronger and more compelling.
For example, if historians are examining the causes of a particular historical conflict, they might consider multiple hypotheses, each proposing different explanations based on available evidence and scholarly interpretations. The hypothesis that demonstrates superior logical coherence, explanatory breadth, and adherence to established truths would be deemed more robust and persuasive than its competitors.
This guideline points to the importance of rigorously evaluating competing hypotheses based on their ability to meet established criteria for historical analysis. Historians aim to identify the hypothesis that offers the most compelling and comprehensive explanation for the complexities of the past.