Tracking the Arrow of Time to Understand the Present
THE STUDY OF HISTORY HELPS US UNDERSTAND HOW ECONOMIES AND SOCIETIES HAVE EVOLVED IN A DIRECTION RATHER THAN ANOTHER. MORE CRUCIALLY, IT PROVIDES A RATIONALE TO ASSESS CURRENT POLITICAL DEBATES AND PATHS OF DEVELOPMENTby Guido Alfani, Dept. of Social and Political Sciences
What does history teach us? All those whose profession is the study of the past, and that includes economic historians, have posed themselves this question at least once in their lives, and students of history are likely to have done the same. "History is life’s teacher," famously said Cicero in the De Oratore. Almost two millennia later, philosopher George Santayana expressed an equally favorable judgment on history: "Those who do not remember the past are condemned to repeat it". Summing up these positions, we could answer the question by saying that knowing history helps avoid repeating mistakes already made by others; in a certain sense, it provides us with a surplus of human experience compared to the one we directly accumulate in the course of our lives.
However, it is inevitable, faced with the sad spectacle that human societies often provide, to ask oneself whether to know history really enables us to avoid past mistakes (and horrors). Are Cicero and Santayana too optimistic, perhaps? Is it possible that we do not learn much from the past, instead, or at least not enough to avoid falling again and again into the same traps? As far as I know, there are professional historians who argue, between the serious and the facetious, that, technically, we learn nothing from history (at least in the performative sense of guiding and orienting human behavior), I am personally convinced that the lesson of history is actually useful to avoid some mistakes, or at least mitigate their consequences. But this is not the reason to study history that I give the students of my classes, including those covering relatively remote periods, whose practical usefulness for the present is even less obvious. In fact, from my point of view, the utility of history is to put the events, even those unfolding before our eyes, in a different and more complex perspective. The historical perspective only in rare cases indicates us the right or the wrong thing to do. Much more often, it helps us to understand what is actually happening, or has just happened, and the real nature of the options that we are facing.
To clarify, take the example of the emergence of China in the global economy, a macro-historical phenomenon of which we are spectators and which is likely to have major consequences for future global arrangements. Let's limit ourselves to one aspect: China’s level of development relative to the West. In terms of per capita income, China is still markedly behind the most advanced OECD economies, but it is catching up quickly. The situation was different in the past, five or six centuries ago, when China had comparable per capita income and living standards, as well as levels of knowledge, with respect to the most advanced areas of Western Europe. All scholars are basically in agreement on this point.
There is no agreement, however, about the timing of occurrence of the so-called Great Divergence, which put Western Europe ahead of East Asia, which is to say China. For some, divergence in growth patterns started around year 1500, at the time of the opening of the new Atlantic trading routes. For others, it is a much later process, starting with the Industrial Revolution (so after 1750). In what sense are these two different views of the historical process relevant to the way we look at the emergence of today's China? Those who believe that divergence began in more remote past tend to see the current historical dynamics as exceptional and unprecedented, thus also worrisome and threatening, i.e. the rise of China corresponding to the West’s decline. On the other hand, those who believe that economic divergence between the two regions is a more recent trend, since it’s a consequence of the Industrial Revolution (and of Europe's temporary ability to control, through its own colonies, the resources of a much larger part of the world), interpret China’s rapid growth as simply the return to the multi-millennial pattern of substantial balance between East and West. It therefore gives a much more reassuring interpretation. Although today the first interpretation is prevalent, the point that I would like to emphasize here is that embracing one or the other position allows you to produce a very different narrative, which is then expendable in current intellectual, and especially political, debates. We should thus be aware that historical narratives are never neutral, but reflect precise convictions and, frequently, overt or covert aims; it is thus essential being capable of critically analyzing the news and information that bombard us daily, and for this historiography is indispensable.
I will provide a second example, also linked to the issue of long-term divergence between regions of the world: in this case, between Northern and Southern Europe. Sometimes, I ask this question in class: why is the European Central Bank located in Frankfurt? Obviously, one could provide an excellent answer based on the political-diplomatic dynamics that formally led to this choice, perhaps adding some considerations on European geopolitics in the late Twentieth century. However, our perspective on the issue changes if we broaden our view a little. If the European Central Bank had been established in 1300 instead of 1998, it would have almost certainly been headquartered in Florence. If it had arisen in 1600, it is very likely it would have been located in Genoa. What happened in the meantime? Many things, of course, but one of these was that Italy, the veritable core of the European economy in the Middle Ages and at the beginning of the modern age, slowly slipped towards the periphery of the Continent while the center of the European economy moved north. Therefore, certain choices made today are the direct result of historical processes that began centuries ago. It is not always pleasant to be aware of historical dynamics: nobody likes to be on the periphery! But it certainly helps us understand the nature of the economic problems Italy is facing.
Read more about this topic:
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Beatrice Manzoni. Wonderful Building, Woeful Planning in Edinburgh
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Guido Tabellini. From Florence to San Francisco: Good Institutions Attract Creative People
Tamas Vonyo. The Myth of the Marshall Plan and Its Effects on Growth
The Ricordi Archives and the Value of Memory. Interview with Pierluigi Ledda
