Over the last decade or so, economists have sought to incorporate the historical into what have otherwise been the timeless and formal models of the dismal science. But they have failed to acknowledge the longs tanding debates amongst political economists and historians that have marked the evolving relationship between the economics and history over the century before economics became historyless. As a result, only an impoverished historical content is being reincorporated into mainstream economics.
Such a conclusion is reached by a careful examination of the evolving historical content of political economy and economics over the past two centuries, examining the contributions of classical political economy, Marx, the methodenstreit, Weber, Schumpeter, Veblen, Marshall, and the old and new institutionalists. The marginalist revolution is seen as a key turning point, establishing economics as a separate discipline and the logical basis on which to shift emphasis from historical induction to logical deduction. But, with the exclusion of the historical from mainstream economic theory, a tension was created between economics as confined to the science of the market and economics, or rational choice, as the explanation of everything. The latter has begun to prevail over the past fifty years, increasingly so over the most recent period, giving rise to economics imperialism or the colonisation of the other social sciences by economics. In this broader context, the contemporary approach by economics to the historical is fully specified.
Developments within economics of incorporating the historical (and the social, institutional, etc more generally) have been welcomed as progress over excessive formalism and lack of realism. But, by situating these developments in terms of the shifting relationship between economics, the historical and an evolving economics imperialism, a fuller understanding of the role of economic theory and the historical is presented as a prerequisite for analysis that aspires fully to address economic and historical change.
