It is often claimed, with some justification, that the difference between classical political economy and neoclassical economics is that one has social and historical content whilst the other does not and is universal in application. Indeed, critics and proponents of neoclassical economics point to its universal, ahistorical and asocial character as deficiency and strength, respectively. The purpose of this chapter is to attach some theoretical flesh to the bones of social and historical specificity. In what way, in particular, do Smith, Ricardo and Marx deploy a historical, and hence social, content to their theory, and what difference does it make? The focus will be on the historical, especially in the economy and classes peculiar to capitalism as a stage in history. But this inevitably carries with it a social content as well. Debate over the relationship between economics and the historical has

often been focused, not surprisingly, on the relative emphasis to be placed upon historical specificity as opposed to theoretical generality, not least in the Methodenstreit of the second half of the nineteenth century and the broader debates that preceded, and followed, the marginalist revolution, for more on which see Chapter 5. With the subsequent emergence of mainstream neoclassical economics, the balance has swung heavily in favour of the theoretical at the expense of the historical. This, however, leaves open two broad issues. The first is to examine the shifting content of the historical and the theo-

retical, and not just the balance between the two. Clearly, pure theories can

be very different from one another, despite sharing a lack of historical content, for example by appealing to marginal utility as opposed to distributional conflict. By the same token, theory-less narratives can differ from one another by virtue of their chosen focus for description – whether it be technology, production, consumption, standard of living, trade or finance. The second issue concerns the question of whether there is necessarily a

trade-off between theory and history: must one always be at the expense of the other? Or, to put it another way, must theory always be universal or general and, in this sense, ahistorical? Such is the basis for the parodied polar extremes in the Methodenstreit, with one side accusing the other of lacking historical specificity and the other riposting with a charge of lack of theory. As the quotation that opened this chapter indicates, even a leading neoclassical economist – albeit one with a strong sense of history – thinks otherwise. Yet it has become commonplace to observe that neoclassical economics is both universal and ahistorical, so much so that close consideration of what this means and what might be a different approach have been overlooked both by critics and proponents alike. The purpose of this chapter is to reaffirm the possibility of economic

theory with historical content, through selective appeal to elements in classical and Marxist political economy. To establish, despite frequent assertion to the contrary, that Marx and the classics offer historically rooted theory is far from immediate. For, broadly, there are two conventional interpretations of classical and Marxist political economy in terms of their contribution to, and dependence upon, the historical and social as well as economic analysis. One, and by far the most prevalent, reflects the division of social sciences into separate disciplines through each of which the classics can be fragmented and selectively read. This is most notable in the case of Marx, who can be incorporated successively or, more exactly, in parallel, into sociology, political science, anthropology, etc. to provide theories of class, the state, precapitalist society and the nature of contemporary capitalism as globalisation, imperialism, or otherwise. The main exception to participation in this interpretative asset stripping of

the classics of political economy is, by cruel irony, the discipline of economics. This is not because of its virtuosity and virtue in accommodating a rounded treatment of its precursors. On the contrary, it has shown scant and decreasing regard for the history of its own discipline. In what Coats (1969) reports as the first contribution in economics on the implications of Kuhn’s theory of paradigms, normal science and scientific revolution, Gordon (1965, pp. 123, 126) posits and anticipates what has become a reality:1

[Adam] Smith’s postulate of the maximizing individual in a relatively free market and the successful application of this postulate to a wide variety of specific questions is our basic paradigm. It created a ‘coherent scientific tradition’ (most notably including Marx) and its persistence can be seen by skimming the most current periodicals … I conclude that

economic theory is much like a normal science and that, like a normal science, it finds no necessity for including its history as a part of professional training. (emphasis added)

As reported by Davis (1997, p. 289), the history of economic thought has become a specialism that now falls outside its own disciplinary umbrella:

Since the [journal] History of Political Economy appeared nearly three decades ago, it seems as if most historians of economic thought have concluded that they no longer speak to other economists, and might accordingly focus entirely on thought that is no longer actively pursued by contemporary economists and on which history has closed the door.