Social Sciences in China (Chinese Edition)

No.4, 2014

The Evolution of British Economics and the Growth of Economic History (1870-1940)

(Abstract)

Guan Yongqiang and Zhang Donggang

Neoclassical economics and economic history originated in the deductive school and the historical school of classical British political economy respectively. Disagreements between the two occurred early on. For a long time the competition between the “otherness” of their views and the multiplicity of their methods acted together to promote the development of political economy. In the early 20th century, the fierce contest between them split the discipline, affecting the development of both. Neoclassical economics, which had become the mainstream, has been extensively criticized because of its excessive reliance on deduction and departure from reality, and economic history has also gradually weakened the historical school’s traditional focus on the real world. A clear grasp of the course of their development helps us gain a deeper understanding of the significance of economic history and the source of the problems of neoclassical economics, encouraging economic history to return to the tradition of historical economics. Such an understanding promotes a virtuous interaction between economics and economic history and encourages their healthy development.