Introduction

Increasing our knowledge of the nature of economic change requires that we utilize the only laboratory we have – the past. But to understand the past we must impose order on the myriad facts that have survived to explain what has happened, and doing so requires theory. The theories we develop to understand where we have been are from the social sciences. There is a constant give and take between the theories we develop and their application to explain the past. Do they improve our understanding – is the resultant explanation broadly consistent with the surviving historical evidence? The first issue that concerns us in this essay is, just how good is our understanding of the past?

The second issue is, just how useful is a good understanding of the past for solving present and future problems? Can the gradual accretion of “sound” explanations of the past help in understanding where we are going? That depends on the degree to which there are lessons from history. If there are lessons they are not those that are the bread and butter of politicians, statesmen, and soothsayers. Rather, they would be the persistent features of the human landscape that are the underlying interrelationships between the rules of the game that humans devise to structure human interaction and the way those rules evolve in the interaction between humans and their environment, an environment which changes as a result not only of external natural forces, but also of changes induced by the players themselves.