Years ago, as a young economics professor, my husband served on a history student’s advisory committee. At the student’s dissertation defense, the historians asked detailed questions about the paper. My husband asked, “What is the theory behind your findings?” The student stammered an answer and my husband concluded that historians don’t think much of theories.
I won’t address whether historians have theories right now, but, rather, discuss economists’ theories about how people make decisions. Some are simple: Incentives matter, so when something becomes more costly (in money, effort, or pain), people usually want less of it. Another is opportunity cost: something may have value, such as sitting on the lawn on a nice day, but its opportunity cost is high if it means missing an interview for a good job.
Economists apply their theories to all kinds of human behavior. In my historical research on primogeniture in the Middle Ages, I came across a bold and bracing paper, “An Economic Analysis of the Protestant Reformation.“[1] The economist authors tried to figure out why some regions in Europe became Protestant and why others stayed Catholic. They hypothesized that some European countries were more open to Protestantism than others: “societies characterized by the decline of feudalism and relatively unstable distribution of wealth” would welcome Protestantism, while “more homogeneous, rent-seeking societies that were mostly dissipating rather than creating wealth” would reject it. Continue reading “Historians Have Facts, Economists Have Theories?”