New Horizons in Institutional and Evolutionary Economics series
Chapter 3: Early Critical Arguments (1800–1870)
The modern idea of culture, which predates both the Industrial Revolution and classical economics, originated in a critical response to the Enlightenment. The eighteenth century did host the early stages of capitalism, with major changes to agriculture and commerce, but the main wave of industrialisation was still ahead. By the early nineteenth century, the Industrial Revolution was at full speed, and cultural thought shifted towards economic affairs in a critique that has persisted ever since. The shift came easily, owing to the close bonds between economics and the Enlightenment. All the pioneer economists, from the Physiocrats to Smith, Ricardo and Malthus, were rationalists and empiricists who dreamed of scientific progress and aspired to bring Enlightenment thought to bear upon society. They adopted an ahistorical posture, following the natural scientists, and claimed to have discovered fundamental principles applicable in all times and places. Most of these principles summarised the new, capitalist economic arrangements and presented a picture of growth and development. The lesson was that the same transformation would be beneficial everywhere and should be pursued as the means to generate economic prosperity. Such a universal template was inconsistent with the diversity and pluralism favoured by the CounterEnlightenment and stirred up a critical reaction. Reservations about the Enlightenment were expanded into a critique of economic theory and capitalist development. Authors in the cultural tradition did not, by and large, distinguish between economic theory and its practical consequences. They took it for granted that the new science of economics was the intellectual...
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