A Synoptic View of Economic Historic States in Theoretical Perspective: Before the Industrial Revolution

Abstract

Our economic founding fathers like Adam Smith and Karl Marx organised their analysis in terms of stages of growth as phenomena in historical time, demonstrating how changing physical and technical environments led to different types of institutions. This particular methodology has been followed in our own time by quite a few scholars, most notably W.W. Rostow. The economic historians have criticised this approach as neither good history nor good economics; when one goes into details one tends to agree with this assessment. However, we may recall that all the attempts at economic theory building have been castigated in almost the same terms by the historical school. After all, economic theory is hardly able adequately to explain historical experience. This does not mean that the theory has to be discarded, but it does indicate that it has to be extended and modified with the creation of new paradigms so that the theory is able to account more accurately for actual economic happenings. Similarly, the stages of economic growth should not be viewed as a necessary sequence of economic systems and institutions explaining every facet of economic phenomena. The historical states that are depicted in such an exposition may not describe the situation completely, but they should help us to bring out the salient features of the situation.