One of the essential interests of an educated economist, the subject of my previous post, is economic history. This used to be a compulsory element of many PhD programs (as it was mine – excellent courses taught by Steve Marglin and Barry Eichengreen) but fell by the wayside. But what about the history of economics, rather than economies? There seems to be an interest in it. Robert Heilbronner's The Worldly Philosophers or at the scholarly end Mark Blaug's Economic Theory in Retrospect seem to be widely read still.

These reflections were prompted by reading The Hesitant Hand: Taming Self-Interest in the History of Economic Ideas by Steven Medema. In a way it's very specialist, being about the evolution of the approach to economic welfare since the Ancient Greeks, but particularly since Adam Smith. But having picked it up in a slightly random way, I'm finding it unexpectedly thought-provoking. The different perspectives on the definition and assessment of welfare over the ages does indeed shed light on current debates about welfare, market failure and the role of the state.

Early in the book is a relatively unfamiliar quote from Adam Smith: “In civilized society [man] stands at all times in need of the cooperation and assistance of great multitudes, while his whole life is scarce sufficient to gain the friendship of a few persons.”

This is the great mystery of economic organization – the focus of Paul Seabright's wonderful book The Company of Strangers. How we achieve the right balance of privately organized and government-organized institutions (including markets) for the best is a more urgent question than ever given the evident failures of both governments and markets in recent times.