Pareto on the History Of Economic Thought as an Aspect of Experimental Economics

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4) Implications and Assessment

Pareto’s approach to the history of economics has implications for the character of textual analysis and for the type of intellectual historians who should undertake research in the history of economics. In regard to the first point, the modern benchmark that historians of economics use for textual analysis derives from “Textual Exegeses as a Scientific Problem” by George Stigler (1965). Given the objectives of this study, there are similarities and difference between the textual exegesis of Stigler and Pareto that warrant consideration. In regard to the second point, the question arises as to whether Pareto’s approach to the history of economics is best undertaken by economists (because it investigates theories of the economic phenomenon) or sociologists (because it investigates theories pertaining to the sociological part of the economic phenomenon).

Textual Exegesis
Stigler’s critical point is that relying on citations as evidence to support a particular interpretation of a scholar’s work is generally misleading. Authors in history are often careless writers, or they may have had scatterings of theoretical elements that are not integrated. He regarded these diverse and unintegrated elements to be of little importance, and considered constant resort to citations as leading to different historians developing different interpretations of theory, some of which devalue the main conclusions of historical works. To correct this, Stigler advocated the principle of scientific exegesis, where the relative importance of particular aspects of a past economic theory is tested with reference to the original theorists’ main conclusions.
“This rule of interpretation is designed to maximize the value of a theory to the science. The man’s central theoretical position is isolated and stated in a strong form capable of contradictions by facts. The net scientific contribution, if any, of a man’s work is thus identified, amended if necessary, and rendered capable of evaluation and possible acceptance.” (Stigler 1965, p.448).

Stigler also contrasts scientific exegesis against personal exegesis, which deals with what the author meant. Interpretation based on personal exegesis may be the same as that based on scientific exegesis, in such cases the theorist is working on positive theory, or they may be different, such as in cases where the theorist is not working on positive theory but still manages to contribute to the progress of science.

Stigler’s approach has been criticised for assuming that the interpreter has prior knowledge of the work that is being reviewed. Emmett (2003, p527) notes that a hermeneutic circle emerges: to interpret an author’s contribution to science, the intellectual historian must first know the author’s central theoretical position. Moreover, the circle is only closed when considered in a timeless sense, with Stigler regarding the author’s central scientific message as the received view of the economics profession. The outcome is a tendency to Whig history.
Pareto’s goal for the history of economics only agrees with Stigler in respect to economic theories for which knowledge is asymptotic. That is, for the class of theories where the extrinsic element diminishes over time and the intrinsic element becomes more profound. For such theories, the Paretian approach too has a tendency to Whig theory, with the associated reliance on rational and experimental assessment criteria. The only notable difference between the two approaches to exegesis and theories with asymptotes is emphasis: Pareto placed much less emphasis on individual theorists’ contributions to economics than Stigler, preferring instead to emphasise the general history of theories.
However, the critical difference between the two is that Stigler’s scientific exegesis filters out and excludes the ‘extrinsic’ elements of theory. To Pareto, this is totally untenable, as he regarded the extrinsic elements of theory as the part for which textual analysis was most important. Scientific textual analysis of uniformities in the extrinsic aspect of theory provides insight into how interaction between sentiment and reason combine in theories, which is mirrored in actions. The text that is screened out in Stigler’s scientific exegesis is precisely the text that Pareto treated as the most fertile field for the history of economics.

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