Why don’t we learn from history?

If life were a seemingly random sequence of unrelated events, it would not be life as we know it, and many of the blessings we now enjoy would be impossible. We see patterns and we categorize. We follow routines day to day. Even over long periods, spanning generations, we are often struck by what we see as situations bearing similarity to what came before. We talk metaphorically of “history repeating itself.” 

For me, as for many of my like-minded friends and colleagues, this Great Recession from which we are struggling to recover, came as no surprise. Nor did the fact that it has been so deep and lingered so long. We see it as a repetition of an old and avoidable folly. We see it as the predictable result of irresponsible monetary and fiscal policies, very reminiscent of the 1920’s, and to some extent also of the 1970’s (see here or here). So the question “why don’t we learn from history?”

I have an answer, a theory [theories are cheap to produce, you will have to decide its market value.]  There are three reasons: Social situations do not provide controlled experiments; memory is very imperfectly transmitted across people and especially across generations; the study of history is neglected.

1.   Social science does not proceed on the basis of controlled experiments that yield unambiguous answers. History does not speak with one voice. This is no surprise. Everyone thinks he is an historian. Multiple interpretations of events and episodes abound. We can neither dispense with, nor feel completely confident in our interpretations. We are dealing with very complex, multiple cause, multiple effect, multiple-multi-layered-multi-directional interactions. Still, when we live through something we get a sense of it – not always accurate, but sometimes (occasionally) the “evidence” is compelling enough to produce a narrowing of interpretations. Such an episode occurred in the 1970’s and 1980’s, leading to the election and reelection of Ronald Reagan (and Margaret Thatcher in Britain). Widespread disillusionment with the preceding decades of Keynesian economics emerged from the experience of “stagflation” – inflation and unemployment simultaneously  – as predicted by the likes of Milton Friedman and before him Friederich Hayek.  I lived through that, and I never imagined that Keynesian economics could ever again gain traction in academe or in policy circles. This is where memory comes in.

2.     Those who were not "there” – indeed were removed from it by a generation or more – did not feel the same sense of conviction that I did. How could they? They learned about it, if at all, from books, or from their parents, or from their grandparents. No matter how much one tries – and probably not many tried very hard – one cannot communicate the sense of what it was like to actually “be there.” In any case, the young tend to discount whatever their parents tell them. It is part of the declaration of independence that accompanies the transition from youth to adulthood. By 2007, not many people actually remembered the excesses of the 1970’s and the stagflation that occurred. We are doomed to have to relearn the lessons of our parents and grandparents by our own experience.

3.     Finally, as unreliable as history (and memory) may be, it is still valuable. The study of history used to be a highly valued component of what was regarded as a well-rounded education, indispensable for good citizenship. It was a proving-ground for critical thinking, for a sense of perspective about the world in which we live. Sadly, the study of history has been devalued at all levels of education, not least, and most significantly, at the college level. [And at the graduate level too – my first year in the Ph.D. program at Chicago they abolished the economic history requirement.] Today’s high school and college graduates are illiterate in historical knowledge. No wonder they are doomed to repeat the mistakes of history.

And being ignorant of our ignorance makes it ever so much more difficult to regain what we have lost. Against the odds, however, with faith in the abiding curiosity of human beings, I remain hopeful.