Stephen Gaukroger, The Natural & the Human: Science and the Shaping of Modernity, 1739-1841 (2016)

This is the third in Gaukroger's four-part series on the emergence and transformation of a modern scientific culture. Gaukroger is astonishingly erudite. I only read parts of this book as my aim was to get back into reading for my project on historical methodology. The most interesting point for me was the contrast between Herder and advocates of a "natural history of man" (think Hume, Voltaire, Smith, Ferguson, Buffon, etc.). Both see themselves as pursuing a science of man, both subscribe to the notion of man's development over time. Yet, they work quite differently and will lead to very different schools or approaches. Herder is one of the founders of historicism. He focuses on differences between particular cultures or peoples and sees the study of language as the key to understanding their thought. Advocates of the natural history of man, on the other hand, rely on comparison across time and space as their essential tool. Many of them adhered to stadial theories of human development - hunter, pastoralist, farmer, trader and craftsman - which meant that their topics were on the grandest of scales. This seems to me like a pivotal moment, in which a comparative and, in my eyes, truly scientific approach to history was available, but lost out to historicism. A few decades after Herder, Ranke supplied historicism with an apparently scientific veneer in source criticism. I'll most likely incorporate this into my methodology manuscript. Next up: Frederic Beiser's history of German historicsm.

John Cassidy, How Markets Fail: The Logic of Economic Calamities (2009)

Another Will Pyle-recommendation, another hit! I plan to use selections in my upcoming course on "capitalism(s) since 1945. Cassidy writes about the economy for the New Yorker and in this book he explains even difficult ideas quite clearly. While I was generally familiar with much of what Cassidy covered, I still learned quite a bit; and the refresher was most welcome. The book is divided into three sections: 1) utopian economics; 2) reality-based economics; and 3) the 2008-9 Global Financial Crisis. In the first part, Cassidy focuses on how economics became a mathematical science, based on many unrealistic assumptions, describing the fiction of innumerable, interconnected markets, i.e. where supply and demand are in equilibrium. This was known as "general equilibrium theory." One of the unrealistic assumptions, previously unfamiliar to me, was this was a world made up only of small producers - large oligopolies and monopolies would ruin the equilibrium. (One of my only quibbles with this excellent book, perhaps my only one, is that Cassidy barely discusses Schumpeter, who wrote a lot about how companies seek to escape price competition, by dominating markets, innovating, or creating niches.) Utopian economics depends on three illusions of the market - that market interactions are harmonious, stable, and predictable. It is more unified than reality-based economics, which has identified endemic externalities, informational asymmetries ("lemons"), skewed incentives ("moral hazard"), prisoner's dilemmas, Keynesian beauty contests, Minskyian ponzi schemes, herd behavior, heuristics and biases, etc. One of the points that was new to me was that Adam Smith's vision of the market depended on negative feedback, which brings the system back to equilibrium (as a thermostat and heating/cooling system do), while in reality, especially in financial markets, there are positive feedback loops, which take the system ever further away from equilibrium.