Linguistics has two branches of study, which were named by the great Swiss linguist Ferdinand de Saussure, in a posthumous classic of 1916 ,“synchronic” and “diachronic.”
Synchronic is Greek for “same time.” You can study how a language such as Portuguese works at one, given time, such as its prominent, and lovely, speaking through the nose, or the frequent use of diminutives such as cachorrinho (Dutch, Scots, and Italian do similar things).
Diachronic is Greek for “through time,” as in historical linguistics—for example, the history of how Portuguese drifted away from Latin, or how it acquired some 800 Arabic words. Saussure contributed notably to both synchronic and diachronic linguistics. He pointed out synchronically that at any one time, a language determines contrasts with other possibilities—present versus future tense in Portuguese, or a little dog versus a big one. Many other of the 7,000 languages in the world do not mark these particular distinctions, using other ones. And in historical linguistics, Saussure early in his career predicted the existence of a guttural H sound in “proto Indo-European.” The other linguists laughed at him. But the discovery many decades later of ancient Hittite written texts gave him, posthumously, the last laugh.
Inspired by Saussure, I have often thought that there’s a parallel between linguistics and my own first field, economics. Now, re-inspired by a brilliant series of videos by a linguist named John McWhorter, I know I’m right.
Like linguistics, economics has both synchronic and diachronic branches. What is called at the University of Chicago “price theory,” for example, is synchronic. Good. I’ve written whole books using it, and a text about it you may find on my webpage, free, free, free. But the present point is that understanding the economy, like understanding language, requires also a diachronic branch—that is, economic history.
All right. Why am I telling you this rather obvious fact?
Because economists are commonly wholly ignorant of economic history, they therefore depend on fairy tales learned at school or, worse, they depend on ideological commitments such as Marxism that depend on outdated diachrony (or in this case also outdated synchrony). Like Noam Chomsky, a great linguist, and a terrible man, they reckon that synchrony suffices.
No, it doesn’t. In economics, you may well understand, say, the role of the price system in allocating goods. Good for you. It puts you far ahead of Thomas Piketty or Mariana Mazzucato. But if you don’t understand that the price system has been doing such allocation since the caves, your head will be stuffed with fairy tales about the “rise of capitalism” or “the prerequisites for economic growth” or “the middle-income trap.”
If it resulted only in bad academic economics, I would weep but you need not. But the result of historical ignorance is wretched economic policy.
A big example among hundreds is believing that accumulation of capital made the modern world. No. Policy then makes people poor.
Weekly column in Folha de São Paulo, Brazil
Translated into Portuguese for the newspaper.
“A big example among hundreds is believing that accumulation of capital made the modern world. No. Policy then makes people poor.“
Would you mind fleshing out that last sentence a bit more? Are you saying that a policy focused on capital accumulation makes people poor?
You are my hero!!👏🏻👏🏻