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[Ed. note: we are running two separate forum responses today, by Jonathan Zatlin and Donna Harsch. As a reminder, the original forum contributions are posted at http://www.h-net.org/~german/discuss/econ/econ_index.htm ] I am pleased that the editors of H-German are hosting a discussion about a "new economic history" and thank Eli Rubin and Adam Tooze for their interesting contributions. I agree with them and the editors that there are excellent studies of the economic history of the Weimar Republic, Third Reich, and postwar Germanys whose findings could be integrated profitably into "big" interpretations of modern Germany. I agree as well that we need to think critically about how to do that. I'll focus on two theoretical revisions that would be on my wish-list for a "new economic history." The first suggestion applies to social history (my field). I propose, similarly to Rubin, that social historians expand our definition of what constitutes "economics," "economic structures," and "material interest" by incorporating insights from consumer studies, feminist scholarship, and cultural analysis. The second revision applies to economic theory and may be unfamiliar to historians. I suggest that historians apply insights from a critical perspective that has emerged within economic theory. Drawing on cognitive and social psychology, "behavioral economists" use lab experiments and field studies to document the ways in which people behave contrary to the rational-choice predictions that underlie the expected utility theory of neo-classical economics. As Rubin observed, a production-biased version of economic history tends to color the backdrop of general histories of modern Germany. I would plead for the integration of consumption into such narratives. Neoclassical economics has already diverged from classical economics in demoting "production" and promoting "consumption" as the key economic activity. Economic historians trained in neoclassical theory have thus taken increasing notice of the rise of mass-consumption economies. For their own reasons, cultural historians have also paid increasing attention to consumption. Yet consumption has yet to be treated as an integral category of analysis (as opposed to a descriptive addition) in most mainstream social histories, although, as Rubin's references illustrate, the production bias is being corrected from several directions. Neoclassical theory would, to my mind, usefully direct social historians toward analysis of the causes and effects of mass consumption. However, the neoclassical theory of marginal utility proceeds from an individualistic base of interest and incentive. Far from encouraging social historians to abandon attention to the social bases of interest, I would urge us to factor in the household, domestic labor, and domestic relations as complex structures that have centrally shaped -- not just been shaped by -- the political economy of modern Germany (and other industrial economies). The household and the nuclear family are sites of private consumption that spawn desires and "needs." When wives and, especially, married mothers enter wage labor in large numbers, the private household/ family generates preferences for more and new kinds of private, commercial, and social consumption. This demand loops back to affect the macro-economy, production, and export/imports. The work of feminist scholars on Germany, Europe, and the U.S. has demonstrated the impact of the household and family systems on economies and state policy. Most mainstream studies have yet to integrate these findings into synthetic interpretations of social relations, economic development, or social/economic policy. Feminist research also suggests that group identity is as influenced by gender norms, domestic inequities, and the conditions of social reproduction as by class bias, public inequalities, and the relations of production. Thus, economic interest and social identity are more complicated than presumed by a straightforward class-based model.[1] Yet they are also more socially structured than posited by a simple "greed" or self- interest model (an assumption that seems resurgent in, e.g., Götz Aly's Hitlers Volksstaat, the economics of which Tooze has convincingly debunked elsewhere).[2] One can point, for instance, to evidence of collusive, cross-class male resistance to the integration of women into skilled employment before and after 1945, in capitalist and in Communist Germany, and, in fact, in all industrial economies. Insights from consumer, cultural and feminist studies could be applied to standard economic questions. Take the example raised by Michael Geyer: the continuing significance of industrial-exports to "post-industrial" German capitalism. Measured in dollars, Germany exported more than any other country in the world in 2005, not only per capita but absolutely (making one wonder about just how "broken" the German economy actually is...). Is this continuity only economically grounded: an effect of "path dependency" and/or Germany's role in global capitalism? Or might it harbor a cultural dimension: does German capitalist culture continue to value skilled machine production relative to mass consumption? [3] And/or has (West) German cultural resistance to married mothers' employment (and the associated attachment to maternal nurture of children) slowed the comparative commercialization of the household and private consumption, thus holding consumer imports and the mass-market service economy in check relative to their sweeping rise in, say, the U.S.? My second wish would be that we incorporate a revisionist trend in economics into a new economic history. Whether as classical Marxism or as neoclassical utility-maximization theory, traditional economic theory rests on the assumption that human beings are motivated by rational interests. Who would deny that material incentive -- from the basic drive for survival to elaborate schemes for individual or national enrichment - plays a powerful role in human history? Yet human beings and societies often behave in a stunningly irrational manner - helping or hurting other people(s) in ways that no rational- actor or materialist model can explain. Historians, as a discipline, generally recognize the significance of irrational motives. We have always turned to ideology/belief or culture/mores as alternatives or additions to materialist explanations of social opinion and action. Historians of Germany, certainly, realize that we have to consider not only interests but also passions. In sum, alongside Rubin's other arguments for not reviving Homo Oeconomicus this one too should be considered: he offered a faulty model of behavioral motivation. We were right to let him languish. Or were we? For all his faults, Home Oeconomicus offers a great advantage: a construct for predicting universally-observed behaviors and systematically explaining their motivation. Modern economic theory is comparative, transnational, and ahistorical; its concepts travel easily, even imperialistically, across cultures (and disciplines); they emphasize similarities between separate civilizations and offer a coherent explanation of the dynamics of "contact." As concepts, culture and ideology highlight the unique and particular. They have allowed historians to reconstruct pasts that are rich, varied, and realistic but that are not analytically "convertible." Culture or ideology cannot explain parsimoniously or systematically what is comparable in social action and motivation across time and place (except by referring to "culture" as a universal attribute of human society). As Tooze points out, a one- sided emphasis on culture can lead to historical parochialism. As I mentioned above, a new branch of economics could provide historians with tools to account theoretically for irrational decisions and actions, while acknowledging the importance of incentives (favored by economists) and context (favored by historians). The sub-field of behavioral economics assumes that people are moved by a wider range of motives than material self- interest. It recognizes, for example, a concern for fairness, a tendency to engage in social comparison, and a powerful dislike of losses (relative to a much weaker enjoyment of gains). The last of these, termed "loss aversion,"[4] could help explain, for example, why middle-class Germans in the Weimar Republic felt their losses in the hyperinflation so intensely, even though the newer research suggests their financial losses were considerably smaller than once assumed.[5] Behavioral economics investigates the distorting effects on decision-making of loss aversion and other cognitive biases such as the fundamental attribution theory, hindsight bias, and group- serving bias.[6] It also studies situations, such as those characterized by high levels of emotionality or elevated drive states, in which people behave in a destructive or self-destructive fashion. Its theoretical perspective and empirical findings could help historians make sense of the interaction between economics and politics in German history and, in particular, the extraordinary violence of the Third Reich.[7] Donna Harsch Carnegie Mellon University NOTES [1] See, e.g., Mary Nolan, _Visions of Modernity: American Business and the Modernization of Germany_ (New York/Oxford, 1994), esp. Chapter 10; Christine von Oertzen, _Teilzeitarbeit und die Lust am Zuverdienen: Geschlechterpolitik und gesellschaftlicher Wandel in Westdeutschland 1948-1969_ (Göttingen, 1999); Carola Sachse, _Der Hausarbeitstag. Gerechtigkeit und Gleichberechtigung in Ost und West 1939-1994_ (Göttingen, 2002); Gunilla-Friederike Budde, _Frauen der Intelligenz. Akademikerinnen in der DDR 1945 bis 1975_ (Göttingen, 2003); Nancy Reagin, _Sweeping the German Nation: Domesticity and National Identity in Germany 1870-1945_ (Cambridge, 2006). [2] Tooze, "Economics, Ideology and Cohesion in the Third Reich: A critique of Goetz Aly's _Hitlers Volksstaat_," September 2005, posted at <http://www.hist.cam.ac.uk/academic_staff/further_details/tooze-aly.pdf> [3] On the interaction between culture and economics in the Weimar era, see, e.g., Nolan, Visions of Modernity. Also suggestive is Richard Overy's discussion of the skilled-production bias of German engineers, Wehrmacht generals, and Nazi officials during World War II (Richard Overy, _Why the Allies Won_ [New York/London, 1997], Chapter 6). [4] Amos Tversky and Daniel Kahneman, "Loss Aversion in Riskless Choice: A Reference Dependent Model," _Quarterly Journal of Economics_ 106 (1991): 1039-1061. [5] Gerald Feldman, _The Great Disorder: Politics, Economics, and Society in the German Inflation, 1914-1924_ (Oxford and New York, 1993). [6] For a long list and short explanations, see http://wikipedia.org/wiki/List_of_cognitive_biases. For a detailed theoretical discussion of several biases, see Daniel Kahneman, Jack L. Knetsch, and Richard H. Thaler, "Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias," _The Journal of Economic Perspectives_ 5(1) (1991):193-206. [7] Christopher Browning was path-breaking in his turn to social psychological theory to help explain the murderous actions of Police Order 101 but historians have not followed him down that path. See Christopher R. Browning, _Ordinary Men: Reserve Police Battalion 101 and the Final Solution in Poland_ (New York, 1992).
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