Hayek on The Spirit of American Economics

Friedrich August von Hayek’s August 1944 review assesses J. F. Normano’s The Spirit of American Economics and A. R. M. Lower’s supplement, The Development of Canadian Economic Ideas. Its central criticism concerns the uncertain object of the history being written: theoretical economics and the ideas shaping economic policy require different kinds of historical explanation, and the volume adequately supplies neither.

Hayek begins with the discrepancy between the scholarly expectations raised by the sponsoring institutions and Normano’s literary, sometimes journalistic treatment. The search for a specifically American economic spirit promises a departure from received accounts but yields the familiar figures of H. C. Carey, Henry George, and E. Bellamy. More consequentially, Hayek connects the author’s evaluative preferences with gaps in his scholarship:

The author's lack of sympathy for economic theory hardly allows him to do justice to the achievement of economists in that field, nor, one suspects, has it assisted his familiarity with their work.

The dismissive treatment of F. W. Taussig exemplifies what Hayek regards as a failure to recognize substantive theoretical achievement. He nevertheless credits the volume with information on early American economists likely to be unfamiliar to European readers. His judgment becomes harsher for the subsequent eighty years, where even the figures Normano considers important receive insufficient attention.

Hayek then turns from uneven coverage to the methodological ambiguity behind it:

This may be partly due to the fact that the author does not seem quite to have made up his mind whether he wished to write a history of economics or a history of "economic ideas" in the sense of ideals governing current economic policy.

This distinction is the review’s principal conceptual move. Hayek does not reject a history centered on policy ideals; he specifies what would make it illuminating:

While he inclines on the whole to the latter, there is little serious attempt to provide the political and economic background against which alone such a history of ideas on economic policy could be made enlightening.

Broad labels assigning national origins and class interests to competing doctrines cannot substitute for that contextual work. The objection thus reaches beyond Normano’s neglect of theory: his preferred history of policy ideas also lacks an adequate explanatory setting.

The final paragraph applies a related test to Lower’s Canadian supplement. Hayek describes a brief economic history with comments on policy controversies and prominent public participants. Because Lower excludes the work of living economists, however, the account reveals almost nothing about contemporary Canadian economic science. The review’s relevance lies in this insistence on matching historical scope to evidence: intellectual achievement requires engagement with economists’ work, while policy ideals require reconstruction of the circumstances in which they operated.