Why we must learn from history

Today's credit crunch will have come as no surprise to students of economic history. And history says if things are to get better, we must relieve debt first - and that may take some time

There are two ways of studying economic theory. One approach is mathematical, and has been much enhanced by the computing power available to the individual economist. The other is historical and relies on the accumulated understanding of economic theory and practice.

The events of 2007 and 2008 have shown the limitations of the mathematical method. The credit crunch was not foreseen by anyone that I read, but it came as a shock to the number crunchers it took them completely by surprise.

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William Rees-Mogg was Editor of The Times from 1967 to 1981. He served as High Sheriff of Somerset and was Chairman of the Arts Council of Great Britain. He was the father of the politicians Sir Jacob and Annunziata Rees-Mogg.