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Critical Methodology and The

Problem of History
Samuel Knafo

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Critical Methodology and The Problem of History
To be published in Johnna Montgomerie (Ed.) Critical Methodologies in Political Economy,
London: Routledge..

Samuel Knafo

The question of method, for me, came relatively late and in an unexpected way. When I
was studying, debates over the nature of knowledge (epistemology) occupied a great
place in IR since they were seen as pivotal for challenging a hegemonic model of science
which left little room for critical and interpretive approaches (Cox, 1981; Lapid, 1996 ).
In this context, methodology was usually considered with suspicion. Seen as the preserve
of positivists, many critical scholars perceived methodological debates as misleading
attempts to specify a practice which can capture the world as it really is . Questions of
method were often treated as secondary and mostly relevant for people who do fieldwork
or who work with data sets, two issues which remained peripheral for someone like me
working mostly on theoretical issues and large scale history. As many others, I did not see
at the time methodology as a defining feature of critical enquiry or as a practice that would
demarcate an approach as critical.

It was eventually a dissatisfaction with theory that brought me to issues of methodology.

I became concerned particularly with the difficult relationship of theory to history which
seemed to involve an inevitable trade-off (Wood, 1986). For the more one seeks to
develop abstract theories which speak to multiple cases, the more it is necessary to
generalize and neglect historical specificities. Inversely, attempts to bring history back
into the picture often seem to require the abandonment of grand narratives which leave
little room for contingency and specificity. It became my central objective to develop a
method which would allow me to make general claims that were attuned to, or more
precisely based on, historical specificity. But how to reconcile both? The key for me was
to turn to comparative methods and used them as tools for historicisation. Whereas
comparative methods are usually employed to find common patterns in different cases
and thus abstract once more from context, I was interested in drawing productive
comparisons which would help contrast and specify the ideas I was working with. It was
an approach that I would later come to refer to as a radical historicism. The purpose was
to find methodological principles that would maximize the use and significance of history
in the very way we theorise or conceptualise issues of global political economy.

This concern would frame in profound ways my work on the rise of liberal financial
governance in 19th century Britain and its main institution the gold standard (Knafo,
2013). First, it changed how I approached my object of research, or research question. My
intention was to frame my problematic in fully historical terms. This meant, for example,
discarding as much as possible any form of deductive reasoning about liberal governance.
I was struck by how this practice of governance was commonly defined mostly in
theoretical terms, in the form of ontological claims about its general nature with no or
very few references to its concrete historical settings. Scholars, of course, had clear ideas
about where to locate these practices, but their conceptualisations of liberal governance
were not based on contextual material. They refer, for example, to the broad idea that
liberalism works to limit state intervention or the assumption that it promotes a market
or capitalist logic. But these conceptions were intentionally devoid of contextual
references so that they could be easily applied to a variety of contexts where liberal
governance was said to have been implemented.
It became clear to me that such general and abstract starting points often entrench
problematic assumptions. They yield axiomatic approaches which foreground our
understanding of liberal governance by stating in advance the nature of our object of
research (i.e. liberal governance) and then leave us with the tasks of reconciling any
incongruence which would then emerge from looking at history. Quite simply, since the
historical evidence comes after the theoretical framing, it is always history which must be
reconciled to the theory, not the other way around. Scholars, for example, were well
aware that the state had intervened much more than it was traditionally assumed, but
they found ways to show that this intervention was relatively unimportant or simply
explained the discordance by pointing to the fact that liberalism had not been fully
implemented (Polanyi, 1957). In other words, historical evidence was at best referred to
in order to show that history never fully played out like the model would suggests
(Eichengreen, 1992), but this was rarely seen as more than a warning not to buy fully into
the myth of the gold standard, not a sign compelling us to rethink what the gold standard
was in the first place.

To move away from such a problematic framing based on abstract deductive reasoning, I
decided to systematically rely on comparative work. This meant comparing the 19th
century gold standard to what existed beforehand in Britain and more generally Europe.
This way of problematizing my object of research through comparisons with other
regimes of governance was key to determine what I felt needed to be explained. It was a
way to use history in order to identify what was the puzzle. For difference could then be
seen as a marker for what is socially constructed. This is how I came to move away from
the idea that liberal financial governance was characterised by its supposedly limited
level of intervention, a feature which simply cannot be established on the basis of
historical facts about 19th century financial governance. Instead I pointed to three
concrete historical features which were drawn from my comparisons: the striking
stability of the pound, the fact that Britain relied solely on gold to anchor its currency
contrary to other states which used bimetallism with a predilection for silver, and the
creation of a central bank. The challenge then was to develop an explanation for these
three features of liberal financial governance.

This brings me to the second aspect of my methodology which is concerned with the
difficult question of historicisation, or more specifically with how we use history in order
to explain social developments. At stake here are the issues of social construction and
agency. As many others, I was attracted to Marx's famous dictum that people make their
own history even if not under the conditions of their own making. However, it was
striking that most people who abided by this idea would effectively come to focus on the
second part, that is the 'conditions that are not of our own making'. By contrast, the
leitmotif of much of my work has been to make good on the first part of the dictum and
emphasise agency. For it is not enough to claim that agency matters. The real challenge is
to grasp what is significant about this agency, what difference does it make to our
narratives. Indeed, agency is difficult to perceive because of the asymmetry which exists
between structural conditions (such as the structures of financial markets) and the
impact that a single agent can make on society. The problem here is mostly one of
perspective. Indeed, it is easy to see what difference an individual can make to their
immediate surroundings, but much more difficult to specify what difference people make
to the broader social processes we are interested in when doing global political economy.
As a result, it is easy to have the impression that structures are shaping reality more than
they are shaped by individuals. How can the actions of an individual compare to large
structures that affect a great number of people? This is why, I argued, scholars continue
to fetishise the structures that govern social life assuming that they are imbued with a life
of their own, as if they impose their own logic on society (Knafo 2002; 2010). Because of
the inherent imbalance between structure and agency, it is futile to ascertain their
respective influence. Such an exercise will necessarily yield a structural accounts which
reify social reality.

Instead, we need a rigorous practice to counterbalance a problem of perspective. I thus

came to see methodology as a corrective lens required for pursuing a critical project which
is based precisely on the idea that social dynamics are not transparent. This meant
systematically tracing the agencies involved in the making of liberal financial governance
in order to better appreciate what difference people make. For the challenge is to show,
against the overwhelming impression that individuals are simply governed by
transcendental structural laws, that it is still people through their agency who make
history, even if they do not do so under the conditions of their own making

This led me to construct my historical narrative of the rise of liberal financial

governance around a series of commitments which were aimed to place in perspective,
usually through some form of comparison, the agencies involved in the construction of
liberal financial governance. This work of tracing involved three different aspects.

1. Characterise the concrete agencies in terms of their specific features

I decided to systematically look into what marked out the key actors who played a role in
political struggles over financial governance or who made key social, regulatory, or
financial innovations, with an eye to focus on the specific features of their position and the
distinctive nature of their relationships to other agents. Instead of turning to generic
characterizations, for example the fact that these actors were bankers, capitalists, or
workers, all terms which were already imbued with strong associations, I looked for what
distinguished these actors from the generic characterisations we use. Looking at bankers,
for example, I would focus on what distinctive features would differentiate these bankers
from other bankers. The purpose of doing this was to avoid falling back on assumptions
that we associated with these general types and which once more lead scholars to rely on
deductive reasoning rather than historical characterisations. Why did bankers of
Birmingham opposed the gold standard while dominant bankers in Manchester did not?
For me this was not a simple detail. It offered a key insight into the politics of the time,
which were particularly valuable because they disrupted the classic stereotypes which
had come to cast the gold standard as favourable to financiers in general.

This form of rigour had a big impact on my analysis which is difficult to capture in a
paragraph. But the simple example of the Bank of England may help to convey how much
difference it can make. As I mentioned, most analysis of liberal financial governance
would start from the idea that the gold standard was an institution that imposed
constraints on a central bank like the Bank of England by forcing it to guarantee the
convertibility of its banknotes at a fixed rate. Neglected in most studies of the gold
standard, however, was that the Bank of England was in fact a private institution when
the gold standard was adopted, one which operated explicitly in the interest of its
shareholders. Scholars, of course, knew this but felt they could neglect this fact in their
conceptualisation. And yet, this changed everything, because it cast the gold standard as
an attempt by the state to discipline a market actor (i.e. the Bank of England), rather than
a liberal attempt to limit the intervention of the state itself.

2. Build a narrative based on what difference the innovations of agents make

The second aspect of this focus on agency was to emphasise the creativity of agents and
their ability to make a difference. It was important for me not to simply describe what
people have done, as many scholars often do in covering history. The reason for this is
simply that this type of historical work often fails to properly establish the agencies
involved and is fully amenable to a highly structural account where history merely
illustrates the theory. We may know that a certain government has adopted a policy or
that a financier developed a new financial instrument, but what difference do these really
make to our accounts? Were they not the expected outcome of the broader context in
which they took place?

In order to break this functionalist thinking which always normalizes innovations as the
normal response that one might expect from a given actor under specific types of
pressures, I systematically tried to establish what was counterintuitive about
innovations. I did this first by showing why this innovation was surprising at the time,
something which can be established through comparisons, for example with how similar
agents operated or simply with what these innovators used to do previously so as to
specify what was new. This could also be captured by showing the reaction, surprise or
resistance of others to these innovations. In short, the challenge was to find an interesting
angle to convey this. My assumption was that if a practice stands out at a particular
historical junction, it is probably because there is something surprising about it,
otherwise others would have done the same thing. But emphasizing the counterintuitive
nature of a development was also a way to challenge how we retrospectively come to
normalize developments we now take for granted because we are used to them. By
establishing through comparisons why these developments were not what should be
expected, I was interested in establishing what difference agencies make in history and
force myself to systematically reflect on the significance of their social innovations.

3. Analyse social developments largely as unintended effects of social struggles

Finally, such an account can only become truly historicist if we detach agency from
intentions. For what agents produce through their strategies or actions rarely conforms
to their expectations or intentions. A crucial component of any historicist analysis is thus
to account for the effects of agency in terms of unintended effects. In this way, one can
move away from functionalist approaches which explain developments in terms of what
was needed (e.g. for the reproduction of neoliberalism or for solving a financial crisis). By
separating agency from intentions, I wanted to recapture what is counterintuitive about
this history by demonstrating, for example, that central banking required a massive leap
of imagination that no agent in the 19th century was able to make. By recognizing this, we
can problematize what agents were actually trying to do, and grasp how their motivations
were very different from what we now assume, because these agents never foresaw what
they ended up constructing. One of the central ideas of my book the Making of Modern
Finance (Knafo 2013) was precisely that the interventions of Liberal governance were
constructed through a series of institutions aimed at disciplining market activity partly
because repeated failures to achieve certain policy goals led state officials to look for
increasingly disciplinary tools to achieve their goals. In that respect, the ideas of
liberalism may have been geared towards liberalizing the market, but the means that
were put in place in its name were usually intended to empower the state in relation to
market activity so as to make sure the latter would behave as state officials intended.
While this never managed to fully stabilise financial markets as intended, it ended up
setting the foundations for Central Banking, the most important institution of modern
economic governance.

All this amounts to a practice of radical historicism which is based on a series of

commitments to systematically place the emphasis on history. Too often critical scholars
have evaded methodological question on the basis that their awareness as to the socially
constructed nature of the dynamics they study is sufficient to make them attuned to the
requirements of a critical approach. It has always seem to me ironic that critical scholars
who have criticized mainstream scholars for relying on common sense, can place an
inordinate amount of faith in their own ability to make judgements without getting
trapped in their own common sense (Knafo 2015). In that respect, radical historicism
constitutes precisely a lens to force us to go in places we would not go otherwise, to
destabilise through rigorous methodological means our biases and make it difficult to
project these on what we study. The goal is to make historicisation, through the
systematic use of historical comparison, the very process by which we theorise, rather
than a practice aimed simply at adding details to a narrative already set at a theoretical
level.

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