By Jacob Soll

The end of the arts and letters in America is nigh, or so we’ve been told. Harvard University, the American Academy of Arts and Sciences, and countless op-ed writers and conference panelists have stepped forward to issue a familiar defense of the power of the humanities to transform the world, to broaden the souls of students, to make them creative, critical thinkers, and, as Condoleezza Rice put it, to preserve the American “sense of us.”

All well and good, but there is a more concrete reason to value the humanities: Our economic health and political stability may depend on it. There has been a recognition, running from Aristotle and Adam Smith to the seminal economists of the mid-20th century, that a society cannot long flourish unless economic activity and thought are grounded in the liberal arts. The humanities were seen as a necessary component of a wealthy and stable society.

Capitalism, and indeed communism, emerged from this intellectual tradition, mixing finance, accounting, and the concept of profit with religion, ethics, art, history, and politics. Montesquieu defined this approach to economics in his 1748 treatise, The Spirit of the Laws, writing that “many things govern men: climate, religion, laws, the maxims of government, examples of past things, mores and manners.” By studying the better qualities or the spirit of a country, he argued, it is possible to emulate them to create wealth.

From the Renaissance to the mid-20th century, the humanities were tightly tied to economic success. Figures like Leon Battista Alberti, a 15th-century engineer, architect, and philosopher, insisted that a well-educated citizenry could best maintain stable states, which, in turn, produced wealth. It was a virtuous circle. Every citizen should be able to “manage a household” (through accounting), but also be well versed in rhetoric, ethics, and history, so as to be an effective and prosperous member of the polity.

The French jurist and philosopher Jean Bodin in the 16th century described finance as the “sinews of the republic,” adding that economic and political stability depended on knowledge of the traditions, laws, and customs of a country. He saw art, too, as integral to good government and growing wealth. Music, he said, could “bring harmony to ferocious barbarians,” and thus peace and commerce.

A belief that economic activity could flourish only if tied to the liberal arts was nowhere stronger than in golden-age Holland, birthplace of modern capitalism and the most prosperous and industrious place in the world between 1500 and 1700. Caspar Barlaeus, a Dutch humanist, envisioned a nation of “merchant philosophers,” arguing that commerce and the liberal arts were in “perpetual reinforcement.”

Barlaeus’s ideal of the merchant-philosopher was personified by the pioneering Dutch free-market theorist Pieter de la Court, who believed that commercial republics were superior to monarchies, as “learned and confirmed,” he claimed, by the history of trade and industry. A man of letters and numbers, de la Court included both historical examples and hundreds of pages of data on Dutch commerce in his writing on economics. John Locke, James Madison, and Adam Smith used de la Court’s ideas as a model for political freedom and economic success.

Proponents of free trade love to cite Adam Smith purely as an economist. But Smith, like his Renaissance predecessors, was first and foremost a moralist and historian. A professor of logic and moral philosophy at the University of Glasgow who lectured on rhetoric, literature, art, and the history of opulence, he was fascinated not only by the human capacity to form moral judgments, but also by what he called “fair” prices, set by markets, not states. To formulate the arguments of The Wealth of Nations, Smith researched ancient economic history, including the Domesday Book—a 1086 census of England conducted for King William I—to understand how the medieval English collected taxes.

For Smith, the utility of economic studies was not simply to become rich. Indeed, he believed that money brought political stability, not happiness. The father of free-market economics thought that happiness came from “tranquillity of the mind,” something he found in Stoic philosophy and the works of the Greco-Roman historian and moralist Plutarch—in other words, the humanities.

Smith’s emphasis on the liberals arts was also evident among the utilitarian thinkers of the 19th century, such as Jeremy Bentham, who believed, rightly or wrongly, that those who had studied philosophy were more “suited to the elevation of their sentiments.” In Bentham’s time, philosophical inquiry meant the quest for wisdom, which he regarded as a “pleasure.” Thus, according to his logic, economic success was bound in a circle with the liberal arts, which created both wealth and pleasure and, in turn, bankrolled and inspired further philosophical study.

Whether one agrees with Bentham’s theory (he was certainly right that education is an indicator of wealth), 20th-century economists continued to be influenced by the liberal arts. Both Carl Menger—founder of the Austrian School of economics, with its animating idea that individuals are fully rational actors who create rational markets—and John Maynard Keynes—who believed in state intervention to regulate economies—studied classics and history.

For Keynes, “irreducible uncertainty,” like hoarding, exuberance, and other irrational behavior, is a central element of economic activity. “Too large a proportion of recent ‘mathematical’ economics are mere concoctions, as imprecise as the initial assumptions they rest on, which allow the author to lose sight of the complexities and interdependencies of the real world in a maze of pretentious and unhelpful symbols,” he wrote in The General Theory of Employment, Interest and Money.

Keynes believed that numbers had to be analyzed through the lens of philosophy, psychology, and history. In so doing, he was walking in the path of the sociologist Thorstein Veblen, who saw economic activity as socially and culturally determined. One does not have to ascribe to Keynes’s economic theory to agree with his approach. Milton Friedman was trained as an accountant, but he nonetheless wrote, with Anna Schwartz, the deeply researched A Monetary History of the United States, 1867-1960. History, Friedman believed, was essential to understanding economics.

Seen in this light, the greatest revolution in economics in the past 50 years involves not only the transformation of the discipline into a more quantitative science but also the separation of the business curriculum from the humanities. Training in economics at the college level no longer forces students to think of people as moral agents shaped by religion, culture, and society, but rather as one-dimensional rational actors blindly pursuing material self-interest. Even behavioral economics, which challenges the rational-actor theory, makes universal claims about human psychology without the deep context of history and culture. (Can there truly be universal or biologically motivated shopping habits or attitudes toward consumerism?) With these reductive and often purely quantitative approaches, we are moving further away from the complex, interdisciplinary understandings that first characterized economic analysis.

No one has yet disproved the idea that the liberal arts create wealth. Training in computer science might create more wealth more quickly than a degree in Italian studies, but whether a healthy economy can be sustained for long without the liberal arts has yet to be seen. Indeed, the question of whether China can succeed economically in the long term without the open, critical culture of the humanities remains unanswered.

Certainly none of the founding thinkers of economics would have thought so. They placed the liberal arts at the center of economic thought, and it is to their example that we must return if we are to continue creating wealth and wisdom at the same time.

Jacob Soll is a professor of history and accounting at the University of Southern California. His book The Reckoning: Financial Accountability and the Rise and Fall of Nations will be published in April by Basic Books.