- Was There Really a German Historical School of Economics?
The German Historical School of Economics (GHSE) is a set piece in contemporary treatments of nineteenth-century economic thought. The rubric is deployed first and foremost to bracket the efforts of Wilhelm Roscher, Bruno Hildebrand, Karl Knies (together, the school’s “older generation”), Gustav Schmoller, Georg Friedrich Knapp, and Karl Bücher (the “younger generation”); to a lesser extent it is intended to capture also the work of other scholars, ranging from the truly obscure to such larger-than-life figures as Friedrich List, Max Weber, and Werner Sombart. Like socialism and economic nationalism, the term functions in our historiography primarily as a foil to the dominant classical paradigm. Beyond this negative function, though, there lies a certain unease about what the GHSE stood for, how it “fits” (Betz 1988; Lindenfeld 1993). I will argue here that this is because the concept of a German Historical School of Economics is itself infelicitous, and that it will better serve our purposes as students and teachers to reconceptualize that literature as part of a broader movement in postclassical economics.
What is wrong with the received view of a GHSE, then? To put only slightly too fine a point on it: the heterodox movement in economics [End Page 547] that we have learned to call the German Historical School was in reality neither German, nor historical, nor a school. Let us consider each of these three negations in some detail.
The idea of a specifically “historical” economics is no ex post facto invention; the aforementioned economists seem themselves to have welcomed the appellation. We see this already on the title page of the inaugural publication of Roscher, the “school’s” first dean: Outline of Lectures on Political Economy, according to the Historical Method (1843). A clue to the true import of this adjective can be gleaned from the most oft-quoted line in the book, where Roscher (1843, 2) stated his desire to do for economics “something akin to what the method of [Friedrich Carl von] Savigny and [Karl Friedrich] Eichhorn has achieved for jurisprudence.” In other words, Roscher was explicitly hitching his own research program to the coattails of the German Historical School of Jurisprudence. No one aware of the tremendous prestige of historical jurisprudence in modern German culture can doubt that Roscher’s claim was a masterstroke of marketing, itself no dishonorable thing. But the poignant question here is not whether it served the purposes of Roscher and his successors to claim the mantle of a better-established German Historical School—clearly it did—but whether it serves our own purposes to continue toting that mantle at third hand. Arguably, it does not. 1
On the one hand, the adjective historical does not serve well in what should be its primary task, namely, to distinguish German economics from the classical mainstream. How fair is it, after all, to call the classicals ahistorical? Was not a dynamic conception of long-term economic development the very raison d’être of their system, distinguishing them, far more than any analytical niceties, from their neoclassical heirs? There is a real sense in which classical economics was ethnocentric, not to say simply erroneous by any standard; but it is quite misleading to confuse weaknesses of that sort with ahistoricality.
Nor, on the other hand, is nineteenth-century German economics itself particularly well served by the word historical. In the first place, [End Page 548] few members of the GHSE published works that would normally be termed histories. And when in their thematic discourses they argued for the great variability of economic action and artifacts, they were as likely to adduce cross-sectional data (in the form of ethnographic and statistical reports) 2 as longitudinal ones; even their longitudinal counterpoints to the present would often cite not the evidence of the past, but their own speculations about the future. This was a far cry from the practice of the historical jurists, not to mention that of professional historians. Roscher himself seems to have recognized as much by the time he wrote his History of Political Economy in Germany (1874, 1032), in which he began...