Historical school of economics

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The historical school of economics shaped German-speaking social science for a century between 1850 and 1950.

She devoted herself to many sub-problems of economics such as the theory of values or the nature of interest , but especially deals with practical problems, such as the emerging social question , i.e. the impoverishment of large groups in the course of industrialization. Their representatives tried to do practical science and to find solutions for current problems of their time. In the history of dogma, it has particularly distinguished itself with its criticism of classical teaching and it can certainly be described as a direct forerunner of modern institutional economics . In addition, it has led to two enriching discussions in the academic world: the methodological dispute in economics , in which the necessity and fruitfulness of inductive and deductive research was discussed, and the value judgment dispute about the question of how normative economics can and should be.

Teaching (overview)

The historical school tries to anchor its hypotheses in reality. To do this, it was necessary to back up one's own studies by means of empirical surveys or to fall back on findings from historical science. Since all development laws worked out in this way depend on their context in space and time, they are not universally applicable, but it is possible to work out so-called development stages that are similar despite their spatial or temporal distance. There, so the assumption, developments would be similar.

These ideas are diametrically opposed to the classical, which is viewed individually, utilitarian and deterministically.

In summary, one can say that the basic conception, which is the same for all representatives, was to understand all life processes as historical events. People are motivated to act not only by self-interest , but also by other cultural factors. Since culture changes and economics deals with people, it can only be a social science , not a natural science, as the classics understood it to be. The aim is then not to record natural laws, but to systematize and generalize historical data in order to arrive at empirically tenable statements.

In his methodological essay, Roscher and Knies and the Logical Problems of Historical Economics, which he wrote between 1903 and 1906, Max Weber criticized the neglect of certain elementary logical-methodological problems, with the scientific concept formation (against emanatic logic following Hegel ) and the divorce from Law and reality science is heavily based on the preparatory work of Baden Neo-Kantianism ( Heinrich Rickert , Wilhelm Windelband , Emil Lask ).

Theory history and development

precursor

Friedrich List and Adam Müller von Nitterdorf pioneered the historical school with their criticism of the Classical Economics. They advocated the idea that there could be no universally valid economic laws. The specific circumstances such as B. the level of development of an economy can be taken into account.

Older Historical School

Main representative:

Above all, the older historical school agrees in its rejection of classical music . Their claim to formulate natural laws, i.e. laws that are independent of space and time, is viewed with great skepticism. In particular, she opposes the notion of an “ideal” economy with the plurality of ideals and the diversity of human behavior - so political economy is not a natural science , but a social science .

Roscher - as the main representative of this school - wants to explore the economic conditions and ideas of individual epochs and geographical areas. From this, he expects, laws of development can be derived through empirical evaluation. Although these are not suitable for forecasting per se, they can help to better understand current developments. Hildebrand even declares economics to be the nucleus of a general cultural theory ( sociology was not yet established as a separate scientific discipline at this point).

As a result of her research, not only were numerous detailed studies from the development of municipal craft businesses to the emergence of entire economic sectors. It also deserves the credit for introducing the concept of culture as an influencing factor on historical changes in the national economy.

Younger historical school

Main representative:

The younger historical school criticizes the older one primarily because of its urge to theory. Instead of trying now to derive development laws, the empirical basis should first be enlarged. Your research activities therefore also largely cover further detailed studies on economic development.

The representatives of the historical school pursue a different methodological approach than the English classical period and accordingly see themselves as their opposite position. The main criticisms of English political economy can be described as follows. The first criticism is aimed at the individualistic approach, which is the theoretical starting point and guiding principle of the classical economists. (Smith-Ricardo-Mill). Where in these figures of thought the individual is in the foreground of scientific investigations; With his individual needs and his autonomous will, Schmoller represents the organic approach: The focus is not on the individual, but on the community, whose historical experiences are reflected in social institutions and organs, which in turn determine the individual's scope for action. The ethics of society result from the historical experiences of community life and not from the reference to the benefit of the individual.

Closely related to this point of criticism is the rejection of the use of abstract terms as an instrument of economic analysis. Accordingly, Schmoller is critical of the deductive method.

The historical school also sees the role of the state differently from the classical. Where the principle of economic liberalism is propagated there, the historical school sees a much greater responsibility of the state.

Especially Gustav von Schmoller worked intensively with social institutions. To self-interest - as a classic drive for human behavior - he added the desire for ethical action, recognition , the fear of punishment and lived habits in law and morality that manifest themselves in these institutions.

In addition, the representatives of the younger historical school were or are often normatively active. They see it as their task, committed to ethics, to provide advice on solving political and, above all, social problems. They attribute many of these problems to side effects of the market economy and call for intervention in the market. Freedom, so on, is necessary but not sufficient to create prosperity. In addition, there must be a state that can correct unwanted results such as industrial concentration processes or increasing wealth inequality. This point of view, which also had a significant impact on the development of the social market economy in Germany after 1945, earned its representatives the name of Kathedersozialisten .

In order to better illuminate social issues, representatives of the historical school and other socio-politically committed scientists founded the Verein für Socialpolitik in 1872 , the stage for major epistemological debates, e.g. B. the method controversy and the value judgment debate .

The unifying element of the representatives of the younger historical school can be found above all in their views on method, society and the economy. The state and the state economy have the task of pursuing macroeconomic goals, in particular the common good, and bringing the private sector to ethical action. The economic process is seen as a socio-organic, evolutionary and not as an eternal cycle. Finally, the inclusion of group interests and the study of the relationship between law and economics form a common view of this school.

literature

Individual evidence

  1. ^ Gerhard Stavenhagen: History of the economic theory. 4th edition. Vandenhoeck & Ruprecht, 1969, ISBN 3-525-10502-9 , pp. 191, 195.