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Über dieses Buch

The volume at hand gives an exposition of the tradition of the Historical School of Economics and of the Geisteswissenschaften or human sciences, the latter in their development within the Historical School as well as in Neo-Kantianism and the sociology of knowledge. It continues the discussion started in the year 1994 on the Older Historical School of Economics and the 19th century German contribution to an ethical theory of economics with the Newer Historical School of the 20th century. Economists, social scientists, and philosophers examine the contribution of this tradition and its impact for present theory. The schools of thought and their approaches to economics as well as to the cultural and social sciences are examined here not as much for their historical interest as for their poten­ tial systematic contribution to the contemporary debates on economic ethics, economics, sociology, and philosophy. The volume at hand contains the proceedings of the Fourth Annual SEEP-Conference on Economic Ethics and Philosophy in 1996, "Economics and Ethics in the Historical School. Part B: Max Weber, Heinrich Rickert, Max Scheler, Werner Sombart, Arthur Spiethoff, John Commons, Alfred Marshall, and Others", held at Marienrode Monastery near Hannover, Germa­ ny, on March 27-30th, 1996, together with several additional invited papers.



On Max Weber’s Contribution


Chapter 1. The Present Relevance of Max Weber’s Wertrationalität (Value Rationality)

The concept of “axiological rationality” (my translation of Wertrationalität) is possibly one of the most difficult of all the concepts Weber put on the market.
Raymond Boudon

Chapter 2. Max Weber and Ludwig von Mises, and the Methodology of the Social Sciences

It is evident that the richness of thinkers like Weber and von Mises cannot be fully captured in a short paper. In 1971 Walter G. Runciman said that the bibliography about Max Weber’s methodology consisted of about 600 works1. In the early 1970’s Wolfang Schluchter and Guenther Roth added that an additional one hundred essays were written every year2. Twenty years have gone by since. Thus, the attainment of complete knowledge of Weber’s thought is almost unachievable. Besides, in a recently published book, Wilhelm Hennis, who knows Weber’s work very well, affirms that “seldom has anyone had such bad fortune in the avoidance of misunderstanding. The libraries written on the ‘Weber thesis’ would otherwise never ever have been written”. And he continues: “Hence Weber has to be read fresh and ‘without prejudice’. And that means the entire corpus of his work”3. Hennis shows us a new and unsuspected Weber. For him, Weber would not be one of the fathers of the sociology, but rather belongs to the tradition of the classical practical or moral sciences4, since he is interested in human nature and the kind of life caused by modernity5. This interpretation is quite different from the usual one -he realizes6-, but his knowledge and his arguments are so convincing that we have to take them into account. Hennis’s essays could constitute something of a turning point in the hermeneutics of Weber’s work. Nevertheless I shall quote him as one opinion, together with those of the traditional interpretations. Von Mises’s work is almost as extensive as the one of Weber. Thus, the following paper will use the original texts and only some of the secondary literature.
Ricardo F. Crespo

Neo-Kantianism, Wissenssoziologie (Sociology of Knowledge), and the Sociological Theory of Money and Exchange


Chapter 3. Value Theory and the Foundations of the Cultural Sciences. Remarks on Rickert

In the early 1880s, a series of disputes arose in German academia over the aims, subject matter, and methods of the social sciences. Although the Methodenstreit — the controversy over methods — began as a debate between historicists in German economics and marginal utility theorists in Vienna, by the eve of World War I, these disputes embraced philosophy, historiography, and sociology. The result was a crisis in the social sciences. Because of the privileged status enjoyed by the partisans in the debate, German university professors who were regarded as the stewards of the fundamental values of western civilization, it was translated into a crisis of modern culture.
Guy Oakes

Chapter 4. The Sociology of Knowledge and Diagnosis of Time with Max Scheler and Karl Mannheim

When Earle Edward Eubank visited European sociologists in the summer of 1934, he held conversations with Hans Freyer, Franz Oppenheimer, Werner Sombart, Ferdinand Tönnies, Alfred Vierkandt, Alfred Weber and Leopold von Wiese in Germany and with Othmar Spann and Erich Voegelin in Austria. They were asked to appraise and define their attitude to a number of German speaking sociologists and also, primarily, to name those authors who, for them, were the most significant. Including the nine taking part in the conversations with Eubank, the talk turned to some 36 sociologists from German-speaking countries. From today’s point of view, one of the remarkable outcomes of this lay in the fact that Max Scheler and Karl Mannheim were each mentioned only once during the talks: Max Scheler by Alfred Vierkandt, who gave Scheler’s work and influence a positive rating, and Karl Mannheim by Leopold von Wiese, who assessed him very affirmatively.1
Karl Acham

Chapter 5. Georg Simmel’s Contribution to a Theory of the Money Economy

I should like to start by asking two questions:
What is Georg Simmel’s2 contribution to economics?
What is his contribution to our theoretical conception and general understanding of the economy?
Raimund Dietz

Ethics and Economics in Sombart, Spiethoff, Freyer, and in Older German Business Administration


Chapter 6. Ethics and Economics in the Work of Werner Sombart

The work of Werner Sombart (1863–1941) presents an especially interesting case for any attempt to take stock of the contribution of the historical school to the relationship between economics and ethics. One the one hand Sombart started out as a student of Schmoller following many characteristic paths of the historical school. On the other hand he used his reading of Marx to press for a more theoretical historism and sided with Weber in his attempt to separate carefully between scientific propositions and value judgements.1 When Sombart published the first edition of his opus magnum Modern Capitalism in 1902 it was directed above all against “the foggy veils of ‘ethical sentiments’” that to him seemed characteristic of the work of the ethical and historical school of economics so dominant in turn of the century Germany.2 Since he is usually treated as a representative of the last generation of the historical school his critical stance is in need of explanation. It is due to the nature of Sombart’s work that such an explanation has to proceed historically itself.3 It is well known that Sombart changed his political positions considerably over the course of his long life: from the socialism of the chair to fascism, as an East German author stated in the early 1960s, or from state socialism to romantic anticapitalism, as could be argued more accurately.4 These changes were often accompanied by methodological reorientations and were clearly mirrored in his scholarly work as well. Thus the chronological approach being used in this article is not only the consequence of a déformation professionelle of the historian but also the reflection of Sombart’s work itself. This work, however, will only be discussed as far as it touches upon the relationship between ethical values and economic and social science on the one hand, the role of ethical motivation in economic history and in economics more generally on the other.5
Friedrich Lenger

Chapter 7. Historical Changes and Economics in Arthur Spiethoff’s Theory of Wirtschaftsstil (Style of an Economic System)

The analysis of historical changes represented certainly a pivotal element in the work of representatives of the German historical school. However at the beginning of the 1900s the resuites achieved in reference to this theme after half a century of intense scientific production seemed quite unsatisfactory. The German historical school had yielded interesting historical analysis, new fields of research and original methodological contributions but the effects on the theoretical constructs within historical economics were quite scarce. The sense of frustration and confusion was further increased by the conclusion of Methodenstreit and by the awareness of the capability of the Neo-classical approach to produce a rising stratification of new theoretical constructs and new scientific categories. So, while the hiatus between history and theory did not seem to have any negative effects on the scientific productivity of the Neo-classical approach, within the German historical school, instead, the attempt to produce a stronger connection between the theoretical and empirical dimension seemed arid and unfruitful.1
Vitantonio Gioia

Chapter 8. Hans Freyer’s Economic Philosophy After World War II

The work of the sociologist Hans Freyer is not well known, not only in today’s English-speaking community of the Social Sciences, but also among the younger German sociologists. Many regard Freyer’s biography as having been on the wrong path, because he supported the National Socialist movement at times. His work appears to be an illegitimate deviation from the mainstream of a nomological social science, a “Historical and Social Philosophy” or a “critique of culture”. But especially his later works from the 50s and 60s (on which we will concentrate here) include some remarkably modern and relevant aspects.1
Volker Kruse

Chapter 9. Business Ethics in Older German Business Administration: Heinrich Nicklisch, Wilhelm Kalveram, August Marx

When leaving the traditional rules of salesmanship and accounting as well as commercial and trading sciences (“old” business administration) out of consideration, the “new” business administration is a quite young discipline. Its origin in Germany can be traced back to the beginning of this century and the foundation of such academies.1 Within the industrial development and entrepreneurial activities, the question of organizing and leading a business in an appropriate, successful and scientifically sound way has become more meaningful and urgent. This is how “Private enterprise economics” (in German: Privatwirtschaftslehre) or “Individual economics” (Einzelwirtschaftslehre) have become a scientific discipline like the already established subject of economics.
Udo Neugebauer

Austrian Economics and the Historical School


Chapter 10. Carl Menger and the Historicism in Economics

A quarter century ago historians of economics celebrated the centenary of the “Marginal Revolution in Economics.” Among the three main figures of this revolution, Menger was more fortunate than other two, Jevons and Walras, that he could have a special conference dedicated to him personally in Vienna besides the Bellagio Conference where all the three were honored equally.1 It was around this year that many historians of economics became aware of Meng er’s peculiar position to the later development of standard marginalist analysis.
Kiichiro Yagi

Chapter 11. The ‘Irrelevance’ of Ethics for the Austrian School

In order to address the issue of the ‘irrelevance’ of ethics for the exponents of the Austrian School, I will base my arguments on the following contentions: only a subset of the participants’ initial expectations are fulfilled through the temporary results of the process of catallactics, and since such results are not determined by their initial motivations, ethical assessment of the latter is irrelevant for the purposes of understanding and explaining how this occurs.
Raimondo Cubeddu

The Historical School and American and British Economists: John R. Commons, Frank Knight, Alfred Marshall


Chapter 12. The Historicism of John R. Commons’s Legal Foundations of Capitalism

It is widely appreciated that American institutional economics (of the now “old” type) bears a family resemblance to the German, and even the English, historical schools. They share emphases on a broad conception of the economic system, an empirical rather than strictly deductive apriorist approach to knowledge, the importance of institutions, the conduct of case studies, and a deep sense of the historicity of the economic system and of economics as discipline. It is also widely appreciated that, although one can make strong exclusivist cases for rationalism and for empiricism, and for pure deduction and for pure induction, in practice these approaches to knowledge are not mutually exclusive; they are always used in some combination. Facts are always theory-laden and theory is always tied to some perception of facts/phenomena. All this applies to historicism.
Jeff Biddle, Warren J. Samuels

Chapter 13. Frank Knight and the Historical School

The present paper is concerned with Frank H. Knight (1885–1972) and his attitude towards the historical school of economics1. It is argued that Knight paid attention to the historical school during his whole life and struggled to develop his own historical framework. The paper falls into five sections. Following this overview the second section recalls the conventional view that there is no real relation between Knight and the historical school; Knight is introduced as a stranger to the historical school. In contrast to this textbook version the following passages analyze Knight’s way of thinking in three steps. His extensive commentaries on the historical school and their protagonists are discussed in the third section. Focusing on Knight as a promoter of Max Weber, the fourth section examines Knight’s role in the dissemination of German social thought into the Anglo-American context. Moreover, Weber is identified as a crucial influence on Knight. Comparing his notion of ideal competition with Weberian ideas it is shown how close his critical stand on the ethical consequences of ideal competition is to the dominant figure of the younger historical school. The fifth section aims at a reconstruction of a historical dimension in Knight’s economic methodology. The final conclusion reflects on the gap between Knight as a stranger to the historical school and his efforts to develop a historical framework of his own. It tries to understand the obvious tensions in Knight’s work from different angles and considers why Knight finally remained reluctant to convert to the historical school.
Claus Noppeney

Chapter 14. Method and Marshall

Economists, or rather some of the most gifted spirits among them, have continued in recent years to conduct a running debate on the more elemental, though by no means more elementary, topic of what sort of a study economics is, and what it is all about. This is a topic which, when I started to read economics at Cambridge in 1910, it was not, I think, fashionable among us to think much about — less fashionable, I dare say, than it may have been a few years previously, when the separate course in economics had not yet been extracted like Eve from the rib of the Moral Sciences Tripos. To us, I think, it seemed a topic more suitable for discussion by Germans than by Englishmen. There was on our reading-list what I have since come to regard as a good, if dry, book about it, J.N. Keynes’s Scope and Method of Political Economy, but to be quite honest I doubt if many of us read it. We thought we knew pretty well what sort of things we wanted to know about, and were glad enough to take the counsel given by Marshall himself near the beginning of the Principles (p. 27),1 ‘the less we concern ourselves with scholastic enquiries whether a certain consideration comes within the scope of economics the better’.2
D. E. Moggridge

The Historical School and the Development of Economics in Japan and Russia


Chapter 15. Two Developments of the Concept of Anschauliche Theorie (Concrete Theory) in Germany and Japan

In the “method debate” (Methodenstreit) at the end of the 19th century, Gustav Schmoller, confronting Carl Menger, argued that there should be no hurrying of theoretical abstraction, but that priority should be given to extensive explanation and analysis of historical facts. But this standpoint of Schmoller, which included an extremely untheoretical tendency, aroused the dissatisfaction of some younger scholars who had grown up under the influence of the “historism” (Historismus). After Schmoller’s death (1917), the concept of “anschauliche Theorie” emerged in the 1920s as an attempt to overcome this perceived weakness.1 In the following, we explain the emergence of the concept, and then consider and compare two further branches of development in Germany and Japan in the years around 1940, taking the circumstances of the two countries at that time into account.
Tetsushi Harada

Chapter 16. Some Reflections on Ethics and Economics Concerning the German Historical School and Its Reception in Russia

It is widely known that the emergence of economic theory as a separate science was connected with /caused by/ its emancipation from moral philosophy. The discovery of Homo oeconomicus, nothing but economic man motivated by self-interest played the major role in that process. But it certainly meant that something like homo oeconomicus could be found in real life. Market economy, turning into a relatively autonomous subsystem of society, provided a mechanism of social coordination alternative not only to orders and traditions, but also to moral norms. This morally neutral way to reconcile private and public interests — the economic way — was emphasized in Mandeville’s “Fable of bees”. Private passions and even vices could be turned into public benefits in case they are given the harmless form of economic interests.1 Detesting Mandeville’s cynicism, Adam Smith was still impressed by his paradox.2 Smith became the first moral philosopher who had two separate images of man for ethics and political economy — and this made him the founder of economics as a separate social science.3
Vladimir S. Avtonomov

The Historical School of Economics and Today’s Economics


Chapter 17. The Old and the New Institutionalism in Economics

As the limitations of mainstream neoclassical theory became increasingly evident during the post-war period, there occurred a remarkable expansion of research activity in modern institutional economics. Not only did the quantity of institutionally oriented research and writing grow over time but, in addition, modern institutional economics began to secure recognition as a distinct and significant area of study.1 Nevertheless, it is important to realize that neoinstitutionalist scholars do not speak with one voice, and that the boundaries of the field have not been established with great precision. This is so, in part, because modern institutionalism was not developed in systematic fashion by individuals sharing a common vision, or by those who saw themselves as engaging in a bold new movement designed to bring about a revolutionary approach to economic theory. Rather, theoretical advance took place largely through innovative work in particular sub-fields such as: transactioncost economics, property-rights analysis, law and economics, constitutional economics, etc. Indeed, during the formative years of what we now call the New Institutional Economics, the writings produced in the various specialized areas tended to be rather diverse in style and methodology as well as in content. And, even today, there are real divisions among scholars about how best to treat institutional and organizational questions in economics. Of course, shared intellectual ground does exist. At a fundamental level, the core element that binds different groups of neoinstitutionalist researchers together is the conviction that orthodox neoclassical analysis is overly abstract and incapable, without some modification, of dealing effectively with many problems of interest to theorists and policy makers.
Eirik G. Furubotn

Chapter 18. Moral Leadership in Ethical Economics

This paper considers the relationship between ethics and economic performance. It is argued that culture has an important intermediating role in this relationship. Cultural intermediation is personified by the social or political leader, who promotes ethical values and is one of the principal beneficiaries of the improved economic performance that results from them.
Mark Casson

Theories of History and of Education, and a Philosophy of the Historical School


Chapter 19. Theories of History and of Education in Germany and France During the 19th Century

I normally resist separating intellectual history from the social and institutional history of intellectual life.1 For this brief presentation, however, I must reduce my comments on social and intellectual history to one broad thesis: Just as the industrial revolution took place at different times and rates in the major European countries — with significant historical consequences, so too there was something like an educational revolution with a time scale of its own. Unlike the industrial revolution, the educational revolution took place much earlier in the German states than it did in England and certainly in France, and this too had notable consequences. Moreover, the radical transformation of secondary and higher education in the German states during the decades around 1800, much like the English industrial revolution, set patterns that subsequently recurred, with certain variations, in other European countries, including in France from the 1870s on. One important element in this educational revolution was the emergence of the so-called research imperative, the institutionalized expectation that university faculty must do original research, while also introducing their students to an increasingly codified set of research practices. The other crucial component in the educational revolution was the establishment of research-based professional qualifications for future secondary teachers, as well as for civil servants and clergymen, and the ultimate extension of educational prerequisites and entitlements to a whole range of other learned professions.
Fritz Ringer

Chapter 20. A Philosophy of the Historical School: Erich Rothacker’s Theory of the Geisteswissenschaften (Human Sciences)

Erich Rothacker has developed, at the end of the Historical School of the Social Sciences and the Human Sciences (Geisteswissenschaften), the philosophy of the Historical School. In his theory of the human sciences as well as in his philosophy of history he tries to give an answer to the question what the essence of the Historical School is and how its philosophy and basic presuppositions distinguish it from other approaches to the social and human sciences.
Peter Koslowski



Chapter 21. Germany, Japan and National Economics: An Alternative Paradigm of Modernity?

Scripture tells us that the truth will set us free. But we moderns hold that only freedom permits the discovery of that liberating truth. This search assumes the existence of an inexhaustible empirical terrain which awaits exploration. But there is another enabling assumption, one equally important but often denied, at work here: intellectual pluralism or the belief that there is more than one method of doing sound social science. The goal of this essay is to show, in a concise and reasoned way, why Friedrich List and the German Historical School stand at the heart of the contemporary defence of such pluralism, of this social scientific freedom to choose.
David Williams


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