History of Economic Analysis part 82 docx

Many of the volumes presented work of a high grade that was not only exemplary in its minute attention to detail but also analytically significant and inspired by considerations of scientific as well as practical urgency. The Verein’s comprehensive price studies (begun in 1910) may serve as an example. Most of them, however, were no better and no worse than such investigations were and are at all times and in all countries. But an investigation into the influence of gold production, directed by Arthur Spiethoff (Der Einfluss der Golderzeugung auf die Preisbildung, 1890–1913, vol. 149 of the Schriften), that was a part of them, rose far above the general level. On the whole, however, the economists responsible for the reports that fill those volumes of the Schriften, cared little for analytic refinement. They took no end of trouble with their facts, but most of them went straight from their impressions of the factual pattern to recommendations, just as would have any nonprofessional worker. They neither used nor contributed to theoretical or statistical technique, in spite of their obvious opportunities for doing so. And the analytic apparatus of economics did not improve but even deteriorated in their hands. Moreover, if abilities adequate to describing the trade practices of distributors of milk plus a fervent allegiance to the ideals of the Verein—glorified no doubt by a little philosophy and other elements of German culture—were all a man needed in order to establish himself as an economist and, in due course, to receive academic preferment, we cannot be surprised that supply adapted itself to the character of demand. Otherwise excellent men ceased to care for the higher spheres of scientific invention and rigor. Men who cannot be described as otherwise excellent threw them overboard with a sigh of relief and prided themselves on doing so. And though there always were a few who tried to keep the flag flying, 9 economic theory as understood in England was in many places almost completely in abeyance for several decades, not only as a field of research but also as a means of training students in scientific habits of mind. When, in the first decade of this century, a reaction began to set in, under Austrian and foreign influence, against ‘economics without thinking,’ the full extent of the damage done revealed itself in the fact that people hardly knew what economic theory meant: many thought that it was a sort of philosophy of economic life or else simply methodology. Many foreign observers laid all the blame for this state of things at the door of the historical school. But the historical school, though cultivating another purely scientific interest, still cultivated a scientific interest; it should not be held responsible for that substitution of convictions for performance. [(c) The Problem of ‘Value Judgments.’] Concern about the future of eco-nomics may have been one of the reasons why an increasing number of men felt it desirable to shape the Verein into something more like a scientific society and, when this had to some extent been attained, to bring forward the question whether economists were within their rights when they took it upon themselves to deliver judgment—moral or other—on the phenomena they analyzed. During the first decade of the century, this problem of the Werturteil 9 [Note intended here on Diehl, Dietzel, Oppenheimer, and Lexis.] History of economic analysis 772 (value judgment) caused heated discussions which culminated in what almost amounted to a row at the Vienna meeting of 1909. To many people it will seem obvious a priori that this attack upon the principle of the Verein’s historic practice must have come from economists who were out of sympathy with the policies sponsored by it. This however was not so. The enemies of the Verein had of course always protested against its lack of scientific ‘objectivity.’ But within the Verein the most prominent leaders in that campaign for freedom from evaluation (Wertfreiheit) were M.Weber and Sombart, 10 both of whom belonged to the radical wing of the Verein and were anything but exponents of capitalist interests. Nevertheless it is abundantly clear from what has been said so far that it was not the epistemological problem involved which accounts for the bitterness of that controversy, but considerations of a different order. One may feel no qualms at all about the logical status of value judgments within a science and yet hold (a) that the substitution of a creed for analytic ability as a criterion of selection of the personnel of a science will impede advance; (b) that those who profess to be engaged in the task of widening, deepening, and ‘tooling’ humanity’s stock of knowledge and who claim the privileges that civilized societies are in the habit of granting to the votaries of this particular pursuit, fail to fulfil their contract if, in the sheltering garb of the scientist, they devote themselves to what really is a particular kind of political propaganda. And it is easy to see that those who thought differently were bound to realize that what was at stake was not a point of scientific logic but their professional standing and all that was dearest to them in their professional activity. The epistemological problem in itself is neither very difficult nor very interesting and can be disposed of in a few words. It will be convenient to do so with reference to the English environment in which the problem arose in the natural course of things—as a science comes of age, the critical searchlights are turned on all its habitual attitudes and practices—and in which those political acerbities that elsewhere affected the handling of the question were much less important. We have seen how awareness of the problem came about and how it was dealt with by the succession of economists between Senior and Cairnes. The distinction between reasoning about ‘what is’ and about ‘what ought to be’ having been well established before, the correct interpretation of this distinction was formulated by Sidgwick 11 in a manner 10 [J.A.S. wrote: Leave page for note on Sombart.] 11 In the introduction to his Principles of Political Economy, 1883 (3rd ed., 1901, pp. 7–8): ‘I have been generally careful to avoid any dogmatic statements on practical points. It is very rarely, if ever, that the practical economic questions which are presented to the statesman can be unhesitatingly decided by abstract reasoning from elementary principles. For the right solution of them full and exact knowledge of the facts of the particular case is commonly required; and the difficulty of ascertaining these facts is often such as to prevent the attainment of positive conclusions by any strictly scientific procedure. ‘At the same time the function of economic theory in relation to such problems is none the less important and indispensable: since the practical conclusions of the most Sozialpolitik and the historical method 773 which left little, if anything, to be desired and which seems to have been accepted—in principle at least—by Marshall and his immediate followers. An ‘ought,’ that is to say, a precept or advice, can for our purpose be reduced to a statement about preference or ‘desirability.’ The relevant difference between a statement of this nature—for example, ‘it is desirable to bring about greater economic equality’— and a statement of a relation—for example, ‘the amount people will attempt to save out of a given national income depends, among other things, on the way in which the income is distributed’—reveals itself in the fact that acceptance of the latter depends exclusively on the logical rules of observation and inference, whereas the acceptance of the former (the ‘value judgments’) always requires, in addition, the acceptance of other value judgments. This difference is of little moment when the ‘ultimate’ value judgments, to which we are led up as we go on asking why an individual evaluates as he does, are common to all normal men in a given cultural environment. Thus, there is no harm in the physician’s contention that the advice he gives follows from scientific premisses, because the—strictly speaking extra-scientific—value judgment involved is common to all normal men in our cultural environment: we all mean pretty much the same thing when we speak of health and find it desirable to enjoy health. But we do not mean the same thing when we speak of the Common Good, simply because we hopelessly differ in those cultural visions with reference to which the common good has to be defined in any particular case. Sidgwick had his full share of the typically English confidence in the ‘ultimate values’ that happen to prevail in one’s own country at one’s own time. Therefore he recognized, beyond the frontiers of the ‘science’ of economics, the existence of a corresponding ‘art,’ whose propositions were precepts but precepts not much less enforceable than are propositions of the logico-factual kind. He saw, however, the real problem as he showed by an excellent illustration which, slightly amplified, will serve to sum up the central point in that controversy. An indefinite number of impulses and considerations enter into the making of a protectionist or free trader. Among them are some which link up with a man’s tastes in national styles or ideals. Therefore no scientific argument can compel him to embrace or abandon protectionism. 12 But his motivation untheoretical expert are always reached implicitly or explicitly by some kind of reasoning from some economic principles; and if the principles or reasoning be unsound the conclusions can only be right by accident.’ 12 It should be observed that this does not mean either that an economist’s convictions in the matter cannot be made the subject of scientific analysis or that they are uninteresting. As regards the first, we may wish to explain why a given individual or group entertains a given conviction about given economic policies. Such an analysis is perfectly scientific. As regards the latter, an economist’s views may reflect the attitude of the stratum he hails from and thus assist us in the diagnosis of a political pattern; besides, the economist in question may be sufficiently interesting as an individual to make it worth while to notice his political preferences. But none of these things has anything to do with the problem in hand. History of economic analysis 774 may, and as a rule does, imply also propositions about causes and effects, some or all of which may come within the province of the economic analyst. If it should be the case, for instance, that our man is a protectionist because he believes protection to be a remedy for unemployment, then the economist is within his rights if he points out that this is so in some cases but not in others and that, in this sense, the man ‘ought’ not to be protectionist unconditionally. The reader will realize that considerations of this order greatly reduce the practical importance of the issue so far as its purely epistemological aspect is concerned. In particular, if an economist is inspired by the typically historical sense for environment, he may be able to proffer—from a knowledge of which value judgments are associated with a given environment—historically relative advice without leaving the precincts of his professional competence. This goes some way, though not the whole way, toward justifying economists’ value judgments. It also explains, in part at least, why the controversy on value judgments did not produce any very important results. But it does not alter the fact that the progress of economics—including progress in its practical usefulness—has been and is being severely impeded by economists’ quasi-political activities. [2. HISTORISM] It is one of the major aims of this book to destroy the myth that there ever has been a time when economists as a body scorned research into historical or contemporaneous fact or when economics as a whole was purely speculative or lacked its factual complement. What, then, is the distinctive characteristic of the group that called itself the Historical School and how was it possible for its members to look upon its program as a new departure? Evidently, it would not do to include everyone who recognized that economic history is an important source of economic truth. Nor can we draw the line around all those who displayed an extensive command of historical facts or a sense of the historical flux of policies and of the historical relativity of propositions: for this would still include List and Marx and Marshall. Not even the actual performance of historical work is enough: there would be no point in a definition that includes James Mill. These considerations, however, point directly to what we are looking for. The basic and distinctive article of the historical school’s methodological faith was that the organon of scientific economics should mainly—at first it was held that it should exclusively— consist in the results of, and in generalizations from, historical monographs. So far as the scientific part of his vocation is concerned, the economist should first of all master historical technique. By means of this technique, which was all the scientific equipment he needed, he should dive into the ocean of economic history in order to investigate particular patterns or processes in all their live details, local and temporal, the flavor of which he should learn to relish. And the only kind of general knowledge that is attainable in the social sciences would then slowly grow out of this work. This was the original core of what became known as the Historical Method in economics. 1 The resulting attitude and program is what economists of a different persuasion meant by Historism. Of course, the term History must be interpreted broadly so as to include both prehistoric and contemporaneous fact and the contributions of ethnology. Our way of defining the historical school no doubt tends to obliterate the frontier line between the Sozialpolitik and the historical method 775 historical economist and the economic historian. But this is no disadvantage. For the methodological creed of the historical school may be summed up precisely in the proposition that the economist, considered as a research worker, should be primarily an economic historian. The work of economists of the historical school in fact supplemented, and was supplemented by, the work of economic historians proper, a species of the historical genus that was by then well established and did not always welcome what it was sometimes inclined to look upon as unfair competition. 2 As thus defined, the historical school cannot be said to have ever been dominant in any country. But in German economics it was, during the last two or three decades of the nineteenth century, by far the most important factor of a purely scientific nature. This is why we are going to acquaint ourselves somewhat more fully with the performance of the German historical school before dealing briefly with the parallel movements in other countries. [(a) The ‘Older’ Historical School.] In deference to established tradition we shall first notice the work of three writers, Bruno Hildebrand, Wilhelm Roscher, and Karl Knies, who are usually mentioned together under the heading of Older Historical School. As a matter of fact, however, they did not form a school in our sense—the reader should remember that in this book the term School means a definite sociological phenomenon and hence cannot be used at will for any group of writers we may choose to select—and their relation to economic history was neither uniform nor very different from that of a host of other economists of all ages. Hildebrand was an active man of many merits who, by program and performance, emphasized the evolutionary 1 It will be seen that this meaning of historical method outlined above has nothing to do with other meanings of the same term, such as the sum total of the historian’s techniques or a genetic method of presentation. 2 Nobody can fail to notice the trade-union aspect of that antagonism. But there was also a more presentable reason for the hostility of some economic and—because historical economists occasionally went beyond anything that can be called economic history—other historians. Economists, Schmoller’s pupils in particular, did not always take much trouble about acquiring the historian’s equipment, and their work in fact failed sometimes to meet the historian’s professional standards. Indictments of this kind were even leveled at Schmoller himself. However that may be, for us the fact, which our definition took into account, viz., that there is really no dividing line, spells a considerable difficulty. We cannot include the historical literature of the period, yet we really ought to do so. Any history of economics in the wide sense sponsored by the historical school would be woefully incomplete if it did not mention such men as Georg von Below, Alphons Dopsch, or Sir Henry Maine and many others, who contributed to our knowledge of the economic and social institutions and processes of the Middle Ages more than economists ever did, but I must draw the line somewhere. History of economic analysis 776 character of economic civilization—without renouncing belief in ‘natural laws’ however—and the basic importance of historical material more than did the majority of his contemporaries. Roscher was the incarnation of professorial learning, mainly of a philosophico-historical nature, and must indeed be mentioned both on account of his scholarly labors in the field of the history of economic thought and as a leading figure on the stage of academic economics. On that stage he conscientiously retailed, in ponderous tomes and in lifeless lectures, the orthodox—mainly English—doctrine of his time, simply illustrated by historical fact. However, this does not make a historical economist in the term’s distinctive sense. Nor does talk about ‘historical laws’ or approval of Mangoldt’s epigram that economics is ‘the philosophy of economic history’—especially if, for the rest, one theorizes exactly as do other people. Knies was the most eminent of the three. But his main performance was in the field of money and credit, where he made his mark as a theorist. His only connection with the historical school consists in a programmatic book, in which he stressed the historical relativity not only of policies but also of doctrines and which owes to commendation, by genuinely historical economists, a prominence it does not quite deserve. 3 [(b) The ‘Younger’ Historical School.] The new departure, the distinctive research program, and the emergence of a genuine school must in fairness be associated with the name of Gustav von Schmoller 4 (1838– 1917). In a sketch as short as this, we must concentrate on his work and leadership. The second-line leaders—whom the same fairness demands we must resolutely label as such—Brentano, Bücher, Held, and Knapp, we can only mention below. 5 And the work of less prominent men must be passed by entirely. Schmoller led the school—the Younger Historical School as it came to be called—by example as well as by word. In his early days he produced a monograph on the clothiers’ and weavers’ craft of Strassburg, which, not otherwise particularly distinguished, acquired importance in its programmatic setting and 3 [Die politische Ökonomie vom Standpunkte der geschichtlichen Methode (1853; enlarged ed. 1883). Knies is discussed in chs. 5 and 8 below.] 4 Of his writings on method, it will suffice to mention the collections: Zur Literaturgeschichte der Staats—und Sozialwissenschaften (1888), and Grundfragen der Sozialpolitik und Volkswirtschaftslehre (1897; in the latter, especially the important address on ‘Changing Theories and Established Truths in the Field of the Social Sciences’); and the last edition of his article ‘Volkswirtschaft und Volkswirtschaftslehre’ in the German Encyclopaedia (Handwörterbuch der Staatswissenschaften), which renders his ripest thought on the subject. I take this opportunity to add that Schmoller brought to bear on his task of leadership not only energy, fighting spirit, and a tremendous capacity for work, but also considerable strategic and organizing ability. Among other things, he founded a periodical—which became known as Schmoller’s Jahrbuch—and edited a series of monographs—the Forschungen—which served the cause and provided facilities for the publication of the school’s work. He was a typical ‘scholarch.’ [See also long article by J.A.S., ‘Gustav v.Schmoller und die Probleme von heute,’ Schmoller’s Jahrbuch, vol. L, 1926, pp. 337–88.] 5 [The note planned on these men was not written but Brentano, Held, and Knapp are mentioned elsewhere.] Sozialpolitik and the historical method 777 became the model of the work of a host of pupils and of followers who were not pupils. His concern with historic work, however, went much further than that instance would suggest. He also did work not usually done by anyone who is not a professed historian; for instance, he took a leading part in the great edition of documents relating to the history of the public administration of Prussia, and always spoke of this achievement with loving pride. Thus, though historical work done by economists was not in itself a novelty, it was then undertaken on an unprecedented scale and in a new spirit. To those critics who felt that the thing was being overdone—and who spoke of Historism in a derogatory sense—it can fairly be replied, first, that all human achievement is of necessity one-sided, and, second, that in spite of all that was accomplished it is impossible to indicate a single field—at least I cannot indicate one—in which the work of the period went as far as we could wish. Much of this work was no doubt rather pedestrian. 6 But the sum total of it meant a tremendous advance in accuracy of knowledge about the social process. It must suffice to list the main headings: economic (especially fiscal) policy and administration; the class structure of society; medieval and later forms of industry, especially of craft guilds and merchant guilds; the growth, functions, and structures of cities; the evolution of individual industries; of bank credit; and (one of the finest pieces of Schmoller’s work) of government and private enterprise. Schmoller’s own circle did not do much in the field of agriculture. But it was sedulously cultivated by others and produced some of the best work of historical economics; the outstanding names are Hanssen, Meitzen, and Knapp. 7 6 The following fact will be appreciated by admirers of Henrik Ibsen’s stupendous ability to delineate his characters by a few traits pregnant with significance. In his Hedda Gabler, Ibsen wishes to create, as quickly as possible, the impression that one of the two male characters, Hedda’s husband, is a thoroughly mediocre academic drudge, not to say a dunce. And what is the first thing about him that Ibsen conveys to readers or audiences? That Dr. Tessman has just completed a work on the linen industry of Brabant in the sixteenth century! This no doubt was done by a layman for laymen. But still… 7 Georg Hanssen’s (1809–94) work—it will be enough to mention his Agrarhistorische Abhandlungen (1880–84)—and teaching (in Göttingen) were methodologically original in two respects: on the one hand, he taught his many pupils to start, in reconstructing agrarian history, from the conditions they had before their eyes, and thus brought out the analytic or explanatory value of past conditions with a liveliness and force all his own; on the other hand, he opened up a new source of material—maps and other topographical documents, reflecting the earlier forms of peasant holdings and casting new light on the structure of the manorial economy. This material was fully exploited by August Meitzen (1822–1910), who brought the experience of the statistician to bear upon the task. His Siedelung und Agrarwesen der Westgermanen und Ostgermanen, der Kelten, Römer, Finnen und Slawen (1895) is, in the first instance, an attempt to depict and compare the ways in which those peoples settled on their land, built their villages, and planned their economy. But for our purpose still more important are the analytic uses made of the results of this monumental History of economic analysis 778 Before we glance at some attempts at synthesis, it is necessary to insist on certain features of this work that have not always received the attention they deserve. First, we have noticed that Schmoller himself and most of his pupils threw themselves into the fight for social reform, asserting their personal value judgments with the utmost vigor. 8 This has obliterated the fact that their scientific credo was extremely critical of value judgments and of the practice of economists to identify themselves with political parties and to recommend measures. One of Schmoller’s objections to what he called ‘Smithianism’ was precisely that these Smithians were so bent on producing political ‘recipes.’ In part, no doubt, he took this stand because he did not like the particular recipes that were proffered by economic liberalism. But this was not all of it. Beyond his allegiance to different principles of economic policy there was the respect for the economic fact and the will to let it speak for itself. Second, the same truly scientific spirit of criticism made the school look askance at the broad generalizations that are in the nature of philosophies of history. Schmoller realized, of course, the inevitability of theories in the sense of explanatory hypotheses, and he was less cautious in framing them than it is usual for professional historians to be. But he stopped far short of any attempt at reducing the whole historical process to the action of one or two factors. A single hypothesis of the Comte-Buckle-Marx kind he did not even visualize as an ultimate goal—the very idea of a simple theory of historical evolution seemed to him a mistaken one, in fact unscientific. This point is essential in order to understand his scheme of thought and in particular in order to distinguish it from all those schemes that have nothing piece of research. Meitzen tried to infer from them the early geographical distributions of those peoples, their agricultural technique, their customs, and their racial descent; and ventured into bold theories, that did not remain unchallenged, about the factors that shaped their social organization. Georg Friedrich Knapp (1842–1926) stayed in this field—which has nothing to do with the two others in which he also left his mark—for about fifteen years, during which he produced two masterpieces—‘classics’ in the eulogistic sense of the word—Die Bauernbefreiung und der Ursprung der Landarbeiter (1887) and Grundherrschaft und Rittergut (1897), which describe the metamorphosis of the German agrarian world that occurred at the threshold of the capitalist era and was both the consequence of, and a potent factor in shaping, the social evolution of Germany. Knapp’s analysis has not only created the standard pattern for quite a literature, but its main results have passed into the common stream of economic teaching. It is a pity that it is impossible to convey in a sketch like this what might be termed the general message of a performance of this kind. Knapp’s marvelous equilibrium of comprehensive vision and detailed research, for instance, is something that can be felt and, by being felt, even learned from him, but it cannot be described in a few sentences. It stands to reason that a man, so long as he is engaged in work of this kind, would rarely if ever feel the need of theoretical training, lack of which was bound to prove a serious handicap in the field of money. 8 [J.A.S. apparently intended to go into this subject at greater length in the early pages of section 1 of this chapter but did not do so.] Sozialpolitik and the historical method 779 in common with his except the reference to history, which, as has been stated above, is too general to be of use. For instance, the view that history is our source of facts might be called Comtist. But Comte turned to this source (or told us to do so) in order to discover—by a procedure which he believed to be the same as that used in the physical sciences—‘historical laws.’ Schmoller’s scientific intent was quite different. For him, Comte’s suggestion was the very incarnation of the ‘naturalist error’ and Comtist historical laws were shams. In fact there is no trace whatever of Comtist influence in his work. This should be clear from our sketch of it and of the program behind it. And it should also be clear that the roots of both the work done and of the program are to be found exclusively in the German past: the high level of historiography; the widespread respect for the historical fact; the low level of theoretical economics; the lack of respect for its values; the supreme importance attributed to the state; the small importance attributed to everything else—these points individualize the school and they were all of them typically German, in their strengths as well as in their weaknesses. Third, Schmoller always protested against an ‘isolating’ analysis of economic phenomena—he and his followers spoke of a ‘method of isolation’—and held that we lose their essence as soon as we isolate them. This view, of course, was simply the consequence of his resolve to feed economics exclusively on historical monographs. For their materials as well as their results are obviously refractory to any attempt at isolating—in most cases, in fact, they become meaningless if isolated. Though perfectly understandable—and, for all economists who have no bent for ‘theory,’ perfectly acceptable—this consequence indicates a limitation of the scope of economic analysis of the Schmollerian type to which corresponds an almost illimited extension of its subject matter. Nothing in the social cosmos or chaos is really outside of Schmollerian economics. In principle, if not quite in practice, the Schmollerian economist was in fact a historically minded sociologist in the latter term’s widest meaning. On this level, specialization would indeed impose itself again if decent work is to be turned out. But the divisions would be enforced by the material and would be of the same kind as those that must exist between medievalists and, say, Romanists. This is the scientific meaning of the label that Schmoller affixed to his school. He did not call it historical simply, but historico-ethical. The label also carried a different meaning—it was to express protest against the wholly imaginary advocacy of the hunt for private profit of which the English ‘classics’ were supposed to have been guilty. But below this surface meaning, which no doubt served well enough with the public, there was one that was less suggestive of salesmanship: the school professed to study all the facets of an economic phenomenon; hence all the facets of economic behavior and not merely the economic logic of it; hence the whole of human motivations as historically displayed, the specifically economic ones not more than the rest for which the term ‘ethical’ was made to serve, presumably because it seems to stress hyperindividual components. Fourth, it is of course a delusion to hope that the results of monographic historical research will weld into ‘general economics’ merely by being co-ordinated and without the aid of mental operations other than those that produced the monographs. But we must not overlook that, though such research plus a co-ordinating study of its results will never produce articulate theorems, they may produce, in a mind appropriately conditioned, something else that is much more valuable. They may exude a subtle message, convey an History of economic analysis 780 intimate understanding of social or of specifically economic processes, a sense of historical perspective or, if you prefer, of the organic coherence of things, which is extremely difficult, perhaps impossible, to formulate. Perhaps the analogy with a physician’s clinical experience—or part of it—will prove more helpful than misleading. These considerations will go a long way toward clarifying the possibilities of synthesis that were within the reach of the Schmoller school. The most obvious one is of course a comprehensive economic history; and the outstanding example, for the German Middle Ages, is Inama-Sternegg’s Deutsche Wirtschaftsgeschichte (1879–1901). 9 But Schmoller himself visualized a different possibility. When the shadows lengthened, he endeavored to take stock of what he and his groups had achieved or intended and to show the world what a systematic treatise of the historical school would look like. An ‘Outline’ (Grundriss) 10 of two volumes was the result. But by that time he had silently unlearned the lessons of extreme ‘historism.’ Into a framework that did not depart fundamentally from oldest tradition, he fitted the rich materials of social history, giving for every type or institution a sketch (in some cases, a masterly sketch) of its historical evolution on the lines of his personal theory of it—in the chapter on social classes, for instance, historical and ethnological material is arranged around a division-of-labor theory of the phenomenon. Of course he had to use a conceptual apparatus, and occasionally to reason in the same way as do economic theorists, traditionally so-called. He theorized weakly— so weakly in fact that his theory (in this sense) is not even thoroughly bad—but he displayed no reluctance to do so. In matters of value and price Schmoller in fact adopted, or meant to adopt, the teaching of Carl Menger. I am tempted to sum up by saying: think of J.S.Mill’s treatise; imagine another that bestows as much emphasis and competence on the institutional aspects as 9 Karl Theodor von Inama-Sternegg (1843–1908) was an economist and statistician who, in the later part of his career, acquired international reputation by his work at the head of the Austrian statistical service (we should say Statistical Board) and by his simultaneous activity as a teacher who powerfully influenced a generation of statisticians and economists. But the illustrative value of the scientific career of this eminent man is in the fact that his own personal research was purely historical. He edited historical documents. He published two purely historical monographs in which he expounded the so-called Manorial Theory, i.e. the theory that the organization of the manor was the primary factor in shaping markets, towns, and industrial life in the dawn of capitalism. The history mentioned in our text was the result of his way of synthesizing, and it is this synthesis by an economist which is significant here: it did not differ in principle from a professional historian’s idea of a synthesis. 10 Grundriss der allgemeinen Volkswirtschaftslehre (1900–1904). Sozialpolitik and the historical method 781 . an History of economic analysis 780 intimate understanding of social or of specifically economic processes, a sense of historical perspective or, if you prefer, of the organic coherence of. of salesmanship: the school professed to study all the facets of an economic phenomenon; hence all the facets of economic behavior and not merely the economic logic of it; hence the whole of. incarnation of professorial learning, mainly of a philosophico-historical nature, and must indeed be mentioned both on account of his scholarly labors in the field of the history of economic thought