Abstract
Carl Menger founded the Austrian School of economics at the end of the 19th century. He rejected some of the main ideas of the German Historical School in his work Investigations into the Method of the Social Sciences with Special Reference to Economics (1881). The submitted paper presents the main implications of the investigations on the theory of economic history with a special reference to the economic history and history of economic thought of the Balkans. The emphasis is on the methodological subjectivism, spontaneous order, rejection of the teleological understanding of the process of economic development, and the application of mathematical models. These principles could be used as a theoretical base of the historical research, though they are widely underestimated in modern economic history.
Highlights
General Historical and Theoretical FrameworkIn the second half of the nineteenth century, despite the huge achievements of economic science there was still a lack of clarity about its main problems and research methods
The analysis of human action would find that the purpose is to get from home to the train to work in the morning and the opposite at night. Rothbard in his preface to Mises’ Theory and History; von Mises 2007.) It is clear that theoretical knowledge can structure otherwise chaotic facts of economic and social life. At this point the confrontation between Menger and von Schmoller becomes apparent, as the leader of the Historical School insists that empirical research must be carried out on the first place and economic theory should utilize the achievements of economic history
Menger clearly distinguishes between the research methods used by the two sciences and the objects they study: economic history deals with the past, which is why it can discover empirical regularities
Summary
In the second half of the nineteenth century, despite the huge achievements of economic science there was still a lack of clarity about its main problems and research methods. In the 1880s Gustav von Schmoller emerged as a leading figure in the German Historical School This is how the main theses developed by von Schmoller and his followers could be summed up: Economic laws could be determined only on the basis of thorough empirical research, that is, by collecting data on the economic past of definite nations, states and regions. In Germany the followers of the school gradually departed from liberalism, embraced certain aspects of socialism (Hayek 1991b; Ludwig von Mises 2005) and became known as Kathedersozialisten His ideas were conservative (Michael Epstein 1917), but in certain aspects, such as statism, government intervention in economy, welfare policy, opposition to laissez-faire etc. He very carefully tries to assess the positive aspects of the historical orientation of economic research
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