The Rise of Historical Economics and Social Reform in Germany 1864–1894 by Erik Grimmer-Solem (review)

Abstract

254 Max Weber Studies Erik Grimmer-Solem, The Rise of Historical Economics and Social Reform in Germany 1864-1894 (Oxford: Oxford University Press, 2003), pp. xiii + 322 + index. ISBN 0-19-926041-9. £55.00. This book is rather more limited in scope than the title suggests, turning on the Verein für Socialpolitik as an instrument of social reform and treating Schmoller and Brentano as emblematic of the professoriate who dominated that organization. Although not directly stated, the beginning of the period treated can be linked to Schmoller's 1864 article 'Die Arbeiterfrage', an evaluation of the debate between Schulze-Delitzsch and Lassalle concerning the degree to which self-help or state assistance might resolve the 'labour question', and which provided a template for the Verein's programme (p. 138). Brentano figures here alongside Schmoller chiefly because of his early inter est in trade union and guild organization. The final chapter is given over to a detailed treatment of the Methodenstreit, concluding with the 1894 Vienna conference of the Verein, symbolizing the way in which questions of social reform and social policy closed that methodological controversy. Grimmer-Solem places a political slant on the confrontation of Carl Menger and Gustav Schmoller, countering Menger's politi cal quietism, if not conservatism, with Schmoller' s active embrace of a social agenda for the social sciences. Social reform is hence linked firmly to the Historical School and detached from the 'new economics', an approach which does however read into the economic sciences of the period an explicit polarization that originated much later, between American institutionalism and an emergent neoclassical economics no earlier than the late 1930s. This is doubly unfortunate. For one thing, many Soviet economists of the 1920s received their early training in 'Austrian economics' overlaid with Marxist terminology. On the other hand, inter-war criticism of socialist planning was countered with arguments drawing on Walrasian general equilibrium econom ics. From the perspective set up by Grimmer-Solem, the ease with which Marxist economists (usually placed in the 'historical' camp) drew on Walras and Menger becomes a real puzzle. Furthermore, in England during the period covered by this book, social reform was an agenda common to proponents of the 'new economics' and those of a more historical cast, chiefly associated with Oxford in the 1880s. The linkage that Grimmer-Solem makes between the German Historical School and social reform is therefore more empirical than theoretico-ideological. Social reformers in Germany might or might not have been historical economists; while some members of the 'Historical School', such as Wagner, are certainly not social reformers in the mould of Schmoller and Brentano. While the agenda for social reform is well established by Grimmer-Solem, little prominence is given to what counted as 'economics' during this period, indepen dently of whatever 'economists' wrote and talked about. Historical economics becomes by default therefore what historical economists do, establishing an uneasy circularity in the underlying theses of the book. But it should be said there is no better definition available, as is shown in the first chapter 'What Was the Histor ical School? A Critical Reassessment'. Among other things this chapter reviews recent commentary, both in German and English, which seeks to establish the con tours of this 'school', or question the utility of approaching late-nineteenth century German economics in its terms. As early as 1891 John Neville Keynes had criticized Schmoller's immoderate rejection of political economy and suggested that his 'rev olutionary' programme amounted to a merging of political economy and economic ) Max Weber Studies 2008. Book Reviews 255 history, or in any case of political economy with the philosophy of economic his tory.1 'Historical economics', was always an unrealized methodological aspiration, underwritten by a pragmatic classical eclecticism, and not a substantive alternative perspective to the 'new economics' of the later nineteenth century. 'Historical econ omists' (Schmoller, or Ashley, or Cunningham) were simply not that interested in economic theory, their critiques of contemporary economics always being method ological rather than substantive in character. Carl Knies' Heidelberg lectures of the 1880s, for example, present as their founding principles a 'moderate' version of clas sical political economy critical of Ricardian doctrine but distinct from...