- Bases of the German historicist school of economics
- Influences
- Phases
- Ancient period
- Young period
- Younger period
- References
The German historicist school of economics was a 19th century school of thought. She based her ideas on the belief that history is the greatest source of wisdom about the economy and, in general, all human actions.
The defenders of this current of the economy argued that, since economic activity depends on culture, it was necessary to study the past of a civilization to understand it. Therefore, they rejected the existence of universal economic laws, which could be applied to all countries, cultures and societies.
Wilhelm Roscher
This current of economic philosophy had a great influence until the middle of the 20th century. Its main leaders were Gustav von Schmoller and Max Weber in Germany, and Joseph Schumpeter in the United States, where it was widely accepted.
Bases of the German historicist school of economics
The main characteristic of this current of economic thought is that its authors defended the existence of a close relationship between economic activity and culture. Therefore, according to them, economics should be limited to studying the phenomena present in reality, both currently and in the past.
The German historicist school was opposed, due to its views on economic activity, to the thinkers of the more classical currents. In the Anglo-Saxon world of the time, authors like John Stuart Mill tried to find universal laws of economics that were applicable to all cultures.
Therefore, the German historicists used inductive reasoning, rather than the logical / deductive thinking that was more common to practitioners of this discipline at the time.
Influences
Despite the great differences that this current of thought presented with the rest of the theories on economics of the time, its ideas were based on the thought of other previous authors.
Mainly, the first defenders of the historicist school drank from Hegel's philosophy. This author was one of the main representatives of German Idealism in the 19th century, as well as one of the most important philosophers in the entire West.
Hegel's influence on the German historicist movement is based primarily on his ideas about history. The philosopher thought that each new system, culture and society arises as a response to the problems presented by the previous models, so it is necessary to study the past to understand the situation of the present.
The German historicist school also emerged due to the influence of Darwin's theory of evolution. The success of this vision of the development of species made many thinkers want to develop a similar theory in the field of economics.
In this sense, the thought of the historicist school also draws on the thought of Karl Marx. This author suggested that the economy has historically been determined by a class struggle, that is, by the culture in which it has developed.
On the other hand, like this philosopher, the historicists believed that state intervention was necessary to ensure the prosperity of countries.
Phases
Three clear periods can be distinguished in the development of the German historicist school, depending above all on the thinkers who were part of each of them.
The three periods of the school were as follows:
- The ancient period, which began with the work of Wilhelm Roscher, and continued with such thinkers as Karl Knies, Friedrich List, and Bruno Hildebrand.
- The young period, whose greatest exponent was Gustav von Schmoller. Other important thinkers of this time were Karl Bücher and Etienne Laspeyres.
- The younger period, whose most important authors were Werner Sombart, Max Weber and Wilhem Lexis.
Ancient period
The beginning of the German historicist school is usually set in the work of Wilhelm Roscher (1817 - 1894). This thinker was the creator of his methodological principles, rejecting the validity of the universal theoretical principles in economics, and exposing the influence of historical and social factors.
His work created the foundations for what would later fully become the German historicist school. Some of his ideas were as follows:
- The goal of economics is to discover what nations have discovered, thought, and desired in the field of economics. Furthermore, it is also important to understand what they have tried to achieve, and why (or why not) they have achieved it.
- A society is not only the set of citizens now alive, but also the thinkers of the past influence. Therefore, to understand the economy of a country, it is not enough to observe the facts of the present.
- No economic institution is totally good or bad. On the contrary, each one of them fulfilled a function at the time in which it appeared. Our job is to try to understand what it was, and why it is no longer capable of fulfilling it.
- We must study economics to understand the relationship between society and its organization. In this way, we will be able to help countries to go through the different periods necessary to develop their maximum economic potential.
In this way, the mission of economists as social agents of change is established.
Young period
While the school of the old period focused on developing the theoretical foundations of the movement, the school of the young period tried to carry out its ideas; however, they lost sight of some of its most important principles.
The main objective of the thinkers of the young period was to find examples that were relevant to the economic situation of the time in which they lived. Some of his most important ideas were the following:
- The existence of a close relationship between the economy and the laws. It was the nature of this relationship that dictated the individual's obligations to the community in which he lived.
- The obligation of economists to study morality as well. For these thinkers, the economy of a country dictates the ethical obligations of its inhabitants.
- The belief that the state should play a greater role in the economy and society. In this sense, the thinkers of the young period were socialists.
Younger period
The thinkers of this generation tried to return to the idealism of the ancient period. However, due to the need they had to find support in the society of the time, they soon deviated from this trajectory and were drawn to ideas closer to those of Marx's communism.
Therefore, one of the main objectives of the thinkers of the younger period was the critique of capitalism and the ideas based on this current.
References
- "Historical school of economics" in: Wikipedia. Retrieved: January 29, 2018 from Wikipedia: en.wikipedia.org.
- "The german historical school" in: The history of economic thought. Retrieved on: January 29, 2018 from The history of economic thought: hetwebsite.net.
- "Historical school of economics" in: Britannica. Retrieved on: January 29, 2018 from Britannica: britannica.com.
- "The German Historical School of Economic Thought" in: San José State University. Retrieved on: January 29, 2018 from San José State University: sjsu.edu.
- "Historical school of economics" in: New World Encyclopedia. Retrieved on: January 29, 2018 from New World Encyclopedia: newworldencyclopedia.org.