Gustav von Schmoller

From Academic Kids

Gustav von Schmoller (June 24, 1838 - June 27, 1917) was the leader of the "younger" German historical school of economics and probably the most distiguished Continental (European) economist of the time around 1900.



Schmoller was born in Heilbronn. His father was a Wrttemberg civil servant. Young schmoller studied Staatswissenschaften (a combination of economics, history and civil administration) in Tbingen. During his academic career he held posts of a professor in Halle (1864-72), Strassburg (1872-82), and Berlin (1882-1913), then the most important university in Europe, if not in the world. He was a leading member of the Kathedersozialisten (socialists of the chair), and a founder and long-time chairman of the Verein fr Socialpolitik, the German Economics Association, which today still exists. Schmoller's influence on academic policy, economic and fiscal reform, and economics as an academic discipline for the time between 1875 and 1910 can hardly be overrated.


As an outspoken leader of the "younger" historical school, Schmoller was against what he saw as the axiomatic-deductive approach of the Austrian school. This lead to the controversy known as the Methodenstreit, which today often appears as being one of the main reasons for the later demise of the whole historical school, although - as Schumpeter had pointed out - this was really a quarrel within that school. In fact, Schmoller's primarily deductive approach, requesting careful study, comparative in time and space, of economic performance and phenomena generally, and his insistence on the cultural specificity of economics, stand in stark contrast to some classical and all neoclassical economists, so that he and his school soon after his death, but at the latest around 1935, fell out of the mainstream.

Today, Schmoller is largely forgotten within "standard textbook economics", even within Germany, and if he is mentioned, then often with a derision that alone should make the reader cautious, seeing his international leadership position in economics for decades during a time of the discipline's heyday. Schmoller is becoming slowly reevaluated since the late 1980s, not surprisingly especially within some branches of heterodox economics (especially development economics, evolutionary economics, neo-institutional economics, and law and economics) which have a similar view of standard textbook economics than the latter have of Schmoller.


Works by Schmoller

One of the reasons of Schmoller's being forgotten is that his myriad of books were not translated into English, because at his time, Anglo-American economists generally read German. An exception is

  • The Significance of the Mercantile System, New York: Macmillan, 2nd ed. 1910.

His magnum opus,

  • Grundriss der allgemeinen Volkswirtschaftslehre, Leipzig: Duncker & Humblot, 1900-1904,

is not available in translation, which makes reception today very difficult. The Grundriss has often been mentioned as one of the most disparaged books in economic history as compared to how many people have actually read it; it might even outrank Marx's Das Kapital in this respect.

Important recent books on Schmoller in English

  • Backhaus, Jrgen G. (1994), ed. Gustav Schmoller and the Problems of Today. History of Economic Ideas, vol.s I/1993/3, II/1994/1.
  • Backhaus, Jrgen G. (1997), ed. Essays in Social Security and Taxation. Gustav von Schmoller and Adolph Wagner Reconsidered. Marburg: Metropolis.
  • Balabkins, Nicholas W. (1988). Not by theory alone...: The Economics of Gustav von Schmoller and Its Legacy to America. Berlin: Duncker u. Humblot. The best short monograph on Schmoller, brilliant on his thought and its relevance today.
  • Koslowski, Peter, ed. The Theory of Ethical Economy in the Historical School. Wilhelm Roscher, Lorenz v. Stein, Gustav Schmoller, Wilhelm Dilthey and Contemporary Thought. Berlin etc.: Springer.
  • Shionoya, Yuichi (2001), ed. The German Historical School: The Historical and Ethical Approach to Economics. London etc.: von Schmoller



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