Gustav Schmoller (1838-1917), German economist, came from a family of Württemberg civil servants, and he began his own career in the financial department of the Wiirttemberg civil service. This experience gave him practical insights into the administration of a territory with a strong cameralist tradition and may have shaped his belief in the close interrelations between the economy and the government. At the University of Tübingen Schmoller studied Staatswissenschaften, a peculiarly German discipline derived from cameralism, which combines public finance, statistics, economics, administrative science, history, and even sociology. Later he became professor of Staatswissenschaften at the universities of Halle, 1864-1872; Strassburg, 1872-1882; and finally Berlin, 1882-1913.
In the early 1860s Schmoller defended the commercial treaty between France and the German Zollverein. Since he was supporting the point of view of the Prussian government against that of Württemberg, he ruined his career in Württemberg but gained favor with the Prussian authorities. In the Wilhelmian period, Schmoller became one of the most ardent Prussian patriots. He was appointed the official historian of Brandenburg and Prussia in 1887, became a member of the Prussian Staatsrat (state council) in 1884, and the representative of the University of Berlin in the Herrenhaus (upper house) in 1889. He was also a member of several academies (Berlin, Munich, St. Petersburg, Copenhagen, Vienna, and Rome) and the recipient of honorary degrees from Breslau and Heidelberg.
As founder and leader of the Verein fur Sozial-politik, the association of German academic economists, and as editor or coeditor of several series of publications (Staatsund sozialwissenschaft-liche Forschungen, from 1879; Jahrbuch fur Gesetzgebung, Verwaltung und Volkswirtschaft im Deutschen Reiche—later known simply as Schmol-lers Jahrbuch—from 1881; Forschungen zur brandenburgischen und preussischen Geschichte, from 1888; and Acta borussica, from 1892) he became one of the first great organizers of research in the social sciences. Thus, he dominated the development of economics and of related social sciences in his country; for several decades, hardly a chair of economics was filled without his approval. He and his followers were called the “younger historical school” because their methodological approach was derived from, but also differed from, the approach of the “older historical school” of Roscher, Hildebrand, and Knies [see ECONOMIC THOUGHT]; they were also called the Kathedersozialisten (most nearly translated as academic socialists) because of their sociopolitical aims and were able to influence contemporary social legislation, since Schmoller was close to many high civil servants and to the crown.
In his political activities, Schmoller may be called a conservative social reformer. He was a royalist, favored strong government, and displayed the highest respect for the Prussian civil service; but he was also deeply preoccupied with the “social question,” the improvement of the condition of the lower classes. He believed that a variety of means should be used to solve this problem: better education of the working classes; governmental regulation of working conditions; cooperatives; and changes in the law, in institutions, and in the attitudes of the ruling classes. He was hostile both to Manchesterism and to Marxism, but he was open to all kinds of reforms that would produce more “social justice,” a concept central to his thinking.
Contributions to the social sciences. Schmoller’s interests embraced history, applied statistics, economic and social institutions and behavior (including social psychology), social anthropology, geography, demography, the theory and practice of economic and social policy, and even ethics and philosophy, but he regarded himself primarily as an economist. His voluminous Grundriss (1900-1904), comparable in scope, though not in method, to Alfred Marshall’s Principles, assembled pieces of all these social sciences into a great mosaic or panorama of the social world, past and present. The only thing the work lacked was an analytical framework to hold the pieces together. Although Schmoller often claimed to have such a framework, he was basically eclectic.
Schmoller’s rejection of analytical theory of the Smith-Ricardo type was of the utmost importance for his own thinking and for the development of economics in Germany under his “regime.” He believed classical analysis to be useless or at best of minor importance, since it is applicable only to very small and artificially isolated fragments of the social reality that he wanted to perceive in all its many facets. It is not true, as many have asserted and as the term “historical school” suggests, that he wanted to replace analytical theory with purely historical research, but he was convinced that a genuine theory can only be the final outcome of an immense amount of descriptive work on past as well as present events, institutions, and structures. His conception of theory is the central defect in his thought and accounts for most of the weaknesses in his own works and in those inspired by him. It is difficult to decide whether he was led to this position by his inability to grasp the nature of theory or by his ethical disapproval of liberal economic doctrines, which he scorned as “business economics."
Reception of Schmoller. Schmoller’s view of theory was attacked in 1883 by the Viennese professor Carl Menger, who wrote a treatise on method in the social sciences, Problems of Economics and Sociology (Untersuchungen uber die Methode der Socialwissenschaften nnd der politischen Oekonomie insbesondere ). Schmoller replied in his Jahrbuch (1883), and Menger renewed the attack in the pamphlet Die Irrthumer des Historismus in der deutschen Nationalokonomie (1884), “which fairly steamed with wrath and of course elicited rebuttal” (Schumpeter 1954, p. 814). This famous Methodenstreit dominated the economic and social sciences in Germany for at least two generations.
There can be little doubt that logically Menger was in a far better position. What he advocated as the appropriate methodology for economics was the use of the partial-equilibrium models that have since become the common method of theorists in most parts of the world. Nevertheless, Schmoller was not entirely wrong when he favored a much broader and more differentiated approach. He wanted to grasp all at once what has since become the object of many different branches of the social sciences. As a consequence, he touched on many important things, but often only superficially and seldom with clear insight about the implications of his observations and judgments. He was attacked not only by theoretical economists but also by professional historians, such as Georg von Below (1904). Interestingly enough, both the theorists and the historians had basically the same objections to the Schmollerian type of social science: both missed a coherent and systematic approach. The issue, then, was not simply one of theory against history, but of how research in the social sciences ought best to be done. Although Schmoller often stated that his method alone was an “exact” one, even his friends and students agreed that he wrote without precision.
The very qualities of Schmoller’s work that were criticized in the academic community won him a broad public audience. He took up many urgent issues of the day, examined them from different points of view, and came to general conclusions that many people could agree with. This made him an effective leader of public discussion and a popular, though not a brilliant, academic lecturer. He was at his best when dealing with those issues of social policy (Sozialpolitik") that urgently required compromise. In political debates he exhibited a considerable amount of personal commitment and civic courage, fighting against aggressive social conservatism (e.g. Treitschke 1875) as well as against the revolutionary position of Lassalle and Marx and their followers. In these debates he made plain his belief in the necessity of more social justice. However, he did not distinguish clearly between the value judgments he made in political debates and the axioms of his scientific thought. This led to another methodological attack on Schmoller, led by Max Weber and Werner Sombart, to eliminate value judgments from the social sciences (see Weber 1910; Sombart 1910).
An appraisal of Schmoller . Given his many weaknesses, one asks what made Schmoller the leader of German social scientists during the Wilhelmian period. Undoubtedly, others were stronger as theorists, as historians, or as sociologists. However, except for Max Weber, who was much younger, no one was quite as universal as Schmoller. Moreover, no one combined so many of the personal qualities of a leader: he was charming but dictatorial; confident in his views but able and willing to accept ideas; basically simple in his thinking but with a broad outlook; fully committed to sharply defined positions but prepared to compromise. Much of his influence appears to derive from his ability to express the leading ideas of his time. He swam with the stream of contemporary opinion, not against it, as is obvious in his views on foreign affairs, on which he had no ideas of his own but shared the nationalistic, imperialistic, even chauvinistic outlook of the German elite. When the tide of sentiment and opinion turned, shortly after his death in 1917, his views were quickly outdated, and people began to wonder how he could ever have been the great leader he certainly was.
His influence on the development of the social sciences in Germany was, on the whole, rather unfortunate. He is mainly responsible for the neglect of economic theory in Germany between 1870 and 1920, and he can be made indirectly responsible for the extreme reaction that produced the subsequent neglect of economic history in twentieth-century Germany. In his attempt to construct a theory mainly by historical methods, he damaged both theory and history, and hampered their development in Germany for nearly a century. Outside Germany, his influence was never considerable, although American institutional economics was based partly on his ideas.
1870 Zur Geschichte der deutschen Kleingewerbe im 19. Jahrhundert: Statistische und nationdldkonomische Untersuchungen. Halle: Waisenhaus.
(1874-1875) 1875 Üer einige Grundfragen des Rechts und der Volkswirthschaft: Ein offenes Sendschreiben an Herrn Professor Dr. Heinrich von Treitschke. Jena: Mauke.→First published in Volumes 23 and 24 of Jahrbiicher fur Nationalokonomie und Statistik.
(1874-1897) 1904 Über einige Grundfragen der Sozialpolitik und der Volkswirtschaftslehre. 2d ed., enl. Berlin: Duncker&Humblot.
1879 Die Strassburger Tucher- und Weberzunft; Urkunden und Darstellungen nebst Regesten und Glossar: Ein Beitrag zur Geschichte der deutschen Weberei und des deutschen Gewerberechts vom XIII.—XVII. Jahrhundert. Strassburg: TrÜbner.
1883 Zur Methodologie der Staats- und Sozialwissen-schaften. Jahrbuch fur Gesetzgebung, Verwaltung und Volkswirtschaft im Deutschen Reiche 7:975-994.
1897 Wechselnde Theorien und feststehende Wahrheiten im Gebiete der Staats- und Socialwissenschaften und die heutige deutsche Volkswirthschaftslehre. Berlin: Bäenstein.
1898 Umrisse und Untersuchungen zur Verfassungs-, Verwaltungs- und Wirtschaftsgeschichte besonders des preussischen Staates im 17. und 18. Jahrhundert. Leipzig: Duncker&Humblot.
(1900-1904) 1923 Grundriss der allgemeinen Volkswirtschaftslehre. 2d ed. 2 vols. Munich and Leipzig: Duncker&Humblot.
1922 Deutsches Stadtewesen in älterer Zeit. Bonner Staatswissenschaftliche Untersuchungen, No. 3. Bonn and Leipzig: Schroder.→ Published posthumously.
1918 Die soziale Frage, Klassenbildung, Arbeiterfrage, Klassenkampf. Edited by Luzie Schmoller. Munich and Leipzig: Duncker&Humblot. → Published posthumously. A revised and augmented edition of the sociological chapters contained in Schmoller’s Grund- riss der allgemeinen Volkswirtschaftslehre, 1900-1904.
1921 Preussische Verfassungs-, Verwaltungs- und Finanzgeschichte. Berlin: Tägliche Rundschau. → Published posthumously.
Zur Litteraturgeschichte der Staats und Sozialwissenschaf-ten. Leipzig: Duncker&Humblot, 1888. → A collection of articles dated 1863-1883.
Zur Social- und Gewerbepolitik der Gegenwart (Reden und Aüfsdtze). Leipzig: Duncker&Humblot, 1890. → A collection of articles dated 1872-1890.
Zwanzig Jahre deutscher Politik (1897-1917): Aüfsatze und Vörtrdge. Munich and Leipzig: Duncker&Humblot, 1920. → Published posthumously.
Below, Georg Von 1904 Zur Würdigung der historischen Schule der Nationalökonomie. Zeitschrift fur Sozialwissenschaft 7:145-185, 787-804.
Below, Georg Von 1924 Zur Stellung G. Schmollers in der Geschichte der Nationalokonomie. Schmollers Jahrbuch fur Gesetzgebung, Verwaltung und Volkswirtschaft im Deutschen Reiche 48:315-319.
Brinkmann, Carl 1937 Gustav Schmoller und die Volkswirtschaftslehre. Stuttgart: Kohlhammer.
Brinkmann, Carl 1953 Gustav Schmoller. Volume 9, pages 135-137 in Handwörterbuch der Sozialwissen-schaften. Stuttgart: Fischer.
Eucken, Walter 1940 Wissenschaft im Stile Schmollers. Weltwirtschaftliches Archiv 52:468-506.
Gide, Charles; and RIST, CHARLES (1909) 1948 A History of Economic Doctrines From the Time of the Physiocrats to the Present Day. 2d English ed. Boston: Heath. → First published in French.
Herbst, Jurgen 1965 The German Historical School in American Scholarship: A Study in the Transfer of Culture. Ithaca, N.Y.: Cornell Univ. Press.
Herkner, Heinrich 1924 Zur Stellung G. Schmollers in der Geschichte der Nationalökonomie. Schmollers Jahrbuch fur Gesetzgebung, Verwaltung und Volkswirtschaft im Deutschen Reiche 47:3-10.
Hintze, Otto 1908 Gustav Schmoller als Historiker. Volume 4, pages 183-191 in Otto Hintze, Historische und politische Aufsdtze. Berlin: Deutsche Biicherei.
Lane, Frederic C. 1956 Some Heirs of Gustav von Schmoller. Pages 9-39 in Architects and Craftsmen in History: Festschrift filr Abbott Payson Usher. Tubingen: Mohr.
Meinecke, Friedrich 1933 Drei Generationen deutscher Gelehrtenpolitik: Friedrich Theodor Visher.—Gustav Schmoller.—Max Weber. Pages 136-164 in Friedrich Meinecke, Staat und Persönlichkeit: Studien. Berlin: Mittler.
Meitzel, C. 1925 Gustav v. Schmoller. Volume 7, pages 251-253 in Handworterbuch der Staatswissenschaften. 4th ed. Jena: Fischer.
Menger, Carl (1883) 1963 Problems of Economics and Sociology (Untersuchungen iiber die Methode der Socialwissenschaften und der politischen Oekonomie insbesondere). Edited with an introduction by Louis Schneider. Urbana: Univ. of Illinois Press.
Mengeb, Carl 1884 Die Irrthiimer des Historismus in der deutschen Nationalokonomie. Vienna: Holder. → The main attack against Schmoller and the historical school by an economic theorist and the culmination of the Methodenstreit.
Mitscherlich, Waldemar 1936 Die ökonomischen Querschnitte Schmollers. Pages 129-149 in Waldemar Mitscherlich, Die Lehre von den beweglichen und starren Begriffen erldutert an der Wirtschaftswissen-schaft, Stuttgart: Kohlhammer.
Ritzel, Gerhard 1950 Schmoller versus Menger: Eine Analyse des Methodenstreits im Hinblick auf den Historismus in der Nationalökonomie. Frankfurt am Main: Enz…Rudolph.
Salin, Edgar 1924 Zur Stellung G. Schmollers in der Geschichte der Nationalökonomie. Schmollers Jahr-buch fur Gesetzgebung, Verwaltung und Volkswirt-schaft im Deutschen Reiche 48:307-314.
Schumpeter, Joseph A. 1926 Gustav v. Schmoller und die Probleme von heute. Schmollers Jahrbuch fur Gesetzgebung, Verwaltung und Volksivirtschaft im Deutschen Reiche 50:337-388.
Schumpeter, Joseph A. (1954) 1960 History of Economic Analysis. Edited by E. B. Schumpeter. New York: Oxford Univ. Press.
Sombart, Werner 1910 Debatte [Über die Productivi-tät der Volkswirtschaft]. Verein fur Soclalpolitik, Schriften 132:563-572.
Spiethoff, Arthur 1924 Zum Abschluss. Schmollers Jahrbuch fur Gesetzgebung, Verwaltung und Volks-wirtschaft im Deutschen Reiche 48:321-324. → This article summarizes a series of assessments of Schmol-ler’s work.
Spiethoff, Arthur (editor) 1938 Gustav von Schmoller und die deutsche geschichtliche Volkswirtschafts-lehre: Festgabe zur hundertsten Wiederkehr seines Geburtstages 24. Juni 1938. Schmollers Jahrbuch fur Gesetzgebung, Verwaltung und Volkswirtschaft im Deutschen Reiche 62:385-757.
Treitschke, Heinrich G. VON 1875 Der Socialismus und seine Conner: Nebst einem Sendschreiben an Gustav Schmoller. Berlin: Reimer.
Weber, Max 1910 Debatte [Über die Productivität der Volkswirtschaft]. Verein für Socialpolitik, Schriften 132:580-585, 603-607.
Gustav Schmoller (gŏŏs´täf shmôl´ər), 1838–1917, German economist. He was the leader of the younger school of German historical economists, who tried to interrelate economics with the other social sciences. He began the "method war" with the school of marginal utility by writing an unfavorable review of Karl Menger's Problems of Economics and Sociology (1883). Selections from his chief writings have been translated by Walter Abraham and Herbert Weingast as The Economics of Gustav Schmoller (1942).