The German Historical Approach To Economics

This is an unusual book and a striking phenomenon. It comprises a collection of thirteen essays on the German Historical School of Economics (henceforth GHSE), exclusively written by Japanese contributors who are mainly full professors at leading universities and mostly have already published on various aspects of the GHSE. The editor, Yuichi Shionoya, is well known internationally as one of the most prominent students of Joseph Schumpeter and Max Weber, whose works provide the basis for the editor’s attempt to erect the framework of the rational reconstruction of the GHSE in the opening essay. This holds in particular for economic sociology, which – besides theory, history and statistics – constitutes the fourth discipline in economics, and includes the social institutions relevant to economic behaviour and also political, legal or religious aspects. The investigation of Schumpeter’s conception of economic sociology (see, e.g.Schumpeter, 1954, pp. 20–21) is at the very heart of Shionoya’s second essay (9) in which the author concludes that Schumpeter combined two essential elements of the GHSE, a belief in the unity of social life and the inseparable relationship among its components and a concern for development, with some stimulus by Max Weber’s analysis of comparative-static social systems and Marx’s analysis of the dynamic process of capital accumulation. It is Shionoya’s belief “that Schumpeter should be regarded as one of the successors of the German Historical School because he attempted a rational reconstruction of that school, especially Schmoller’s research program, in terms of economic sociology and made his own contribution from this perspective” (p. 9). Whether and how this statement from the editor’s first essay fully fits with the one from Shionoya’s second essay, that “Schumpeter’s conception of economic sociology intended to integrate history and theory, the antitheses at theMethodenstreitbetween Gustav von Schmoller and Carl Menger” (p. 139), is left to the reader’s judgement. Characteristically, the contradictions involved can be found in Schumpeter’s own writings. In the very same year,1926, in which he published the article “Gustav von Schmoller and the Problems of Today,” which forms the key basis for Shionoya’s argument, Schumpeter eliminated the seventh chapter on “The Overall View of the Economy” of the first German edition ofThe Theory of Economic Developmentfrom the second German one and omitted it in all later editions of the book, including the 1934 English translation. The reason was that Schumpeter believed that this chapter with its much broader perspective and its fragment of cultural sociology has sometimes distracted the reader’s attention from pure and “dry” economic reasoning. It had led to a kind of consent which was at the very opposite of his intentions in so far as the seventh chapter was misunderstood as an alternative to economic theory. For that kind of reasoning Schumpeter did not want to provide any ammunition. For Shionoya, on the other hand, Chap. 7 is not a fragment of cultural sociology but a research program for a universal social science that he has specified in an earlier article (Shionoya, 1990) in which he regrets Schumpeter’s decision to omit it.