History of Economic Analysis part 83 potx

Mill bestowed upon theory in the traditional sense, and reduce correspondingly the space
and thought allotted to the latter; and you have Schmoller’s Grundriss, barring of course
politico-philosophical backgrounds, which do not concern us here.
[(c) The Methodenstreit.]
Thus, the leader had sheathed the sword. More important still, the flood of ‘historism’
had begun to ebb and a feeling of neighborly tolerance had begun to prevail all round.
Comfortably assured of the survival of both parties, we may therefore turn back for a
moment to consider the famous clash between theoretical and historical economists that
has come down to posterity as the Battle of Methods (Methodenstreit). The main facts
were these. When ‘historism’ was nearing high tide, Carl Menger, in 1883, published a
book on methodology
11
that dealt on a broad front with the fundamental problems of
procedure in the social sciences but was very obviously intended to vindicate the rights of
theoretical analysis and to put the Schmoller school in its place—and a very secondary
place it was!
12
Schmoller reviewed the book unfavorably in his Jahrbuch, and Menger
replied in a pamphlet entitled the Errors of Historism,
13
which fairly steamed with wrath
and of course elicited rebuttal. This not only created a lot of bad feeling but also set
running a stream of literature, both of which took decades to subside. In spite of some
contributions toward clarification of logical backgrounds, the history of this literature is
substantially a history of wasted energies, which could have been put to better use.
Since there cannot be any serious question either about the basic importance of
historical research in a science that deals with a historical process or about the necessity
of developing a set of analytic tools by which to handle the material, the controversy, like
all such controversies, might well seem to us to have been wholly pointless. This
impression is strengthened by the surprising fact, which stands out clearly enough if one
cares to look below the ruffled surface of polemical arguments and slogans, that neither

party really did question its opponent’s position outright. The quarrel was about
precedence and relative importance and might have been settled by allowing every type
of work to find the place to which its weight entitled it. The reasons why, for a time,
neither party felt able to adopt this standpoint are important
11
Untersuchungen über die Methode der Socialwissenschaften und der Politischen Ökonomie
insbesondere. Since our interest in methodology per se is but a limited one, justice cannot be done
here to this book, which is no doubt one of the significant performances in its field although, so far
as logical fundaments are concerned, it hardly goes beyond Mill’s Logic. I take the opportunity to
refer readers interested in methodology to Professor Felix Kaufmann’s excellent treatise,
Methodenlehre der Sozialwissenschaften (1936); [English trans., Methodology of the Social
Sciences, 1944].
12
A little later, substantially the same ground was taken by Menger’s followers headed by Böhm-
Bawerk (‘The Historical vs. the Deductive Method in Political Economy,’ Annals of the American
Academy of Political and Social Science, 1890) and by German theorists who were not followers
but opponents of Menger’s theoretical teaching, especially H.Dietzel (‘Beiträge zur Methodik der
Wirtschaftswissenschaften,’ Jahrbücher für Nationalökonomie, 1884, and other publications).
13
Die Irrthümer des Historismus in der deutschen Nationalökonomie (1884).
History of economic analysis 782
enough for the sociology and history of science—of any science—to require explicit
statement.
The first thing to be observed about all controversies between scientific parties is the
large amount of mutual misunderstanding that enters into them. This element is not
absent even in the most advanced sciences where homogeneous training, habits of exact
statement, and a high level of general competence could be expected to exclude it. But
where, as in economics, conditions in all these respects are immensely less favorable than
they are in mathematics or physics, men frequently have but an inadequate notion of what
the other fellow really worries about. Hence a great part of the fighting is directed against

positions which are indeed hostile fortresses in the imagination of the warrior but which
on inspection turn out to be harmless windmills.
Secondly, this situation is made worse by the fact that methodological clashes often
are clashes of temperaments and of intellectual bents. This was so in our case. There are
such things as historical and theoretical temperaments. That is to say, there are types of
mind that take delight in all the colors of historical processes and of individual cultural
patterns. There are other types that prefer a neat theorem to everything else. We have use
for both. But they are not made to appreciate one another. There is a parallel for this in
the physical sciences: experimenters and theorists are not always the best of friends. But
again, things will be more difficult where neither party can boast of spectacular successes
that conciliate and impress. Moreover, every decent workman loves his work. And this
alone, for some of us, implies dislike for other ‘methods’ in a perfectly irrational and
impulsive way.
Third, we must never forget that genuine schools are sociological realities—living
beings. They have their structures—relations between leaders and followers—their flags,
their battle cries, their moods, their all-too-human interests. Their antagonisms come
within the general sociology of group antagonisms and of party warfare. Victory and
conquest, defeat and loss of ground, are in themselves values for such schools and part of
their very existence. They will try to appropriate labels that are considered honorific—in
our case, both parties laid claim to such epithets as ‘empiric,’ ‘realistic,’ ‘modern,’
‘exact’—and to affix derogatory labels—‘speculative,’ ‘futile,’ ‘subordinate’—to the
work of the enemy. These labels may mean little or nothing in themselves, but they
acquire a life of their own and in turn keep controversy alive. All this gives scope to
personal vanities, interests, and propensities to fight that may, as they do in national and
international politics, count for more than any real issues—in fact to the point of
obliterating the real issues.
[(d) The ‘Youngest’ Historical School: Spiethoff, Sombart, and M.Weber.]
The controversy petered out as all controversies of this type do and the zeal for the
historical monograph returned to normal. But the work of the Schmoller school was
carried on under the leadership of new men who hailed from Schmoller; had experienced

the influence of his message in their formative years; and, though they differed from him
and from one another in aims, methods of research, and performance, remained faithful to
the fundamental principles he had been foremost in asserting. We might almost speak of

Sozialpolitik and the historical method 783
a ‘youngest’ historical school. By far the most eminent members of it are Spiethoff,
Sombart, and M.Weber.
14

So far as technical training is concerned, Spiethoff is no historian at all. But
Schmoller’s fundamental precepts came into his approach to a problem in this way: at the
beginning of each of his great research projects mentioned above stood a simple
conceptual apparatus, constructed with care but with a view to adequacy for the particular
investigation rather than with a view to refinement per se; with this apparatus and a
provisional analytic idea or hypothesis, he attacked in detail selected sets of facts that the
apparatus and the idea indicated as relevant, sometimes going so far as to analyze the
economics of an individual apartment house or of a particular firm; finally, he described
the general features of the pattern that emerged without the help of any elaborate method,
and these general features, properly adapted to the questions to be answered, were his
‘theoretical’ results. I daresay that the reader is not
14
For the sake of convenience I mention them here, although their work, and still more their
influence, belongs in part to the next period.
The international reputation of Arthur Spiethoff—for a long time assistant to Schmoller (and also
for a long time de facto editor of the latter’s quarterly journal, the Jahrbuch, before Spiethoff edited
it under his own name), later on professor in Bonn—rests upon his outstanding performance in the
field of business cycle research. Neglecting earlier papers of a purely theoretical nature on this and
cognate subjects, capital theory in particular, we shall content ourselves with mentioning the article
‘Krisen’ in the 4th ed. of the Handwörterbuch der Staatswissenschaften (vol. VI, 1925), which
presents in a compressed form what really amounts to an extensive treatise. His highly interesting

scientific credo—recognition of a large number of historical ‘styles’ of economic life, each
requiring its own theory in addition to a common fund of concepts and propositions belonging to
‘timeless theory’—is contained in his paper ‘Die Allgemeine Volkswirtschaftslehre als
geschichtliche Theorie: die Wirtschaftsstile’ in Schmollers Jahrbuch, 1932. Far removed from
Schmoller’s position, Spiethoff’s will nevertheless bear interpretation as a development of it in a
particular direction. His method of approach characterized in the text is illustrated in his book
Boden und Wohnung…(1934), an inquiry into the pricing of dwelling room and the rent of urban
land, and by two series of publications by his pupils which he edited and the preparation of which
he supervised with the minutest care: the Bonner Städteuntersuchungen and the Beiträge zur
Erforschung der wirtschaftlichen Wechsellagen (Contributions to the Study of Business Cycles).
[While J.A.S. taught at Bonn (1925–32), he came to know Spiethoff both as a valued colleague and
as a firm friend. After the death of J.A.S., Spiethoff together with Erich Schneider arranged for the
publication in Germany (and edited) a collection of many of the earlier articles and essays of J.A.S.
The first of three volumes will appear in 1952.]
As a man and as a scholar, Werner Sombart (1863–1941) was in every respect the opposite of
Spiethoff. The difference between the fame of the two men—not only with the public at large—
provides food for thought on the subject of the sociology of science. The only work of his that need
be mentioned here, his Modern Capitalism (Der Moderne Kapitalismus, 1902, 2nd ed., much
enlarged, 1916–27) shocked professional historians by its often unsubstantial brilliance. They failed
to see in it anything that they would call real research—the material of the book is in fact wholly
second-hand—


History of economic analysis 784
much impressed with the novelty of this procedure, which may seem to him nothing but
obvious common sense. But it was new in its neatness, the crystal-clear distinction of the
steps, and the equal attention bestowed on all of them—in the success with which
Spiethoff did not clamor for, but actually developed, ‘realistic theories’ of a certain type.
It should be observed that, though a man of wide cultural interests, be remained a
research worker strictly within the traditional boundaries of economics. He did not care to

merge economics into an all-embracing sociology. In this respect he did not follow
Schmoller’s example.
But Sombart did; and, throwing aside all qualms about the limits of professional
competence, even out-Schmollered Schmoller. His Modern Capitalism—which title
really covers a much wider area—represents a third type of historical-school synthesis, to
be distinguished alike from the general economic
and they entered protests against its many carelessnesses. Yet it was in a sense a peak achievement
of the historical school, and highly stimulating even in its errors.
Max Weber (1864–1920) was one of the most powerful personalities that ever entered the scene of
academic science. The profound influence of his leadership—in large measure due to a chivalrous
ardor for doing the right thing that sometimes verged upon the quixotic—upon colleagues and
students was something quite outside of his performance as a scholar, yet was a vitalizing force
(milieu-creating rather than school-creating) which it was impossible not to mention. Some earlier
researches of his, such as his Römische Agrargeschichte (1891) can be passed by with the comment
that, unlike Sombart, he did some historical research in the professional’s sense. The few sentences
of the text to which I must unfortunately confine myself in dealing with the purely analytic aspects
of a monumental achievement will be adequately substantiated by reference to the following works:
(1) The Protestant Ethic and the Spirit of Capitalism (appeared in German as ‘Die protestantische
Ethik und der “Geist” des Kapitalismus’ in Archiv für Sozialwissenschaft und Sozialpolitik, 1904–
5; republ. in Gesammelte Aufsätze zur Religionssoziologie; English trans. by T.Parsons, 1930). This
is the work that advanced the famous theory, so full of far-reaching implications, that the religious
revolution from which Protestantism emerged was the dominant factor in the molding of the
capitalist mind and thus of capitalism itself. It attracted much more attention than the studies in the
sociology of the great religions that followed (in later volumes of the Archiv) and gave rise to a
controversy in which sociologists of all countries took part. (2) ‘Roscher und Knies und die
logischen Probleme der historischen Nationalökonomie,’ Schmollers Jahrbuch, 1903–5, the most
important of his many ‘methodological’ studies. (3) General Economic History, the report of a
course given at the University of Munich a year before his death, and compiled mainly from
students’ notebooks; English translation by no less an authority than Frank H.Knight. (4) Economy
and Society (Wirtschaft und Gesellschaft), a part of the Grundriss der Sozialökonomik (a work of

many volumes by many authors which began to appear in 1914) which Weber initiated and edited
and which, though it can only be mentioned in passing, is an important landmark on the road of
German economics. (5) Adaptation and Selection in the Labor Force (an investigation of the
Verein für Sozialpolitik suggested and led by him; only fragments have appeared in the Verein’s
Schriften), which I mention merely as an example of the freshness and originality of his ideas and
as an illustration of a type of problem that readily occurred to him. This example also will come in
usefully when we discuss American Institutionalism.


Sozialpolitik and the historical method 785
history type and from the type of Schmoller’s Grundriss. It is a vision of the historical
process that has an artistic quality and is drawn into the sphere of science by being
nourished with historical fact and expressed by means of a primitive analytic scheme. It
is histoire raisonnée, with the accent on the reasoning, and systematized history with the
accent on system in the sense of a succession of frescoes of social states. The kind of
historical theory that emerges is best illustrated by Sombart’s theory—though it is
traceable to Marx and though he abandoned it in the second edition—of the early
accumulation of industrial capital from the rent of land: they are explanatory hypotheses
suggested by facts. However, his theories are not exclusively or even primarily economic.
An attempt such as his defies departmentalization. All factors operative in the totality of
the historical process do come in and must come in: wars and Jews enter pari passu with
saving or gold discoveries. And this is quite all right so long as we remember (a) that
such comprehensiveness is the privilege of just that one type of scientific endeavor; (b)
that this type cannot live except on the food provided by other types of work if it is not to
degenerate into irresponsible dilettantism; and (c) that Sombartian success depends on a
combination of personal qualities not usually found together in the requisite intensity and
cannot be had by wishing for it—which it is just as well to emphasize in view of the wide
international appeal of Sombart’s work.
Sombart’s ‘methodological’ pronouncements followed fashions too closely to be
interesting. At first he was duly contemptuous of those who ‘drilled Robinson Crusoe’

(see below, ch. 6, sec. 1, n. 2). When the wind changed he was anxious to be recognized
as a theorist and took credit for having used, in spots, the ‘deductive method.’
Considering the relation of his work to American institutionalism this change of front is
important to remember. Much more important is it, however, to note the same absence of
hostility to economic theory (in the narrow sense of the term) in M.Weber, whose views
on the nature of the logical processes in the social sciences were much more significant.
15

Weber did not confine himself to mere professions of methodological faith couched in
general phrases. He really went into the matter and analyzed the forms of thought
actually used within his range of comprehension, that is mainly those used by historical
economists and sociologists. And he emerged from gigantic labors with a definite and
positive doctrine. This doctrine turns on two concepts: the Ideal Type and the Meant
Meaning. In the social sciences, he held, we perform operations of a kind entirely foreign
to the physical sciences. In the physical sciences explanation never means more than
description. In the social sciences explanation involves the understanding of ‘cultural
contents,’ the interpretation of Meanings: hence the term Interpretative Sociology
(Verstehende Soziologie). There is no sense in asking what the fall-
15
In working his way toward his methodology, M.Weber availed himself (not always to advantage)
of such help as he thought he could derive from contemporaneous philosophic work. In particular,
the influence of Rickert’s and also of Windelband’s teaching is occasionally very noticeable.



History of economic analysis 786
ing stone is about beyond stating the law of its fall. But there is sense in asking what a
consuming household is about. In order to make headway with the analysis of the latter—
and of all social phenomena—the observer must understand his subject of research in a
sense in which he cannot and need not understand the falling stone. For this purpose he

must create types which, though not necessarily pure like the economic man, are
abstractions in that they possess only essential and lack non-essential properties: they are
logical ideals. And we try to get at an understanding of what such a type does, feels, says,
by asking not what his actions, feelings, utterances mean to us, the observers, but what
they mean to the type under research or, to put the same thing into different words, we try
to unearth the meanings that the types intend to attach to themselves and their behavior. If
this conveys something to the reader, then he will realize that this theory of the logic of
the social sciences—whatever its merits or limitations and its sources in professional
philosophy—is quite neutral as between the various kinds of analytic activity. In
particular, economic theory in the traditional sense is not ruled out. And it makes
precious little difference to the practical work of a theorist whether Mr. Methodologist
tells him that in investigating the conditions of a profit maximum he is investigating
‘meant meanings’ of an ‘ideal type’ or that he is hunting for ‘laws’ or ‘theorems.’ As a
matter of fact, in the epoch of his ripest thought, M. Weber was not unwilling to declare
that, so far as his almost complete ignorance of it enabled him to judge, he saw no
objection of principle to what economic theorists actually did, though he disagreed with
them on what they thought they were doing, that is, on the epistemological interpretation
of their procedure.
16

Indeed, he was not really an economist at all. In an atmosphere not disturbed by
professional cross-currents, it would be the obvious thing to label him a sociologist. His
work and teaching had much to do with the emergence of Economic Sociology in the
sense of an analysis of economic institutions, the recognition of which as a distinct field
clarifies so many ‘methodological’ issues.
So far we have been dealing with a specifically German phenomenon that grew out of
specifically German roots and displayed typically German strengths and weaknesses. Of
course, some of the factors that account for the rise of the German historical school were
ubiquitous. Moreover, in every country there were other factors that favored parallel
movements—Comtism was one of the most important of these. Finally, the work of the

German school was far too important to remain without influence on the course of things
in other countries. Nevertheless, it is important to realize that these parallel movements,
though similar, were yet essentially different; that they owed less to
16
It was with this motivation that he invited two strong partisans of economic theory, in the
Marshallian sense, to write the ‘theory’ and the sketch of the history of doctrines and methods for
his Grundriss der Sozialökonomik. Again, this is relevant in view of the fact that he is sometimes
invoked as a champion of institutional economics. [The two strong partisans of ‘theory’ were
Joseph A.Schumpeter and Friedrich von Wieser. The sketch of the history of doctrines and methods
was the Epochen der Dogmen-und Methodengeschichte of which this History is, in a sense, an
outgrowth.]


Sozialpolitik and the historical method 787
the German example than one might be tempted to suppose; and that, with the possible
exception of American Institutionalism, none of them was strong enough to cause a break
in traditions and to redirect research, partly because that tradition was stronger and more
ably defended.
In Italy, the German development was sympathetically noticed by some, as was the
German Sozialpolitik. But neither influence availed to upset the existing patterns. Italian
economics had always been strong on the ‘factual’ side and continued to be so. Nobody
seems to have thought of fighting over it. Although some leaders—such as Einaudi—did
some or most of their work in the field of economic history, it would hardly occur to
anyone to speak of an Italian historical school in the sense of a distinct scientific party.
The same holds true for France. The great tradition of French historiography
continued, of course, and, following the interests of the times, economic history received
additional attention. Some economists did historical work. I shall mention only
Levasseur.
17
Later on some work was done on lines suggestive of those of Sombart, for

example, by Henry Sée. And those brilliant historians or historical sociologists, like
Hippolyte Taine or Alexis de Tocqueville before him, whose works have become
‘required reading’ for any cultivated person, painted to a considerable extent in economic
colors. Nothing of this spelled any new departure for professional economics.
18
But
Simiand’s work and methodological creed did. Though he owed nothing to German
influence—if his work had any source in the past, that source was Comte—his views of
traditional theory, which his théorie expérimentale was to replace, and his arguments
against it (speculative castles in the air and so on) were pretty much those of Schmoller.
Only, no group has as yet rallied to his standard.
19

17
Pierre Émile Levasseur’s (1828–1911) most important work was: Histoire des classes ouvrières
en France depuis la conquête de Jules César jusqu’à la Révolution (1859) and Histoire des classes
ouvrières en France depuis 1789 jusqu’à nos jours (1867; the second editions of both works add
the words et de l’industrie). But it did not occur to him to secede—on methodological or any other
grounds—from the group mentioned below in Chapter 5, as is abundantly clear from his textbook.
18
Some readers might miss the name of the Belgian economist Émile de Laveleye (1822–92), who
was a man of many merits and in his time enjoyed a well-deserved international popularity that has
kept his name alive. But the only reason for making him a member either of the German or of a
non-existent French historical school is that he wrote a book De la Propriété et de ses formes
primitives (1873), a historicoethnological analysis of private property. His elementary textbook
(Éléments d’économie politique, 1882) is neither distinguished nor distinctive and shows that so far
as analytic technique is concerned he did not stray far from the beaten path (there is an English
translation with an introduction by F.W.Taussig, 1884).
19
François Simiand (1873–1935) formulated his methodological creed in La Méthode positive en

science économique (1912), which seems to me to come nearest of all that has been written in
Europe on questions of procedure to represent the institutionalist view. Criticism, made less
effective than it could be by the large element of misunderstanding that enters into it, and
methodological considerations, which in their positive suggestions are often very valuable, also
claim a large space in the only other work of


History of economic analysis 788
[(e) Economic History and Historical Economics in England.]
Turning to England, we first notice the quality and quantity of the work done by
economic historians that rose to new levels during the period and laid the foundations for
the still greater achievements in our own time. The performance of Cunningham may
serve as an example.
20
He did, and felt himself to be doing work that was and always had
been essential to ‘economic science’ which is ‘primarily analytic’ as he put it (Growth of
English Industry and Commerce, vol. I, p. 18). He wished to see it used by theorists and
he asserted its claim to a place in the economist’s curriculum. But beyond expressing the
belief that the conceptual apparatus of analytic economics is not readily applicable to
conditions anterior to the capitalist epoch, he nowhere indicated a desire to see it replaced
by generalizations proceeding from historical research.
That claim on behalf of economic history did not meet any appreciable resistance.
Several economists, such as Rogers,
21
were primarily economic his-
his I am going to mention: Le Salaire, l’évolution sociale et la monnaie (3 vols., 1932). This work
shows his methods in action and is unique in the infinite care bestowed on working out, before the
reader’s eye, every step of his analysis. Though the results are not, perhaps, wholly encouraging
and could, such as they are, have been arrived at in a less laborious manner, it is precisely to that
care that the work owes its very considerable significance—it should really be more widely known.

Is it unfair to add, to so short a notice, a point which may thereby acquire undue importance?
Professor Simiand (op. cit., vol. II, pp. 544 et seq.) very properly holds up to scorn the minimum-
of-existence theory of wages, which is in fact an excellent example of bad workmanship (though
really it should not be invoked in a criticism of modern theory). But he overlooks the fact that the
faultiness of this theory proves nothing against any kind of method except that it is not foolproof.
And he further overlooks that this particular miscarriage occurred precisely because the economists
of the eighteenth and the beginning of the nineteenth century followed the method that Professor
Simiand advocates: they ascertained what then was a broad fact—viz. that workmen as a rule did
not earn more than a bare subsistence—fitted a hypothesis to it, found it verified, and there they
were. Had they been better theorists, they could not possibly have put such implicit faith in that
fact.
20
William Cunningham (1849–1919) was a very prolific writer. For our purposes, it suffices to
mention his great work, The Growth of English Industry and Commerce During the Early and
Middle Ages (1st ed. 1882, greatly improved 5th ed. 1910–12), An Essay on Western Civilization in
its Economic Aspects (1898–1900), and his Progress of Capitalism in England (1916).
It seems unjustifiable to pass by such meritorious work as Leone Levi’s History of British
Commerce…(1872, 2nd ed. 1880) or Arnold Toynbee’s (1852–83) famous Lectures on the
Industrial Revolution in England (posthumously published in 1884), which remained the standard
work on the subject until they were replaced by Mantoux’s book (La Révolution industrielle au
XVIII
e
siècle, 1905). But it is impossible within the compass of this sketch to do justice to historical
work as such, and listing names and titles would serve no useful purpose. This is also the reason
why the reader will find no reference to the leading economic historians of the last thirty years.
21
J.E.Thorold Rogers (1823–90), twice professor of economics in Oxford. His main performance
was his History of Agriculture and Prices in England, 1259–1793, seven

Sozialpolitik and the historical method 789
torians so far as their research was concerned. Alfred Marshall was a better historian than
most of those who later attacked his economics as unhistorical, speculative, and so on.
His Industry and Trade alone suffices to prove that, though the whole extent of his
historical acquirements was not known outside of his circle until the publication of
Keynes’s biographical essay.
Under these circumstances there was evidently no room for a historical school in the
sense of a scientific party committed to fighting for a distinctive program. As a matter of
fact there were but the merest fragments of one. There had been a ‘forerunner,’ Jones.
22

And later on, at the time of the ascendancy of the Schmoller school in Germany, some
English economists professed allegiance to more or less similar principles. The most
important men to remember are Ashley, Ingram, and Cliffe Leslie.
23

But though all three of these men attracted attention and made their marks, none of
them succeeded in forming a group, let alone a militant one. This
volumes, of which the first appeared in 1866. His more popular Six Centuries of Work and Wages
(1884) is more widely known, however. He also prepared an edition of the Wealth of Nations,
wrote a not very brilliant Manual of Political Economy for Schools (1868), and other things. He
devoted much energy to the propagation of Cobden-Bright ideas. His reputation as a scholar,
however, rests wholly on the History.
22
Richard Jones (1790–1855), who, among other things, was Malthus’ successor as professor in
Haileybury, was a vital personality of strong convictions. His dislike of Ricardian economics took
the form of vigorous protests against hasty generalization and of an advocacy of patient factual
research, the results of which were eventually to replace the provisional structures of existing
‘systems.’ And he gave an example of what was in his mind in the first and only part completed—

on Rent—of his Essay on the Distribution of Wealth and the Sources of Taxation (1831). Thus he
does not badly fit the role that historians of economics assigned to him, although it is not easy to be
sure what either his programmatic pronouncement or his example amounted to. Some of the
objections leveled at Ricardo were not well taken; but it is more important that many of them were
such as any theorist might level at any other theorist, e.g. the objection, anticipated and refuted by
Ricardo himself, that the latter’s law of diminishing returns in agriculture was invalidated by the
fact of technological progress. Moreover, in his discussion of ‘Primitive Political Economy’
(mentioned above, Part II, ch. 7, sec. 3), he argues from the standpoint of the opinions of his time
without displaying any sense of the historical relativity of doctrine. Still, both the pronouncements
and the example do suggest historical school ideas. His lectures and essays, stimulating reading,
have been edited by W.Whewell under the title Literary Remains (1859).
23
William James Ashley (1860–1927), unquestionably the strongest personality of the three,
professor at the University of Birmingham and the academic leader in Joseph Chamberlain’s
protectionist movement, conformed more than any other English economist to the German
professional type of that time. Having in his early years experienced the influence of economic and
legal historians (Toynbee and Maine, in particular, and later on the influence of the Germans), he
ran true to that type in his works—such as his excellent industrial monographs and his very
successful Introduction to English Economic History and Theory…(2 vols., 1888 and 1893)—as
well as in his methodological pronouncements and in his sympathies with Sozialpolitik and
economic nationalism. But he had absorbed enough from his English environment to be proof
against the crudenesses of his prototype: nobody who lived in England could possibly


History of economic analysis 790
was so even in the seventies. Later on, when Marshall’s leadership asserted itself, the
majority of economists (and practically all the talent) flocked to his standard. Some
opposition there was, but it was only in part methodological in nature. We may mention
Hobson and the Webbs.
24

The modest trickle of
misunderstand economic theory so completely as Schmoller had done in the early part of his career.
John Kells Ingram (1823–1907) was a quite different sort of man. He commanded a much wider
cultural background (he was a philosopher and poet, and was in 1866 appointed Regius professor of
Greek in Dublin, and also wrote on Shakespeare and Tennyson) but he can hardly be said to have
done any economic research at all. His History of Political Economy (first in the Encyclopaedia
Britannica, 1885, independently published, 1888; latest edition, with a supplementary chapter by
W.A.Scott, 1915) is conclusive proof both of his wide philosophical (especially Comtist) and
historical erudition and his inadequate command of technical economics. The latter fact made it
easier of course for him than it would otherwise have been to talk glibly about the New Economics
to which the future belonged (compare, e.g., his address at the Dublin meeting of the British
Association for the Advancement of Science, 1878, on ‘The Present Position and Prospects of
Political Economy’) and with which his name was associated on the strength of programmatic
pronouncements. High sentiment and moral tone—in which Marshall was soon to compete—
protest against isolating economics from the work of other social sciences, emphasis upon
(Comtist) evolution and historical relativity, induction vs. deduction, were the main points that
appealed to the public.
Thomas E.Cliffe Leslie’s (1826–82) name survives not because of his scholarly work of the
‘descriptive’ kind—though some of it is of high grade, such as, e.g., his work on Irish, English, and
European land systems—or because of his papers, some of them forceful and brilliant, on current
questions of policy, but because of his advocacy of the historical method, which was both judicious
and effective and did not fail to impress. The two papers that present his methodology or, as he
preferred to call it, philosophy of the social sciences (reprinted in his Essays in Political and Moral
Philosophy, 1879; a 2nd ed., that left out some but added others, appeared posthumously) read
much like a reformulation of the Schmollerian program; in view of the dates of their first
publication (1876 and 1879) this should not induce us to deny them originality. And if we consider
certain unguarded statements made by theorists, such as Senior, we may even discover some merit
in the otherwise none too startling assertion that economists must always start from and verify
deductions by facts.
24

John A.Hobson’s (1858–1940) feud with Marshallian economics was not primarily
methodological. However opposed to the theories of his contemporaries, he always fought them by
theories without challenging their methodological credentials. All the same, there was a
methodological aspect to that antagonism. For instance, Hobson’s insistence upon what he
considered to be irrational behavior of consumers and upon the institutional factors that, rather than
‘rational choice,’ determine this behavior really implies a research program of the historico-
sociological sort. This is important to realize because it supplies one of the links between Hobson
and American institutionalism.
Beatrice (1858–1943) and Sidney Webb (1859–1947) have to be mentioned in this connection,
first, on account of the nature of their research, which contributed substantially to the achievement
of English economic historians (see especially, History of Trade Unionism, 1894, and the Manor
and the Borough, 1908); and second, on


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