Everything about Methodenstreit totally explained
Methodenstreit is a German term (lit. 'strife over methods') referring to an intellectual controversy or debate over
epistemology, research methodology, or the way in which academic inquiry is framed or pursued. More specifically, it also refers to a particular controversy over the
method and
epistemological character of
economics carried on in the late
1880s and early
1890s between the supporters of the
Austrian School of Economics, led by
Carl Menger, and the proponents of the (German)
Historical School, led by
Gustav von Schmoller. To distinguish it from other similar disputes, German speakers sometimes specify it as the
Methodenstreit der Nationalökonomie (
Methodenstreit of economics), but outside of German speaking countries, the
Germanism Methodenstreit mostly refers to this one.
On an intellectual level the
Methodenstreit was a question of whether there could be a science, apart from history, which could explain the dynamics of human action. Politically there were overtones of a conflict between the
classical liberalism of the Austrian School and the
welfare state advocated by the Historical School.
History
Background
The Historical School contended that economists could develop new and better social laws from the collection and study of statistics and historical materials, and distrusted theories not derived from historical experience. Thus, the German Historical School focused on specific dynamic institutions as the largest variable in changes in political economy. The Historical School were themselves reacting against
materialist determinism, the idea that human action could, and would (once science advanced enough), be explained as physical and chemical reactions.
The Austrian School by contrast believed that economics was the work of philosophical logic and could only ever be about developing rules from first principles — seeing human motives and social interaction as far too complex to be amenable to statistical analysis — and purporting their theories of human action to be universally valid.
Menger and the German Historical School
The first move was when
Carl Menger attacked Schmoller and the German Historical School. Menger thought the best method of studying economics was through reason and finding general theories which applied to broad areas. Menger, as did the Austrians, concentrated upon the subjective, atomistic nature of economics. He emphasized the subjective factors. He said the grounds for economics were built upon self-interest, utility maximization, and complete knowledge. He said aggregative, collective ideas couldn't have adequate foundation unless they rested upon individual components.
Schmoller responded with an unfavourable review of Menger's book.
Consequences
The term "Austrian school of economics" came into existence as a result of the
Methodenstreit, when Schmoller used it in an unfavourable review of one of Menger's later books, intending to convey an impression of backwardness and
obscurantism of
Habsburg Austria compared to the more modern
Prussians.
Related rivalry
Another famous — and somewhat related —
Methodenstreit in the 1890s pitted the German social and economic historian
Karl Lamprecht against several prominent political historians, particularly
Friedrich Meinecke, over Lamprecht's use of social scientific and psychological methods in his research. The dispute resulted in Lamprecht and his work being widely discredited among academic German historians. As a consequence, German historians pursued more political and ideological historical questions, while Lamprecht's style of
interdisciplinary history was largely abandoned. Lamprecht's work remained influential elsewhere, however, particularly in the tradition of the French
Annales School.
Further Information
Get more info on 'Methodenstreit'.
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