Gustav Friedrich von Schmoller Biography

Gustav Friedrich von Schmoller

(Heilbronn, 1838-Bad Harzburg, 1917) German economist.Representative of the historicist school, he adopted the historical-descriptive and empirical method in the analysis of economic policies.He held an important chair at the University of Berlin, from which he exerted a notable influence on the German academic world in the last years of the 19th century.A furious enemy of the classical, neoclassical, and Marxist schools, he was part, along with Adolf Wagner, Lujo Brentano, Werner Sombart, and others, of the group of economists that some liberal thinkers disparagingly referred to as "academic socialists" for their ideas on social reform..After his death, the historicist school and its influence gradually declined.

Gustav von Schmoller

Son of a public official from Württemberg, he carried out Staatswissenschaften studies, a combination of economics, history and management science, at the University of Tübingen.After completing his university degree, he held a position in the finance department of the Württemberg administration for a short time.However, attracted by the academic world, he worked for a position as a university professor.In 1864 he managed to get a chair at the University of Halle, a position he held until 1872.

The prestige achieved by his brilliant economic thinking gave him, in that same year, the opportunity to teach classes at the University of Strasbourg, where he remained for a whole decade.In 1882 he took the most important step in his professional career by moving to Berlin to teach economics at the city's university.From his chair he became one of the most influential figures in the German university world; It was even said that Schmoller controlled each and every one of the academic positions and promotions of the German university.

In this Berlin era, as has been pointed out, he was already part of the group of thinkers to which the liberals they disparagingly described as Kathedersozialisten ('academic socialists').In order to develop his ideas in a much broader forum of discussion, he created in 1872, together with other thinkers, the Verein für Socialpolitik ('Union for social policy'), which he was for a long period its top leader.

This group was formed mainly by traditionalist and conservative intellectuals who defended a peculiar corporatism in which industry and workers would join the state.The Union was viewed with suspicion by liberal circles as well as by supporters of socialism and Marxism.The Marxists considered the Schmoller group one more weapon of the state and the bourgeoisie to oppress and control the workers under false promises of social reform.The facts gave them the reason in a way, since the Verein rarely opposed imperial economic policies, and these were not especially revolutionary.

The power that Schmoller acquired It was not confined to the realm of economics, but it tried by all means to seize large patches of influence in other areas of the social sciences.In this sense, its main objective was to try to reorganize the investigations through a change in the method used until then.As the leader of the historicist school, he used to attack frontally the methods applied by the classical and neoclassical schools, in which axiomatic-deductive abstraction predominated.

It was within the scope of this opposition that one of the most important intellectual discussions of the nineteenth century in Germany was born, the one known as Methodenstreit ('Fight over method').The confrontation developed between supporters of the inductive method and those who advocated the deductive method.The origin of the discussion was Carl Menger's attack on Schmoller's theories, stating that the exact methods of the natural sciences and the abstract of logical reasoning should be applied to the analysis of economic policy.The confrontation occupied two generations of German economists and produced a vast literature on the subject, with no apparent result other than the defeat of Schmoller.

Despite this, the power of the latter was not affected in the slightest, and a clear example of this was that it continued to keep classical and neoclassical proposals away from German classrooms.The struggle between the two sides was somewhat strange, since Schmoller did not completely deny the use of deduction in the application of the inductive method either.His main interest was to end the abstractions in economic policy, since he believed that it should be consolidated through an empirical basis.At the same time, he already began to defend the need for a multidisciplinary analysis that would allow each subject to know its psychological, sociological and philosophical aspects.In 1887 he became part of the German Academy of Sciences, which gave him a greater influence.

In the transition between the 19th and 20th centuries, Schmoller focused his interest on the study of mercantilism.Through a careful analysis, he came to the conclusion that its appearance in the economic world was linked to the process of formation of the state and the national economy.He made a historicist study of mercantilism from the appearance of the first economic measures of this type in Germany in the 17th and 18th centuries.He went so far as to affirm that such measures were the consequence of the lack of centralization of a national state and of the power that, at that time, maintained feudal individualism of a local character.

In his analysis it was very clear the influence that Prussian education had had on his life, since he saw in the Prussian princes the paradigm of the perfect monarch.Schmoller claimed that only a strongly centralized monarchy was capable of creating large economic territories that would result in the emergence of nation states.He believed that states should imitate the Prussian bureaucratic apparatus as a means of establishing power over the working classes.For him, this fact was one of the most important circumstances in the evolution of the history of Germany.

Despite this clearly traditionalist and conservative thinking, Schmoller had progressive ideas of reform and social justice.In his opinion, the state should apply a paternalistic economic and social policy, focused especially on expanding the cultural and material bases of the working classes.He was fully confident that taking these measures would prevent any kind of social revolution.His theory of justice and social reform confronted him with Marxist thinkers, with the liberalism of the Manchester school, and with the most reactionary sectors of the German state; Proof of this was his controversy with the historian Hienrich von Treitschke.

His presence in the publishing world was certainly important as he participated as editor or co-editor in numerous publications, such as Staats und sozialwissenschaftliche Forschung and Jahrbuch für Gesetzgebung , Verwaltung und Volkswirtschaft im Deutschen Reich (1881, later known simply as Schmollers Jahrbuch ).Among the studies that he published, the one entitled Grundriss der allgemeinen Volkswirtschaftslehre ('Principles of general economic theory', 1900-1904) stands out above the rest, in which, surprisingly, he coincided in some postulates with the thought Neoclassical.

The importance of Schmoller was such in the German academic world that he managed to be appointed an official historian of Brandenburg and Prussia.In the performance of these positions, he was in charge of supervising the editing of the Acta Borussica and the Forschungen zur brandenburgischen und preussischen Geschichte .In 1879 he published a historical study on the Strasbourg weavers' guild and on the Brandenburg and Prussian guilds during the 17th and 18th centuries.

He also carried out this type of analysis on the Prussian silk industry in the 18th century; on financial policy (1898); on the history of German cities (1900); on the history and formation of social classes (1904); and around the development of the class struggle (1908).Other works of his are On the history of German small industry in the 19th century (1870), The idea of ​​justice in economic policy (1881), Social and industrial history (1890), The mercantile system and its historical importance (1897) and On class conflicts in general (1914).