Topic
Methodenstreit
About: Methodenstreit is a research topic. Over the lifetime, 150 publications have been published within this topic receiving 7304 citations.
Papers published on a yearly basis
Papers
Posted Content•
TL;DR: This paper argued that economic theory learns nothing from economic history, and economic history is as much corrupted as enriched by economic theory, and that the attempt to construct economics as an axiomatically based hard science is doomed to fail.
Abstract: I have in the back of my mind a picture of the sort of discipline economics ought to be -or at least the sort of discipline I wish it were. If economics were practiced in that way there would be nothing problematical about its reciprocal relationship with economic history. It would be pretty clear what it is that economic theory offers to economic history and what economic history offers to economic theory. I will try to describe what I mean below. For better or worse, however, economics has gone down a different path, not the one I have in mind. One consequence, not the most important one, but the one that matters for this discussion, is that economic theory learns nothing from economic history, and economic history is as much corrupted as enriched by economic theory. I will come to that, too, later on. You will notice that I am using strong language. I am prepared to admit right away that I may be dead wrong in my judgements. But there is no point in pussyfooting. Bluntness may lead to an interesting discussion. After all, no one would remember the old German Historical School if it were not for the famous Methodenstreit. Actually, no one remembers them anyway. (There must be a lesson in that.) To get right down to it, I suspect that the attempt to construct economics as an axiomatically based hard science is doomed to fail. There are many partially overlapping reasons for believing this; but since that is not the topic under discussion today, I do not have to lay them out in an orderly way. I hope the following hodgepodge will convey what I mean. A modern economy is a very complicated system. Since we cannot conduct controlled experiments on its smaller parts, or even observe them in isolation, the classical hardscience devices for discriminating between competing hypotheses are closed to us. The main alternative device is the statistical analysis of historical time-series. But then another difficulty arises. The competing hypotheses are themselves complex and subtle. We know before we start that all of them, or at least many of them, are capable of fitting the data in a gross sort of way. Then, in order to make more refined distinctions, we need long time-series observed under stationary conditions. Unfortunately, however, economics is a social science. It is subject to Damon Runyon's Law that nothing between human beings is more than three to one. To express the point more formally, much of what we observe cannot be treated as the realization of a stationary stochastic process without straining credulity. Moreover, all narrowly economic activity is embedded in a web of social institutions, customs, beliefs, and attitudes. Concrete outcomes are indubitably affected by these background factors, some of which change slowly and gradually, others erratically. As soon as time-series get long enough to offer hope of discriminating among complex hypotheses, the likelihood that they remain stationary dwindles away, and the noise level gets correspondingly high. Under these circumstances, a little cleverness and persistence can get you almost any result you want. I think that is why so few econometricians have ever been forced by the facts to abandon a firmly held belief. Indeed, some of Fortune's favorites have been known to write scores of empirical articles without once feeling obliged to report a result that contradicts their prior prejudices. If I am anywhere near right about this, the interests of scientific economics would be better served by a more modest approach. There is enough for us to do without pretending to a degree of completeness and *Department of Economics, Massachusetts Institute of Technology, Cambridge, MA 02139.
238 citations
Book•
9 Dec 2008
TL;DR: Milonakis and Fine as discussed by the authors argue that economics has become a monolithic science, variously described as formalistic and autistic with neoclassical orthodoxy reigning supreme, with the separation of economics from the other social sciences, especially economic history and sociology.
Abstract: Economics has become a monolithic science, variously described as formalistic and autistic with neoclassical orthodoxy reigning supreme. So argue Dimitris Milonakis and Ben Fine in this new major work of critical recollection. The authors show how economics was once rich, diverse, multidimensional and pluralistic, and unravel the processes that lead to orthodoxy’s current predicament. The book details how political economy became economics through the desocialisation and the dehistoricisation of the dismal science, accompanied by the separation of economics from the other social sciences, especially economic history and sociology. It is argued that recent attempts from within economics to address the social and the historical have failed to acknowledge long standing debates amongst economists, historians and other social scientists. This has resulted in an impoverished historical and social content within mainstream economics. The book ranges over the shifting role of the historical and the social in economic theory, the shifting boundaries between the economic and the non-economic, all within a methodological context. Schools of thought and individuals, that have been neglected or marginalised, are treated in full, including classical political economy and Marx, the German and British historical schools, American institutionalism, Weber and Schumpeter and their programme of Socialokonomik, and the Austrian school. At the same time, developments within the mainstream tradition from marginalism through Marshall and Keynes to general equilibrium theory are also scrutinised, and the clashes between the various camps from the famous Methodenstreit to the fierce debates of the 1930s and beyond brought to the fore. The prime rationale underpinning this account drawn from the past is to put the case for political economy back on the agenda. This is done by treating economics as a social science once again, rather than as a positive science, as has been the inclination since the time of Jevons and Walras. It involves transcending the boundaries of the social sciences, but in a particular way that is in exactly the opposite direction now being taken by "economics imperialism". Drawing on the rich traditions of the past, the reintroduction and full incorporation of the social and the historical into the main corpus of political economy will be possible in the future.
148 citations
Book•
26 Sep 2008
TL;DR: In this paper, the authors present an overview of the history of the American School of Salamanca and its role in the development of the theory of free market economy and its application in the American economy.
Abstract: 1. THE THEORY OF DYNAMIC EFFICIENCY, 2. THE ONGOING METHODENSTREIT OF THE AUSTRIAN SCHOOL, 3. CONJECTURAL HISTORY AND BEYOND, 4. ENTREPRENEURSHIP AND THE ECONOMIC ANALYSIS OF SOCIALISM, 5. THE CRISIS OF SOCIALISM, 6. ENTREPRENEURSHIP AND THE THEORY OF FREE MARKET ENVIRONMENTALISM, 7. A THEORY OF LIBERAL NATIONALISM, 8. A LIBERTARIAN THEORY OF FREE IMMIGRATION, 9. THE CRISIS AND REFORM OF SOCIAL SECURITY, 10. A CRITICAL ANALYSIS OF CENTRAL BANKS AND FRACTIONAL-RESERVE FREE BANKING FROM THE AUSTRIAN SCHOOL PERSPECTIVE, 11. A CRITICAL NOTE ON FRACTIONAL-RESERVE FREE BANKING, 12. THE ETHICS OF CAPITALISM, 13. A HAYEKIAN STRATEGY TO IMPLEMENT FREE MARKET REFORMS, 14. THE FUTURE OF LIBERALISM: THE DECONSTRUCTION OF THE STATE THROUGH DIRECT DEMOCRACY, 15. JUAN DE MARIANA AND THE SPANISH SCHOLASTICS, 16. NEW LIGHT ON THE PREHISTORY OF THE THEORY OF BANKING AND THE SCHOOL OF SALAMANCA, 17. LUDWIG VON MISES' HUMAN ACTION AS A TEXTBOOK OF ECONOMICS, 18. IN MEMORIAM OF MURRAY N. ROTHBARD, 19. HAYEK'S BEST TEST OF A GOOD ECONOMIST, 20. THE RICARDO EFFECT, 21. SPANISH ROOTS OF THE AUSTRIAN SCHOOL -- INTERVIEW
124 citations
TL;DR: As a result of the division of intellectual labour that followed the Methodenstreit in the social sciences, sociology neglected the analysis of the social production of money and has concentrated i... as discussed by the authors.
Abstract: As a result of the division of intellectual labour that followed the Methodenstreit in the social sciences, sociology neglected the analysis of the social production of money and has concentrated i...
116 citations
TL;DR: The first battle of methods between the abstract-deductive and empiric-inductive methods was defined by Menger and Schmoller as mentioned in this paper, who argued that the former was more accurate than the latter.
Abstract: Should an economic theory be built abstractly, deductively and hypothetically, regardless of empirical reality; or is economics condemned to be restricted to the dry collection of empirical facts and their compilation into dull statistics? Does exact knowledge mean getting rid of all empirical evidence, or conversely, making a radical move towards empiricism? Is methodological individualism, as opposed to methodological collectivism, indispensable for economics or vice versa? The above questions are not at all new in economic theory; they have appeared as early as the end of the 19th century in what is referred to as Methodenstreit between Carl Menger and Gustav Schmoller. It is useful to take a look at this dispute in greater detail because it is regarded as one of the most significant methodological disputes in the history of economics. In some sense, it had anticipated the methodological disputes in contemporary economics. As early as the last third of the 19th century, German economists argued that Austrian economic theories were unfounded because they were non-empirical, non-realistic and hence unusable, while Austrians criticized the Germans stating that their historical method only covered a mere description of the existing phenomena and failed to seek generally valid economic laws and relations. Who was more accurate? Concept of the First Battle of Methods In the English language literature, the Methodenstreit is usually described as a dispute between the abstract-deductive method represented by Menger on one side and the empirical-inductive method represented by Schmoller on the other side. This description is supported, in various versions, by Schumpeter (1972: 814), Seligman (1962: 274), Lekachman (1959: 249), Newman (1952: 195), Landreth (1976: 275), Ingram (1967: 235) and Haney (1949: 550). The first person who brought this concept to the Western literature was Bohm-Bawerk (1890: 244-271). John Neville Keynes (1891), the father of the famous John Maynard Keynes, also played an important role in the dissemination of the standard Anglo-Saxon interpretation. The seeds of the future terminology had already been present with one of the participants of the dispute, Schmoller. He primarily understood his dispute with Menger as the struggle between induction and deduction (Schmoller 1883). Although the definition of the first battle of methods as a dispute between the abstract-deductive method and the empirical-inductive method is attractive and quite widespread, one can also find some faults in it. These faults lead some authors--especially German and Austrian writers--to arrive at the idea that the traditional concept of Methodenstreit is too reductive and needs to be broadened--Kerschagl (1948: 29-33), Ritzel (1950: 118-124), Albert (1962: 142). The related arguments are as follows. Firstly, Methodenstreit cannot be reduced to a dispute between the abstract-deductive and empirical-inductive method because the key polemic between Gustav Schmoller and Carl Menger also included some other points of controversy, including the issue of the justifiability of exact economic laws. This issue is related to the first dispute to a certain degree, but not completely. Furthermore, the third important aspect of the Methodenstreit is relatively separate--it is known as the dispute over methodological individualism versus collectivism in economics and social sciences. Secondly, the Methodenstreit cannot be reduced to a dispute between an abstract-deductive and empiric-inductive method for the reason that this terminology itself is an interpretation. This interpretation is very close to the terminology of one of the participants of the dispute, Schmoller; however, Menger never used his terminology. Instead, he spoke about the exact and empirical-realistic orientation of scientific research (die exakte und die realistisch-empirische Richtung der Forschung). Thirdly, the Methodenstreit can hardly be reduced to a personal dispute between Menger and Schmoller. …
65 citations
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Performance Metrics
| Year | Papers |
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| 2021 | 2 |
| 2020 | 6 |
| 2019 | 8 |
| 2018 | 5 |
| 2017 | 5 |
| 2016 | 12 |