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Published by EH.NET (April 2004) 
 
Heino H. Nau and Bertram Schefold, editors, _The Historicity of Economics: 
Continuities and Discontinuities of Historical Thought in 19th and 20th 
Century Economics_. Berlin and Heidelberg: Springer, 2002. vii + 245 pp. 
$79.95 or £54 (hardcover), ISBN: 3-540-42765-1. 
 
Reviewed for EH.NET by Roberto Romani, Faculty of Political Sciences, 
University of Teramo, Italy. 
 
 This book deals with the legacies that historical political economies since Schmoller
have left behind them. As Bertram Schefold writes, this collection of six conference
papers addresses "the causes and consequences of adopting a historical perspective in
economics." The underlying assumption is that the historical perspective "is like looking
through a kaleidoscope": a slight turn and the image begins to change, a larger turn and a
new image arises, "but some principle of symmetry persists" (p. vii). The book combines
chapters placing historical economics in historical context with chapters pointing to the
validity of historical concepts and viewpoints for the economists of today. At least one
extensive commentary is appended to each contribution. As regards the editors'
institutional affiliations, Schefold is a full professor of economics at the Goethe
University in Frankfurt am Main, Germany, and Heino Heinrich Nau works at the same
university as an assistant professor.
 
Nau's introduction establishes a link between the nineteenth-century 
Historical School of Economics and New Institutional Economics, on the 
grounds of a common concern with institutions and path dependency. Nau's 
intention is to show that "major research interests of Historical Economics 
are once more relevant in modern economics" (p.3). Nau's twofold goal is to 
provide a fresher image of Schmoller's Historical School, on the one hand, 
and to add to the store of critical arguments against the neoclassical 
paradigm, on the other. Nau uses a broad brush to articulate his view of 
the Historical School as a forerunner of new institutional economics. Some 
major new institutionalists' themes are surveyed but precise references to 
historical economists' texts are scanty. 
 
Of the two chapters concerning the German Historical School neither is 
completely original. Heath Pearson rehearses his view that there was no 
such thing as a "German Historical School."[1] Pearson puts in its place a 
group of economists -- ranging from Roscher and Schmoller to Schäffle, 
Wagner, and Sombart -- who attempted to fulfil the promise of a 
"comparative" (that is empirical and fact-based) psychology as the core of 
comparative economics. Knut Borchardt, for whom "a strong or well defined 
connection between psychology and economics" did not exist (p. 48), rejects 
Pearson's hypothesis. Karl Häuser defends the use of the label "German 
Historical School," especially because of the differences existing between 
the German and the non-German unorthodox political economies in the final 
decades of the nineteenth century. The former was shaped by "a special 
emanation of economics in the tradition of historism" (p. 55). 
 
The following essay by David Lindenfeld is an outline of part of his book 
on the institutional framework within which nineteenth-century German 
political economy functioned.[2] In Lindenfeld's view, "the emergence of 
economics in Germany as a research program was shaped to a great extent by 
the pedagogical environment in which it grew" (p. 57). History and 
economics, Lindenfeld argues, were linked in many ways in German curricula, 
and often individuals taught both. In his commentary, Erik Grimmer-Solem 
points to the need to explore not only continuities in the 
_Staatswissenschaften_ tradition but also changes. Among these, he notes 
the consequences of the generation gap between, say, Schmoller and Roscher, 
and of the move of the _Staatswissenschaften_ from the law to the 
philosophical faculty. A further commentary by Pearson questions the idea, 
which he ascribes to Lindenfeld, that interdisciplinary cross-fertilization 
was peculiar to Germany before the "breakthrough" in disciplinary 
specialization occurring at the turn of the century. 
 
Like Pearson and Lindenfeld, Geoffrey Hodgson summarizes arguments exposed 
by him in greater detail elsewhere. His contribution surveys "historical 
specificity" in the writings of "old" American institutionalists. 
"Historical specificity" is the idea that "different socio-economic 
phenomena require theories that are in some respects different from each 
other" (p. 93). Hodgson clearly supports the view that "with diverse, 
complex phenomena, there are limits to explanatory unification" (p. 93), 
but no further details are given about the role and importance of 
"historical specificity." In commenting on the chapter, Helge Peukert 
points to this deficiency. Hodgson considers various issues related to 
"historical specificity," like habits and knowledge in economic life, 
Darwinian evolution, instinct psychology, ideal type theories, the role of 
customs and incentives, and economic stages. As a result his contribution 
lacks a recognizable focus. 
 
Almost incidentally, Peukert reminds the reader that old institutionalism 
"was engaged in the political battles of its time" (p. 128) -- as were the 
European historical schools. This is a platitude perhaps, but one which is 
often forgotten by critics of mainstream economics writing in the 
historical and institutional traditions. They fail to take into account the 
well established connection between those traditions and social and 
political reform. One wonders whether not only institutions and history 
matter, as the authors of this book keep repeating, but also political 
orientations do. It is a fact that, besides the universal validity of its 
laws, value neutrality is the most effective guarantee of the scientific 
character of neoclassical economics. Historical and institutional 
economics, on the other hand, are value laden, at least in origin, and the 
model of scientificity they intended to attain was somehow different. Peter 
Koslowski does not ignore this question, since his chapter is unequivocal 
about the necessity of a "normative" political economy. He argues in favor 
of a "theory of ethical economy as a cultural, ethical, and historical 
economics," basing his proposal chiefly on Schmoller. However, Koslowski 
criticizes Schmoller's "ethical relativism." Matthias Lutz-Bachmann 
comments on the difficulties involved in any "integration" of the normative 
with the empirical approach. 
 
The title of Richard Swedberg's paper is "What Can New Economic Sociology 
Learn from the Historical School, Especially Max Weber?" Drawing on 
previous writings of his, Swedberg proposes to replace Granovetter's 
"embeddedness" with Weber's concept of social action centered on the 
element of "orientation to others." Swedberg puts to use Weber's conceptual 
precision to seek a fresh perspective on new economic sociology. In 
particular, Weber was way ahead of new economic sociology, Swedberg 
contends, with reference to the conceptualization of capitalism, the 
subjective method of analysis (_Verstehen_), the role of power structures 
in the economy, and the application of counterfactuals. Philippe Steiner's 
commentary emphasizes the potential usefulness of Weber's "historicity" to 
economic sociology. 
 
The collection concludes with an essay by Rainer Klump on the place and 
role of "culturally determined parameters" in utility functions, both 
individual and collective. Vitantonio Gioia questions Klump's view that 
classical political economy had rejected the intrusion of culture into 
economics in the same way as marginalism did. According to Gioia, Smith and 
J. S. Mill effectively addressed the problem of how culture affects the 
behavior of economic man, so that a proper break occurred only with the 
marginalistic revolution. Neoclassical maximizers entail a "removal of 
socio-cultural conditionings" (p. 233). This is why, continues Gioia, "the 
possibility of producing eclectic syntheses between theories grounded on 
different visions of the economic agent is very limited" (p. 235). 
 
1. See H. Pearson, "Was There Really a German Historical School of 
Economics?" _History of Political Economy_, 31 (1999), pp. 547-62. 2. See 
D. Lindenfeld, _The Practical Imagination: The German Sciences of State in 
the Nineteenth Century_, Chicago: University of Chicago Press, 1997. 
 
 Roberto Romani works as a researcher at the University of Teramo, Italy. He is the author
of _National Character and Public Spirit in Britain and France, 1750-1914_, Cambridge,
Cambridge University Press, 2002. He also authored, with E. Grimmer-Solem, "In Search of
Full Empirical Reality: Historical Political Economy, 1870-1900," _European Journal of the
History of Economic Thought_, 6 (1999), pp. 333-64, and "The Historical School, 1870-1900:
A Cross-National Reassessment," _History of European Ideas_, 24 (1998), pp. 267-99.
 
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