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LONG POST - Response to Rosser's query about Streissler's  
theses. 
 
If memory serves, Streissler offered 2 hypotheses for why both the  
German and the Austrian writers tended to ignore or downplay the  
importance of the "proto-neoclassical" writings of the earlier German  
economists.   
 
1. A corpus consisting solely of textbooks is both tedious to review  
and difficult to investigate systematically.  Because the textbook writers  
did not follow standard ciation procedures, it would also be virtually  
impossible without surveying the entire field to figure out who said  
what first, who influenced whom, etc. Streissler hypothesizes that these  
characteristics made it easier to "forget" this literature. (By the way,  
Keith Tribe's excellent 1988 book, GOVERNING ECONOMY: THE  
REFORMATION OF GERMAN ECONOMIC DISCOURSE, 1750- 
1840, Cambridge: CUP, tells the story of the literature up to the  
emergence of the Older German Historical School.)   
 
2. As important, from about the turn of the century onwards, neither  
Austrians nor Germans had much reason to keep knowledge of the  
tradition alive.  By the 1880s German economics fell under the sway of  
Schmoller and his friend Friedrich Althoff (the latter a Minister of  
Education responsible for recommending who should receive university  
appointments).  Though elements of subjectivist ideas remain in the  
work of the Younger Historical School, their emphasis became the  
collection of statistical data. For their part, third generation Austrians  
like Schumpeter and Mises had come to associate Germany with  
Prussian statism and German economics with historicism and anti- 
liberalism.  In such an atmosphere, it may have been difficult for  
Austrian economists to credit Germans with any good ideas. If this was  
true, the antagonism was somewhat misplaced. Some of the writers in  
the earlier tradition were themselves Austrians, others were from the  
southern German states and were themselves distrustful of Prussian  
ambitions.   
 
Schumpeter comes in for specific criticism because he panned the  
contribution of virtually all the German economists (except for Rau and  
Hermann) in his 1912 book on doctrinal history. As George Stigler  
reminds us, once a mistake gets into a textbook it is nearly impossible  
to get it out. He also made the following statement in his obituary for  
Menger "Without external stimulation, and certainly without external  
help, he attacked the half-ruined ediface of economic theory... Menger  
is nobody's pupil, and what he created stands..."    
 
Now, it should be added that what Schumpeter found most original in  
Menger was not his subjectivism (which Streissler shows was there in  
the earlier tradition) but his insight that "From a purely economic  
standpoint, the system is merely a system of dependent prices,... and  
all specific economic regularities are deduced from the laws of price  
formation."  (Also from the obit notice.) This _is_ a different idea from  
what was found in the earlier textbook literature. And it also explains  
why Schumpeter thought that Walras' formalization of the notion of  
general interdependence to be such a signal contribution. Schumpeter's  
ultimate assessment was that Walras was the greatest economist. And  
that's one reason why very few "Austrian economists" claim  
Schumpeter as an Austrian.    
 
Bruce Caldwell  
 
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