----------------- HES POSTING ----------------- 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 ------------ FOOTER TO HES POSTING ------------ For information, send the message "info HES" to [log in to unmask]