Kathedersozialismus and Social Question Drechsler

Kathedersozialismus and Social Question
20021
Wolfgang Drechsler
When I disembarked from the boat which had taken us back from
Capri to Naples and handed my suitcase to one of the boys who lay
around on the pavement for him to carry, he shook his head saying: I
already ate! (Brentano 1931, 113)
But, gentlemen, everything is so incredibly complex. (Schmoller

cited by Gay 1941, 411, English trsl. in Balabkins 1988, 51)
1. From Today to Yesterday
1
This paper is the only slightly edited version of my contribution to the 15th Heilbronn Symposion in
Economics and the Social Sciences on “The Social Question – Die Soziale Frage“, presented 21 June
2002. As I was then in the process of writing a book on Kathedersozialismus, I did not submit the paper
for inclusion in the conference proceedings. However, as the book project since became sidetracked,
and will at best remain in cold storage for some years to come, I agreed to the suggestion to publish it in
2007, half a decade later, as a working paper, so that argument and sources could be accessed and cited.
However, I reconsidered even this because in the meantime, a couple of publications concerning its
topic appeared, so that the paper essentially represents the state of the scholarship of 2002. It is
therefore offered here just for classroom use, with all German quotes translated into English.
Translating the Kathedersozialisten is a challenge indeed, and it is even more difficult to do it well. In
this case, I have profited from Ingbert Edenhofer having undertaken this arduous task, and the
translations herein are largely his. Given the aim and subject of the paper, it was necessary to present
rather lengthy quotes, because the German originals are generally not very accessible and Schmoller,
Wagner and Brentano are quite generally referred to in the economic literature without consulting the
texts.
Next to Ingbert Edenhofer, I am grateful for Rainer Kattel and Erik S. Reinert for their critical input and
to Erik especially for giving me access to his magnificent library, where the core of this paper was
written.
2 Kathedersozialismus and Social Question
It may well be that once again, the ‘West’ – and not only the ‘West’ – is faced with a socio-
economic paradigm that holds so general sway that it has even bagged its natural antagonists:
The consequence was that the economic train of thought of the Liberals gained such
dominance over public opinion that even their opponents fell under its influence. … The one
glaring contradiction to the dominating thought that the public saw was the Social Democratic
program. … Protective tariff was merely engaged in a rear guard battle. … From the most
democratic media to the Kreuzzeitung, everyone considered free trade the natural truth,
eternally valid for all peoples and all times. Factory legislation was regarded as an outrageous
abandonment of civic freedom to the police despotism of an absolute regime.
This may just be the very End of History, as presented well over a decade ago now by Francis
Fukuyama.2 Fukuyama says that our present system is here to stay, not because a utopia is
impossible, but because we have reached the best and final society already.3 According to
Fukuyama’s interpretation of Hegel (Fukuyama 1989, 2), liberal democracy, joined with
economic liberalism, in its universalization is that final form of human society. It has no
universal competition anymore; its last one, Socialism, having not survived the year of 1989.
Add to that blatant economization, deification of efficiency, and global capitalism that is said
to be scientifically inevitable, and opponents of such a view world-wide face a no-win situa-
tion, or so it seems. Clearly, then, this is an ideology, and per definitionem, ideologies are
wrong, because they are reduced perspectives of reality, reified by their believers because
they cannot handle the complexity of the latter. (See Kaiser 1984, esp. 27-28) Jürgen
Habermas, in his programmatic speech on the European Constitution, has summed up this
model of society as described
2
It has been fashionable to dismiss Fukuyama for all these years now. Hardly was the essay published,
did Lord Dahrendorf say that Fukuyama had had “his 15 minutes of fame (à la Warhol)” (1991, 36), but
by discussing Fukuyama at length, Dahrendorf himself made sure that he was wrong. And indeed, as a
ready term of reference, his model – and not Alexandre Kojève’s original work – has remained, in spite
of the challenges of 9/11.
3
However, see Thomas Pangle’s admonition that there is an objective End of History just at the point
when the belief in the system and its basic values is gone. (Pangle 1992, 1) Cf., however, Graebner
1976.
Kathedersozialismus and Social Question 3
• by the anthropological image of the human person as a rationally deciding entrepreneur who
exploits his or her own power of labor;
• by the socio-moral image of a post-egalitarian society which has become resigned to margi-
nalizations, warpings, and exclusions;
• by the economic image of a democracy which reduces its citizens to the status of members of
a market society and which redefines the state as a service company for clients and customers;
• finally by the strategic notion that there is no better politics/policy than that which makes itself
obsolete. (Habermas 2001)
The first quote, however, is not very recent. Rather, it is from one of the leading Katheder-
sozialisten, Lujo Brentano. (1931, 72-73) Written as referring to the times well over a century
earlier, for the Berlin Empire rather than for the Berlin Republic, it demonstrates right away
why Kathedersozialismus may be interesting today: It is an approach that is based on a re-
action to problems similar to the ones we are facing today. (Cf. Peukert 1999, 445-446, 453)
Of course, such parallelisms cannot be overstretched – Carl Böhret has, for instance, nicely
illustrated why today we might be faced by the “‘individual’ (or ‘personal) question’” (2001,
5) –, but they are nonetheless important to cognize, so that one can learn from them whatever
is possible.
Perhaps this is all the more interesting in these days, when advances in economics, and spe-
cifically what Brian Arthur has called the “Schumpeter-Perez-Freeman story” (2002), seem
once again to indicate a certain regularity in economic development. If Carlota Perez, in
Technological Revolutions and Financial Capital (2002) is right, then one should expect not
only somehow similar developments during the unfolding of the great surges, driven by the
techno-economic paradigm-leading industries, but also somehow similar societal, legal and
political responses to these changes, requiring as they do some form of adjustment, especially
in the later phases of the surges.
A key difference today, perhaps, could be that the Social Democrats have moved so far to-
wards the center themselves that they have to a good extent shot beyond it, and so their being
an alternative is quite limited. A further problem would be that almost any common Third-
Way thinking today, as well as all kinds of ‘New Left’ approaches, is antagonistically inclined
against the one agency that was, and could again be, built up against globalization and
economization problems, viz., the State. On the contrary, those who could mount an opposi-
tion to the problems mentioned seem to delight themselves with utopian models of net-
working, soft structures, NGO’s, and the like (see exemplarily the highly influential Giddens
1998, 2000). Suffice it here to point at Hans-Joachim Wehler’s recent remarks that the call of
our time is exactly that of the “Wiedergewinnung glaubwürdiger Staatsherrschaft (regaining
of credible State rule)”, which globalization and economization require more than ever.
(Wehler 2001; see also Drechsler 2001a)
2. Social Policy and Social Reform
Just as now, many people realized that there was a problem in the mid-19th century in spite of
the general opinion – again the classic case of the end of a paradigm.
The idea of social policy or social reform as conscious acknowledgment of the necessity for
State and society to be active in bringing about a conciliation between the dispersing interests
and intents of the various social strata encompassed by the State was familiar as early as the
beginning of the 1860s to certain circles in Germany that were limited at first. The progressing
industrialization at that time with its accumulation of workers at certain places as well as the
agitation by Lassalle had alerted them, and a form of literature that was reflecting rather than
imminently or even radically propagandistic in character had already established itself next to
socialistic literature. What was important afterwards was the question of whether an effective
organization was to be created for a socio-political practical endeavor that somehow matched
this idea. (Boese 1939, 1)
Thus begins the history of the Verein für Socialpolitik, which became that very institution,
written on occasion of its dissolution in 1932.4
It was, in other words, clear that something was wrong, that the system led to undesirable re-
sults, and not only to those most concerned – the workers, and those representing them – the
Social Democracy, and especially Lassalle, their most important representative. It was also of
concern to most of those dealing with economic and social issues academically, because, I
would argue, their main concern was the welfare of Man, i.e. of the human person. In all
naïveté, or so it would seem today, that was the focal point of economics, not abstract
4
In spite of its problems, this is the key systematic account until today, and therefore it was mainly used
herein. A second classical source is Wittrock 1934, but the blatant Nazi ideology of the book so mars
any information one might find there that I have ignored it altogether.
modeling, and this approach, together with some basic ethics, resulted in the cognizing of a
problem.
Even prominent ‘Anti-Kathedersozialisten’ such as Julius Wolf would have agreed with that
proposition. (1899, 20-22)5 However, the key here is that Liberals and Socialists in our sense
(including Social Democrats and Communists) would agree with the question, but their
general answer would be different – the former, including Wolf, would say that the system
actually will eventually take care of the problem; the latter, that the entire structure, the
system, would need to be changed.
That many of the people who basically liked the system – and this was the majority of
economists – approved of the Prussian Monarchy, is no contradiction, but logical. They saw a
generally good system that was problem-ridden, and especially in order to preserve and purify
it, there had to be changes made through the system. The impetus for these reforms – social
reforms – was thus both ethical and system-preserving, which was interlinked. It was clear
that things had to be done; otherwise, a revolutionary potential would explode. This is the
approach of reformism, perhaps an approach not so inappropriate today, either.6 As Gustav v.
Schmoller, the leading Kathedersozialist, put it, “all progress in history consists of replacing
revolution with reform.” (Schmoller 1904, 117)
Kathedersozialismus, now, is the catchword for precisely those activities: The perception of
the problem, the effort to ameliorate it by policy measures, and the scientific, or better schol-
arly, approach to show what is wrong. The policy measure would be that of social reform or
Social Policy, almost interchangeable terms in our context.
Heinrich Dietzel, a non-member of any group but a very keen observer of the scene and an
eminent economist defines Social Policy thus:
Social reform, in the widest sense, is the epitome of everything that solidifies social peace by
placating the present class struggle, which predominantly revolves around material goods. In a
narrower sense, social reform is the epitome of everything by which the lower stratum of
5
This lecture is one of the most interesting systematic critiques of Kathedersozialismus from the Liberal
perspective.
6
If one argues that our time is described by an uncertainty about utopia and ideology, a basically good
system and the problems of consensus and agency, then a reformist approach is prima facie the one of
choice.
society, embittered against the prevailing order, is to be rendered more content so that the
threat of social revolution is diminished. (Dietzel 1901, 3)
Turned into the positive, Schmoller’s definition is this:
[The general aim of social reform] consists of the reestablishment of an amicable relationship
among the social classes, the abolition or reduction of injustice, an enhanced approximation to
the principle of distributive justice, the creation of social legislation which furthers progress
and guarantees the moral and material elevation of the lower and middle classes. (Schmoller
1904, 118)
3. Kathedersozialismus Approached
Kathedersozialismus is mainly associated with three eminent economics professors: the

aforementioned Gustav v. Schmoller (1838-1917) and Lujo Brentano (1844-1931), and
Adolph Wagner (1835-1917).7 Schmoller and Wagner, during the height of their career, held
the two main economics chairs in Berlin, and were probably the leaders of German
economics; Brentano taught in Munich and was more unconventional – more liberal, more
humanities-based, non-Prussian, Catholic – and a less distinguished economist.8 Their
relationship was neither easy nor always friendly or even civil. It is fair to say that Wagner
and Brentano disliked each other, even were enemies,9 while Schmoller maintained a more or
less cordial relation with Wagner (see the respective birthday addresses, Schmoller 1913, 280-
284, and Wagner 1908), and a moderately good one with Brentano, which was, given their
very different views on so many things, the best one could have hoped for. (See Brentano
1931, 96-99; 134; Stieda 1932, 23) Schmoller was not a very social or leisure-oriented man,
quite in contrast to Brentano. (Brentano 1931, 106-107)10 All of them must not have been
very easy to get along with.
7
For first biographical reference: Schmoller = Balabkins 1988 (biographical part 12-52); Brentano =
Brentano 1931; Wagner = Wagner 1978 (Rubner).
8
On the importance of Brentano in several respects and the specificity of his approach, see, e.g.,
Kuczynski 1968, 347, 356; Curtius 1950, 135-136; see also Brinkmann 1959b, 410.
9
Wagner had already been the Referent for Brentano’s habilitation, and it had not been a good experi-
ence. (Brentano 1931, 63-66)
10
A good description of the differences between Brentano and Schmoller is Curtius 1950, 121-125, 134-
137; see also Sheehan 1966, 51-58, with many further references.
As regards the concept itself, if one asks how a word is used rather than how it originated, and
keeping in mind that definition is largely a matter of power (which includes convention),
Kathedersozialismus is of course no Socialism at all. So, the term Kathedersozialismus itself
is thus a very unfortunate one for today. Coined with an unfriendly intention by H.B. (Bern-
hard) Oppenheim to begin with (Boese 1939, 25; Lexis 1908, 27-28; see Brentano 1931, 76,
96), it was meant to indicate that its protagonists were academically secure men who
promulgated a kind of salon socialism. The critique came, of course, from the Liberal, not
from the Socialist side. But the term stuck, and like many a term meant critically before, it
was soon taken up even by those who were criticized, although slowly and at first in quotation
marks.
To add to the confusion, there is also a movement called Staatssozialismus. This can be easily
translated into “State Socialism”,11 but that does not help us to answer whether it is an in-
dependent, a part-identical, or a sub-school to Kathedersozialismus. For the present purpose,
it is probably best to say that the state socialists focus more on the state, not necessarily as the
primary subject of their investigation, but rather as the active part in economic and Social
Policy, than Kathedersozialisten generally. Nonetheless, it is also best to see Staatssozialis-
mus as a specific form of Kathedersozialismus. Adolph Wagner himself was the main pro-
tagonist of that school,12 although Albert Schäffle (1831-1903) and Karl Rodbertus (-
Jagetzow) (1805-1875)13 were important leaders of that thought as well.14
11
Here, too, we have a misnomer problem, because “state socialism” was and is also used, formerly
especially by the non-communist Left of the ‘West’, to describe the institutionalized systems of
socialism, such as the German Democratic Republic, between 1917 and 1989. This is unfortunate, but
on the other hand, the original state socialism was so forgotten a topos after 1917 that in some sense, the
word was free. Wagner indeed wanted to see State Socialism as the real, the true Socialism (Skalweit
1948, 3), but few others actually agreed.
12
About the differences between Kathedersozialismus and State Socialism, in Wagner’s opinion, see
Wagner 1900, 9; 1892, 59. Still, it is important to remember that Wagner saw himself as a
Kathedersozialist; see, e.g., Wagner 1902, 11 FN 2: “uns Berliner ‘Kathedersozialisten’.”
13
On Schäffle, see Schmoller 1888, 211-232; on Rodbertus, nicely Dietzel 1886-1888.
14
Schmoller would later attest that
All three of them created theoretical-speculative thought systems; they all glorified a notion of
state reminiscent of ancient Greece; they all came very close to socialism and demanded
4. Realism
The realist element, with that word, is emphasized again and again by all three main
protagonists. What unites them is, as Brentano puts it, “striving for a theory of economic life
which matches the facts of life.” (Brentano 1923, vii)
However, if there is a science the subject of which is life as it really is, it is economics. And a
science of economics which only holds true under circumstances that differ from real life may
well be highly interesting in theory … But a science of real life faces other demands than
those that can be met by a science which, in order to gloss over the fact that its theorems do
not correspond to reality, constantly uses the excuse that it did not intend to correspond with
real life and that it was content if the science was right even if only under circumstances the
insufficiency of which it concedes. (Brentano 1919, 13-14)
Already Roscher emphasized this:
We refuse entirely to lend ourselves in theory to the construction of … ideal systems. Our aim
is simply to describe man’s economic nature and economic wants, to investigate the laws and
the character of the institutions which are adapted to the satisfaction of these wants, and the
greater or less amount of success by which they have been attended. Our task is, therefore, so
to speak, the anatomy and physiology of social or national economy! (1878, 1: 111)
Roscher begins his book, simply, with the statement, “The starting point, as well as the
object-point, of our science is Man.” (1878, 1: 52) This is not obvious and was not, nor is it,
typical. But why else do we do economics? Brentano explains further:
Starting and end point of the economy are not the goods but the people, that was the opinion.
The economy is not an end in itself, its task is merely to provide human beings with the
indispensable means for developing their abilities and powers. The worker is a human being,
too. (Brentano 1931, 75)
Schmoller, in his 1897 Rektoratsrede, sums up:
Thus, a mere science of market and exchange, a sort of business economics which threatened
to become a class weapon of the property owners, returned to being a great moral-political
science which examines both the production and the distribution of goods, as well as both
socialization in social reform that went further than, e.g., the majority of the members of the
Verein für Sozialpolitik … regarded as sensible. (Schmoller 1913, 282)
value and economic institutions, and which has its central focus not on the world of goods and
capital but on the human person. (Schmoller 1897, 388)
And Brentano elucidates:
Lightning, too, hits where it strikes by virtue of natural law. Yet, while civilized people make
use of this natural law to render the lightning bolt harmless with a lightning conductor, you
wait for the lightning flash to put your hut on fire, and then like savages, you fall to your knees
before the thunder god and pray to him: only, the name of your thunder god is natural law. For
you assume that by pronouncing these words, your entire task in socio-political life was
fulfilled. We, however, are of the opinion that one has to use the natural laws in order to
minimize pain and bitterness while helping progress to reach its natural destination. (Brentano
1931, 75)
But the key is probably realism in relativity – Seligman put it best:
The truly historical mind will acknowledge, with Adam Smith, the immense benefits of
Cromwell’s navigation act, but will rejoice, with Cobden, at the repeal of the corn-laws; he
will praise, with Gournay, the attempts to unshackle industry, but will deplore Ricardo’s
opposition to the factory acts; he will applaud Bentham’s demolition of the usury laws, but
will realize the legitimacy of recent endeavors to avoid the unquestioned evil of absolute
liberty in loans. He will, in one word, maintain the relativity of theory; he will divest the so-
called absolute laws of much of their sanctity, and thus henceforth render impossible the
baseless superstition that all problems can be solved by appeal to the fiat of bygone
economists. (Seligman 1925, 17)
And Schmoller himself talks about the
absolutely wrong idea … which already List, Roscher, Hildebrand and Knies so vehemently
contested, namely the idea of a constant standard form of economic organization above and
beyond space and time, culminating in free trade, free enterprise, and free real estate
commerce, only distortable by wrongful interference by State and legislation, and beyond
which no progress was possible. (Schmoller 1904, 52)
This is the key to the issue: Things as they are, not things as they should be. Brentano says, “I
think there are no absolute economic ideals. To me, the ideal economic organization is the one
which corresponds to the concrete circumstances of a people as perfectly as possible.”
(Brentano 1931, 211) But also Wagner agrees: “I have always, also in these matters and also
recently, maintained the stance of relativity.” (Wagner 1902, 9)
Schmoller speaks of “historical and other realistic research” (1900, 1:116), and says,
Recently, people have frequently claimed that the most significant difference between more
recent realistic national economy and the older dogmatic and abstract variety was based on the
difference in the role that the newer school assigned to the state concerning economy. This
holds true to a certain degree but not without limitations; in some of the newer disputed issues,
the opposite is the case; thus, I posit that this is not the right distinction because the opposition
lies deeper. (Schmoller 1904, 43)
Schumpeter, in his great essay on Schmoller, is famously queasy about this claim:
I am caught in the embarrassing situation of finding a usable word for Schmoller’s ‘direction’.
‘Exact’ or ‘realistic’ are unsuitable because every scientific train of thought and every
scientific method, including all theoretical ones, are both out of necessity, and because both
words have misleading connotations. Furthermore, the opposition of realistic-theoretical does
not work because Schmoller’s direction is ‘theoretical’ as well. If a word is necessary for
illustration’s sake, one can, with these reservations, at least say ‘realistic’. (1926, 356, n. 1 (n.
1 is 355-356))
But here is an epistemological error of Schumpeter, who uses his own Wissenschaftsbegriff.
Of course, we can define science in many ways, including some that do not pay heed at all to
realism or exactness – most current ones do not; they are self-referential.
Or we can say that scientism and realism exclude each other. The point is as follows: Natural
science only represents, because of its own definition, i.e. systemically, a reduced part of
human existence and experience. Realism, however, focuses on what is, and thus any method
that reduces what is (including experiences) cannot be genuinely realistic. And although many
theories could be paraded out on why science cannot cope with reality, Heidegger surely is
the best: “One stands in front of a blossoming tree. Only in a scientifically unguarded moment
can one rightly experience its blossoming. In scientific perspective, one will let drop the
experience of the blossoming as something naive.” (Summary by Safranski 1994, 458.) More
detailedly:
Everyday experience of things in a broader sense is neither objectivizing nor objectifying. If,
e.g., we sit in a garden and take pleasure in a rose in full bloom, we do not turn the rose into an
object, not even into a thematic idea. Should I even find myself in silent devotion to the
shining red color of the rose and ponder the redness of the rose, then this is not a thing or an
object like the rose. The rose is in the garden, maybe swaying in the wind. The redness of the
rose is not in the garden, nor can it sway in the wind. Nonetheless I think of it and speak of it
by naming it. Thus, thinking and saying is possible in a manner that is neither objectivizing
nor objectifying. (Heidegger 1970, 73)
Further to Schumpeter, however, realism, as is the point of this sub-chapter and to a large
extent of this book, is a matter of motivation, of impetus, of emphasis, of prioritizing – and I
think it is fair to say that STE is in the end not interested in the reality connex, at least not
today. Lexis puts it very sharply thus:
Abstract theory may opine that its theorems do not even require verification. For positivistic
economics, i.e. one based on experience, on the other hand, verification is the decisive
authority; regularities inferred from deduction are viewed as assumptions as long as they have
not been proven by observations in real life. Statistics provides the most exact method of
observation and at the same time, it offers measures to determine the limits within which the
theoretically deduced theorems correspond with experience. (Lexis 1908, 40)
The claim to realism is, then, what matters here; the desire to say something about reality.
Brentano phrases it programmatically:
We do not set out to master life, neither by filling terminology with the postulations we desire
to deduce from them, nor by chasing ideals that lie beyond reach. In determining the terms, we
strictly adhere to reality; in our aspirations, we are content if the material conditions for a
proper existence for everyone are created. (Brentano 1888, 4)
The basis of this is the insight of the relativity of the human person in space and time. (1919,
18-19) And, to continue again with Schmoller, “This is why I regard the theory of egotism or
interest as the psychological, constant and regular source of all economic actions as nothing
but infinite superficiality.” (Schmoller 1904, 50)
Beckerath once said that Schmoller’s “tendency towards ‘realpolitik’ occasionally, as in the
debate about protective duty and free trade, made him neglect the necessity of fundamental
decisions in economic matters.” (Beckerath 1962, 71) But what could this necessity be? Pure
metaphysics. And realism is the opposite in impetus. This is precisely where realism equates
with Aristotelian phronésis. For Lexis, “realistic theory attempts to adhere to concrete
occurrences. Thus, it is forced to dissect the material under observation casuistically, in the
process limiting the purview of its theorems but at the same time increasing their applicability
in future cases.” (1910, 18-19)
In that sense, we do not have a construction here – not more, at least, than we have with any
school of thought, or with any phenomenon that is grouping anything together. In other
words, it is indeed realism that seems to bind all three together, although Wagner of course –
as the most far out on the Theory side – emphasizes it the least. He may and must easily be
the one who neglects realism the most, at least in the exercise of theory; his political
engagement and writing were another ball game, and his explicit statements also say
differently.
5. The Verein für Socialpolitik
Kathedersozialismus had then, by and large, an institutionalized form, the Verein für Social-
politik.15 Etienne Laspeyres plainly puts it so, e.g.: the “Mitglieder des Vereins für
Socialpolitik, vulgo Kathedersozialisten.” (1875, 4) Significantly, the Verein was conceived
originally by a journalist, Julius v. Eckardt, editor-in-chief of the Hamburgische
Correspondent, a newspaper which was close to Kathedersozialismus, and the purpose was
some coordination between journalists and scholars of this persuasion and the subsequent
transmission of these ideas into the public debate. (Boese 1939, 1-3) Eckardt had written
about this plan to Adolph Wagner, then already a distinguished professor in Berlin, who had
in return contacted the up-and-coming Schmoller. (Boese 1939, 2)
Thus, Schmoller was only the “third man”, becoming chairman of the Verein only in 1890,
but it was he who dominated the association from the beginning. (See Brentano 1931, 154;
Boese 1939, 3-4) Wagner left it fairly soon; Lujo Brentano, “third man” in position and
power, much later, after Schmoller’s death. (Cf. Backhaus and Hanel 1994, 22)
The Liberals were opposed to the Verein, whose members they saw as Bismarckian lackeys.
(See Boese 1939, 20)16 Of course, if truly perceptive, they were also afraid of the possible
alliance between lower and upper class, Socialists and Conservatives, leaving them high and
15
Cf. nicely Balabkins 1994, 34-37.
16
For a typical critique from the conservative side, also concerning the difference between Wagner,
Brentano, and Schmoller, see Tille 1912, 9-11 (Tille was a henchman of Wagner’s enemy Baron
Stumm, and was a professional enemy of the Kathedersozialisten; see Brentano 1931, passim).
Laspeyres 1875, 4-7, makes the rather harsh point that at that time, professors of economics had (too)
few students because of the educational system, and that therefore they looked simply for something to
do – hence, Kathedersozialismus.
dry in the middle.17 The relation of Bismarck with Kathedersozialismus, however, is entirely
ambivalent – and even here, it could only mean with Schmoller and Wagner, never with, say,
Brentano (Born 1957, 85) –; it is even unclear precisely to which extent Bismarck used
Socialpolitik of this kind after his famous turn of politics. (See Schmoller 1913, 27-90; cf.
Born 1957; Priddat 1995, 24-25; Backhaus and Hanel 1994, 23)
Brentano reports that the pre-discussions for the Verein right away did not go far enough for
Wagner as regards social reform (Brentano 1931, 78) and that he lost for his position soon.
(94) Indeed, the Verein swiftly became more of an economic academic association (and today
it is only that). The focus of its work was on large empirical works on socio-economic
phenomena, published in the famous and paradigmatic publication series, “Schriften des
Vereins für Sozialpolitik.” (See Boese 1939, 19; Brentano 1931, 92-93; the handy description
of all vols. is Hohmann 2001)
Schmoller’s speech on occasion of the opening of the first meeting of the Verein on 8 October
1872 in Eisenach (in Boese 1939, 6-11) sums up the program of the Verein and also
Kathedersozialismus very nicely. (See Priddat 1995, 24-25) We will thus provide a longer set
of quotes:
The professors and scholars of this school, called Kathedersozialisten by their opponents, do
belong to the tight-knit group of parties in the political center, it is true; but their economic
views do not set the tone for these parties, which depend on entrepreneurs and can hardly deny
this social origin in the battle between that class and the workers. (7-8)
The majority of those who convened the assembly and signed the invitation agree on an
understanding of state which is as remote from the glorification of the individual and his
arbitrariness, based on natural right, as from the absolutist theory of an all-devouring state
authority. By placing the state in the flow of historical development, they admit that its
responsibilities are sometimes fewer, sometimes more, depending on cultural circumstances;
never, though, do they regard it, as the Manchester school does, as a necessary evil that needs
to be confined; they always consider the state the greatest moral institution for the education
of mankind. Sincerely devoted to the constitutional system though they may be, they do not
support an ever changing rule of the economic classes that struggle with each other; they
17
Sheehan 1966, 63. Of course, this was the basis of the success of Social Toryism in general – to which
Kathedersozialismus is, I would claim, more similar than to any other socio-politico-economic set of
views – and Lords Disraeli and Birkenhead in particular; see Drechsler 1995b, esp. 230-231.
demand strong state authority above the egotism of the classes and responsible for legislation,
just administration, protection of the weak, elevation of the lower classes …(8)
According to their opinion, the main reason [for the current deficiencies in economics; WD] is
the fact that recently, the only question asked was whether at that moment production was
being increased, and not the equally important question of what effect it would have on the
people. (9)
Our societal ideal is not a socialistic evening-out; we regard a society as most normal and
healthy if it is representable as a ladder with various levels of existence but with easy access
from one step to another; our society today, however, threatens to be more and more like a
ladder which rapidly extends at the upper and lower ends while more and more steps in the
middle break off so that people can only hold on to the top or the bottom. (9)
5. Kathedersozialismus and Method
Let us advance that the popularly-held assumption is that Kathedersozialismus, Social Policy
motivated by the Social Question, the Historical School, and the Verein are somehow identi-
cal, at least partially so. This is generally true, but the main argument of this short paper is
that one can and must be more specific here. We may maintain that Kathedersozialismus is
the thought that is to a good extent a reaction to the Social Question, and that it finds its or-
ganized expression in the Verein.
However, how about the Historical School? Here I would say that Historicism – with which I
obviously mean in this context to primarily study historical data in order to learn about
economic phenomena – is almost an “optional extra” for Kathedersozialismus, i.e. that one
could be a Kathedersozialist without being a historicist, but that in fact most historicists were
Kathedersozialisten – hence the misperception. One must also keep in mind that in the
position of Schmoller, his specifically “ethical-historical” research program links Historicism
and Kathedersozialismus very directly,18 and since Schmoller is usually ceded the helm of
both, this compounds the problem.
18
On Schmoller’s sympathy with the worker, in line with the times and the rebirth of ethics, see
Schmoller 1897, 392. On the systematic connex of ethics and history in Schmoller, see for a good
introduction Shionoya 1997 and Backhaus 1994, esp. 9-16; cf. also Lexis 1910, 244; Priddat 1991.
Let it briefly be said that the Historical School was founded in the 1840s by Bruno Hildebrand
(1812-1878) with his Die Nationalökonomie der Gegenwart und Zukunft (1848), Karl Knies
(1821-1898) with his Die politische Oekonomie vom geschichtlichen Standpunkte (1883, new
edn), and especially Wilhelm Roscher (1817-1894), the head of the Older Historical School
and the most eminent German economist of the mid-19th Century, author of the magisterial
System der Volkswirtschaftslehre (Engl. tr. 1878).19 Friedrich List was their predecessor, the
first one to analyze comparatively the economy of different nations. (See nicely Lexis 1908,
22-23; 1910, 243)20 The movement was taken over in the 1870s by the Younger Historical
School, headed by Schmoller.21 A third movement, perhaps best called the Youngest
Historical School, would be best characterized by letting Werner Sombart (1863-1941) more
or less head it.
Edwin A. Seligman, in what to me still seems to be the best English treatment of all these
phenomena, sums it up thus for the Older Historical School:
the new ideas first obtained a truly scientific basis about the middle of the [19th] century, when
three young German economists – Roscher, Knies and Hildebrand – proclaimed the necessity
of treating economics from the historical standpoint. They initiated a new movement whose
leading principles may be thus formulated: 1. It discards the exclusive use of the deductive
method, and stresses the necessity of historical and statistical treatment. 2. It denies the exis-
tence of immutable laws in economics, calling attention to the interdependence of theories and
institutions, and showing that different epochs or countries require different systems. 3. It dis-
claims belief in the beneficence of the absolute laissez-faire system; it maintains the close in-
terrelation of law, ethics and economics; and it refuses to acknowledge the adequacy of a sci-
entific explanation, based on the assumption of self-interest as the sole regulator of economic
action. (1925, 15-16)
19
Roscher’s method program is 1878, chapter III, sections XXII-XXIX, 102-116. On Roscher from the
Younger School’s perspective, see Brentano 1888, 2; Schmoller 1900, 1:117-118; 1888, vii-x, 147-171.
On the three Older Historical School leaders see Schmoller 1900, 1:117; 1897, 383, according to which
they had wanted to correct the preceding system, rather than to build a new one. Further on the three
men and their emphases, excellent summaries in Balabkins 1988, 26-29; Lexis 1908, 36-38.
20
See Schmoller 1900, 1: 116-117; 1888, 102-106; 1913, 135-137.
21
On the take-over, see Brentano 1931, 73-74; Schmoller 1900, 1: 118, in which he emphasizes the even
more empirical, careful approach of the Younger School.
The Verein was supposed to include all the protagonists of the Older Historical School as
well.22
Following Schmoller’s inaugural lecture, the famous constitutional lawyer Rudolf von Gneist
(1816-1895), who had been elected chairman of the first congress – which shows how broad
and inclusionary the Verein was –, actually took exception to Schmoller, pointing to Adam
Smith as being more solid, but Schmoller refuted that.23 But Gneist might have spoken for
many key members. Wagner was right when he said,
My scholarly opponents can by no means attack “Kathedersozialismus” lock, stock and barrel,
for there is not at all a unified direction, neither in method nor in theory or the treatment and
direction of practical matters. In spite of criticism of its ideas, many “Kathedersozialisten”, me
among them, have never vehemently opposed classical national economics, especially its
leading authorities, Smith, Ricardo, and Malthus. In my opinion, much can be learnt from
what classical national economics teaches and how it deals with things, more than from the
“historical school”, which dabbles in relativism to such an extent that it loses theoretical
clarity and edge, as well as the practical ability of taking a stance on concrete matters as
eternally weighing the “pros and cons” does not lead to anything. (Wagner 1902, 18-21, FN 1,
19-20)
So, Wagner himself was not a historicist at all.24 (Cf. Lexis 1908, 40-41) Indeed, Brentano
calls him “constantly adhering to abstract method.” (1931, 83; see 93) And Schmoller told
him, “But your innermost nature drew you to the ‘principles’, to abstract theory, to the
22
Wagner to Schmoller of 20 May 1872, in Boese 1939, 2-3, 3.
23
Boese 1939, 11-12; see especially Hildebrand 1873 for a comment on this and longer quotes from the
speech itself; Brentano 1931, 94 for Gneist leaving the chairmanship.
24
Reginald Hansen has vehemently contradicted this statement, saying that Wagner was the epitome of a
historicist – contrary to Schmoller –, believing in certain historical development and the economist’s
role to “midwife” economic developments according to the “spirit of the times”. (The same point in
Hansen 1996, 199-203) But as explained above, “historicist” is used here in the sense that one is
interested in history partially to completely for its own sake, not in the sense that one sees a certain
logic in history (which, incidentally, would also not be half as absurd as Hansen thinks), and bringing
economic thought in line with the paradigms of the time is indeed what marks a successful economist,
so if Wagner really thought so, he would have been quite correct. The “ideological bias” for which
Wagner is blamed (Hansen 1996, 203) seems rather to be located elsewhere. On Hansen 1996, see
Andel 1998, which is fair in its critique (as far as it goes) but probably not in the reason for it, as it
seems aimed more at the PhD advisor than the candidate.
establishment of the system.” (1913, 281) But also Brentano was a Smithian of sorts, agreeing
with Smith on certain labor theories and other matters, to which Schmoller, allegedly,
objected. (Brentanto 1931, 101-103; cf. Stieda 1932, 20-21) Brentano has even been placed,
theoretically, midway between the Viennese school (i.e., Austrian economics) and Schmoller
and Wagner. (Brinkmann 1959a, 411)
Brentano was a free trader, and he saw free trade in corn as important for the masses, in given
times. (See Brentano 1931, 211, 171-172, 330; see Lexis 1910, 244) Dietzel strongly agreed
with this and even argued that one had to be a free trader in order to be a Kathedersozialist.
(Dietzel 1902, esp. 5) It is of key importance, thus, to remember that a Kathedersozialist is
not necessarily a protectionist, although today (and partially it was the same back then) this is
the overwhelming impression. Lexis also made the point that since 1879, the free trade issue
was less and less important in the respective discourse. (1908, 29)
Wagner was, as regards Corn Laws, of the extreme opposing opinion. This also had
something to do with his view on population dynamics, but altogether it is my impression that
Wagner was in this case at least more sinned against than sinning. As he says,
Present here are, in my opinion, not matters of principle but matters of extent; they distinguish
me from Brentano and other opponents because we react differently to these matters of
“extent”. In his criticism and his polemic, however, Brentano insinuated that I have an
absolute attitude, a tendency towards an absolute ideal and economic demand of an absolute
sort in favor of an “agrarian state”; each one a matter I do not support. (Wagner 1902, 9)
Wagner here shows again the concern with the welfare of the state rather than of the group
and is thus particularly indignant about the attack – especially as being put in one boat with
the Brotwucherer. (1902, 20-21) Originally, Wagner had been a “Man of Manchester”; his
‘conversion’ took place after he had been called to Berlin, i.e. between 1870 and 1872. (See
Brentano 1931, 71, 76; Schmoller 1913, 282)
We find some methodological homogeneity among the Kathedersozialisten, perhaps, in the

reaction against the classical view. (Cf. Salin 1951, 147; Brandt 1993, 194) And “classical” is
not accidental, as Brentano compares it to classical sculpture taste. (Brentano 1888, 2-4; see
also passim and 1919, 11 on classical economics) Wagner, however, insisted on refining the
classical school rather than building a new one. (Wagner 1908, 5)
With Schmoller, the emphasis on change was much stronger. If one looks at the theory de-
scription part in his magnum opus, the Grundriss der allgemeinen Volkswirtschaftslehre
(1900, 1: 111-124), one gets the idea quite strongly.25 Schmoller sums up the goals of
modern, i.e. his, economics like this:
1. the acknowledgment of the idea of development as the ruling scientific idea of our era; 2. a
psychological-moral consideration which takes drives and emotions as a realistic basis,
acknowledges moral powers and regards all economics as a societal phenomenon due to
morality and the law, institutions and organizations; 3. critical attitude towards both the
individualistic concept of nature and socialism, schools whose correct teachings should be
extracted and acknowledged while their wrong teachings should be rejected; also the rejection
of any class point of view; instead clear aspiration to always support the common good and the
healthy development of nation and mankind. (Schmoller 1900, 1: 122)
We must read this very carefully, because it is difficult to see which school of thought has
been so much maligned as Schmoller’s, and which suffers more from a distorted image.26
Already Brentano claimed, “Schmoller condemned all aspirations to discover necessary
causality. This was a step backwards to pre-Montesquieu times. In any case, Schmoller was
more historiographer than national economist. This is proven foremost by his ‘Grundriß der
Nationalökonomie’.” (Brentano 1931, 99; cf. Salin 1951, 146-147 – on Salin on Schmoller,
however, cf. Balabkins 1988, 77-78) But that is simply not true – as Schmoller says, “valuable
observation leads to causal explanations. But observation always has to be at the beginning
and the completed causal explanation at the end of a scientific method.” (Schmoller 1904,
297) On the other hand, in 1912, Schmoller called the Acta Borussica his “most important
œuvre.” (1913, v)27 It is difficult to interpret this in any other way than that Schmoller was in
that sense a historian as that for him, at least on occasion, the historical research was the end
and not the means for Social Policy.28
25
An excellent summary and interpretation of the Grundriß – the only useful one available in English at
all, and the book has not been translated yet – is Balabkins 1988, 53-67.
26
A survey of the reception of the Grundriß since its publication is in Balabkins 1988, 67-76. Today, it
may be said, Schmoller suffers almost, but not quite, as much from many of his self-chosen champions.
27
On the Acta and their not only historical but also political significance, then and now, see now briefly
Kraus 2002.
28
Dopfer 1994 and Schumpeter 1926, esp. 19, are nice antidotes to such a view, especially because of
their focus on Schmoller’s theoretical-methodological contributions. Backhaus has also pointed out to
me (and in writing; see 1988, 8) that Schmoller’s dedication of his final years to a revision of the
Grundriß shows clearly that his priorities were not historical.
6. Views and Policies
So much for method, but what binds the protagonists together in policy? Politically, even the
official history of the Verein agrees to give the left wing to Brentano, the center to Schmoller,
and the right wing to Wagner. (Boese 1939, 20-21) That is indeed correct. As we saw,
Wagner was pro-State, although much less so than has always been said, whereas in the end,
Brentano was an ardent individualist who believed that the individual was the motor of
culture and change. (1931, 83-84) As was to be expected, all three developed over time:
Schmoller to Prussian conservative, Wagner to conservative state socialist, Brentano to left-
liberal of some sorts, bordering late in life even on Social Democracy. (Cf. Brentano 1931,
110; Stieda 1932, 20) As Stieda blames him, he “was biased to overlook the shortcomings of
democracy” (1932, 22), surely a beautiful epitaph by our standards.
Schmoller was always accused of wishy-washy middle-of-the-roadism, and of indecisiveness

in concrete questions. (Wagner 1902, 18; 18-21, FN 1, 21) But one should keep in mind that
what perhaps appeared so to Wagner, was actually Schmoller’s policy program. The perhaps
best summation of the basis of Schmoller’s Social Policy agenda (which somewhat softened
towards his later life) is his book Über einige Grundfragen der Sozialpolitik und der
Volkswirtschaftslehre. (1904)29 Stieda actually calls this and the original lecture one of
Schmoller’s best efforts, if not the best. (1921, 224; this is of course a back-handed
compliment.) Based on his respectful but firm writings against the famous Prussian
constitutional historian Heinrich v. Treitschke, whose argument against the
Kathedersozialisten is so breathtaking in its arrogance and ignorance that even by the
standards of the time, it boggles the mind, Schmoller nicely lines out what he thinks. (Cf. also
Priddat 1995, 181-214; Stieda 1921, 224-226) As Schumpeter says, “He defeated Treitschke
in both ‘tactics’ and ‘strategy’, most importantly, however, in a ‘higher sense’.” (1926, 355)
Partially, this is that it is precisely his loyalty to the present order that makes him a reformist
(Schmoller 1904, 5-6) – something the Kathedersozialisten have been attacked for from the
Left ever since. And of course, this is a key genuine Conservative principle: “Se vogliamo che
tutto rimanga come è, bisogna che tutto cambi.” (Tomasi di Lampedusa 1993, 41)
29
This is the 2nd edn, which contains some important additions to the 1st; the main material is from the
mid-1870s.
An excessive amount of economic injustice, accumulated over several decades, tears down all
pillars of the existing order. There are no other causes of great social movements. They never
originate in the crazy schemes of single people; they are mere symptoms of social ailment, not
its cause. (Schmoller 1904, 111)
Brentano – a Catholic liberal who did not like Prussia – sums the first meeting of the Verein
up thus: The members
were inspired by the thought that every person was an end in himself, called upon to develop
their abilities to the fullest. Already Christianity had acknowledged every person as an end in
himself. This was the liberal idea which had sustained the emancipation of the working classes
since the end of the Middle Ages. Kant had taught it in Königsberg, and in the most free
development and application of abilities and strengths, Stein and Hardenberg see reason for
hope and a basis for the future existence of the Prussian state. However, in order to come
closer to these ideal goals, the workers needed to obtain the necessary tools. Managing this
became the goal of our social policy. (Brentano 1931, 78)
Again, Brentano was by far the most ‘left’ member of the circle socially, but he was also the
most anti-state and free-trade one; he was the least ‘historical’, although there are many
historical studies by him. (See, as examples only, Brentano 1923, 1-11; 1929) Contrary to
Wagner and Schmoller, he left an autobiography – probably even his best work, certainly in
retrospect –, and as he finished it only shortly before his death, it is a very complete one, not
as with Bücher (1919). Brentano would even argue in favor of cartels to alleviate economic
problems. (1888, esp. 23-27; see 1931, 150-151) He could (‘still’) see the family as the basic
unit of economic unity. (Brentano 1931, 190) In the end, Brentano’s views would in my
opinion almost converge with Social Democracy, although he was altogether too unorthodox
for that. During the Bavarian Räterepublik, he even served as Volkskommissar für Handel und
Industrie, albeit only for days; he held, however, other high positions in this regime. (See
Brentano 1931, 356, 361, generally 349-367)
Wagner’s politics, in his own understanding, were that of a genuine ‘third way’. As he puts it,
“Socialism per se does not need to be cast away just like that, but only that [part] of it which
is utopian or must have a disastrous impact.” (1916, 14) In an earlier and longer piece, after
claiming that the utopian Socialist society would be “undesirable” and “impossible”, Wagner
goes on to explain that
the “State Socialists” acknowledge … that Socialism is to a large extent correct in its criticism
of the theories of economic individualism; it is largely right in the critique of the practical
economic shaping of those few generations during which “free competition” has become more
and more the regulating factor of the modern economies [as well], even when considering se-
30
veral exaggerations which Socialism permits itself in this area. (1948, 38)
As regards the state, it is one of the most stunning phenomena for me that it is rarely men-
tioned, both by the Kathedersozialisten and by modern scholars dealing with them, that their
view of the state is completely Hegelian.31 That is most strongly so concerning Schmoller,
even more than with Wagner. But admittedly, it is not explicit; of course, none of the three
protagonists left genuinely philosophical writings, except perhaps Schmoller’s 1860s study of
Fichte (1888, 28-101), which is however particularly unhelpful.
As Priddat is right to say, Schmoller understands the State not as taking individual liberty
away but rather making it possible to begin with. (1995, 92) There is, thus, absolutely no
preference of the state over the individual (as, e.g., Janssen 1998, 201-202, claims). Precisely
this is proper Hegelianism – Hegel’s point in the Grundlinien der Philosophie des Rechts
(1921) is the State that is the sphere of genuine Freedom, including individual Freedom.
7. Summation
30
The same sentiment, with a slightly different perspective, is formulated thus by Umpfenbach:
As long as the relationship between state authority and society is one of balance with live and
organic interaction, the term socialism or state socialism will be usable to present the behavior
on both sides as justified. If, however, this relationship degenerates due to a mechanical
distortion of economic interrelations, no matter whether upwards or downwards, the terms
communism or individualism will have to be applied. (1883, 8)
Laspeyres (1875, 6-7) says the same. – Any Third Way thinking will generally be accused both of
Nazism as well as of Communism; this almost goes without saying and need not be dealt with in any
detail here. For Kathedersozialismus and the former, see Senn 1997, 103-116, specifically, and broadly
and systematically Senn 1996, for a weighed analysis. A particularly bizarre example for the latter if it
is not intentional satire, which apparently blames Kathedersozialismus in Dorpat for Russian
Communism (via German and then Russian Nationalism), is Uebe and Kratz 1999.
31
An exception is, e.g., Dietzel’s book on Rodbertus (1886-1888), but that is quite peripheral for our pur-
poses. Concerning contemporary scholarship, this would – because of the general ignorance and thus
dismissal of Hegel – not be too surprising, were not two of the most important rediscoverers of
Schmoller, Priddat and Koslowski, Hegel scholars as well. (But see, e.g., Priddat 1995, 38, 87-89)
Let us, for the moment, sum up: Kathedersozialismus is not a method, but methodologically,
it is characterized by a realistic impetus. It is politically motivated by the Social Question,
which does not allow one to do economics as l’art pour l’art. To what extent Social Policy
should be undertaken in order to ameliorate the problems at hand is a question of degree, not
of principle; as is to which extent ‘the system’ should be modified. But, as Peter R. Senn has
argued in this context, if the final question of the social sciences is “what ought to be done,”
(1997, 128), one will certainly not find the answer on an empirical basis.32
In any case, if we allow ourselves the methodological dubitability of a matrix with two axes,
of which one describes method – from theory to history/empiricism – and the other the social
reform inclination – from social reform in a radical way to Manchesterian individualism –,
ignoring a third axis from individualism to collectivism or state to person, we could see nicely
how the three protagonists, to which I add – without prejudice – some other
Kathedersozialistsen whom I think I can judge – relate.33
32
This is not to discount empiricism at all. The point is that empiricism alone is not sufficient for the
social sciences. Cf. even Hilligen 1992, 793; cf. also Strauss 1953, 49; a good „classical“ introduction to
empirically-oriented social science without neglecting this point is Senn 1971.
33
A somewhat similar graph for a somewhat similar question is in Shionoya 1997, 62.
Social Reform
Brentano
Wagner
Bücher
Laspeyres Lexis Schmoller
Stieda
Theory History /
Empiricism
Manchester
And indeed we see that all are in the same half of the social reform impetus. This seems to
indicate that the emphasis on policy and not on method is what unites the
Kathedersozialisten.34 This, however, because it can be contrasted with other ways, is
certainly sufficient to qualify for Kathedersozialismus being called a method, a movement, a
school, or whatever – the protagonists were senior scholars, not clones, and more cohesion is
not necessary, and certainly not desirable, for academic group formation.35
As regards the diversity in method, that, as was said supra, also can be united under a special
concept, viz. one designating the impetus, rather than its shape: realism. In short, for many the
historical method simply yielded the basis for a good and especially appropriate (for time and
place), i.e. realist, Social Policy. (See also Janssen 1998, 201) Lexis said, interestingly, “The
realistic method – which always also makes use of abstractions – and the historical method do
not conflict with each other but form necessary complements for each other.” (1910, 22-23)
For the conclusion, one might well remembers R.G. Collingwood’s insight, important as it is
for philosophy as well as for history, that I cannot understand any historical statement if I do
not realize that any such statement is an answer to a question, and a specific question at that –
and that I need to know what this question is. (See most handily Collingwood 1978, esp. 29-
43)36 With this perspective in mind, one can continue to argue that Kathedersozialismus is
best defined as the academic movement that saw it as its responsibility to address the
problems raised by the Social Question through Social Policy.
But is this of any interest other than the historical one? What is the contribution, the relevance
of Kathedersozialismus today? There are two aspects that have led to a reevaluation of
Kathedersozialismus right now. The first is theoretical – Priddat is right: according to
Backhaus and generally, the problem with a Schmoller renaissance is a deep incompetence,
34
This is not a novel point, of course; see only – because they phrase it particularly well for our context –
Salin 1951, 147, and Janssen 1998, 200-201; Brinkmann 1959a, 451.
35
The recently advanced thesis, for instance, “that the historical school was neither German, nor
historical, nor a school” (see Peukert 2001, 113) is for the same reasons just too absurd as to merit
seriously refutation, or even citation.
36
Incidentally, it is this point of Collingwood’s which Gadamer uses as the departure point for the famous
section of Wahrheit und Methode (1990) entitled “The Logic of Question and Answer” (II,3,c,∃, 375-
384), which includes the “fusion of horizons” concept, 383.
especially in the theory area, of today’s economists. (1995, 278-279) The transposition of
Schmoller in today’s economics, demanded by Priddat (1995, 280), however, is actually
uncalled for – that would assume that today’s economics has something that it is worth to link
to. “Sombart praised Schmoller for his ‘vivid outlook on world and people’, his firm roots in
philosophy and history. Today, this is less praise than reproach.” (Beckerath 1962, 71)
On the other hand, there has been something like a Schmoller renaissance since the mid-
1980s, even if it has remained confined to a small group. (See only Priddat 1995, 7; Giouras
1994, esp. vii-viii) And Backhaus is right when he insists on the necessity of Schmoller’s
program today. (1993, esp. 9) But this has been exclusively focused on Schmoller, not on the
Kathedersozialisten.37 The highly interesting, relevant, and thought-provoking books by
Hodgson (2001) and Chang (2002) are the first genuine Anglo-American works on the subject
matter that might start a reevaluation.
Priddat asks, “Should Schmoller and the economists of the ‘historical school’ not have
realized that their own economics would also fall prey to historical relativism?” (Priddat
1995, 40) Certainly, but first of all, as Schumpeter said, he certainly did, as Schmoller had
“possessed the unparalleled self-denial of stressing the relativity of his deeds every step along
the way.” (Schumpeter 1926, 354)38 As we have seen supra, this is not quite true, but it is
interesting to note Schumpeter’s point. More important, secondly, the Historical School is
back, as the competition has run out of legitimacy. Regarding Schmoller, but this can be
generalized, Balabkins states the following:
Schmoller was not a classroom economist, seeking eternal verities. He knew that he was
place- and time-bound. He wanted to save German masses from a violent, Communist-led
revolution. He feared the Marxists and he was not popular with the fashionable crowd of
37
And even here one must say that Schumpeter’s Schmoller essay of 1926 is still unrivalled in scope and
quality as regards a ‘reconstruction’ of Schmoller, in spite of its many personal judgments,
misperceptions, and mistakes, but that is hardly surprising, either. Generally, Nicholas Balabkins’ study
– a combination of biography, explanation of work, and impact study – is still the best single modern
treatment of Schmoller, including all essay collections. (1988)
38
In epistemological terms, Schumpeter sums up Schmoller’s program very nicely: “approaching the
material with a minimum burden of a priori, thereby capturing interdependencies which enter as
additional a priori; this yields the (provisional) framework for investigation, a framework that is further
refined in a continuing interplay of subject matter and mental process.” (1926, 381-382; Backhaus’
translation from Backhaus 1994, 5)
“progressive” leanings. As late as 1983, the pronouncement on Schmoller in America was that
his methods “were not fit to cope with theoretical problems.” As emphasized repeatedly,
Schmoller’s concern was how to cope with the social fiasco of the laissez-faire system. His
concerns were the pressing social problems of the day, not speculative hypotheses, or
equations and matrices on the blackboard. (1988, 81)
And in this, one has to admit – and even enemies admit it, if with a negative prefix (see e.g.
Lövenich 1989, 538) – , Kathedersozialismus was successful indeed. There arguably never
was such a successful revolution in Germany, ever, as the change that led to Social Policy and
ultimately the Social Market Economy.
What is secondly to be learned from Kathedersozialismus is then the realism that is a question
of attitude – and the combination of social policy and economics, belonging together as they
do: If the economic policy is all right, much less social policy is needed to begin with. In
order to find out what ought to be done, one must find out what is first. And that was the
focus of the Kathedersozialisten. One can say, however, that indeed the historical approach,
as long as it remains a tool and not a goal, as it did in Stieda’s case and also, in part, I regret to
say, occasionally in Schmoller’s, is the best way to do so.
The legacy of Kathedersozialismus is a responsible and responsive form of economics as an

integrated social science with the primary focus on the real life, on people living in their
world, and on optimizing their welfare. This focus forces one to consider methods that yield
results that one can use. One has to steer the way between the Charybdis of formalism and
mathematization, which become so abstract as to be self-referential, and the Scylla of
historical antiquarianism, i.e. the right tool becomes its own purpose – and again, self-
referentiality sets in. But once again, there arises the Aristotelian necessary combination of
insight and meliorism, or of epistemology and ethics. This is the key principle, focus and
challenge of the social sciences, and one that is completely out of focus in early 21st-Century
mainstream. The Kathedersozialismus legacy “plays through” the different options and their
implications in a way that makes particularly clear and apparent what should be done. Seen
thus, this legacy is as important today as it ever was.
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Kathedersozialismus and Social Question

But, gentlemen, everything is so incredibly complex. (Schmoller

1. From Today to Yesterday

2. Social Policy and Social Reform

Turned into the positive, Schmoller’s definition is this:

Kathedersozialismus is mainly associated with three eminent economics professors: the

Already Roscher emphasized this:

Schmoller, in his 1897 Rektoratsrede, sums up:

And Brentano elucidates:

But the key is probably realism in relativity – Seligman put it best:

And Schmoller himself talks about the

Brentano phrases it programmatically:

5. The Verein für Socialpolitik

5. Kathedersozialismus and Method

We find some methodological homogeneity among the Kathedersozialisten, perhaps, in the

6. Views and Policies

Schmoller was always accused of wishy-washy middle-of-the-roadism, and of indecisiveness

Laspeyres Lexis Schmoller

The legacy of Kathedersozialismus is a responsible and responsive form of economics as an

Backhaus, Jürgen G. 1988. “Preface.” In Balabkins 1988, 5-8.

Böhret, Carl. 2001. Politikfunktionen während der transindustriellen (R)evolution. ‘Speyrer

Brentano, Lujo. [1888]. “Die klassische Nationalökonomie.” In 1923, 1-33.

Brentano, Lujo. 1919. Wie studiert man Nationalökonomie. München: Reinhardt.

Brinkmann, Carl. 1959a. “Lujo Brentano.” In Handwörterbuch 2, 410-411.

Brinkmann, Carl. 1959b. “Friedrich Albert Lange.” In Handwörterbuch 2, 451-452.

Bücher, Karl. 1919. Lebenserinnerungen 1 (1847-1890). Tübingen: Laupp.

Collingwood, R.G. 1978 [1939]. An Autobiography. Oxford: Clarendon Press.

Dietzel, Heinrich. 1902. Socialpolitik und Handelspolitik. Berlin: Simion.

Dostal, Robert J. 1997. “Gadamer’s Continuous Challenge: Heidegger’s Plato Interpretation.”

Drechsler, Wolfgang. 1995a. “Staatssozialismus.” In H. Drechsler 1995.

Drechsler, Wolfgang. 2000a. “Karl Bücher (1847-1930).” In Backhaus 2000, 413-416.

Drechsler, Wolfgang. 2000b. “On the Possibility of Quantitative-Mathematical Social

Drechsler, Wolfgang. 2001b. “On the Viability of the Concept of Staatswissenschaften.”

Folz, Hans-Peter. 1999. Demokratie und Integration: Der Konflikt zwischen

Gadamer, Hans-Georg. 1977. “Hans-Georg Gadamer.” In L.J. Pongratz (ed.). Philosophie in

Gadamer, Hans-Georg. 1990 [1960]. Wahrheit und Methode. Grundzüge einer

Gadamer, Hans-Georg. 1997a. The Philosophy of Hans-Georg Gadamer. ‘The Library of

Gadamer, Hans-Georg. 1997b. “Reply to G.B. Madison.” In 1997a, 366-367.

Giouras, Athanasios. 1994. Arbeitsteilung und Normativität: Zur Rekonstruktion der

Hansen, Reginald. 1996. Die praktischen Konsequenzen des Methodenstreits. Eine

Hildebrand, Bruno. 1848. Die Nationalökonomie der Gegenwart und Zukunft.

Hilligen, Wolfgang. 1992. “Wissenschaftstheorie.” In H. Drechsler 1995.

Janssen, Hauke. 1998. Nationalökonomie und Nationalsozialismus. Die deutsche

Kattel, Rainer. 1997. “The Political Philosophy of Xenophanes of Colophon.” Trames 1

Laspeyres, Etienne. 1875. Die Kathedersocialisten und die statistischen Congresse:

Lexis, Wilhelm. 1908. “Systematisierung, Richtungen und Methoden der

Lexis, Wilhelm. 1910. Die Entwicklung der deutschen Volkswirtschaftslehre im neunzehnten

Lövenich, Friedhelm. 1989. “‘Unter Zurückdrängung der sozialrevolutionären Wühlerei...’ –

Pangle, Thomas. 1992. “The Spirit of Post-Modernism.” American Enterprise Institute

Peukert, Helge. 1999. “Gustav von Schmoller.” In Backhaus 1999, 445-454.

Peukert, Helge. 2001. “The Multifaceted Balance of the Concept of Staatswissenschaften in

Pinkard, Terry. 2000. Hegel: A Biography. Cambridge: University Press.

Schmoller, Gustav. 1888. Zur Litteraturgeschichte der Staats- und Sozialwissenschaften.

Schmoller, Gustav [1897]. “Wechselnde Theorien und feststehende Wahrheiten im Gebiete

Schmoller, Gustav. 1900. Grundriß der Allgemeinen Volkswirtschaftslehre 1. Leipzig:

Schmoller, Gustav. 1913. Charakterbilder. München – Leipzig: Duncker & Humblot.

Seligman, Edwin A. 1925. Essays in Economics. New York: Macmillan.

Shionoya, Yuichi. 1997. “A Methodological Appraisal of Schmoller’s Research Program.” In

Skalweit, August. 1948. “Vorwort des Herausgebers.” In Wagner 1948, 3-9.

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