Methods for Understanding Economic Change: Socio-Economics and German Political Economy, 1896–1938

Notwithstanding the plurality of meanings and connotations in time and space, Socio-Economics clearly was a theoretical endeavor, unlike the common myths about the anti- or -theoretical nature of the Historical School’s research program. In a world of quantitative growth and qualitative transformation of economy and society, many of the economists of the time wondered whether there were any stable social-scientific categories that one could use to analyze the modern market economy as it presented itself to them. Or, to put the same question differently: If historical institutional evolution is so encompassing, how are we to understand a universalist social science? Such questions came to the fore in Germany and its neighboring countries during the 19th century in part because Germany was late to industrialization, and late to form a modern state. But once industrialization set in and the Empire was formed, the country, compared to other dynamic nations, experienced one of the most pronounced growth explosions during the late 19th and early 20th centuries (Broadberry and Burhop 2010, 404–415). This growth coincided with qualitative transformations within society and the political order, while the role of the bourgeoisie, the working class and newly emerging institutions like political parties and trade unions were in constant motion (Wegner 2020, 4–9). In that sense German socio-economists were deeply aware of the depth and revolutionary potential of historical change, as opposed to British economists who prided themselves in the gradual evolution of their history. The methodological debates so formative for German Socio-Economics in the late 19th and early 20th centuries, above all the Methodenstreit and the Werturteilsstreit (Glaeser 2014), reflect precisely this deep uncertainty of an ever-changing, “moving target”-like object of inquiry – such as the capitalism of their age. This led to the constant struggle to revisit one’s toolbox, to identify the best methods for capturing socio-economic dynamics, and to clarify the admissible role of the scholar amid such dynamics in the wide spectrum between purely descriptive analysis and propagandist demagoguery.

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