Introduction

In the second half of the 19th century, ‘the progress of Germany became the wonder of the world,’ as it assumed a leadership position ‘in industry and trade, in literature and education, in military growth and civil administra­tion’ (Kinley 1918, 5).

From the 1870s up until the beginning of WWI, German universities held supremacy over their counterparts in Britain and France when it came to the quality of teaching and the enrollment of international students. Basi­cally, ‘no country in Europe’ could rival Germany in many academic disci­plines (Rowe 1890, 78). In the case of political economy, German universities achieved remarkable development due to the work and efforts of the theorists of the German Historical School of Economics (GHSE), who became global leaders in the discipline. In addition to international students, many Germans were also trained under the GHSE, including government officials, members of social and economic institutions, and anybody else who wanted to obtain a higher education in political economy.

The GHSE was at ‘its apex’ in the latter part of the 19th century, when ‘it stood unrivaled in the number and high quality of scholars who were devot­ing themselves to research and teachings in the various branches of economics’ (Ferguson 1950, 154). During that time, international students seeking ‘ad­vanced teaching in economics’ went to Germany, ‘since in England there was very little systematic teaching of economics, and no graduate qualification as in Germany; while the French university system was then (and still is) firmly linked to a closed educational and cultural system’ (Tribe 2002, 2).

Political economy departments at German universities not only attracted large numbers of international students who wanted to obtain an advanced education in the discipline, they also became the models for many countries around the world. After those international students completed their stud­ies and training, they returned to their home countries and brought their newly acquired knowledge, experiences, and ideas with them. That means the inf luence of the GHSE was manifested through the modification of opin­ions, which led to changes in the way political economy was taught and learned in many different countries (Ingram 1915, 131). More specifically, German-trained young men from a number of nations were able to help ‘bring forward economic science, from its old position’ (Dunbar 1891, 397). In this way, ‘the methods and principles’ of the GHSE gained ground in many countries, including the US, Italy, France, England, and Japan (Ely 1883, 234). In case of the US, ‘no one of the moral science’ made ‘a more rapid or solid gain than political economy, either in the extent and importance of its scientific investigations, or in the dignity of method and spirit which charac­terizes its work, or in its educational value’ (Dunbar 1891, 397).

This chapter focuses on German-trained American political economists, who played significant roles in the development of economic thought from the late 19th century up until the outbreak of WWI. It begins by brief ly providing information about some of the distinguished American economists who studied political economy at German universities under the theorists of the GHSE. It also explains why these returning economists were not satisfied with the classical orthodoxy that was dominant among American political economists at that time. It then presents some of striking similarities in the methods, approaches, policies, reforms, goals, values, and ideas defended by these returning American economists and those advocated by the GHSE.