Roscher, Hildebrand and Knies

Wilhelm Roscher (1817-1894) began his studies in 1835, first in Gottingen where he read history and philosophy, then in Berlin, where he studied ancient philology with Boeckh, and history with Ranke.

Karl Otfried Muller, whose lectures Roscher attended in Gottingen, had published in 1833 an edition of Aeschylus’ Eumenides which drew on art and archaeology as well as textual sources, prompting the criticism from Gottfried Hermann that use of such sources was not appropriate for the study of texts. Muller had studied with Boeckh, whose defence of his favourite student led to a schism between the Wortphilologie of Hermann and what became known as Realphilologie, which supplemented the textual study of classical texts with ancient history, literature and art (Gerber 2010: 104-5). Boeckh had published a major work of this kind in 1817 devoted to the Staatshaushaltung der Athener, book 1 of volume 1 dealing with “Prices, wages and interest in Attica”, the second book dealing with financial administration and expenditures - apart from being addressed to ancient Greece, the work clearly owes a great deal to the descriptions of states and their economic organisation that can be found in the writings of contemporary Staatswissenschaften and Statistik.

Roscher’s initial interest lay in this projection of the Staatswissenschaften into ancient society; the year before the Grundriβ appeared he had published a substantial book on Thucydides, announcing in the preface that:

Hitherto my lectures have been limited to the history of political theories, Staatswirthschaft, Politik and Statistik; from now on they will extend to real history (die eigentliche Historic). I regard Politik as the doctrine of the developmental laws of the State; Staatswirthschaft and Statistic as especially important and detailed branches and aspects of Politik. I believe I can find these developmental laws through a comparison of those histories of peoples with which I am familiar. (Roscher 1842: vii)

Despite the fact that he went on to contrast philology and ancient history, and identify himself with the latter, it is Boeckh’s version of ancient history that is the clear source for his thinking. For the “histories of peoples” to which he was here referring concern the peoples of Ancient Greece and Rome, not the ancient Germanic tribes, and even less so the peoples of medieval and early modern Europe. This is apparent both in his book on Thucydides and the programmatic statement he made the following year in the context of his lectures on Staatswirtschaft. This was described as a “political science”:

Our aim is to present an account of what people have, from an economic perspective, thought, wanted and felt; what they have striven for and achieved, why they have so striven, and why they have achieved what they have... The people is not however just the mass of those living today. Whoever wishes to study the economy cannot just stop at the observation of present- day economic relationships. The study of earlier cultural stages seems to have almost the same importance, since it is the best teacher about the more primitive peoples of the present... The difficulty of finding the essential, law-like regularities in the great mass of phenomena impels us to compare economically all those peoples known to us.

Roscher suggested a comparison with the work of Savigny, who had studied the early development of relations of property and possession and spawned the “Historical School of Law”. However, he never developed this allusion; nor, in fact, did his comparative history ever get off the starting blocks. The nearest thing to any such comparative history is his study of Thucydides, announced as the first part of a major work that never mate­rialised. The programmatic intent of identifying developmental laws - Staatswirtschaft is “the doctrine of the developmental laws of the economy”, politics is “the doctrine of the developmental laws of the state” (Roscher 1843: 4) - through the pursuit of com­parative history remained unfulfilled. Instead, Roscher produced a popular five-volume System der Volkswirthschaft (1854-94) that combined extensive description of economic organisation with a conventional German textbook exposition of the main principles of political economy, and in 1874 a history of German economics that drew on many essays that he had written in the previous 20 years. The identification of the developmental laws of the economy from a systematic comparative study of human history remained an aspiration that barely seems to have survived its first articulation. Roscher remained an important figure, publishing in 1892 his Politik as a “historical natural doctrine of monarchy, aristocracy and democracy”, which in its closing sections examined the devel­opment of plutocracy, the proletariat and Caesarism, this last beginning in ancient Rome and culminating with Cromwell and Napoleon.

Bruno Hildebrand (1812-1878) had a more conventionally historical training at Leipzig and Breslau, but his career was from the first student semester onwards dogged by his activism. Appointed to a chair in the Staatswissenschaften at Marburg in 1841, during 1848 he was a deputy to the National Assembly in Frankfurt; but this politi­cal involvement brought retribution, and by 1851 he had fled to Switzerland, where he first held a chair in Zurich, and then in Bern, returning to Germany only in 1861 to an appointment at Jena.

This first part, “The systems of political economy”, is divided into five sections - on Smith and Ricardo, Adam Muller, Friedrich List, socialism and Proudhon - and never moves beyond a critique of existing work:

The Smithian system represented itself as a general theory of human economy, but was only an expression of a money economy just become pre-eminent... Economics was treated by the entire Smithian school as a natural science of commerce, in which the individual was assumed to be a purely selfish force, active like any natural force in a constant direction and which, given similar conditions, will produce the same results. For this reason its laws and regularities were called both in Germany and in England natural economic laws, and eternal duration attributed to them, like other natural laws. (Hildebrand 1848: 29, 33-4)

Knies would later point out that Hildebrand’s association of Smith with “selfishness” or “egoism” was a mistaken idea originating in a faulty German translation of The Wealth of Nations by Max Stirner, but Hildebrand’s association of Smith’s analysis with natural laws distinguishes his critique from that of Friedrich List, who had in Das nationale System derpolitischen Oekonomie (1841) argued primarily against the national­ism of Smith’s account of commercial economy. List had organised his critique of Adam Smith’s “cosmopolitical economics” around the idea that in the present it only served Britain’s national interests, whereas Smith’s principles belonged properly to a future international economy. Hildebrand maintained that List’s criticisms had made him a “benefactor of the German people” despite the fact that he was otherwise “partisan, superficial, exaggerating, really only repeating one single idea in a thousand variations” (1848: 69); a stimulus to historical study, but no historian himself.

Hence List’s criticism of British political economy for being “unhistorical” did not necessarily entail an explicitly historical stance. But the same argument can be made of Hildebrand’s own work: he never completed his promised account of the real method of political economy; no further parts to his book were ever published. However, once back in Jena he founded the Jahrbucher fur Nationalokonomie und Statistik in 1862, the first German periodical dedicated to political economy broadly conceived, and which remained the leading publication for German-language economists into the 1890s, given that the Jahrbuch fur Gesetzgebung, Verwaltung und Volkswirtschaft im Deutschen Reiche that Schmoller took over in 1881 always had a more broadly legislative and historical profile. Hildebrand was also, in 1872, a founding member of the Verein fur Socialpolitik (see below), a broad association whose main function was to encourage systematic research into social and economic questions and debate them at an annual conference.

Hildebrand did therefore overlap with the “Younger” generation, as did Carl Knies (1821-1898), who had a similarly rocky start to his career before settling into a 30­year tenure of the Heidelberg chair. Knies began in 1841 as a student of history and the Staatswissenschaften in Marburg, thus overlapping with Hildebrand, but he never described himself as a student of Hildebrand, nor indeed did any of these three academ­ics form any kind of “school” themselves. Having completed in 1846 a dissertation on the Roman city of Palestrina, he was hampered in finding an academic post by his lack of publications, although he had already deputised as a lecturer for Hildebrand and von Sybel. He was therefore sent to a training school in Kassel to write a book, pub­lishing in 1850 a study of Statistik. Returning to Marburg, there had been a ministerial changeover and no appointment materialised, and so he left once more to teach in a school, quickly writing up Die politische Oekonomie vom Standpunkte der geschichtli- chen Methode (1853).

The object of study for the sciences of the state and society consists in the actions or works of men, and the conditions of a societised and legally ordered living community (vergesells- chafteten und rechtlich geordneten Lebensgemeinschaft) founded upon the actions and works of many individuals and entire peoples. This is not a matter of a world of thoughts and ideas within man, as with the human sciences, but rather process and circumstances that can be found in the external world of sensually perceptible phenomena. (Knies 1883: 6)

Fortunately, student lecture notes from his courses in 1880 and 1886 have also survived, and demonstrate that in his teaching of political economy Knies followed a predictable path, beginning with definitions of “wants” and “goods”, just like Roscher, or any other German teacher of economics for that matter. The exposition of the leading concepts - of production, distribution, value and price - is geared primarily to a critique of socialist theory, especially the doctrines of Marx, associated by Knies with the English political economists. Rejecting the idea that price is determined by cost of production, Knies argues that if this were true then prices would not fluctuate in the manner that they do while costs of production remained stable. Instead he identifies the interaction of supply and demand as the dominant factor, in effect adopting the position Jean-Baptiste Say had taken in his criticism of Ricardo some 70 years earlier:

The significance of production costs in price formation is determined by the extension or con­traction of supply... Where production cannot be expanded or reduced prices will rise with higher demand, or fall with less demand. If production can be varied, then prices do not vary so greatly, despite altered demand. (Knies 1886 [2000]: 48)

There is no suggestion in these lectures that the principles expounded should be founded inductively; as with Roscher and Hildebrand, the principal historical element involved reference to the classics of economics such as the Physiocrats, Adam Smith and David Ricardo. While he retained a strong interest in systems of communication and money, publishing separate works on these topics, his exposition of the principles of political economy was not merely unremarkable, it was continuous with the understanding of many other German economists not usually assigned to either “Historical School”. Turning, for example, to Lorenz von Stein’s Die Volkswirthschaftslehre (1878), finds a “historical” or institutional account of the economy by a writer not normally asso­ciated with any Historical School. The work of Roscher, Hildebrand and Knies is only one part of an extensive, if unexplored, hinterland of writing associated with the Staatswissenschaften, shading off into ancient history and philology. Not only are there significant differences between the work of these three members of the “Older School”, each of them can be related more directly to other contemporaries than to each other.