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This chapter defines and traces the social question and its salient attributes for Schmoller and his colleagues by relating it to the rapid processes of social and economic change in Prussia during the 1860s and 1870s. It also traces the rise and spread of contemporaneous social thought and the simultaneous demise of classical economics between about 1850 and 1870.

This introductory chapter begins with a discussion of one of the most important heterodox variants of economics, the so-called ‘Historical School’ and the emergence of a ‘younger Historical School’ in Germany between 1860 and 1890. It discusses studies on the impact of statistics and historical economics on empirical social research and the emergence of sociology, and the influence of the ‘Historical School’ on American academic disciplines and the social question as a methodological and epistemological problem in German social science The chapter also considers relevance of Gustav Schmoller and historical economics to the history of Imperial Germany. An overview of the subsequent chapters is presented.

This chapter presents an empirical reconstruction of German economics as a university discipline during the era in question, and the place in this of historical economics. It investigates the university and non-university institutions, academic culture, professional bodies, publishers, monographs, and journals that enabled their scholarly output. It also evaluates the influence of Schmoller and his colleagues on this mode of production and the dynamics of change over time.

This chapter evaluates the involvement of Schmoller and his colleagues in the rise of an organized social reform movement. It analyzes the dynamics that gave rise to Verein für Sozialpolitk, the place of historical economists in this organization, what disputes and controversies this sparked, and how Schmoller and his colleagues responded to these challenges.

This chapter investigates how the historical economists' commitment to social reform led to the famous Metodenstreit (dispute over methods) between Schmoller and the Austrian economist Carl Menger. It traces and evaluates their relationship from the early 1870s, placing this dispute within the context of academic professionalization and the rise of social reform in Austria between 1870 and 1894.

This chapter presents some concluding thoughts from the author. It reflects upon the implications of the findings of this book for the place of Schmoller and his colleagues in the history of economic and social thought. It shows that the historical economists were practical idealists who believed that economics addressed questions bigger than satisfying the wants of commodity-trading individuals; it was a policy science concerned with the sources of national prosperity, a science of progress that unavoidably contained an applied ethical component.

This chapter discusses the Methodenstreit, the battle over methods between Carl Menger and Gustav Schmoller. It begins with an examination of the book that began the conflict, Menger's Investigations into the Method of the Social Sciences. Menger's major goal was to show that, despite Schmoller's assertions to the contrary, a theoretical approach to the investigation of social phenomena is, indeed, possible. It shows that, although certain aspects of his defense of theory involved principles that are widely accepted today, other parts raised questions that would occupy many subsequent generations of students of methodology. Looking further into the book, the chapter identifies issues that reemerge in the debates that Hayek would have with opponents a half century later. Once the study of the Investigations is complete, it describes and reflects on the polemical battle that followed. Although Joseph Schumpeter's assessment that the conflict was a “history of wasted energies” has much truth to it, the struggle had important consequences for the development of both the German historical and the Austrian schools, at the time as well as in subsequent decades.

The second chapter shows that, in the eyes of ordoliberals, power is the source of an epistemological problem. Eucken tried to acquire a scientific understanding of the driving forces underlying the economic order, what he called the actual economic reality. His ambition rested on a method to escape the given and immediate aspects of the reality, which seemed contaminated by vested interests. Thus, Eucken updated the old German methodological quarrel (Methodenstreit). In order to resolve the great antinomy between theory and history, Eucken suggested articulating these two approaches by means of his theory of orders. Eucken aimed at applying theoretical analysis to the uses and abuses of power in the economy but without falling under the influence of the expression of vested interests.