Thorstein Veblen
ADOLPH WAGNER'S NEW TREATISE. (in Notes)
The Journal of Political Economy, vol. 1, No. 1 (Dec., 1892), pp. 110-117
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[110] Economic students will be glad to learn that in a note to the third 
edition of his Grundlagen der Volkswirthschaftslehre, which has just come 
from the press, Professor Adolph Wagner announces that arrangements have been 
made for the completion of his Lehrbuch der Politischen Oekonomie. It is now 
almost twenty years since Wagner, with the promised assistance of the late 
Professor Erwin Nasse, undertook his great literary project. The 
comprehensive character of the original plan of the work and the cyclopaedic 
fullness of its first volumes, which followed so slowly upon one another that 
but four volumes have thus far been published, have always made the ultimate 
completion of the work a matter of great doubt. When the original literary 
partnership was interrupted some three years ago by the untimely death of 
Professor Nasse, and when, about the same time, Wagner announced his 
intention of abridging the unfinished portion of his Finanzwissenschaft by 
the omission of a volume, it seemed more likely than ever before that the 
whole work would remain, as many had all along feared, a torso. But it now, 
fortunately, looks as though the work will be rescued from that fate and be 
carried to completion on an even more elaborate scale than the original 
scheme contemplated. The greater range and elaborateness of the new 
enterprise is, perhaps, indicated in the change of its title to Lehr- und 
Handbuch der Politischen Oekonomie. Associated with Professor Wagner in the 
accomplishment of this colossal work is a new group of collaborators, made up 
of Professors Dietzel and Bücher, of the Universities of Bonn and Leipzig, 
respectively, and Ministerial Councillor Buchenberger, of Karlsruhe.

According to the present scheme, the work is to be divided into five main 
divisions, each of which will be sub-divided into as many separate parts or 
volumes as the treatment may require. The following parts [111] have been 
provided for, and the work of preparation apportioned among Wagner and his 
collaborators, as follows:
In Division I, Wagner treats of the Fundamentals of Political Economy in two 
volumes, the one on the Basis of the National Economy, the other on National 
Economy and jurisprudence, or Freedom and Property; in Division II, Dietzel 
discusses Theoretical Political Economy; in Division III, Practical Political 
Economy is dealt with in four parts: (1) Exchange and Transportation by 
Wagner; (2) Agriculture, in two volumes, by Buchenberger; (3) Forestry, by 
Bücher and Buchenberger; (4) Industry and Trade, by Bücher, in two volumes; 
in Division IV, Wagner adds to his already published three volumes on 
Finance, a fourth, and eventually a fifth, on the Theory of the Special Taxes 
and on Public Debts. A fifth division, not yet arranged for, is to give a 
History of the Literature of Political Economy.
It appears from this survey that the completed work will embrace not less 
than fifteen volumes, far surpassing in its compass anything hitherto 
attempted in the domain of economic science, and the high scholarship of the 
writers is an ample warranty that the quality of the treatment will be 
commensurate with its extent. The volumes on Agriculture are promised for an 
early date, and we are assured that the whole work will be energetically 
pushed to completion.

It will be noticed in the new scheme that Wagner's share of the work has been 
considerably augmented by the expansion of his Grundlegung into two volumes. 
During the thirteen years that have elapsed since the appearance of the 
second edition, its author's views have undergone some change; and certain 
fundamental questions that were sparingly noticed in the earlier editions are 
given a place of particular prominence in the present edition. It is rather 
significant that the question of method, on which the author was silent in 
the first two editions, should receive such extended notice now. Not that his 
opinions on this much controverted subject have not hitherto been known, for 
Wagner has long been known, at least, as a vigorous critic and opponent of 
the new Historical School, but he has never hitherto expressed himself with 
so much fullness and freedom from reserve. His account of the reciprocal 
relations of the different schools and, more particularly, his estimate of 
the influence exerted by the extreme historical tendency, are especially 
interesting. A few passages, indicating the author's attitude, are here 
reproduced. They are well worthy [112] of notice as coming from one of the 
most eminent of economists, and as foreshadowing the end of a long 
controversy, whose results have proved, as was anticipated by men of 
temperate judgment, less revolutionary than reactionary.
"Certain general conceptions and demands, at first adopted by the older 
group, are maintained by the younger, but are further developed by them and 
have been accepted by scholars outside the strict German historical school, 
and on the whole by the present author. But as regards the method and aims of 
the science, the younger historical school takes a somewhat different 
position. They incline to a fusion of industrial history and political 
economy; they reject too sweepingly the older British a priori doctrine as a 
basis for actual scientific theory; they ignore the difference between 
concrete economic history and special or practical economics as distinct 
divisions of political economy - even brushing aside the distinction in 
purpose, method and manner of treatment between economic history and economic 
theory. So far as the younger historical school gives prominence to these 
views, I differ from it in this work, as in general. ... The historical 
school has partly in its earlier, and fully in its later period, reacted too 
strongly in respect to the method of political economy. It does not always 
correctly and clearly distinguish as regards the aims of economic science 
between theoretic and practical political economy, and reproaches the entire 
English system with faults which are to be found only in certain of its 
adherents, which, indeed, are often merely accidental, and do not necessarily 
follow from the essential methods or conceptions of the system." (p. 47).
The preface charges the historical school with a spirit of intolerance: "I 
have found myself impelled to discuss from time to time the tendency of the 
younger German historical economists. If these discussions have occasionally 
been somewhat sharply critical, I wish it to be understood that the matter in 
hand is not merely a question of protesting against a one-sided method which 
I thought pernicious, but of protesting as well against an attitude of 
arrogance on the part of certain writers toward those who do not allow 
exclusive validity among methods to historical induction, and who do not 
identify economic history with political economy - a narrowness of an 
opposite kind to that of the older British deductive and abstract writers, 
though at bottom more dangerous."
[113] Schmoller, as the leader of the extreme historical school, is noticed 
at great length, praise which approaches enthusiasm for his services as an 
economic historian appearing in strong contrast to such comments as the 
following on his attitude as a scientist: "To Schmoller, whatever does not 
belong to the historical-statistical 'exact' investigation is more or less 
the work of sportive fancy (Gedankenspielerei). It is branded, after the 
manner of Comte, as 'mere speculation,' belonging to the still 'metaphysical 
period' of the science, and thus demolished. ... But this tone toward 
everything and everyone not in agreement with him does not enable Schmoller 
to conceal the fact that as to questions of fundamental principle, in points 
of theory, of primary conception (which, after all, even the historians 
cannot avoid), of law, and even of method, Schmoller is not always clear and 
not always sure of himself. As his great services in economic history show, 
his talent lies much more in other fields and in other directions. He has 
himself remarked on occasion, that the historians of a science are seldom 
equally skillful as its theorists. This may be confirmed by an observation of 
his own case." (pp. 53-54).
Wagner's respect for the British so-called "orthodox" school is indicated by 
numerous explicit statements referring to groups of writers or to 
individuals. "According to the character of the problem to be considered, 
according to the specific application of the general problem, and, assuredly, 
according to the individual cast of mind, the peculiar preference or tendency 
of each writer, -the individualist in political economy has in fact at one 
time made use predominantly of speculative deduction, at another time of 
induction. In some authors, as Ricardo, Senior, Mill, Herrmann, there is a 
fondness for deduction - this in part because that method seemed especially 
applicable to the particular problems in hand (as to the doctrine of price, 
income, or distribution). But for example, A. Smith himself, has made use of 
both methods together, - so much so that to this day, and among the latest 
historians of the subject, opinions differ as to whether he preferably 
employed deduction or induction. That alone shows that the charge against the 
earlier British economists of exclusive deduction is unfounded. It is 
asserted that deductions after the usual manner (in which self-interest 
especially is taken as the starting-point) are necessarily wrong. This is 
mere assertion, which has not yet been at all adequately justified by those 
who offer it, and which is flatly belied by their own work in economics. For 
these writers, including the historical economists, on all [114] occasions, 
even in the most 'exact historical investigations,' employ for explanation or 
proof deductions from economic self-interest and the related motives, acts 
and omissions ....
"The British and the Continental representatives of the Individualist 
political economy have fallen into error, not from the employment of the 
deductive method, and not from the effort to secure abstract results in the 
treatment of problems - this- effort being of itself proper. Their errors 
have resulted rather from the failure to give their method a sufficiently 
firm support in their psychological premises - and to keep in mind the 
hypothetical nature of this method in applying it to concrete relations. The 
question is therefore not as to an entire change of the method of deduction, 
or even of its replacement by induction. This entire substitution would be 
impossible, and not altogether right or desirable, if it were possible. To 
secure a truer use of deduction, giving it a more accurate and a deeper 
psychological basis and development, more cautiously applying it, not 
forgetting its hypothetical character, more sharply observing the necessary 
limits of its applicability with reference to classes and character of 
questions and to the peculiarities of special scientific tasks, often 
properly uniting it with induction (to do this always is impossible), and in 
certain cases substituting induction for deduction, - in short, to secure a 
use of deduction better in all these particulars, - that is the problem. By 
failing to do this, distinguished representatives of the British school have 
undoubtedly often made mistakes. But they were usually not so much errors of 
method, or errors resulting inevitably from the character of the method, as 
errors in the application of the method. The appearance of the German 
historical political economy was not necessary to the recognition of this 
fact, although it has certainly merited much by its critical services at this 
point. But as this school in its turn went to the opposite extreme, 
depreciating the true deductive procedure, and over estimating its own 
inductive method, and ignoring the limits beyond which its method was of less 
service than the other, it has done at least as great damage, if not greater, 
than can be alleged against the British school. ... General reproaches as to 
method, such as the later German historical writers have cast upon the 
English group, with a self-sufficiency to which the logical clearness and 
acuteness of their argumentation do not correspond, are unjust and incorrect. 
The use of both the chief methods is demanded by the subject matter of 
political economy, and by the character of [115] the problems proposed for 
its solution. Moreover, that which is right and warranted in the German 
historical method, is not new. Many of the older theorists, authors of 
systematic treatises or of monographs, as well as those who discussed 
practical questions, have used this method,- not least, again, A. Smith....
"…. In our opinion, the British theory and dogmatic teaching may claim, under 
certain hypotheses, a great and lasting usefulness. With substantial 
correctness they gave a knowledge of the skeleton, the salient points and 
outlines of the system of private economy, both static and dynamic, with the 
legal and psychological hypotheses which, on the whole, are realized in 
developed civilizations like those of the present day." ... "The English 
economists failed, however," says Wagner, "to perceive that these hypotheses 
are not always fulfilled, or are fulfilled in varying degree in different 
times or places or specific instances. But if these defects be remedied," he 
continues, "as they may be, in fact have been, in accordance with the spirit 
of the English school, no less than with that of the historical political 
economy, the critics of the younger historical group find the ground cut away 
from under them, while that which is essential in the British theory 
survives." (p. 49).
Mill is given chief prominence among writers on logic. "I think that with 
reference precisely to political economy, no logician is more instructive. 
... It seems to me that we should hold fast to Mill's views on the logic of 
our particular science - this holds especially of his justification of 
deduction and the corresponding application of the inductive methods to 
experimental research." (pp. 138, 139).
As to Ricardo, Wagner remarks: "Very properly Marshall maintains the 
continuity of development of the science. He, and recent American writers, in 
opposition to the exaggerations and obscurity of the historical writers, have 
indicated the immense importance of Ricardo. ... Marshall judges Ricardo's 
Cost of Production theory quite justly in declaring that it has remained to 
the present day fundamentally intact, much being added to it, much built upon 
it, but little taken from it. With this youthful moderation let me compare 
the judgments passed by the younger or youngest German historical writers on 
Ricardo and other older authors of his method and tendency. Herrmann is now 
hardly known by many of the younger scholars among us; his unsurpassed work 
finds abroad, like von Thünen's, so much the more grateful appreciation. As 
to the new doctrines, Marshall says very properly: 'they have supplemented 
the older, have [116] extended, developed, and sometimes corrected them, and 
often have given them a different tone by a new discussion of emphasis, but 
very seldom have subverted them.'"
To the Austrians, the special antagonists of the exaggerated historical 
tendency, Wagner turns with satisfaction. "Fortunately," he says, (p. 63) 
"either action or excessive reaction, in 'free science,' outside of the 
narrow boundaries of schools, always calls forth reaction. It is the merit of 
Carl Menger of Vienna to have brought about a very strong reaction in German 
economic science. Under his leadership, or in company with him, a number of 
specialists, particularly in Austria, have ably and justly thrust the 
theoretical problems of political economy again into the foreground, 
especially the question of value. ... One need not accept all the specific 
results of their investigation in regarding their starting-point as a proper 
one. 'The ways by which judgments are reached, the methods of research, 
conform to the objects of the investigator, and to the formal nature of the 
truths sought for.' (Menger). Deduction in the domain of theoretical 
political economy has rightly been brought, by the efforts of Karl Menger, 
his school and adherents, once more into a position of honor in German 
science, despite the pretentiousness of the historical school - a 
considerable service, as well from the standpoint of one who, like the 
present author, seeks to take a middle position in the methods controversy. 
... That it [the service of the Austrians] has received less recognition in 
Germany than abroad, is to be explained variously, - in part from personal 
causes and from the prejudices of schools, - but this lack of recognition 
does not detract from their value. A certain tendency to exaggeration and 
one-sidedness may, perhaps, be occasionally discovered in this reaction 
against the historical school, especially in the heat of controversy, as is 
almost always the case when there arises a proper reaction against a 
different one-sidedness. That, however, will be corrected in time. ... Men 
like the younger Dietzel have shown that one may come by his own way to a 
like manner of treatment of theoretical problems, and yet, with respect to 
important fundamental themes, as of Value and Marginal Utility, may stand 
outside of the new Austrian school without failing to appreciate the service 
which that school has rendered."
The influence of the extravagant historical group has, however, for the most 
part been confined to Germany. It has appeared abroad "only in scattered 
instances, and even so in a more moderate form. [117] Where the just element 
in the historical movement has been acknowledged, the acknowledgment has been 
made much as I have made it here. (p. 63). ... Distinguished economists 
abroad, as in Italy before all, L. Cossa, with his expressed preference for 
the historical treatment of the subject, the Belgian, É. de Laveleye, the 
Englishmen, Sidgwick, Marshall, Keynes, numerous younger American savants who 
received their training in Europe, have attached themselves to the historical 
and socio-political movement, but represent it with moderation and hold fast 
to the kernel of the old theory."
--- The End ---