As an outspoken leader of the "younger" historical school, Schmoller opposed what he saw as the axiomatic-deductive approach of classical economics and, later, the Austrian school—indeed, Schmoller coined the term to suggest provincialism in an unfavorable review of the 1883 book Investigations into the Method of the Social Sciences with Special Reference to Economics by Carl Menger, which attacked the methods of the historical school. This led to the controversy known as the Methodenstreit, which today often appears as a waste of energies and one of the main reasons for the later demise of the whole historical school, although—as Joseph Schumpeter once pointed out—this was really a quarrel within that school. Schmoller's primarily inductive approach, requesting careful study, comparative in time and space, of economic performance and phenomena generally, his focus on the evolution of economic processes and institutions, and his insistence on the cultural specificity of economics and the centrality of values in shaping economic exchanges stand in stark contrast to some classical and most neoclassical economists, so that he and his school fell out of the mainstream of economics by the 1930s, being replaced in Germany by the successor Freiburg school. However, it is often overlooked that Schmoller's primary preoccupation in his lifetime was not with economic method but with economic and social policy to address the challenges posed by rapid industrialization and urbanization. That is, Schmoller was first and foremost a social reformer. As such, Schmoller's influence extended throughout Europe, to the Progressive movement in the United States, and to social reformers in Meiji Japan. His most prominent non-German students and followers included William J. Ashley, W.E.B. Du Bois, Richard T. Ely, Noburu Kanai, Albion W. Small, and E.R.A. Seligman. Since the 1980s, Schmoller's work has been re-evaluated and found relevant to some branches of heterodox economics, especially development economics, behavioral economics, evolutionary economics, and neo-institutional economics. He has long had an influence within the subfield of economic history and the discipline of sociology. ;Works by Schmoller His works, the majority of which deal with economic history and policy, include:
Der französiche Handelsvertrag und seine Gegner
Zur geschichte der deutschen Kleingewerbe im 19. Jahrhundert
Strassburg zur Zeit der Zunftkämpfe
Zur Litteraturgeschichte der Staats- und Sozialwissenschaften
Umrisse und Untersuchungen zur Verfassungs-, Verwaltungs-, und Wirtschaftsgeschichte
Grundriss der allgemeinen Volkswirthschaftslehre
Ueber einige Grundfragen der Sozialpolitik
After 1881, Schmoller was editor of the Jahrbuch für Gesetzebung, Verwaltung, und Volkswirthschaft im deutschen Reich. From 1878 to 1903, he edited a series of monographs entitled Staats- und sozialwissenschaftliche Forschungen. He was also an editor and major contributor to Acta Borussica, an extensive collection of Prussian historical sources undertaken by the Berlin Academy of Science upon Schmoller's and Sybel's instigation. One of the reasons why Schmoller is not more widely known today is that most of his books and articles were not translated, as during his time Anglo-American economists generally read German, which was the dominant scholarly language of the time. German having fallen out of favor, the untranslated texts are now inaccessible to readers without knowledge of German. Two exceptions are:
The Mercantile System and Its Historical Significance, New York: Macmillan, 2nd ed. 1910. This is a chapter from Schmoller's much larger work Studien über die wirtschaftliche Politik Friedrichs des Grossen which was published in 1884. The chapter was translated by William J. Ashley and published in 1897 under the English title above.
Koslowski, Peter, ed. The Theory of Ethical Economy in the Historical School. Wilhelm Roscher, Lorenz v. Stein, Gustav Schmoller, Wilhelm Dilthey and Contemporary Thought. Berlin etc.: Springer.
Shionoya, Yuichi, ed. The German Historical School: The Historical and Ethical Approach to Economics. London etc.: Routledge.
