Hostname: page-component-7479d7b7d-68ccn Total loading time: 0 Render date: 2024-07-15T12:04:18.063Z Has data issue: false hasContentIssue false
  • English
  • Français

The German historical school on monetary calculation and the feasibility of socialism

Published online by Cambridge University Press:  03 May 2023

Eduard Braun Open the ORCID record for Eduard Braun [Opens in a new window]
Eduard Braun*
Affiliation:
Institute of Management and Economics, Clausthal University of Technology, Julius-Albert Straße 2, 38678 Clausthal-Zellerfeld, Germany
*
Corresponding author. Email: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

Several scholars anticipated Ludwig von Mises's calculation argument against socialism. The present paper summarises the contributions by the members of the German Historical School of Economics who preceded Mises and provides several examples of anticipation that have not been discussed in the literature. Furthermore, the paper explains why it is not a coincidence that members of the Historical School claimed as early as the nineteenth century that socialism was unfeasible due to calculation and knowledge problems. In their attempts to understand historically specific features of capitalism, they developed an approach to capital that involved the institutions of private property, money, the market, the enterprise, and monetary calculation. Starting from this institutional approach to capital and capitalism, it was only a small step to the question of what it means for socialist systems that those institutions are lacking.

Keywords

Capitalhistorical school of economicsmonetary calculationsocialism

JEL classification

P11: Planning, Coordination, and Reform P16: Political Economy B15: Historical • Institutional • Evolutionary P21: Planning, Coordination, and Reform
Type
Research Article
Information
Journal of Institutional Economics , Volume 19 , Issue 5 , October 2023 , pp. 579 - 597
Copyright
Copyright © The Author(s), 2023. Published by Cambridge University Press on behalf of Millennium Economics Ltd.

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Boettke, P.J., Coyne, C.J. and Leeson, P.T. (2014) Hayek versus the neoclassicists: lessons from the socialist calculation debate. In Garrison, RW and Barry, N (eds), Elgar Companion to Hayekian Economics. Cheltenham et al.: Elgar, 278–293.Google Scholar
Braun, E. (2015 a) Carl Menger's contribution to capital theory. History of Economic Ideas 23(1), 77–99.Google Scholar
Braun, E. (2015 b) Unsuspected origins of modern Austrian economics: the historical school of economics on capital and economic calculation. In Bylund, P and Howden, D (eds), The Next Generation of Austrian Economics. Auburn, AL: Mises Institue, 75–87.Google Scholar
Braun, E. (2016) The German historical school on the impossibility of economic calculation under socialism. Betriebswirtschaftliche Forschung und Praxis 68(2), 126–135.Google Scholar
Braun, E. (2017) The theory of capital as a theory of capitalism. Journal of Institutional Economics 13(2), 305–325.CrossRefGoogle Scholar
Braun, E. (2020) Carl Menger: Contribution to the theory of Capital (1888), Section V. Journal of Institutional Economics 16(4), 557–568.CrossRefGoogle Scholar
Braun, E. and Wollboldt, M. (2022) Friedrich Julius Stahl (1802–1861) on the impossibility of socialism. Available at https://www.researchgate.net/publication/365704347_Friedrich_Julius_Stahl_1802-1861_on_the_impossibility_of_socialism.Google Scholar
Braun, E., Lewin, P. and Cachanosky, N. (2016) Ludwig von Mises's approach to capital as a bridge between Austrian and Institutional Economics. Journal of Institutional Economics 12(4), 847–866.CrossRefGoogle Scholar
Bunyk, M. and Krasnozhon, L. (2022) Young Mr. Mises and younger historicists: Origins of Mises's liberalism. Review of Austrian Economics 35(2), 177–191.CrossRefGoogle Scholar
Calberla, G.M. (1877) Karl Marx, “Das Kapital” und der heutige Sozialismus. Kritik einiger ihrer Fundamentalsätze. Dresden: Schönfeld.Google Scholar
Dekker, E. (2016), The Viennese students of Civilization: Humility, Culture and Economics in Interwar Vienna and Beyond. Doctoral thesis, Erasmus University Rotterdam.Google Scholar
Dönniges, W.V. (1845) Ueber die wissenschaftliche und praktische Bedeutung des Socialismus und Communismus. Allgemeine Zeitung 1845(69), 545–547, (70): 554–57; (71): 563–65; (72): 572–74.Google Scholar
Drucker, P.F. (1933) Friedrich Julius Stahl: konservative Staatslehre und geschichtliche Entwicklung. Tübingen: Mohr.Google Scholar
Ebeling, R.M. (2003) Economic calculation under socialism: Ludwig von Mises and his predecessors. In Ebeling, RM (ed.), Austrian Economics and the Political Economy of Freedom. Cheltenham and Northampton: Edward Elgar, 101–135.CrossRefGoogle Scholar
Grimmer-Solem, E (2003 a) The Rise of Historical Economics and Social Reform in Germany 1864–1894. Oxford: Clarendon Press.CrossRefGoogle Scholar
Grimmer-Solem, E. (2003 b) Imperialist socialism of the chair. Gustav Schmoller and German Weltpolitik, 1897–1905. In Eley, G and Retallack, J (eds), Wilhelminism and Its Legacies. New York and Oxford: Berghahn Books, 106–121.Google Scholar
Hauwe, L.V.D. (2019) Ludwig von Mises’ argument against the possibility of socialism: early concepts and contemporary relevance. In Backhaus, J, Chaloupek, G, and Frambach, HA (eds), The First Socialization Debate (1918) and Early Efforts Towards Socialization. Cham: Springer, 191–222.CrossRefGoogle Scholar
Hayek, F.A. (1937) Economics and knowledge. Economica (New Series) 4(13), 33–54.CrossRefGoogle Scholar
Hayek, F.A. (1945) The use of knowledge in society. American Economic Review 35(4), 519–530.Google Scholar
Hayek, F.A. (2014) The Collected Works of F. A. Hayek, Vol. XV, edited by B. Caldwell, Chicago and London: University of Chicago Press.Google Scholar
Hildebrand, B. ([1848] (1922)) Die Nationalökonomie der Gegenwart und Zukunft und andere gesammelte Schriften. Jena: Fischer.Google Scholar
Hodgson, G.M. (2010) Albert Schäffle's critique of socialism. In Vint, J. (ed.), Economic Theory and Economic Thought, London et al.: Routledge, 296–315.Google Scholar
Hodgson, G.M. (2014) What is capital? Economists and sociologists have changed its meaning: Should it be changed back? Cambridge Journal of Economics 38(5), 1063–1086.CrossRefGoogle Scholar
Hodgson, G.M. (2015) Much of the ‘economics of property rights’ devalues property and legal rights. Journal of Institutional Economics 11(4), 683–709.CrossRefGoogle Scholar
Hodgson, G.M. (2016) Some limitations of the socialist calculation debate. Schmollers Jahrbuch 136(1), 33–58.CrossRefGoogle Scholar
Hülsmann, J.G. (1997) Knowledge, judgment, and the use of property. Review of Austrian Economics 10(1), 23–48.CrossRefGoogle Scholar
Knies, K. (1885) Geld und Credit. Vol I: Das Geld. Darlegung der Grundlehren von dem Gelde, 2nd edn. Berlin: Weidmannsche Buchhandlung.Google Scholar
Kolev, S. and Dekker, E. (2023) Carl Menger's Smithian contributions to German political economy. Review of Austrian Economics, 36(3): 247–269.CrossRefGoogle Scholar
Lewin, P. and Cachanosky, N. (2018) Substance and semantics: The question of capital. Journal of Economic Behavior and Organization 150, 423–431.CrossRefGoogle Scholar
Marx, K. (1859) Zur Kritik der Politischen Oekonomie. Berlin: Duncker.Google Scholar
Menger, C. (1888) Zur Theorie des Kapitals. Jahrbücher für Nationalökonomie und Statistik 17, 1–49.CrossRefGoogle Scholar
Mises, L.V. ([1920] (2012)). Economic Calculation in the Socialist Commonwealth, translated from German by S. Adler, Auburn, AL: Mises Institute.Google Scholar
Mises, L.V. ([1932] (1951)). Socialism. An Economic and Sociological Analysis, translated by J. Kahane, New Haven: Yale University Press.Google Scholar
Mises, L.V. (1966) Human Action: A Treatise on Economics, 3rd edn. Chicago: Henry Regnery.Google Scholar
Pasquino, P. (1981) Introduction to Lorenz von Stein. Economy and Society 10(1), 1–6.Google Scholar
Raico, R. (1995) The Austrian school and classical liberalism. Advances in Austrian Economics 2A, 3–38.Google Scholar
Roos, N.H.M. (1994) Hayek's Kantian heritage and natural law. In Birner, J and Zijp, RV (eds), Hayek, Co-Ordination and Evolution. London and New York: Routledge, 287–307.Google Scholar
Roscher, W. (1864) System der Volkswirthschaft. Vol. 1, 5th edn. Stuttgart: Cotta.Google Scholar
Savigny, F.C.V. ([1814] (1973)) Vom Beruf unsrer Zeit für Gesetzgebung und Rechtswissenschaft. In Hattenhauer, H (ed.), Thibaut und Savigny. Ihre programmatischen Schriften. München: Franz Vahlen, 95–192.Google Scholar
Savigny, F.C.V. ([1815] (1973)) Über den Zweck dieser Zeitschrift. In Hattenhauer, H (ed.), Thibaut und Savigny. Ihre programmatischen Schriften. München: Franz Vahlen, 261–268.Google Scholar
Schäffle, A.E.F. (1870) Kapitalismus und Socialismus mit besonderer Rücksicht auf Geschäfts- und Vermögensformen. Tübingen: Laupp.Google Scholar
Schäffle, A.E.F. (1878), Bau und Leben des socialen Körpers. Vol. 3, Tübingen: Laupp.Google Scholar
Schumpeter, J.A. (2005) Interest on Capital. In Bliss, C, Cohen, AJ and Harcourt, GC (eds), Capital Theory. Vol. 1. Cheltenham, UK and Northampton, MA: Elgar, 350–404.Google Scholar
Sombart, W. (1919) Der moderne Kapitalismus, Volume 2.1. München and Leipzig: Duncker & Humblot.Google Scholar
Sombart, W. (1927) Der moderne Kapitalismus, Volume 3.1. München and Leipzig: Duncker & Humblot.Google Scholar
Stahl, F.J. (1846) Die Philosophie des Rechts. Vol. 2: Rechts- und Staatslehre auf der Grundlage christlicher Weltanschauung. Sect. 2: Die Lehre vom Staat und die Principien des deutschen Staatsrechts, 2nd edn. Heidelberg: Mohr.Google Scholar
Stahl, F.J. (1847) Die Philosophie des Rechts. Vol. 1: Geschichte der Rechtsphilosophie, 2nd edn. Heidelberg: Mohr.Google Scholar
Stahl, F.J. (1863) Die gegenwärtigen Parteien in Staat und Kirche. Berlin: Verlag von Wilhelm Hertz.Google Scholar
Stahl, F.J. (1978) The present-day parties in the state and church: twenty-nine academic lectures. State College, PA: Blenheim Publishing House.Google Scholar
Stein, L.V. (1887) Lehrbuch der Nationalökonomie. Wien: Manz.Google Scholar
Streissler, E.W. (1990) The influence of German economics on the work of Menger and Marshall. History of Political Economy 22(S1), 31–68.Google Scholar
Veblen, T. (2005) Professor Clark's economics. In Bliss, C, Cohen, AJ and Harcourt, GC (eds), Capital Theory. Vol. 1, Cheltenham, UK and Northampton, MA: Elgar, 445–493.Google Scholar
Wagner, A. (1907) The rights and wrongs of socialism. Fortnightly Review 81(484), 682–694.Google Scholar
Witt, U. (1997) The Hayekian Puzzle: Spontaneous order and the business cycle. Scottish Journal of Political Economy 44(1), 44–58.CrossRefGoogle Scholar
Zwiedineck-Südenhorst, O.V. (1930) Kapital und Kapitalismus. Schmollers Jahrbuch 54(2), 1059–1092.Google Scholar