Böhm-Bawerk’s essay is a review of Gustav Schmoller’s Zur Literaturgeschichte der Staats- und Sozialwissenschaften, but its real object is the methodological dispute between the historical school and the Austrian-theoretical current associated with Menger. He grants the stature of Roscher and the historical school, yet insists that the controversy has been clouded by caricature. The issue is not whether economics should use history, statistics, and institutional inquiry; it is whether such inquiry may exclude an equally legitimate theoretical method.
Wenn wir also alle Mißverständnisse beiseite lassen, so läßt sich der status controversiae auf folgenden einfachsten Ausdruck zurückführen: die Streitfrage lautet nicht, ob die historische oder die exakte Methode die richtige ist, sondern lediglich, ob neben der unzweifelhaft berechtigten historischen auch die „isolierende“ als andere Hauptmethode der nationalökonomischen Forschung anzuerkennen ist.
English translation: If, then, we set aside all misunderstandings, the status controversiae can be reduced to this simplest expression: the question in dispute is not whether the historical or the exact method is the correct one, but merely whether, alongside the unquestionably legitimate historical method, the "isolating" method is also to be recognized as another principal method of economic research.
His preferred term, “isolierende” Methode, is important. Böhm-Bawerk does not defend apriorism in the sense charged by opponents. He defends an analytic procedure that separates causal strands within complex economic life so that they can later be recombined. Historical research supplies indispensable materials and correctives, especially for concrete institutional questions and policy problems. But the historian’s accumulation of facts cannot by itself explain the general causal architecture of value, price, capital, interest, saving, wages, or cost.
Against the historical school’s attack on classical political economy, Böhm-Bawerk argues that the failure of particular doctrines does not discredit deduction as such. The classics did not simply lack access to ordinary economic experience. Rather, they often misread and misprocessed the experience already before them.
Nicht ihre empirischen Kenntnisse also waren in diesem Falle unzureichend, sondern sie haben einfach — hier und unzählige Male sonst — falsch „destilliert“.
English translation: It was therefore not their empirical knowledge that was inadequate in this case; rather, they have simply—here and countless other times—"distilled" incorrectly.
The metaphor of distillation structures the essay’s central epistemology. Economic theory works on empirical matter, but its task is not merely to gather more of it. In many of the most general problems, the decisive data are familiar and abundant: people value, exchange, compare satisfactions, bear costs, and respond to scarcity. What remains difficult is interpretation—discovering which elements are causally decisive and how they are connected.
Die Schwierigkeit und zugleich die wissenschaftliche Aufgabe liegt hier nicht darin, die empirischen Tatsachen zu erlangen, sondern die längst erlangten zu begreifen, zu deuten, richtig auszulegen.
English translation: The difficulty and, at the same time, the scientific task here lies not in obtaining the empirical facts, but in comprehending, interpreting, and correctly construing those already long obtained.
This is why Böhm-Bawerk treats marginal-utility theory as empirical rather than anti-empirical. It begins from observable acts of valuation and choice, then isolates the dependence of value on the marginal importance of a good for welfare. Its abstraction is not flight from reality but a disciplined reconstruction of reality’s causal order. Conversely, he suggests, historians who reject theory do not escape generalization; they often smuggle older doctrines into their explanations without testing their logical foundations.
The essay therefore has both polemical and conciliatory force. It rebukes methodological exclusiveness, but it does not call for a monopoly of Austrian theory. Böhm-Bawerk’s settlement is a division of labor: historical-statistical research should dominate where the question is concrete, institutional, and policy-specific; isolating theory should dominate where the question concerns general causal relations. Each method needs the other’s results, but neither may absorb the other.
Meine Absicht ist vielmehr, den Streit zu versöhnen als ihn weiter zu verschärfen.
English translation: My intention is rather to reconcile the dispute than to sharpen it further.
As a document of the Methodenstreit, the essay’s importance lies in this distinction between empirical material and theoretical explanation. Böhm-Bawerk’s economics remains empirical in origin and verification, but theoretical in its search for necessary causal relations. The historical school is right that economics must be rooted in life; Böhm-Bawerk’s reply is that life becomes science only when its facts are analytically understood.
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