Eugen Philippovich von Philippsberg · 1886
Philippovich’s inaugural lecture enters the German Methodenstreit by refusing the premise that political economy has one exclusive task and one proper method. Its confusion, he argues, comes from treating Nationalökonomie as a single homogeneous discipline, when it is really a coordinated field of inquiries with different objects and standards of certainty.
Die politische Oekonomie umfasst eine Reihe von Wissenschaften, die verschiedene Erkenntnisziele, verschiedene Erkenntniswege und in ihren Resultaten eine verschiedene Strenge aufweisen.
English translation: Political economy comprises a series of sciences that exhibit different cognitive aims, different cognitive paths, and, in their results, a different degree of rigor.
This classificatory claim structures the whole lecture. Historical and statistical investigation are indispensable because economic life always appears in concrete institutional forms: property systems, credit arrangements, household organization, law, and national development. Yet Philippovich resists the historicist temptation to let description replace explanation. Historical inquiry can reconstruct the individuality of economic phenomena, but it cannot by itself establish the causal regularities on which scientific and practical judgment depend.
Niemals aber gelangen wir durch eine solche Betrachtung der Tatsachen zur Erfassung wirklicher Kausalgesetze.
English translation: But never do we arrive by such a consideration of the facts at a grasp of genuine causal laws.
Theory therefore has its own legitimate task. It abstracts from the full complexity of social reality in order to isolate the typical economic element in action: the pursuit of material provision under conditions of scarcity. Philippovich does not deny moral, legal, habitual, altruistic, or mistaken motives; rather, he brackets them so that the specifically economic tendency can be examined with precision. His examples from mortgage and bank credit show that practical assessments already rely on such causal propositions about liquidity, repayment, tenure, and institutional form. Narrative history supplies the material, but theory clarifies the connections.
A third sphere is practical economics. It asks not only what has happened or what causal relations obtain, but how economic life should be purposively ordered under given ends. Here Philippovich distinguishes the doctrine of private economy, economic policy, and public finance. This practical branch is normative, but not arbitrary: it must draw simultaneously on historical knowledge of concrete circumstances and theoretical knowledge of economic regularity.
Wir fragen nun nicht mehr, was ist, sondern was soll sein
English translation: We now no longer ask what is, but what ought to be.
The lecture’s central methodological defense is thus a defense of exact theory without reductionism. Following Menger, Philippovich maintains that economics may construct laws from the isolated operation of economic interest. These are not complete pictures of real social life, because actual conduct is always modified by non-economic motives and institutions. They are laws of economic tendency, valid under specified abstraction and useful precisely because they show what forces are at work when other conditions do not obscure them.
Jene Gesetze, welche wir aus der Beobachtung des allein wirkenden wirtschaftlichen Interesses ableiten, sind Gesetze des Wirtschaftslebens, allein nicht solche der realen menschlichen Wirtschaft, sondern solche der „Wirtschaftlichkeit“
English translation: Those laws which we derive from the observation of the sole operation of economic interest are laws of economic life—yet not of the real human economy, but of "economizing" (economic rationality).
This also explains his careful treatment of egoism. Philippovich rejects the older liberal faith that self-interest naturally harmonizes society, but he preserves the analytic value of self-interested action as a formal feature of economic conduct. Egoism is not a full moral anthropology; it is a way of identifying the visible direction of action toward an economic result. In this sense, the lecture criticizes both Manchester liberalism and anti-theoretical historicism.
His discussion of economic law is similarly conditional. Laws are real, but they are not inviolable natural commands before which policy must retreat. Gresham’s law illustrates the point: bad money tends to drive out good only under determinate conditions, and legal arrangements can alter those conditions. Theory therefore does not dictate policy mechanically; it reveals tendencies whose operation depends on the surrounding institutional field.
Die Theorie gibt keine Maxime des Handels; sie konstatirt Regelmässigkeiten und Zusammenhänge.
English translation: Theory yields no maxim of action; it establishes regularities and interrelations.
Philippovich’s methodological mediation is the lecture’s enduring significance. Historical research gives economics its empirical depth; exact theory supplies causal intelligibility; practical economics converts both into reasoned guidance for reform. The closing civic impulse is not to dissolve science into ethics, but to place disciplined economic knowledge in the service of a morally formed national life.
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