Karl Theodor von Inama-Sternegg, “Schmollers Volkswirtschaftslehre” — Summary

Inama-Sternegg’s essay is a sympathetic but exacting review of Gustav Schmoller’s general economics. Its central issue is methodological: whether a historically grounded economics can still be theoretical. The opening problem is the status of economic law itself.

Im letzten Grunde ist diese Frage gleichbedeutend mit der nicht minder oft aufgeworfenen Frage, ob es allgemein gültige Gesetze der Volkswirtschaft gibt.

English translation: At bottom, this question is equivalent to the no less frequently raised question of whether there are universally valid laws of political economy.

Inama rejects both extremes: timeless deductive laws detached from history, and a purely descriptive historicism unable to generalize. He defends abstraction, but only when it is drawn from comparable social-economic formations. For that reason, the historical school’s critique of classical economics must be made carefully. Classical theory was not simply wrong because it formulated general propositions.

Zwar der Vorwurf, der von hier aus der klassischen Nationalökonomie gemacht wurde, sie habe sich mit ihren abstrakten Lehren von Wert und Preis, Lohn und Rente vermessen, allgemein gültige Gesetze zu formulieren, ist innerlich nicht begründet.

English translation: The reproach made from this quarter against classical economics—that with its abstract doctrines of value and price, wages and rent, it presumed to formulate universally valid laws—is not, in its inner substance, well founded.

The real issue is not abstraction as such, but the level and historical control of abstraction. Inama therefore distinguishes economic theory from mere economic history. Collections of facts, however exact, do not yet constitute theory unless they are organized into concepts of recurrent social processes.

Nur darf eben nicht verkannt werden, daß diese Ergebnisse nicht Bestandteil einer Theorie der Volkswirtschaft, wenigstens in dem gegenwärtigen Zustande ihrer Ausbildung, sondern reine Wirtschaftsgeschichte sind.

English translation: It must only not be overlooked that these results are not, at least in the present state of its development, a component of a theory of political economy, but are pure economic history.

This distinction lets him praise Schmoller precisely where Schmoller’s practice exceeds his own methodological caution. Schmoller’s work demonstrates that historical-realistic research can become theoretically fruitful by reconstructing the organization and movement of economic life: markets, exchange, money, credit, price formation, rent, income distribution, and institutional development.

Schmollers Werk selbst beweist, daß die historisch-realistische Forschung auch für die Theorie mehr zu leisten vermag, als er ihr in seinem allgemeinen Teile zuzuschreiben sich getraut.

English translation: Schmoller’s work itself proves that historical–realistic research can accomplish more for theory as well than he ventures to attribute to it in his general part.

Inama’s agreement with Schmoller is strongest on the social conception of economics. Volkswirtschaftslehre does not study isolated individuals but the economy as a collective, institutionally ordered life-process of a people. Yet this agreement also grounds his criticism. Schmoller’s preparatory sections on psychology, ethics, anthropology, geography, and sociology are often illuminating, but they risk overburdening economics with foundations borrowed from neighboring sciences. Inama wants synthesis without disciplinary sprawl.

He is also critical of the work’s internal balance. Schmoller’s emphasis on social organization and distribution leaves the theory of production less fully developed than it should be. For Inama, production is not merely a technical prelude to exchange; it concerns the economic power of the people as a whole, including land use, sustainability, diminishing returns, technical progress, forestry, mining, agriculture, and industrial transformation.

The essay’s most admiring pages concern Schmoller’s treatment of markets, prices, rent, and distribution. Here Inama sees the historical method at its best. Price is not an abstract point of equilibrium only, but the outcome of market organization, transport, intermediaries, competition, monopoly, public intervention, credit, and legal-institutional arrangements. The old problem of the just price therefore returns in modern form as a question of market order and social regulation, not as scholastic moralism.

Inama’s final judgment is that Schmoller’s Volkswirtschaftslehre is not a closed deductive system but a powerful anatomy of modern economic society. Its importance lies in showing how economics can remain theoretical while treating its object as historical, institutional, collective, developmental, and ethically consequential.