Julius Friedrich Gans von Ludassy · 1890
Julius Friedrich Gans von Ludassy’s review of Franz Berghoff-Ising’s academic inaugural address, Ueber die historisch-ethische Richtung in der Nationalökonomie, treats the address as evidence of a methodological rapprochement rather than an original theoretical contribution. Its interest lies in what it reveals about the historical school’s willingness to accommodate the newer Austrian economics:
Wir sehen in Berghoff-Ising das Compromiss personificirt, zu welchem sich die historische Schule geneigt fühlt.
English translation: In Berghoff-Ising we see personified the compromise toward which the historical school feels inclined.
Ludassy presents this compromise as both recognition and attempted incorporation: Berghoff-Ising acknowledges the Austrian direction while portraying it as an outcome of historical-ethical economics. The review proceeds from this diagnosis through a sharply critical examination of the historical school’s social ideals, then turns to the relations between theory and history, induction and deduction.
In Ludassy’s account, Berghoff-Ising contrasts classical economics’ socially detached individual with the historical school’s emphasis on nation, state, society, and the ethical significance of economic conduct. Socialist criticism of egoism supplies an intermediate stage in this genealogy. The historical school consequently advocates protection for those disadvantaged by competition and an economic order in which people of average capacities can secure a dignified existence. Ludassy turns this promise against its proponents:
Der Individualismus proclamierte die Herrschaft des rücksichtslosen Genies; der socialethische Historismus dagegen die beschwerlichere der rücksichtslosen Mittelmässigkeit, die Mediokratie.
English translation: Individualism proclaimed the rule of the ruthless genius; social-ethical historicism, by contrast, the more burdensome rule of ruthless mediocrity, the mediocracy.
This polemical reversal distinguishes the protection of average capacities from genuine assistance to the weakest. Ludassy argues that “Mediokratie” suppresses intellectual advance from above while continuing to oppress the poorest below. His theoretical criticism parallels this practical indictment: historical economists accumulate materials while postponing the work of constructing an explanatory system. Their social programme, meanwhile, merely redistributes dominance without necessarily relieving destitution.
The review then reconstructs Berghoff-Ising’s more conciliatory methodological argument. Historical inquiry and finer psychological analysis should broaden and deepen theory, not displace it with descriptive economics. Berghoff-Ising seeks a middle position between Schmoller and Menger: economic science cannot be subordinated entirely to economic history, but neither can practical decisions be deduced mechanically from abstract propositions without regard to changes of place and time.
Bezüglich des Streites zwischen Induction und Deduction hält Ising natürlich dafür, dass sie beide relativ berechtigt wären.
English translation: With regard to the dispute between induction and deduction, Ising naturally holds that both are relatively justified.
The reviewer’s “natürlich” makes this reconciliation appear characteristic of Berghoff-Ising’s cautious positioning. Deduction remains indispensable, while knowledge of concrete circumstances provides a check on speculative reasoning. The conceptual move is thus to assign historical investigation a role within theoretical inquiry rather than make it an alternative to theory.
Ludassy closes by interpreting the address’s presentation as further evidence of the historical school’s guarded retreat:
Kennzeichnend für die Behutsamkeit, mit der er vorgeht, ist der Umstand, dass er die Anerkennung der österreichischen Richtung in Anmerkungen verbirgt.
English translation: Characteristic of the caution with which he proceeds is the circumstance that he conceals his recognition of the Austrian school in footnotes.
The notes acknowledge advances in modern value theory and concede the insufficiency of historical knowledge alone. For Ludassy, their marginal placement exposes the tension between substantive concession and continued school allegiance. The review’s significance lies in this partisan reading of methodological convergence: reconciliation becomes evidence that historical economics must recognize the explanatory achievements and necessity of the Austrian theoretical approach.
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