ABSTRACT
The task of this chapter is to discern the problematic of the German Historical School, the concept of political economy in nineteenth-century Germany, and to discuss how this problematic has been treated in successive years. Although political economy became purified as economics or pure theory in the second half of the century, the German Historical School seems to have been left behind in this process. The main focus of this school was not on the development of analytic tools for market mechanisms, and that is why it seems to have become outdated from a retrospective viewpoint. How, then, did the German Historical School regard political economy? What were its theoretical problems? In considering these problems, we must first understand the school’s characteristics. Here I am following the conventional conception of the old (Wilhelm Roscher, Bruno Hildebrand, Karl Knies) and the new school (epitomized by Gustav Schmoller).1 To discern the school’s characteristics and the shift within the school, I will examine Knies’s idea of political economy with reference to the following two points.
