Handbook on the History of Economic Analysis Volume II

Handbook on the History of Economic Analysis Volume II

Schools of Thought in Economics

Edited by Gilbert Faccarello and Heinz D. Kurz

Volume II contains entries on the major schools of economic thought and analysis. These schools differ with regard to their 'vision' of the working of the economic system, the major forces and interactions that shape its path, and the policy recommendations proposed. At any moment of time, several such schools typically compete with one another, striving for dominance within the economic and political discourse. Each Handbook can be read individually and acts as a self-contained volume in its own right. It can be purchased separately or as part of a three-volume set.

Chapter 15: Non-Marxist socialist ideas in Germany and Austria

Günther Chaloupek

Subjects: economics and finance, history of economic thought


The term “socialist” conveys a variety of meanings that are shaped by national contexts (German, French, and English speaking countries). To limit the range of coverage in view of given space constraints, the main focus will be non-Marxist economic contributions to the concept of a socialist economic order. From the viewpoint of economics, a socialist economic order has two essential elements: social ownership of the means of production, and coordination of economic activities through a central plan instead of private ownership and coordination via independent markets. Authors who deal with measures of social policy to improve the living conditions of the working class, but not under the perspective of a socialist order, will be mentioned but given less attention. In contrast to Britain, in Germany and in Austria socialism as a political movement was dominated by Marxist theory from the 1870s onward to 1914. This implied adherence to the labour theory of value which was vigorously defended by Karl Kautsky and Rudolf Hilferding. As a consequence, marginalist thinking was rejected as “Vulgärökonomie” – “vulgar economics” (Chaloupek 1987). Rodbertus’s version of socialism, developed independently of Marx, is of theoretical interest only, while the so-called “Kathedersozialisten” (socialists of the chair) were opposed to socialism and did not support the Social-Democratic Party. Lassalle was recognized as co-founder of the party. If his theory of the state could not be harmonized with Marx’s approach, it became evident before World War I that it was in many cases better suited as a basis of concrete policy demands, when the Social-Democratic Party gained strength as a political force in the parliamentary system.

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