An Alternative Perspective
New Horizons in Institutional and Evolutionary Economics series
Edited by Erik S. Reinert
Chapter 3: The Views of the German Historical School on the Issue of International Income Distribution
Jürgen G. Backhaus The title of this chapter needs a few words of explanation. First, the views discussed here are theory-based and tested against speciﬁc policies within welldeﬁned institutions. Second, the reference to the German Historical School is purely a convenience; these views are likewise held in diﬀerent language areas, such as the French, the Dutch and the Italian traditions, but when the institutions through which economic policies are to be carried out diﬀer, then speciﬁc policies informed by the same basic outlook will diﬀer as well. Third, the term ‘Historical School’ refers to a body of literature before the advent of econometrics, which used historical evidence systematically in order to test theories against empirical evidence. Historical economics also tended to be deﬁned more broadly than economics is today; institutions, legal issues, rules of law and customs as well as issues of geography and technology tended to be part of the explanatory apparatus. We can refer to Friedrich List (1789–1846), Wilhelm Roscher (1817–1894), Gustav von Schmoller (1838–1917) and Werner Sombart (1863–1941), in chronological order.1 The list could easily be augmented with authors from other language areas. In a nutshell, the views of the Historical School on the international distribution of income resulting from international trade were inspired neither by nationalism (the issue of state building) nor by anti-market sentiment (the choice of state command rather than market forces as the preferred allocation mechanism). Nor were the Historical School’s...
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