ECS3705_Study_unit_6 notes

Chapter 11: German Historical School 1. The meaning of the historical school’s evolutionary approach. Evolutionary approach is a dynamic evolutionary perspective in its study of society. It concentrated on cumulative development and growth. An analogy was sometimes drawn to Darwin’s evolutionism in biology: the social organism is born, develops and grows, and finally decays and dies. Society is constantly changing. Therefore, what is relevant economic doctrine for one country at a particular time may be irrelevant for another country or another age. This relativistic approach was especially useful in attacking classical economics as being unsuitable for Germany. 2. The historical school’s nationalism as opposed to the classical school’s individualism. The historical school was nationalistic, whereas classical economics was individualistic and cosmopolitan. If the social organism is the centre of study, if it is the force for dynamic movement, then society and the state, rather than the individual, occupy the centre of the stage. In Germany, it was the state that fostered industry, transportation, and economic growth. In the process of defending a unified economy, it was easy to develop an ardent nationalistic glorification of the state. The historical school gave great prominence to the need for state intervention in economic affairs and emphasized that the community has interests of its own that are quite distinct from those of the individual.