Bridging Old and New Institutional Economics: Gustav Schmoller, Leader of the Younger German Historical School, Seen with Neoinstitutionalists’ Eyes

Abstract

After a brief review of Schmoller's work as a historical economist,similarities and dissimilarities between the work of Gustav Schmollerand of neoinstitutionalists, in particular Douglass C. North, arepointed out. It is shown that their critique of neoclassical theory andthe questions they ask are strikingly similar - though the answers arenot. Schmoller shies away from theorizing while North gives illuminatingand useful answers. Still, as for the infamous Methodenstreit, we ratherdoubt that Carl Menger deserves the laurel-wreath and are more inclinedto offer Schmoller the prize - at least for asking the more importantquestions.