Carl Menger, Irrthümer des Historismus in der Deutschen Nationalökonomie (1884)

Menger’s Irrthümer continues the methodological dispute opened by his Untersuchungen über die Methode and is a central document of the Methodenstreit. Its immediate occasion is Gustav Schmoller’s critical review, but its larger target is the “historical school” insofar as it treats historical inquiry not as an aid to economics but as economics itself. Menger’s main thesis is that political economy can be reformed only by recovering its own questions and methods, while making disciplined use of history, statistics, psychology, and other auxiliary sciences.

Die Reform einer Wissenschaft vermag nur aus ihr selbst, nur aus den Tiefen ihrer eigenen Ideenkreise hervorzugehen; sie kann nur das Werk der in die eigensten Probleme ihrer Disciplin sich vertiefenden Forscher sein.

English translation: The reform of a science can proceed only from within itself, only from the depths of its own circles of ideas; it can be only the work of researchers who immerse themselves in the innermost problems of their discipline.

The sixteen letters move from personal defense to methodological reconstruction. The first two justify answering even shallow criticism: such exchanges expose confusions that otherwise remain implicit. From the third letter onward, Menger clarifies the distinct aims of historical, theoretical, and practical social sciences. Historians and statisticians study concrete peoples, states, institutions, and developments; theorists study forms and laws; practical sciences formulate maxims for purposive action.

„Es sind concrete Thaten, Schicksale, Institutionen etc. bestimmter Völker und Staaten, es sind concrete Culturentwicklungen und Zustände, deren Erforschung die Aufgabe der Geschichte, beziehungsweise der (historischen!) Statistik bildet, während die theoretischen Socialwissenschaften uns die Erscheinungsformen der sozialen Phänomene und die Gesetze ihrer Aufeinanderfolge, Coëxistenz u. s. f. darzulegen die Aufgabe haben.“

English translation: "It is concrete deeds, fates, and institutions of particular peoples and states, concrete cultural developments and conditions, whose investigation is the task of history, and respectively of (historical!) statistics, while the theoretical social sciences have the task of setting forth for us the phenomenal forms of social phenomena and the laws of their succession, coexistence, and so forth."

This distinction is the book’s conceptual core. Menger does not deny the value of history; he denies its sovereignty. Economic history and statistics are indispensable, but they are not identical with political economy. The historicist error is a category mistake, intensified by the scarcity of scholarly labor: when economists devote themselves almost exclusively to historical monographs, theory decays.

Nicht der wieder und immer wieder betonte mittelbare Nutzen historischer Studien für die Forschung und die Lehre auf dem Gebiete der politischen Oekonomie, sondern die Verwechselung von Theorie und Geschichtsschreibung, die einseitige Hingabe eines nicht geringen Theiles der deutschen Vertreter unserer Wissenschaft an die Bearbeitung einer Hilfswissenschaft dieser letzteren, ist, was ich in meinen „Untersuchungen“ bekämpft habe.

English translation: It is not the repeatedly emphasized indirect utility of historical studies for research and teaching in the field of political economy, but rather the confusion of theory and history-writing, the one-sided devotion of no small part of the German representatives of our science to the cultivation of an auxiliary science of the latter, that I combated in my "Untersuchungen."

Menger therefore presents himself not as an enemy of historical inquiry but as an opponent of its monopoly. His defense is methodological pluralism ordered by task: each science has its own object, and confusion among them produces dilettantism rather than reform.

Nicht ich trage die „Scheuleder wissenschaftlicher Arbeitstheilung“.

English translation: It is not I who wear the "blinkers of scientific division of labour."

Against Schmoller’s demand for a vast historical “understructure” before theory can advance, Menger argues that no exhaustive economic history could ever be completed, and that theory cannot wait upon infinite empirical accumulation. Even more, history is not the exclusive empirical basis of economics. Theoretical economics must also begin from ordinary experience of individual action, motives, purposes, and constraints, since social phenomena arise from the interaction of individual economies.

Die Anhänger der obigen Meinung scheinen mir — um zunächst von dem Historismus in der theoretischen Nationalökonomie zu sprechen — vor Allem zu übersehen, dass neben der Geschichte auch die gemeine Lebenserfahrung (die Kenntniss der Motive, der Ziele, der den Erfolg bestimmenden Umstände und der Erfolge individualwirthschaftlicher Thätigkeit) eine nothwendige Grundlage der theoretischen Volkswirthschaftslehre sei.

English translation: The adherents of the above opinion seem to me — to speak first of historicism in theoretical political economy — above all to overlook that, alongside history, the common experience of life (the knowledge of the motives, the aims, the circumstances determining success, and the results of individual economic activity) is a necessary foundation of theoretical economics.

This is also where Menger defends the “exact” direction of theory. Its task is not to reproduce empirical reality in all its complexity, but to isolate simple typical elements and derive laws of their connection. This does not abolish empirical research; it explains why historical description alone cannot yield economic theory. The “isolation procedure” at the core of this exact method, Menger insists, strips away only a phenomenon’s accidental features, never its essential ones:

Wer auch nur die Elemente der Logik kennt, weiß, dass man unter dem Isolierungsverfahren nur die Isolierung von den einer Erscheinung accidentiellen Momenten versteht, und wer mein Buch gelesen hat, weiß, dass ich nirgends auch nur die entfernteste Veranlassung zu der unsinnigen Meinung gebe, dass unter dem Isolierungsverfahren die Isolierung von den einer Erscheinung essentiellen Momenten zu verstehen sei.

English translation: Whoever knows even the elements of logic knows that by the isolation procedure one understands only the isolation from the accidental moments of a phenomenon, and whoever has read my book knows that I nowhere give even the remotest occasion for the absurd opinion that the isolation procedure is to be understood as the isolation from the essential moments of a phenomenon.

The same anti-historicist argument governs Menger’s treatment of policy and finance. Practical sciences cannot be replaced by narratives of past policy, because action confronts new situations and changing technical, moral, and institutional conditions. The historian may instruct, but cannot rule the practical sciences as sole authority.

Der Historiker, „der rückwärts gekehrte Prophet“, kann nicht der allein Massgebende auf dem Gebiete der praktischen Wirthschafts-Wissenschaften sein.

English translation: The historian, "the prophet turned backwards," cannot be the sole authority in the field of the practical economic sciences.

Menger’s sharpest formulation comes in his account of the historical school’s decline from theory into annotated narrative. What began as theory enriched by history becomes, in his view, historical material pretending to be theory.

Theorie! — Theorie verbrämt mit historisch-statistischen Notizen und durchbrochen von historischen Excursen! — Blosse Notizen und historische Excurse mit dem Anspruch, für eine Theorie zu gelten!

English translation: Theory! — Theory trimmed with historical-statistical notes and broken up by historical excursuses! — Mere notes and historical excursuses with the pretension of passing for a theory!

Letters ten through thirteen extend the critique to Schmoller’s wish to “raise” practical economics and finance into theoretical sciences. Menger insists that practical sciences are not inferior “recipe books”; they are disciplines concerned with principles of effective action and must be grounded in theory, not dissolved into it.

Die Wissenschaften unterscheiden sich — was Schmoller zu übersehen scheint — nicht durch ihren „Rang“, sondern durch die Aufgaben, die sie zu lösen haben.

English translation: The sciences are distinguished — which Schmoller seems to overlook — not by their "rank," but by the tasks they have to solve.

The later letters return to Schmoller’s methods, accusing him of distortion, oversimplification, and political labeling. The work’s continuing importance lies in Menger’s disciplinary architecture: history, theory, and practice are mutually useful but not interchangeable. Irrthümer is thus a defense of autonomous economic theory against historicism, while still preserving history as an essential auxiliary to a universal science of economic phenomena.