If we take a close look at the historical institutions under which scientists or scientific schools develop their theories, we can also draw conclusions about which institutions are conducive to the formation of good theories and which are not. This is especially true if competing schools pursue theory building under different historical institutions and if these rival institutions find expression in geopolitical disputes and aggressions; for example, when in a certain historical phase, such as at the time of the Methodenstreit, one school develops theories under a restrictive regime (Germany), while its competitor (Austria) practices the same in a comparatively liberal milieu.

Content Preface 7 Hardy Bouillon Introduction 9 The Economic Thought Systems in the 19th Century in Europe 15 John Locke and the Foundations of Classical Liberalism 15 Scottish Enlightenment 17 Foundations of the Classical System 19 The Methodenstreit before the Methodenstreit 23 Classical Tradition’s Diffusion and Reactions in the German-speaking World 27 The Historical School of Economics in Germany 29 Gustav von Schmoller and the New German Historical School of Economics 33 Association for Social Policy, Chair Socialism, and the Althoff System 36 Carl Menger and the revolutionary economics turn 42 The Marginalist Revolution 42 The Great Transformation in Vienna in the late 19th century 47 The Development of the Principles… 49 Foundations and Reception of Menger’s Work 50 Between Aristotle, Adam Smith, and the German Tradition 55 Carl Menger and His Followers After 1871 59 The dimensions of the Methodenstreit 64 Debates Surrounding Political Economy as a Discipline 64 Debates on the Nature of Human Being 73 Debates on the Origin and Dynamics of Social Institutions 75 Debates on Economic Policy and Social Reform 86 The solutions 95 The Quest for a Social Theory in Eugen von Wieser 96 Joseph Schumpeter and the Reconciliatory Attempt 99 The Proposals of Friedrich von Hayek and Ludwig von Mises 102 Epilogue 105 References 111 About the Author 144 Friedrich A. v. Hayek Institut 145 Publications of the Friedrich A. v. Hayek-Institut 146