Carl Menger as a German economist In the early 1970s historians of economics celebrated the centenary of the “Marginal Revolution in Economics.” Among the three main figures of this revolution, Carl Menger was more fortunate than the other two, W. S. Jevons and L. Walras, in that he had a special conference dedicated to him personally in Vienna, in addition to the Bellagio Conference where all three were honored equally.1 It was around this time that many historians of economics became aware of Menger’s peculiar position in the later development of standard marginalist analysis. Since then, partly owing to the resurgence of the Austrian school of Economics, growing numbers of researchers have published their view on this difficult scholar.2 Some of them have tried to place Menger in the contemporary intellectual environment of German economists. Erich Streissler, who was in the forefront of this approach, titled his 1990 paper precisely, “Carl Menger, the German Economist” (Streissler 1990a). Meanwhile, Menger’s personal papers were donated to Duke University and thus become available to researchers. The Hitotsubashi University, the owner of the Carl Menger Library has completed its project of providing microfilms of the total collection of this grand library. Further, there are several sets of lecture notes which have their origins in Menger’s lectures at Vienna University, as well as in Crown Prince Rudolf ’s study. (Rudolf 1876; Streissler and Streissler 1994) Despite some progress made recently, it is safe to say that the work to bring Menger into his own milieu is still ongoing. One of most natural questions arising from the German context of Menger’s works is that of his relation to the Historical School. This constitutes the topic of this chapter. To fulfill this task I first, in the second section, explain the context that German Historicism became Menger’s main adversary. This is described as Menger’s reaction to the reviews to his 1871 Principles (Grundsätze der Volkswirtschaftslehre). In the third section I then investigate the fierce dispute between Menger and Schmoller, and discuss not only Menger’s defense of the “abstract theory” but his offensive against German Historicism. In the final fourth section I interpret Max Weber’s attitude to economics around the turn of

the century as the outcome of the dispute between the two schools. Max Weber showed a deep sympathy with Menger in his criticism of Historicism, but still remained loyal to the idea of the “social economics” as historical science. In 1871 Menger published his Grundsätze der Volkswirtschaftslehre and dedicated it to Wilhelm Roscher. As Streissler has argued, this fact certainly suffices to indicate Menger’s sympathy with German economists at that time, but it is not appropriate to extend this sympathy to Roscher’s position as a founder of the German Historical School. (Streissler 1990a, 1990b, 1990c) Because Roscher had another role in German economics as a prominent textbook writer. Menger’s study of Roscher’s textbook during the gestation period of the Grundsätze left its traces in the frequent citations from Roscher’s Grundlagen in Menger’s Grundsätze.3 As a theoretical economist Roscher belonged to the peculiar German tradition4 that dealt with the value in exchange under the basic conception of the relation between goods and the needs of human beings that should be satisfied by the former. It was to this role of Roscher that Menger confessed his obligation.