The Austrian school’s deductive method crystallized in the Methodenstreit against German historicism

Evidence

The Austrian tradition that Robbins uncovered had been established by Carl Menger, one of the three developers of marginalutility theory, in the middle years of the nineteenth century. It was characterized, in part, by a commitment to theoretical abstraction. Menger had clarifi ed his methodological views during a bitter dispute, which became known as the Methodenstreit, with the German economist Gustav von Schmoller. Schmoller argued that economists should devote the majority of their attention to the accumulation of vast sets of data, from which they would eventually use induction to arrive at their analysis. Menger did not deny the benefi ts of historical information or inductive reasoning, but he believed that economic theory emerged primarily through deductions from fi rst principles. — Angus Burgin, The Great Persuasion, 60

Categorization

• DEFINE: Precisely distinguishes the Austrian a priori-deductive stance from the German historical-inductive school it split from.
• XREF: Echoes the epistemology-vs-empiricism fault lines later seen in the Mont Pèlerin–Keynesian and positivist disputes. — connects to: The Methodenstreit pitted inductive data gathering against deductive first-principles theory — Angus Burgin, The Great Persuasion: Reinventing Free…, 60; Free-market economists were publicly branded as a priori deductivists since the Methodenstreit. — Angus Burgin, The Great Persuasion: Reinventing Free…, 408

Broader Connections

• The Methodenstreit pitted inductive data gathering against deductive first-principles theory #complicates (0.95) — Angus Burgin, The Great Persuasion, 60
• Free-market economists were publicly branded as a priori deductivists since the Methodenstreit. #expands (0.80) — Angus Burgin, The Great Persuasion, 408