New Historical School

(younger historical school), a movement in vulgar bourgeois political economy that formed in the 1870’s and 1880’s and developed primarily in Germany up to the 1930’s as the direct successor to the historical school.

The new historical school sought to justify the aggressive policy of German imperialism and opposed the revolutionary workers’ movement and its ideology, Marxism-Leninism. Like the historical school, the new historical school substituted national economic history for true political economy. The distinguishing characteristics of the new historical school reflected the specific historical conditions of the late 19th and early 20th centuries, when capitalism based on free competition was turning into monopoly capitalism and Marxist ideas were spreading in the growing workers’ movement. By then, the bourgeoisie could no longer use the theoretical tenets of the historical school, which were primarily oriented toward struggle with Utopian socialism.

The new historical school primarily studied the historical origin and fate of capitalism, attempting to divide the historical process into periods and identify its dynamic force. Leading representatives of the movement included the German economists G. Schmoller, D. Brentano, K. Bücher, and W. Sombart. Substituting apologetic economic history for abstract economic theory, which they rejected, they tried to eliminate the main proposition of political economy, namely, that social development is predictable. They formally recognized economic development but considered it a gradual change that could occur among secondary aspects of social phenomena while the foundations of the capitalist system were preserved.

Concentrating on the development of common phenomena of the feudal past of Germany and on giving them a subjective and idealistic interpretation, the representatives of the new historical school were unable to overcome the metaphysical quality characteristic of all bourgeois political economy. Viewing the socioeconomic development of different countries as an expression of “national spirit,” they denied the existence of objective laws of economic development common to all capitalist countries. With society considered a “social organism,” the economic phenomena of monopoly capitalism could be described and justified; in particular, the thesis of the “national character” of various economic theories, which were said to differ for different capitalist countries, could be substantiated.

To depict socioeconomic development, theorists of this school used pseudohistorical schemes that denied the objective laws of economic development, yet posed as full explanations of this development in terms of political economy. Such schemes ignored the historically recognized modes of production and socioeconomic formations and the determining role of production in the development of society. For example, Bücher distinguished three stages of economic development: the domestic (household) economy, predominantly natural; the town economy, marked by production to order and by poorly developed commercial relations; and the national economy, in which commodity production for an anonymous market is typical. Bücher’s scheme fails to take into account such decisive criteria of socioeconomic development as the level of development of the productive forces and the character of relations of production, and grasps only some secondary manifestations of society’s economic activity in the sphere of exchange. His approach blurs the distinctions between socioeconomic formations and tries to eliminate the question of the inevitability of revolutionary transition from one formation to another, and thus of the inevitability of socialist revolution. Sombart pursued identical goals, also distinguishing three stages of society’s economic development: the individual economy, the transitional economy, and the social economy.

A negative attitude toward abstract economic theory prevented the new historical school from offering its own basic categories of political economy; these were borrowed instead from other schools of bourgeois political economy. As a rule, the school’s representatives treated value in terms of the concept of maximum utility and surplus value in terms of maximum productivity, as suggested by various British and American economists. Under the influence of the new historical school, the ruling circles of Germany adopted a number of laws in the area of social policy. The school was also a source of the ideology of German fascism as a whole and specifically for the economic theory of Hitlerite “national socialism,” particularly through the works of Sombart. Brentano was one of the founders of the theory of the welfare state. At the present stage of capitalist development, W. Rostow presents a reworked version of views held by the new historical school in his theory of the “stages of economic growth.”