Methodenstreit (German for "method dispute"), in intellectual history beyond German-language discourse, was an economics controversy commenced in the 1880s and persisting for more than a decade, between that field's Austrian School and the (German) Historical School. The debate concerned the place of general theory in social science and the use of history in explaining the dynamics of human action. It also touched on policy and political issues, including the roles of the individual and state. Nevertheless, methodological concerns were uppermost and some early members of the Austrian School also defended a form of welfare state, as prominently advocated by the Historical School.
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- I end with a concluding ironic point about the Methodenstreit. Although at first the Germans were successful and then later (for a time) the Austrians appeared vindicated, in the still longer term it might be said that neither group won. One focused on national destinies might be tempted to say that the French won. Both schools would, after all, end up losing out to the followers of Léon Walras (who mathematized marginalism) and of Auguste Comte (the father of positivism}. Ah, the French.
- Bruce Caldwell, Hayek's Challenge: An Intellectual Biography of F. A. Hayek (2004), 4. Max Weber and the Decline of the Historical School