The social question and fundamental principles of modern market economics – there is more agreement than contradiction: The case of von Schmoller's labour question

Abstract

Purpose

In view of current catchwords like globalisation, internationalisation and flexible markets, it should be remembered that many of the fundamental economic positions which are assigned to those terms were already put forward by promoters of the social question. The questions discussed are whether the social question and modern market economics are related to each other – if at all – and to what extent the strategies of the social question can be helpful, may be even to the solution of present problems.

Design/methodology/approach

Different issues and methods are compared which lead both the Historical School and modern economic theory to similar results. “Historical” hermeneutical and modern analytical (e.g. game theoretic) thinking are described and compared.

Findings

It turns out that parts of the Historical School agree with the fundamental principles of modern market economics. It is also shown (in contrast to widely spread opinions) that von Schmoller can be considered as a great forerunner of the social market economy in many of his views.

Research limitations/implications

The analysis of the social question is restricted to the example of von Schmoller's treatment of the labour question. Comparison is reduced to certain issues such as the role of productivity, free competition, bargaining.

Practical implications

The comparison of different methods of analysis recommends not to thoughtlessly refusing the results of the Historical School. It makes sense to assess some of these old results in relation to the current conditions and circumstances.

Originality/value

The solution to the social question is linked to the harmonious development of individual and social goals, not only based on the exchange of economic quantities but also under consideration of these relationships as an expression of ethics, custom, culture, ideas, education and public opinion – all of which are problems of the present.

Citation

Frambach, H. (2006), "The social question and fundamental principles of modern market economics – there is more agreement than contradiction: The case of von Schmoller's labour question", Journal of Economic Studies, Vol. 33 No. 3, pp. 224-236. https://doi.org/10.1108/01443580610680473