Historical School

Economic Approaches:

Key assumptions and aspects:

  • Main concern: National economic development 
  • Economies are made up of: Nations
  • Human beings are: Citizens of a nation
  • Economies change through: Political decisions along national-cultural specific paths of development
  • Favoured methods: Inductive statistical and archival analysis 
  • Typical policy recommendations: Infant industry protection, public infrastructure investment and social policy

The German historical school, together with the partially overlapping American school (or national system), arose as a reaction to classical political economy which argued free markets and free trade create prosperity. Furthermore, it was opposed to the deductive approach which had become dominant within classical political economy, and developed inductive historical and statistical approaches to studying the economy. Human beings were understood as part of cultural and historical specific nations. To understand how people behave and economies work, one thus has to look at the history of a specific place instead of just making assumptions about individuals that are supposed to be universal. Germany was the centre of academic life during the 19th century, in doing so it inspired an English (and French) historical school of economics and institutional economics in the US. But because of the rise to power of the Nazi’s and the Second World War, the influence of the historical school was abruptly ended.


  • A Companion to the History of Economic Thought by Warren J. Samuels, Jeff. E. Biddle & John B. Davis, from 2003, chapters 14. 
  • The German historical schools in the history of economic thought by Peter Senn, from 2005.
  • The German Historical School: The Historical and Ethical Approach to Economics by Yuichi Shionoya, from 2000.