CHAPTER 2 Economics as an Academic Discipline

Economic disciplines at Austrian universities developed from the eighteenth century science of “cameralistics,” which was intended to endow future civil servants with the necessary economic and administrative skills to manage the domains and estates of the authorities. The first relevant chair was instituted at the Theresianische Akademie in 1751, which at the time was an educational center for young Viennese aristocrats. Later, the universities of Vienna and Prague followed suit. This development was driven mainly by Joseph von Sonnenfels (1732–1817), who in 1763 established the “Polizey- und Cameralwissenschaften” (“Science of Regulation and Cameralistics”) at the Faculty of Philosophy in Vienna. In 1784 he relocated the chair to the Faculty of Law. From then on and until 1919, economics remained part of the law curriculum under a variety of labels. (cf. Schruttka-Rechtenstamm 1898, pp. 170–173).

With his Grundsätze der Polizey-, Handlungs- und Finanzwissenschaft (1765–1772, three volumes) (“Principles of Regulation, Administration and Public Finance”), Sonnenfels presented a text book which was a mixture of well-meaning concern and confining paternalism typical of the enlightened, Josephian¹ authoritarian state. Until the middle of the nineteenth century it served to educate prospective civil servants, and was only replaced by Die Grundlehren der Volkswirtschaft (1846) (“The Basic Rules of Economy”), written by Joseph von Kudler (1786–1853), one of von Sonnenfels’s successors. Thus were Austrian students led—until far into the nineteenth century—into a way of thinking that took for granted the paternalism of the state as well the comprehensive administrative monitoring of its citizens and the economy.

With Kudler’s death this traditional Austrian strain would soon be lost. What followed was an increasing orientation toward German and Prussian universities where cameralistic studies were assigned chiefly to the philosophy faculties. Only in Strassbourg, Würzburg, and Freiburg were they integrated into the respective law faculties. Independent faculties of political science existed in Munich and Tübingen (cf. Grimmer-Solem 2003, p. 41). In the middle of the nineteenth century, in a phase of identity-seeking reorientation, the term Cameralwissenschaft (“cameralistics”) was replaced by a confusing multitude of denotations; for example, Finanzwissenschaft (“public finance”), Politische Ökonomie (“political economy”), Nationalökonomie (“national economics”), Volkswirtschaftslehre (“social economics”), or Staatswissenschaften (“political sciences”) (ibid., pp. 39–42). For graduates, the terms Kameralist or Nationalökonom were preferred. (cf. Conrad 1884, p. 135). The term Volkswirth (“social economist”) tended to be rejected because of its linguistic closeness to Bierwirth or Schenkwirth² (cf. Wagner 1892, pp. 264–265).

With the role of the German economist changing rapidly in the face of a growing nation state and the developing industrial society, the inadequacy of his customary, two-year education soon became apparent. This had a detrimental effect on career prospects in civil service and began to unsettle all of its members. Concerns that educated lawyers might possibly replace cameralists were voiced (cf. Lindenfeld 1997, p. 212; Bruch 1985, p. 135; Kleinwächter 1876, pp. 2, 6, 12–13). By contrast, these sorts of problems were unknown to economists in Austria. Their foundational studies in law ensured them of sufficient career opportunities. In fact, demand was increasing greatly on the part of the Austrian state administration.

The Verein für Socialpolitik, founded with the substantial involvement by the German economist Gustav Schmoller (1838–1917), succeeded in calling a halt to this uncertainty. From the beginning, tangible corporate interests played a major role (cf. Lindenfeld 1997, p. 224) and for a short while, setting up the society as an official trade association was considered (cf. Brentano 1888, p. 141). Most held the view that economics should be principally concerned with the possibilities of state influence on economic processes. On the basis of such a program, members expected jobs, resources, reputation, and influence. An understanding of economics as a science for analyzing and explaining the nature of the economy was neglected when compared to this view (cf. Hennings 1988, p. 48). With this self-assured reorientation, those who had recommended a combined legal and economic education in Germany gradually disappeared as well (cf. Kleinwächter 1876, pp. 2, 14; Conrad 1884, p. 119).

The establishment of economics within varying faculties also resulted in typical Austrian and German graduates having remarkably different social profiles. Evidence shows that law students at the University of Vienna, who comprised about forty percent of the empire’s total law students, originated largely from the middle and upper classes (high-level civil servants, officers, lawyers, factory owners, businessmen; cf. Cohen 1987, pp. 301, 307–308). The same can be said of law students (as a whole) in Germany. The Faculty of Philosophy, however, where German “cameralists” studied, recruited members predominantly from the lower class (Conrad 1884, pp. 54, 110).

Perhaps even more than social background, institutions and curricula determined a significantly different scholarly socialization and a dissimilar intellectual character. In order to graduate as an economist in Austria, one had to complete a course in law, of which the history of law was a substantial part. While working on abstract law terms, terminology analyses, and methods of interpretation and their practical applications, students were being coached above all in analytical thinking, linguistic precision, and logic. The major subjects of jurisprudence were oriented toward hermeneutics. In contrast, cameralistics at German universities was based on a predominantly descriptive-empirical approach, evident from the encyclopedic breadth of the course alone. Areas of study ranged from farming, agriculture, mining, trade, and industry, to finance, political science, and government accounting, and the program was closely associated, both institutionally and methodologically, with the natural sciences. As far as their intellectual self-conception, career goals, career options, scientific culture, and methodological repertoire were concerned, economists trained in Austria and Germany basically came from two different worlds.

Looking at university statistics, it is easy to understand German economists’ fear of falling behind in their careers. The total number of students at the twenty German and Prussian universities had increased steeply from 13,247 (1861–1862) to 24,207 (1882–1883, including the newly founded University of Strasbourg) (Conrad 1884, pp. 24–25). It is true that the cameralists were only counted along with the agriculturalists and the pharmacists for statistics purposes, but even so they totaled only 1,455 students in all, to which about one hundred students of the Munich and Tübingen faculties of political science should be added (ibid., pp. 137, 150). In any case, their proportion in the student body decreased from ten percent in 1841 to less than six percent in 1881 (ibid., p. 135). Despite a general boom in education, the number of authors in the discipline of cameralistics, about half of whom held professorships, remained unchanged at about one hundred throughout the nineteenth century, (cf. Hennings 1988, p. 53). In comparison, the total number of students at the seven German language universities of the Austrian monarchy (Vienna, Prague, Innsbruck, Lemberg, Krakow, and Cernowitz) had increased from 6,034 (1863–1864) to 13,069 (1883–1884), even though the University of Krakow was “Polonized” in 1870 and the University of Cernowitz had only been founded in 1875 (cf. Pliwa 1908, no. 106). The law faculties had 2,527 (1863–1864) and 5,407 (1883–1884) students respectively, thus constantly more than forty percent of all students (ibid., No. 45). In terms of student numbers, the Faculty of Law in Vienna was the largest law teaching institution in the world.

Because of growing student numbers, the larger law faculties were given a second chair of economics in the 1860s. The two Viennese professorships were deemed to be particularly lucrative, especially as tuition and exam fees flowed in plentifully: “With a considerable 3,000 to 4,000 students attending, I had the most attractive outlook for my accounts,” recollected Albert Eberhard Friedrich Schäffle (1831–1903), Carl Menger’s predecessor (Schäffle 1905, vol. 1: p. 150). Nevertheless, some chairs remained vacant for years because of a great shortage of professors. Of the seventy-one professorships at all law faculties in the Austrian monarchy, only fifty were occupied in 1874. In Vienna alone, six of the seventeen chairs were vacant. Because Austrian professors had to be qualified in law as well, the circle of possible candidates from Germany was limited from the start. Furthermore, many ideal candidates rejected the summons to Vienna because the faculty was considered to be too “school-like,” research was neglected, and the climate among the teaching staff was considered less than harmonious (cf. Grimmer-Solem 2003, p. 268). The shortage of local junior lecturers was the result of the boom of the Gründerjahre.³ This boom “absorbed a not insignificant number of the most talented younger lawyers, who received rewarding, often illustrious positions as directors, secretaries and the like” (Kleinwächter 1876, p. 72). Only a significant increase in public officials’ salaries in the 1870s resulted in a greater influx of lawyers entering public service.

When Carl Menger began his law studies in Vienna, Lorenz von Stein (1815–1890) was teaching political economy. The second professorship was occupied by Leopold Hasner von Artha (1818–1891), who, after serving for only two years, was promoted to Minister for Education and later to Prime Minister, and did not return to the university. His successor, Albert E. F. Schäffle, from Württemberg, took over the office of Minister for Trade in 1871 and shortly thereafter went to Stuttgart. At about the same time, the Viennese publishing house, Braumüller, published a book by the up-to-that-time unknown, thirty-year-old, Carl Menger. It was almost 300 pages long and would yet make history: Grundsätze der Volkswirthschaftslehre (1871) (Principles of Economics, 1950/2007).

¹Ed.: Named after Emperor Joseph II (1741–1790).

²Ed.: Both terms, Bierwirth and Schenkwirth, can be translated as “publican” or “innkeeper.”

³Ed.: The economic expansion in Austria and Germany in the second half of the nineteenth century