The Argument Over Economic Methodology Between Menger And Schmoller

The selection and use of methodology is a key to scientific progress and development, economics study as well. Since the development of economics devoted many efforts and hard works of a lot of schools of economics and economists, a variety of viewpoints, different economists held their own viewpoints and methods of economics , enlighten and explain them, while they criticize the views of the other schools and absorb them. That is, in this environment, economics continues to move forward.In the late 19th century and the early 20th century, western economics not only developed rapidly, but also a variety of perspectives in all schools, "all school argument" period, which occurred in this period, Menger represented the Austrian School, and Schmoller represented the German Historical School, this argument over methodology of economics among them is the most significant struggle, and this debate has been a shining pearl in the development of economics . They explained their views and ideas of economics from their own standpoint due to their standpoints. In order to win, Menger as a representative of the Austrian School firstly questioned Schmoller, a representative of the new Historical School .From then, the debate lasted twenty years .The dispute involved mainly the following three areas: inductive method and deductive method in methodology, subjectivism and relativism in epistemology, individualism and collectivism in values. To Menger and the Austrian school, they respected deductive method, and thought that deductive method was the only analytica method of economic phenomena and the basic approach. This idea of the Austrian school led to its epistemological subjectivism and individualism in values; While Schmoller and the German Historical School held the view that induction is the primary method to search for economic laws, deduction is only an auxiliary method, which led them to advocate epistemological relativism and collectivism in values, the article attempts to sort out the views on both sides from three aspects, and analysis them from a purely economic point to the point of economic philosophy. The argument had many important impacts not only on economy but also on the social and political systems.