Gustav Schmoller

Gustav von Schmoller was a prominent German economist and a key figure in the later historical school of economics. This school of thought, which emerged in Germany in the latter half of the 19th century, emphasized understanding economic phenomena within the broader context of a nation's total historical experience.

Unlike classical economics, which relied on deductive reasoning, the historical school favored an inductive method. They believed that economic motives were just one part of a larger social order and that government intervention could be a positive force. Schmoller, in particular, aimed to identify cultural trends through extensive historical research. The historical school's influence was felt across Europe and the United States, impacting American institutional economists.1