Nietzsche Schumpeter Menger

8/12/2019 Nietzsche Schumpeter Menger

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Nietzsche, Schumpeter and Menger - The Methodenstreit with theGerman Historical School

This is probably the biggest "offer" we have made to our loyal friends so far: Nothing less than alengthy excerpt from the Nietzschebuch - originally meant to be a chapter of Krisis and now abook in its own right (close to completion) The book is called Umwertung: Niet!sches "Trans-valuation of All #alues" $n%oy reading it&

It is of the utmost importance to realize that what Nietzsche opposes is not the

“instrumental” approach to society and community: Nietzsche understands that not only is

this “instrumentalism” possible, but it is also valid “as a tool or strategy of power”! This may

sound surprising in a philosopher who spared no effort to lampoon British Empiricism in

science whilst at the same time constructing his entire philosophical Entwurf on the reality

of “happenings”, of “events and appearances” and of “becoming” against all “rationalisms” –

something that would normally have brought him closer to the Empiricists and even to the

Machian Menger and the Austrian School. But what Nietzsche does not admit of is the

validity of the “values” – scientific (truth), moral (good or evil) and ethical (justice) – that the

“historicists” and the empiricists and Machians alike seek to ascribe to the “reality” of the

istorein. Far from being or representing a “value”, history is an amethodon hyle – the“formless matter” of Herodotus and Thucydides – that exemplifies, e-veniences the “nature”

or “physis” of the “individuals” involved. There is no “virtue” (arete’) or even “providence”

(Herodotean “pro-noia”) or “spirit” (Geist) in history, but there is “fate” which is certainly not

“Tyche” or “fortuna” (chance!), but rather nothing more than, most important for Nietzsche

as we shall evince dramatically in Part Two of this work, the manifestation of the Will to

Power as the Rationalisierung of life and the world!

Three kinds of “rationalities” are possible, therefore. One is the empiricist rationality of

scientific research, another is the “teleological”, “idealist” rationality introduced by Hegel,

and finally we have the Rationalisierung that Nietzsche expounds as the objectification ofthe Wille zur Macht. How difficult and confusing it may be to separate the three is perfectly

illustrated by the most “philosophical” economic theoretician of the neoclassical and Austrian

schools, Joseph Schumpeter, who combined a solid Machian background in the Vienna of

Karl Renner with a Nietzschean vision of reality filtered through Max Weber. Schumpeter

begins Chapter Two of his Theorie with this sweeping and suggestive summation:

“The social process which rationalizes our life and thought has led us away from the

metaphysical treatment of social development and taught us to see the possibility of an

empirical treatment; but it has done its work so imperfectly that we must be careful in

dealing with the phenomenon itself, still more with the concept with which we comprehendit, and most of all with the word by which we designate the concept and whose associations

may lead us astray in all manner of directions. Closely connected with the metaphysical

preconception…. is every search for a ‘meaning’ of history. The same is true of the postulate

that a nation, a civilization, or even the whole of mankind must show some kind of uniform

unilinear development, as even such a matter-of-fact mind as Roscher assumed…” (p.57)

http://www.eforum21.com/2011/09/nietzsche-schumpeter-and-mises.html






The footnote at “rationalizes” was expanded for the English translation and reads as follows:

“This is used in Max Weber’s sense. As the reader will see, “rational” and “empirical” here

mean, if not identical, yet cognate, things. They are equally different from, and opposed to,

“metaphysical”, which implies going beyond the reach of both “reason” and “facts”, beyondthe realm, that is, of science. With some it has become a habit to use the word “rational” in

much the same sense as we do “metaphysical”. Hence some warning against

misunderstanding may not be out of place.”

Evident here is the maladroit manner and dis-comfort (not aided, and perhaps exacerbated,

by the disjoint prose) with which Schumpeter approaches the question of the “meaning” of

history. The Rationalisierung, which Schumpeter adopts from Weber, has made “possible” a

scientific “empirical treatment” of “social development (Entwicklung)”, but has done so only

“imperfectly”, not to such a degree that we are able to free ourselves entirely of

“metaphysical” concepts – which is why “we must be careful in dealing with the phenomenon[Entwicklung] itself”. Nevertheless, Schumpeter believes that it is possible to leave

“metaphysics” behind and to focus on “both ‘reason’ and ‘facts’”, and therefore on the “realm

of science”. In true Machian empiricist tradition, Schumpeter completely fails to see the point

that Weber was making in adopting the ante litteram Nietzschean conception of

Rationalisierung to which he gave the name. “The social process which rationalizes” is an

exquisitely Weberian expression: far from indicating that there is a “rational science”

founded on “reason” and “facts” that can epistemologically and uncritically be opposed to a

non-scientifc idealistic and “metaphysical rationalism”, Weber is saying what Nietzsche

intended by the ex-ertion of the Will to Power as an ontological dimension of life and the

world that “imposes” the “rationalization” of social processes and development in such a

manner that they can be subjected to mathesis, to “scientific control”! What Weber posits as

a “practice”, one that has clear Nietzschean onto-logical (philosophical) and onto-genetic(biological) origins, Schumpeter mistakes for an “empirical” and “objective” process that is

“rational” and “factual” at once – forgetting thus the very basis of Nietzsche’s critique of

Roscher and “historicism”, - certainly not (!) because they are founded on “metaphysics” (!),

but because they fail to “question critically” the necessarily meta-physical foundations of

their “value-systems”, of their “historical truth” or “meaning”!

Far from positing a “scientific-rational”, “ob-jective” and “empirical” methodology from which

Roscher and the German Historical School have “diverged” with their philo-Hegelian

“rationalist teleology”, Nietzsche is attacking the foundations of any “scientific” study of “the

social process” or “social development” that does not see it for what it is – Rationalisierung,that is, “rationalization of life and the world”, the ex-pression and mani-festation of the Wille

zur Macht! By contrast, Schumpeter believes that the mere abandonment of any “linearity”

in the interpretation of history, of any “progressus” (as Nietzsche calls it), is sufficient to

“free” his “rational science” from the pitfalls of “metaphysics”!



This contrast between Nietzsche’s approach to the world of experience and perception and

appearance as “becoming”, against the Machian “empiricist” approach to “scientific reality

and fact and truth” is quite revealing: both Nietzsche and Mach start from the opposition of

“experience” and “perception” to any “meta-physical reality” that may lie “beyond” the

human perception of life and the world – including, even for Mach, the Newtonian conception

of space and time! But, a most crucial distinction, whereas Mach still believes in the

epistemological “reality” of Newtonian physics and of the “laws of science” tout court,

Nietzsche in extreme and radical contrast comes to question the very “scientificity” of this

“science” and of this “reality”, whether Newtonian or indeed Machian, questioning in the

process even the Kantian epistemological foundations of logico-mathematics! (We shall pay

the closest attention to these matters – which constitute the whole thrust and import of our

present work – in Part Two of this study.)

Here it will suffice to reiterate that Nietzsche shares wholeheartedly – nay, makes it a point

of pride of his philosophy dating from Birth of Tragedy - the anti-historical notion of “fate”

not as “pro-noia” or pro-vidence, and not even as the “cyclical” and “pagan”, pre-Judaeo-

Christian interpretation of historical time, but certainly against the mediaeval Scholastic“linear” interpretation of Christian millenarism. (Cf. Mazzarino, ‘PSC’, Vol.3, refs. to

Nietzsche.) “Cyclicality”, whether in its cosmological version (the exact repetition of events or

palingenesis with final apokatastasis) more attributable to Epimenides, with whose concept

of “prophecy” Nietzsche would have disagreed, or even historical-analogical (the repetition of

“cycles”, anakyklosis) as with Polybius and Vico (“corsi e ricorsi”), was certainly not what

Nietzsche intended to oppose to his presumed Christian “linearity”, but rather the “a-

historicity” or “realism” of a Thucydides or Machiavelli intent on the study of “completed

actions” (autopsia, dia-gnosis).

Nietzsche may well have approved of Karl Menger’s attack on “the errors of historicism” forits unwillingness “to theorise” mathematically certain social phenomena, economic ones in

particular; but most certainly not in pursuit of a “scientific empeiria”, a factual “research”

that could follow “empirical methodological or scientific standards”. Rather, he would stress

the “instrumental” nature of any such “mathesis”: in other words, he would insist that such

“regularities and tendencies” as the neoclassical Menger and Jevons sought (the phrase is

Keynes’s, who uses it to describe the latter’s innate “statistical” quest, in ‘Essays in

Biography’) – a search joined even by Marx in his “scientistic” mode - exist not as “absolutes”

or as “explanations”, but purely as “descriptions” of a “reality” that changes and is “trans-

formed” continuously! This would explain Mazzarino’s “perplexity” [‘PSC’, Vol3, p.362] when

confronting Nietzsche’s attack on Roscher for his “historicist” divergence from the

Thucydidean focus on individual events and Menger’s equally virulent “anti-historicist”

diatribe with this most “pro-Thucydidean” of German historians and his successor, GustavSchmoller, for refusing to draw scientific generalizations from history because of their focus

on just such individual events! Mazzarino’s perplexity can be overcome if one considers that

whilst Nietzsche did not admit of a “linear history” from which a “telos” or a “scientific truth”

could be deduced, nevertheless he could have agreed with Menger that “scientific

instruments” could be applied in a “practical” or “strategic” sense to the study of a given

“historical space” as nothing other than ex-ertions of the Will to Power, as “the

rationalization of life and the world”!



It is most important to note at this juncture that, as we argue in our study on the origins of

“The Neo-classical Revolution in Economics”, the Austrian and German Schools, however

“heated” their controversy over the “methodology” of the social sciences (the famous

“Methodenstreit”) constituted powerful forces in the concerted effort by capitalist bourgeoisinterests across Europe to counter the emergence of socialist parties and their ideologies in

the name of an overall “methodological subjectivism” that displaced the entire focus of

Political Economy from “Labour” to “individual Utility” and therefore from the dramatic

transformation and concentration of the labour process (Taylorism and Fordism), of the

composition of the working class (from the skilled [Gelernt]to the mass worker), and that of

capital (the rise of large cartels and corporations vertically and horizontally integrated) in

what has been generally described as “the Second Industrial Revolution” (see Alfred

Chandler Jnr’s The Visible Hand), to a vision of the liberal “free and competitive” market

that championed the Planlosigkeit (spontaneous plan-lessness, anarchical freedom) of

bourgeois civil society (Ferguson’s and Hegel’s burgerliche Gesellschaft) against the

regimentation of the “planned”, “organized” economy advanced by the Sozialismus. It is the

“abandonment” of all “metaphysical illusions” – the better to conceal the greater illusion of“marginal utility” - that will allow the conceptual fusion by the German ruling elites in the

period to World War Two and beyond of the German Historical School’s focus on “individual”,

interventionist specific projects of German industrial domination in Europe, on one hand,

and of the Austrian School’s elevation of “individual” consumer choices on the other. In this

context, Nietzsche’s own philosophical Entwurf, together with the spread of Machism in

science that subtended both the Austrian (Menger, Bohm-Bawerk, Mises and Schumpeter,

then Hayek) and the Lausanne (Walras and Pareto) Schools, must be seen as one co-

ordinated and massive intellectual counter-attack by capital against the emergent working

class whose political expression will culminate with the overarching intellectual vision of

Max Weber. (For an initial outline of these arguments, see Cacciari’s “Sul Problema

dell’Organizzazione” in ‘PNR’.)

The mathesis, which again will be the central theme of Part Two of this study, is a politically-

charged praxis that Nietzsche brilliantly identified but failed to enucleate sufficiently.

Despite vague warnings about the dangers of “scientisation” from far-sighted critical

thinkers such as Gunnar Myrdal (‘The Politics of Economic Theory’) and Hannah Arendt (in

‘The Human Condition’) and Jurgen Habermas (in ‘Theorie und Praxis’), no serious attempt

has been made to date to “theorize” or “identify” and spell out its nature and import. (We

shall have occasion to explain later why Heidegger’s conception of Technik is at once

inapplicable and irrelevant to the critique of capitalist social relations despite his mostvaliant efforts in that direction [in Die Technik und die Kehre and in Brief am Humanismus],

capably but unconvincingly supported by Cacciari [‘Confronto con Heidegger’ in ‘PNR’].)

Thus, to repeat, the “difference” between Nietzsche and Menger is that whilst the former

denied the possibility of a “science” of history, he may have agreed on the “instrumental” use

of scientific techniques to societies and of economics in particular – what constitutes the



Rationalisierung –, whereas the latter took the “historicist” denial of the “possibility” of

economic “science” as “erroneous”, just as did Schumpeter. Whilst Nietzsche would agree

with Roscher’s “historicism” in exalting historical “uniqueness” (except perhaps for the

“analogical cyclicality” of the Eternal Return), he would also agree with Menger that this

“historicism” cannot prevent (except epistemologically) the adoption of certain scientific

“techniques” as strategies (ideologies) in the overall Rationalisierung of life and the world.

Menger, for his part, starting from a Machian position, would argue that these “techniques”

are also “scientific”. So, whereas Nietzsche understands “historicism” as “historical science”

and deprecates it, Menger interprets it as “refusal to be scientific in economic matters” –

which Nietzsche would allow! Marx will go even further than Menger by “historicizing” the

laws of motion of modes of production in a historical-materialist sense, which is why he could

deride jokingly the philo-Hegelian idealist “emanationism” of “Thukydides-Roscher” (in ch.9,

Vol.1 of Das Kapital).

But the fact that Nietzsche, who championed Thucydides for confining himself to

“happenings”, could attack Roscher’s “historicism” whilst Marx could do the same

(although from a “historico-materialist” perspective) by lambasting “Thukydides-Roscher” ought to have warned the philosopher of Rocken about the possible different

interpretations of Thucydides, with Marx placing the Greek historian clearly in the

“historicist” camp. Later, Hayek and Schumpeter will assume a position similar to

Menger’s. Even the Mengerian assault on Roscher and the German Historical School is

evidence of Nietzsche’s mistaken “strictures” on the compass of Thucydides’s historical

method, which could lend itself to broader “historicist” use in the “reflexive history”

tradition (Hegel) of what Dilthey sought to theorise as the hermeneutic

“Geisteswissenschaften”. (For a review of the “hermeneutic” current of historical

interpretation, the obligatory reference, although from a heavily Heideggerian

“perspective”, is H. Gadamer’sWahrheit und Methode.)

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Nietzsche Schumpeter Menger