interesting passage

I've been meaning to put this up for a while now. For those of you who don't know, the German Historical School rocks. They invaded American economics way back in the last quarter or so of the nineteenth century. Rather than framing their arguments in terms of mathematical equations built on minimal assumption sets, these institutionalist thinkers combined the latest trends in other social sciences of the time (notably psychology and evolutionary theories in social sciences) into a grand view of the economy as part of a social system. Veblen is probably the most popular of the scholars in this tradition, but they were all working together at various points, part of what is now termed the "Wisconsin School". Here's a passage from J. R. Commons, student of Richard Ely (who, in turn, was a founder of the American Economics Association). I select this passage in particular because it's a perfect example of the beautiful writing and ideas applied in a "big picture" framework which this school was known for (and which any sociologist studying the German classics up until around the 1920s will be very familiar with):

Towards a motivation for the study of political economy:

An accompanying mark of progress in economic theory is indicated by changing views as to the Time dimensions of value and economy [note 'economy' is used here in the sense of how to allocate resources among the four factors of production, labor, land, capital, entrepreneurship]. Early economists found the 'cause' and 'substance' of value in the stored-up energy of the past, either Quesnay's vital forces of nature, or Ricardo's and Marx's stored-up labor power. Then followed the hedonic economists who found value in the pains and pleasures of the present, while the later theories find value in the hopes, fears, probabilities and lapse of time of the future, depending on the will of persons existing in the present. The progress has been from 'efficient causes' flowing from the past into the present, to 'final causes' originating in the purposes and plans for the future and guiding the behavior of the present. While the earlier theories were quantity theories of value and economy, the later are expectancy theories.

These changes in concepts of quantity and time have accompanied changes in the concept of the energy itself which is the 'substance' of value and the 'cause' of economy. Early theories attempted to get away from the human will, since that was conceived to be internal, capricious, no subject to law, and therefore economics should be reduced to one of the nature sciences, analogous to chemistry, physics, or physiology [see my above definition of economy: first principle of physics, matter is never created or destroyed, it simply changes form]. It should be a theory of commodities or mechanisms, not a theory of the will [my own comment - mainstream economics is a theory of people as they relate to objects, not a theory of people in relation to other people]. But a larger knowledge of the human will, derived from the human-nature sciences of psychology, ethics, law and politics, begins to find the will, not in an unknowable caprice, but merely in human behavior, and this behavior begins to be formulated into natural laws of its own.

-J. R. Commons, Legal Foundations of Capitalism