KARL KNIES AND THE PREHISTORY OF NEOCLASSICAL ECONOMICS: UNDERSTANDING THE IMPORTANCE OF “DIE NATIONALOEKONOMISCHE LEHRE VOM WERTH” (1855)

Abstract

This essay serves as the introduction to the authors’ translation of Karl Knies’ essay “Die nationaloekonomische Lehre vom Werth” (1855). Knies is one of the acknowledged founders of the Older German Historical School, and yet in recent years several writers have described his 1855 essay as seminal in the evolution of marginal utility analysis. The authors examine how Knies develops his nascent theory of marginal reasoning in his essay, arguing that rather than cling to his earlier historicist programmatic, Knies attempts to discover general laws; however, not by strict causal analysis but by a typical ‘German art’ of taxonomy and classification that resembles juridical argumentations. This results in an ambiguous text, which influenced several marginalist pioneers who studied under Knies at Heidelberg (including Eugen von Böhm-Bawerk, Friedrich von Wieser, and John Bates Clark), as well as several members of the Younger German Historical School (including Gustav von Schmoller).