Question

In what respect did the views of the older and younger historical schools differ regarding classical economics?

Answer 1

1) The primary difference between the historians and classicists was that while the historians thinkers approached the economic phenomena from the organic point of view, while the classicists approached it from the mechanic point of view

2) The older and younger historical schools believed that economic laws are relative and not absolute; and thus cannot be applied everywhere and at all times as believed by the classical economics.

3) The historians stated that self-interest not to be the only motivation in the world's economy. It is directed by numerous motives, such as, pity, glory, vanity, love, pleasure, duty, custom, benevolence, etc. The classicists pointed the self-interest to be the only motivation in an economy.

4) Classical economists started with a specific prior assumptions and with an approach of simple process of reasoning deduced from them all economic laws. The historical economists stated these laws insufficient as they do take into consideration the various motives actually operative in the world of economy.