While JA Schumpeter is among the least ideological of the economists, it is well for us to remember his pedigree. Schumpeter was a student of Eugene Bohm-Bawerk, who was in turn a student of Carl Menger. This is significant because it helps to explain why Schumpeter never appreciated what all the fuss was about.
Yet, note, this does not imply that he is ready to acknowledge the validity of the criticism leveled against the Austrian School of Economics by members of the German Historical School. At best, he says, it was simply a misunderstanding.
And, yet, when we look closely at Henry Sedgwick’s way of handling the problem of value judgment (in 1883, actually before the controversy arose), it solves this problem less than ignores it.
The problem of “what is” and “what ought to be” is not the problem of value judgment. First, the problem of value judgment is that there is nothing in the scientific method per se that dictates to what I should apply this method, i.e., what I should find interesting or valuable or necessary to study. Yet, at the very beginning, it is this interest (of an individual, a department, an economic sector, an elected official) that dictates the research program.
But, second, when I delimit the research problem—and choose what should and should not be included—such judgments are rarely if ever driven by the integrity of the problem. To the contrary, a researcher will often exclude variables because a) their relationship to other variables is less well understood and would therefore risk jeopardizing the research; b) the variable, while not random, is not entirely predictable and therefore, again, would introduce uncertainty into the outcome and validity of the results.
It is true that more often than not a community of researchers can agree upon which variables should be laid aside and which should be included and therefore that practically speaking the remaining issues are technical and not a matter of value judgments.
But the mere fact that an entire community shares a prejudice does not under any circumstances obviate the need to theorize the bearing a variable may have on the outcome of research. Sedgwick’s argument (and Schumpeter’s) simply ignores the problem raised by the Historical School and, by ignoring it, counts it solved.
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