Economics might have been (and will attempt to again be) a universal social science. That is to say it might have been a science that, elaborating upon GFW Hegel’s outline, might have sought to reflect critically upon and offer explanations for a highly differentiated social landscape that included history, society, politics, geography, social psychology and so on.
However, if we are correct then capitalism itself demanded a different set of interpretive categories by which it would be understood. This set of categories would seek to grasp the abstract (formally neutral and temporally independent) character of value; value isolated from the historical, social, political, and social psychological landscape in which it was embedded. And it would seek to derive abstract, universal principles through which it could explain the increasingly comprehensive, total, and systematic appearance of the emerging capitalist social formation.
Some (mostly left-wing) economists have faulted Menger for merely borrowing from the physical sciences an abstract, formal scientific framework ill-adapted to the complexities of modern economic action. Yet this criticism ignores the increasingly abstract and formal character of economic action, regulation, law, and institutional arrangements emerging in late nineteenth century Europe. There was, it could be argued, an increasing correspondence between the kinds of categories that Menger adopted, the kinds of questions he was raising, and the kind of society he was examining. And while it may be true that mature capitalist societies did display increasing complexity, it is also undeniable that this complexity was not in kind, but in orders within kind. Thus, things that on appearance seemed to differ qualitatively from one another suddenly lent themselves to analysis using the same categories and explanatory structures.
This, I believe, is the significance of Carl Menger’s bold new economic science. It distinguishes Menger’s science from what could be called “romantic” economics, in the sense that, for example, the early Marx wished to recover and apply categories from early or pre-capitalist social formations to contemporary society. From this perspective, the early Marx, Adam Smith, David Ricardo, and Thomas Malthus all used interpretive categories that were ill-suited to the emerging mature capitalist social formation. That formation Menger sought to grasp scientifically.