Alfred Schutz and the Austrian School of Economics

Author(s): Christopher Prendergast

Source: American Journal of Sociology, Vol. 92, No. 1 (Jul., 1986), pp. 1-26
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Alfred Schutz and the Austrian School

of Economics'
ChristopherPrendergast
Illinois WesleyanUniversity

is exAlfredSchutz's reconstruction
of Max Weber'smethodology
amined fromtwo points of view: Schutz's decade-longaffiliation
with the Austrian school of economics and his project for the
unification
ofthesocial sciences.Biographicaland textualevidence
shows that Schutz's methodologicalgoals for his firstbook, Der
sinnhafteAufbau der sozialen Welt (published in 1932), were
shaped bytheepistemological
debateswithintheAustrianschoolof
economics,ratherthan some abstractand unmotivatedattemptto
"synthesize"Weberand Husserl. SchutzmodifiedWeber'sconcepts
of Verstehenand the ideal typeto meet Austrianobjections,and
revisedthemfurtherto complywith canons of reliabilityadopted
fromthe logical empiricisttheoryof science,with which he was
familiarthroughhis friendFelix Kaufmann.The essay concludes
witha depictionofSchutz'slittle-known
programfortheunification
of the social sciences,whose origincan be tracedto the same intellectual context.
For scholarswho would like sociologyto be a cumulativebutnonpositivisticsocial science,themethodology
ofAlfredSchutzholdsspecialimportance.In his reconstruction
oftheideal type,Schutzpromisedto reconcile
history,the most humanisticsocial science, with economics,the most
nomothetic.Looking beyond Max Weber, who saw sociologyas a
generalizingauxiliarydisciplineto history,Schutz saw that descriptive
sociologycould play the part of a particularizing
auxiliarydisciplineto
economicsas well, providedthata commonmethodology
and a common
corpusofconceptsunitedthethreefields.No longeroperatingin isolation
or competition,
each disciplinewould becomeprogressively
more"objective," in thesenseofutilizingthesmallestnumberofconceptsrecognized
as relevantto theirrespectivesubject matters.
Thispaperis dedicatedtoPeterAndreasMunch(1908-84),whotaughta generation
of
studentshow to read socialtheoriesphilosophically.
1

Requests for reprintsshould be sent to ChristopherPrendergast, Department of

Sociology and Anthropology, Illinois Wesleyan University, Bloomington, Illinois
61701.
? 1986 by The Universityof Chicago. All rightsreserved.
.50
0002-9602/87/9201-0001$01

AJS Volume 92 Number 1 (July1986): 1-26

AmericanJournalof Sociology
Schutz'sprojectforthe unification
of the social sciencesseemsto have
falleninto a black hole as faras the commentators
are concerned.Selfconsciouslystrivingto createa coherentbut noncumulative"school"of
social theoryand philosophy,contemporarysocial phenomenologists
preoccupythemselveswith Schutz's relationshipto Husserl, Bergson,
James,and otherphilosophersofconsciousness(see Rogers1983;Wagner
1983b; Powell 1977). Theorybuildingwithinthe school has become increasingly"egological"as a consequence,focusingabove all on the"constitutive"activitiesthat bestow meaningon the world originaliter.In
theirmethodologicalremarks,likewise, social phenomenologists
have
become more skeptical of the possibilityof cumulativesocial science
and thus more humanisticby default(see Wagner 1983b, pp. 207-11;
Levesque-Lopman 1983).
ofa morepositivisticbenttaketheoppositetack,denyCommentators
ingthatSchutzeversoughtanythingmorethanan egologicalfoundation.
His methodological
endeavorsstrikethemas contradictory
or mysterious
(Hindess 1972). Robert Gorman's analysisof Schutz's "dual vision" at
least recognizesthat Schutz'sconceptof sciencewas formedin dialogue
withlogical empiricism(Gorman 1977, pp. 138-41). But because Gorman assiduouslyavoids the intellectualcontextin whichSchutzcame to
absorbthistheoryofscience,he too is unableto see Schutz'slargergoal of
the unification
of the social sciences.
In this paper, I would like to reexaminethe methodologicalgoals of
Schutz'sfirstbook, Der sinnhafte
Aufbaudersozialen Welt,publishedin
1932,in thelightofhis interestin theunification
ofknowledge.To do so,
it will be necessaryto scrutinizethe personaland intellectualcontextin
whichthesegoals wereformulated.Enamoredoftheexquisitecritiqueof
and the relatedanalysis
Weber'smethodof Verstehen("understanding")
ofinner-time
have cometo forgettheprobconsciousness,commentators
in thefirstplace.
lemsthatled Schutzto investigateWeber'smethodology
Schutz'sfriendsand associates,however,recognized,as we do nottoday,
that the Husserl-Webersynthesiswas a means to an end, not the end
itself.Moreover,theyrecognizedthatthe object of Schutz'sreformwas
not just sociology,but economicsand historyas well. Above all, they
canvassedSchutz'sfirstbook to findoutwhetherWeber'sideal typecould
be made to accountfortheallegeda prioricharacterofthebasic concepts
and laws of economics.If to us post-Kuhnianstoday it seems quaintly
old-fashionedto speak of the basic conceptsof any social science as
"universallyvalid priorto all experience"(Schutz1967,p. 242), giventhe
ideological dimensionsof modern culture,it was quite otherwisein
Schutz'scircle,whereindefenseof thistenetwas a criterionof membership.
Through textual analysis and biography,I will show that Schutz's
2

AlfredSchutz
earliestintellectualenvironment
was dominatedby the epistemological
problemsof the Austrianschool of economics,of whichhe was a member. Committedto the school's overall methodologicalstandpoint,but
recognizinginadequatelyjustifiedcomponents,Schutz, in cooperation
with his friendFelix Kaufmann,began to investigatealternativesolutions. AlthoughI believe that many characteristic
themesof Schutz's
substantivesocial theory-the pragmaticconceptionof social action in
the "paramountreality"of everydaylife,the disregardfornormsin the
conceptionofaction,and thequestionofthesocial distribution
ofknowledge-can be tracedto thecentrality
ofthelaw of marginalutilityin his
systematicthinking,I will restrictmyselfto methodological
issues.
The presentessay has the meritof reconcilingtwo aspectsof Schutz's
life generallythoughtto be at odds with one another.Schutz's biographer,HelmutWagner,who has otherwisedone so muchto disentangle
the threadsof Schutz'sever-expanding
synthesis,treatsSchutz'slifelong
employment
as a specialistin internationalbankinglaw as an "imposition" on his scholarship(Wagner 1983a, p. 17). In the interpretation
presentedhere, Schutz's technicaltrainingand practicewere essential
stimulantsto his methodologicalthinking,howevermuchtimetheyconsumed. The world of work also provideda ready source for informal
comparisonsof the a prioriassumptionsof economictheorywith the
behaviorof everydaymen and womenand thusgroundsforconsidering
the interdependencies
of the varioussocial sciences.
I will begin by situatingSchutz in his properintellectualniche. This
procedurewill serveto introducetheAustrianschoolto thoseunfamiliar
with its subjective approach. SubsequentlyI will focus on Weber's
methodologicalconcepts and the goal of unifyingthe social sciences.
Inasmuch as the sociometryof Schutz's intellectuallife before1932 is
incomplete,however,theanalysisremainsspeculative.My purposeis not
to introducea "new interpretation"
oftheoriginsofSchutz'sphenomenologyofthesocial worldbutonlyto castfreshlighton theuses forwhichhis
was designed.
methodology
THE INTELLECTUAL ENVIRONMENT
In this section,I will put forwardthreearguments.First,the primary
audience for Der sinnhafteAufbau der sozialen Welt was not the
phenomenological
movementbut the groupof scholarsinterestedin the
methodological
problemsofthesocial sciences,especiallythosedefending
or modifyingthe epistemologicalstandpointof the Austrianschool of
economics.Second, Schutzturnedto Max Weberformethodological
inspirationbecause of two weaknessesin the Austrianapproach: (a) its
impoverishedaccount of intersubjective
understanding
and (b) its anti3

AmericanJournalof Sociology
quated, rationalistic
accountofthea prioricharacterofeconomictheory.
These weaknesseson the"theoretical"side ofthestill-smoldering
Methodenstreit,Schutz felt,threatenedthe progressof all the social sciences.
Third,howevermuchhe leaned towardWeber'ssolutionsto theseproblems, Schutz never questionedthe core elementsof the Austriantradition. His effortswere consciouslyorientedtoward its preservation,althoughthe rescue requiredthat it be set upon different
epistemological
pilings.As we will see, Schutzneverproposedto adopt Weber'smethodology as it stood, but always contingenton its reform.The reform
usuallyamountedto theeliminationoffeaturesobjectionableto theAustrian school. To meet these objections,Schutz had to emphasize the
nominalistic,
rationalistic,
and "value-free"aspectsofWeber'smethodology.
The pictureof Schutz thatemergesfromthisinterpretation
is thatof
a loyal memberof a schoolwho acts to protectits theoreticalsuperstructure by correctingserious shortcomingsin its epistemologicalselfand even the
understanding.The recognitionof those shortcomings,
selectionof Weber's ideal typeas a possiblesolutionto them,were not
originalinsightsof a prescientyoungphenomenologist
risinghead and
of a
shouldersabove his contemporaries.They were accomplishments
syntheticmind situated near the vortexof many-sidedcontroversies,
reactingprogrammatically
to a growingsenseofcrisisand dissatisfaction
of
among scholars of internationalrepute. The problem-definition
Schutz'sfirstbook was theby-product
ofa decade-longdialoguewiththis
audience.
distinguished
The Audienceof Schutz'sFirstBook
To inquireabout the audience of a writer'sbook is to ask not onlywho
read it but also whyit was written.Today we know Schutzas one of the
leadingexponentsof Husserlianphenomenology,
the authorof some 10
of
essays on the subject. One naturallyexpectsthe problem-statement
such an author'sfirstbook to reflectHusserlianconcerns.Granted,Der
sinnhafteAufbauder sozialen Weltcould not have been writtenwithout
theauthor'scarefulstudyof Husserl'sFormaland Transcendental
Logic,
because oftheessentialroleplayedbytheconceptsof"generalization
and
in theconstruction
formalization"
of theSchutzianideal type(see Schutz
1967, pp. 244, 31-38). Nevertheless,Schutz's firstbook was not addressedto thephenomenological
movementperse, althoughhe naturally
expected the book to come to its attention.His purpose was to use
phenomenologicalinsights"to become clear about the basic themeand
of the social sciences"(1967, p. xxxi).
methodology
AlthoughEdmund Husserl had studiedin Vienna underFranz Bren4

AlfredSchutz
tano and would returnthereto delivera famouslecturein 1935 (Carr
1970,p. xvii),therewas no organizedphenomenological
circlein Vienna
when Schutz was workingon the manuscript.Schutz's friend,Felix
Kaufmann,was the only thinkerin Schutz'senvironment
activelypromotingHusserlianconcepts,and he was just as powerfully
influencedby
Hans Kelson's"puretheoryoflaw," logicalempiricism,
and theAustrian
schoolof economics.It was Kaufmannwho finallygot Schutzto undertake a serious study of Husserl in 1928, after Schutz set aside his
unfinishedBergsonian monograph,Lebensformenund Sinnstruktur
(Wagner 1983a, p. 35). Togethertheyread Husserl's publishedworks,
beginningwith the lectureson internaltime-consciousness,
so that by
1932 SchutzwentbeyondborrowingisolatedconceptsfromHusserland
became a competent,self-taught
phenomenologist.
Nevertheless,aside
froma now-famous"appendednote,"in whichhe feltcompelledto takea
positionon Husserl's deepeningtranscendentalism
(Schutz 1967, p. 4344), thereis nothingin Schutz's firstbook to suggestthat he was addressingissues of pressingconcernto phenomenology.Rather,he was
using discretephenomenologicalinsightsto solve large methodological
problems.One goal mayhave been to make an overtureto Husserl,butif
so, it was a minorone.
Anotherpotentialaudience mighthave been communitiesof scholars
united in professionalassociations.With a degree in law includinga
specialtyin international
trade,a stintas executivesecretaryof theAustrianBankersAssociation,and employment
in a bankingfirm(see Wagner 1983a,p. 9), Schutzmighthave beenaddressingtheacademicwingof
theseprofessions.Schutzdid writetechnicalreports,such as the one on
the taxationof capital yieldin German-Austrian
trade,publishedin the
local organof the AustrianBankersAssociation(Schutz 1927). But Der
sinnhafte
Aufbauaddressedno issuewithwhichjuristsor monetary
economistswould be professionally
concerned.
Who, then,composedSchutz'saudience?The outercircleconsistedof
thosepublishedauthorswho had participatedin the major methodological disputesin the social sciencessince the posthumouspublicationof
Weber'sWirtschaft
in 1922. The innercircleconsistedof
und Gesellschaft
thosewithwhomSchutzwas in verbaldialoguein Vienna-his teachers,
Hans Kelson in law, Ludwig von Mises, Hans Mayer,and Friedrichvon
Wieser(d. 1926)in economics;theirstudentsofSchutz'sgeneration(Felix
Kaufmannabove all); and residentand visitingscholarsin allied disciplineswho competedforrecognitionin the formaland informalgatheringsat the Universityof Vienna throughout
the decade. These were the
peers and scholarswhose opinionsSchutzvalued highlyand whose disagreementshe hoped to resolveby recourseto the Weberianideal type.
The mostimportantsettingforthe face-to-face
exchangeof ideas was
5

AmericanJournalof Sociology
undoubtedlythe "Mises seminar," a private study group chaired by
Schutz'sformerprofessor,Ludwig von Mises, who was the titularhead
of the Austrianschool of economics.The group met twice a monthin
Mises's officein theAustrianChamberofCommerce(Mises 1969,p. 16).
Amongthebetter-known
participantsduringthetwentiesand earlythirties were the economistsOskar Morgenstern,
FriedrichA. Hayek, Fritz
Machlup, Gottfried
Haberler,and Paul N. Rosenstein-Rodan
(fora completelist,see Mises 1978, p. 100). Participantsin the seminarpresented
workingdraftsof papersin progress,whichwerediscussedand criticized
by memberspresent.Accordingto Mises, the participants"were united
bya burninginterestin thewholefieldofthesciencesofhumanaction.In
the debates the problemsof philosophy,of epistemology,of economic
theory,and the various branchesof historicalresearchwere treated"
(1969, p. 16).
As an institution,
theMises seminarwas the primevehicleforforging
and maintainingthe distinctivetheoretical,philosophical,and policy
it
traditionofAustrianmarginalism.Some yearsbeforeMises reinstituted
in 1922, the seminarhad been run by the distinguishedtheoristand
chancellorEugen von Bohm-Bawerkfrom1905 untilhis death in 1914
(Schumpeter1954, p. 845). Justas Bohm-Bawerkused the seminarto
hold the school togetherafterits founder,Carl Menger, retiredfrom
publiclifein 1891(see Hayek 1952,pp. 362-63), so Mises hopedto holda
new generationof scholarsto themarginalisttradition.By no meanswas
the maintenanceof traditionthe sole functionof the seminar-new
theoretical
deductionsand revisionsweremade all throughtheperiod(see
Machlup 1982, p. 41)-but it was the pivoton whichthe othersturned.
The seminardispersedin 1934,afterHitlerbegan actingon his pledgeto
annex Austriato the Third Reich.
Schutz attendedthe Mises seminarfrom1922 to 1932, althoughhis
topicalattendancerecordis unknown(Kauder, personalcommunication;
Wagner 1983a, p. 34). At no timewas he the centralfigureof the circle
(Kauder, personalcommunication).When the seminarresumedin 1922,
Schutzhad just begunhis bankingcareer;themeetingsprovidedintellectual stimulationand friendship.Perhaps the most importantpersonal
contactwas Felix Kaufmann.An incrediblyprolificwriter,Kaufmann
was Privatdozentin the philosophyof law at the Universityof Vienna.
Duringtheperiodoftheirfriendship,
he publishedtwobooksand several
articleson Hans Kelson's puretheoryoflaw (see Kaufmann1921, 1924),
discussed the Weberian ideal type as it pertainedto economictheory
(Kaufmann1925, 1929),and arguedforHusserl'srelevanceto anytheory
ofscience.After1928,Kaufmannalso participatedin thefamous"Vienna
Circle" of logical positivism,in which he, like Karl Popper later,was
consideredthe"loyalopposition"(Nagel, in Kaufmann[1930]1978,p. x).
6

AlfredSchutz
It was fromKaufmannthatSchutzlearnedof the modernconceptionof
scienceas a systemof decisionrulesand evidencecriteria,ratherthana
systemof "trueand justifiedbeliefs"in the mindof the knower(forthe
significanceof the linguisticturn, see Burger 1976, pp. 13-18, 55).
Schutz'sevolvingattitudetowardtheapriorismof Kelson and Mises, his
standson the methodologicalproblemsof the social sciences,his reflectionson the ideal type,his studiesof Husserl'sphenomenology,
and his
understanding
of thepositivisttheoryof scienceall tookshape duringhis
frequentand rewardingdiscussionswith this treasuredfriend.In the
prefaceto his firstbook, Schutz thanksthe man "who shared and furtheredthesestudiesin theirincipientstages,always withthe mostindefatigableinterest,who renderedme the laboriousserviceof readingthe
proofsheets, and, finally,who was a constantsource of stimulation"
(1967, p. xxxii).The collaborativenatureof Schutz'sfirstbook is recognizedbyWagner,who acknowledgesthatKaufmann"helpedto shape its
content"(1983a, p. 37) and statesfurther
that"theyearsof his [Schutz's]
university
studiesand hisintellectualdevelopmentstoodunderthesignof
his friendshipwith Felix Kaufmann"(1983a, p. 331). Discussionswith
Kaufmannled Schutzto attachtheabove-mentioned
"appendednote"to
the textwhile it was at the printer(Wagner 1983a, p. 36). Later KaufmannassistedSchutzin obtaininghis firstmeetingwithHusserlin 1932
(Wagner1983a, p. 46). Schutz'sattendanceat theMises seminarceased
soon thereafter,
as he quicklybecame immersedin Husserl'sphilosophy
and personality
(see Schutz 1977,p. 43). As I will show below, at crucial
pointsin Schutz'sargumentwithMises and in his interpretation
of the
"anonymity"
of the ideal type,it is Kaufmann'sinsightsthat move the
argumentforward(see, e.g., Schutz 1967, p. 184).
Schutz deliveredthreelecturesbeforethe Mises seminarduringthe
winterand springof 1928-29 underthe collectivetitleof "Pragmatism
and Sociology."Max Scheler, Georg Simmel,and Leopold von Wiese
in Schutz'sfirstattemptto characterizethe typical
figuredprominently
patternsofknowingand actingthatSchelercalled the"relativelynatural
worldview"(Scheler 1973, pp. 21-22). In June 1930, he addressedthe
seminaragain in a lectureentitled"Understandingand Action," announcingforthefirsttimehistopicaloutlineforDer sinnhafte
(on
Aufbcau
the lectures,see Wagner[1983a], pp. 34-35).2
2 Noteshouldalso be madeofa secondcircle,theGeistkreis,
halfofwhosemembers
overlappedtheMisescircle(see Wagner1983a,pp. 12-13). Becauseit was dedicated
to morehumanistic
themes,Schutzfoundin it an outletforhis interests
in music,
language,and culture,delivering
somesixlecturesto thegroupduringthetwenties.
Thoughimportant
forSchutz'ssubstantivesocial theory,the secondcircleis less
relevantforhis methodological
work.

AmericanJournalof Sociology
The initialresponseto Schutz'snow-famousbook is indicativeof the
compositionand interestsof its audience. Only the Vienna economists
haileditas an importantcontribution
to methodology.
Afterthebookwas
publishedin 1932,an eveningoftheMises seminarwas setaside to study
it (Kauder 1965, p. 122), Kaufmannquicklypublisheda summaryof it
(Kaufmann1932),and Mises endorsedSchutz'sinterpretation
oftheideal
type(Mises [1933] 1960, p. 125n). In 1936, anotherseminarparticipant,
FritzMachlup, promotedit among English-speaking
audiencesin a paper in Economica, theneditedby seminarmemberF. A. Hayek (Machlup 1936, p. 44n). Two otherVienna-trained
economists,Karl Bode and
AlfredStonier,summarizedSchutz's interpretation
of the ideal typein
Hayek's journal in 1937 (Stonierand Bode 1937). In 1936, Hayek requestedof Schutza paper exploringtheimplicationsof his book "forthe
methodology
ofpoliticaleconomy,and in particularfortheinterpretation
of the theoryof marginal utility"(quoted in Wagner 1983a, p. 52).
Schutz'sfirstEnglish-languageessay,"The ProblemofRationalityin the
Social World,"subsequentlyappeared in Economica in 1943.3
Aside fromKaufmann,who could appreciateDer sinnhafte
Aufbauon
multiplelevels,Schutz'saudiencewas primarily
interested
in his application of the ideal typeto economics.This was not a parochialreading.
Schutz'sreconstruction
oftheideal typewas a vitalattemptto reestablish
the Austrianapproach to pure theoryon a new foundation,forthe old
one had been severelyweakenedbythecumulativeattacksofhistoricism,
theLausanne schoolof mathematicaleconomics,and, after1928,logical
empiricism.By 1930 the Austrianschoolwas in crisis.The crisiswas at
once theoretical,policyrelated,and methodological,but all lines of attack convergedon the epistemologicalplane.4 Althoughmuch of the
I

Later Hayek suggestedthat Schutz, newlyarrivedin America, reviewforEconomica

an importantnew book by a youngHarvard sociologist,Talcott Parsons; too long fora
review, Schutz's essay on The Structureof Social Action was eventuallypublished in
1978 (Grathoff1978, p. xvii). An invitationto address Parsons's seminarin 1940 was
facilitatedby another member of the Mises circle, GottfriedHaberler, then on the
Harvard faculty(Wagner 1983a, p. 75). Fritz Machlup invitedSchutz into his classes
to discuss the ideal type and economic theorythroughoutthe late fortiesand early
fifties,during which time Schutz's major papers on the methodologyof the social
sciences were published (Wagner 1983a, pp. 166-67). Althoughthe Mises group disbanded in 1934, the friendshipsestablished during its formativeperiod continued to
provide an intellectualnetworkin which the original relevancies were upheld.
4 The recentlypublished book by Karl Pribram, A History ofEconomic Reasoning,
containsan excellentdiscussion of the theoreticaland policyaspects of the crisis(1983,
pp. 314-35, 435-88). Pribram, a student of Wieser and B6hm-Bawerk who met
regularlywithMises and Kelson beforeleaving Vienna in 1921, explains how the crisis
of marginalismheightenedthe school's long-standinginterestin epistemology:"Faced
with incessant criticismsof their doctrine, the Austrian economists felt obliged to
strengthen,above all, the logical foundationsof theiranalysis and to enlarge the scope
8

AlfredSchutz
Austriancounter-polemic
was directedat historicism
and mathematical
theory,familiarfoes that could be repelledby familiararguments,the
positivistcritiqueof apriorismprovedto have the mostfar-reaching
effects.The logical positivistcritiqueof Aristotelian
rationalismin mathematics(see Beth 1950), which was soon generalizedto otherdeductive
sciences,quicklyunderminedtheconceptionofpuretheorythatSchutz's
generationhad inheritedfrom Carl Menger. Kaufmann and Oskar
Morgenstern
importedthepositivistcritiqueintotheMises seminarfrom
the Thursdayeveningsessionsof the Vienna Circle. There the foundations of deductive theorywere deemed to be either"conventions"or
"tautologies,"not synthetica prioritruthsas Menger(and virtuallyall
otherrationalistthinkers)had believed.The Mises seminarwas dedicated
to solvingproblemsof deductivemethod,but it was soon apparentthat
Mises was reluctantto strayfarfromMenger'soriginaland increasingly
indefensible
position.But whereasMises would standpat, even marshaling Husserl'scritiqueof psychologism
and his theoryofcategoricalintuitionin thedefenseofapriorism(see Mises [1933] 1960,p. 23n),a strategy
immediatelychallenged by Stonier (1935), Schutz believed that Max
Weber'sideal typecould be resurrected
to thesame end. That is whythe
economistswere so interestedin a book ostensiblyconcernedwith the
originof meaning in consciousness.No greatertestimonyto Schutz's
successis neededthanthefactthatHayek, Machlup, Bode, Stonier,and
othersquicklyadopted the ideal typeto describethe basic conceptsand
laws of economictheory.
If the epistemologicalproblemsof the Austrianschool of economics
played the role that I suggestin establishingthe contextof Schutz's
methodologicalreform,it will be necessaryto look morecloselyat the
core elementsof thistradition.We will thenbe in a positionto examine
Schutz'sproposalsthemselves.
The AustrianTradition
For purposesofthisessay,I willreducetheAustriantraditionto two core
commitments:
the subjectivetheoryof value and the a prioriconception
ofeconomictheory.The Austrianschoolwas foundedby Carl Mengerin
ofitsapplicability"
(1983,p. 314). Becausetheyemphasizedsubjectivemotivation
as
theultimatecause ofeconomicbehavior,"subtlepsychological
problemswhichwere
onlyremotely
connectedwitheconomicissuesweretheobjectofextensive
investigations"(p. 314). The logicalstatusof marginalutilitytheory"was closelyconnected
withtheoutcomeoftheepistemological
discussion"(p. 423). This heightened
interest
in epistemology
createdtheaudienceforSchutz'sfirstbook. It also providedSchutz
witha specific
methodological
aim:thedefenseofhypothetical-deductive
inlaw
theory
and economics.
9

AmericanJournalof Sociology
1871, with Menger's firstpublishedstatementof the law of marginal
utility.Twelve years later,Menger launched the Methodenstreit
("dispute over methods")in a polemicagainsttheinductivismof theGerman
historicalschool,thenheaded by Gustav Schmoller.Mengermaintained
that for economicsto develop as a hypothetical-deductive
science, the
economicprinciplehad to be "isolated"fromotherfactorscommingling
in
concretehistoricalreality,somethingthatthehistoricists
wereloathto do
(see Menger[1883] 1963,pp. 41-49). This was to be done byimagininga
minimalisteconomicworld in which the wants of individualsand the
available means of want satisfactioncollide to producea systemof exchangecoordinatedby prices.Since all wantscannotbe satisfiedwithout
sacrificing
othervalued goods (or theirmoneyequivalent),actorsfashion
scales ofpreferences
and seek to exchangequantitiesoftheirleast-valued
goods forquantitiesthattheyvalue morehighly.Value was definednot
by an objectivestandardsuch as Ricardo and Marx used-the quantity
of labor embodiedin the product-but subjectively,by the quantityof
goodsthateconomicactorswerewillingto give up to obtainothervalued
goods, the "marginal"value being the decisive last unit added to or
subtractedfromtheequation(see Smart1920;Howey 1960).Value, then,
dependson thevaluationsof actorsand theirpreference
schedules,while
exchangedependson theabilityof actorsto understandthevaluationsof
others.Here we need only note how naturallythe subjectivetheoryof
value dovetailswithWeber'smethodological
individualismand Husserl's
reflexivepsychology.
The secondtenetderivesfromMenger'sinsistenceon isolatingabstraction. The Austrianswere committedto the positionthat the basic conceptsand laws ofeconomictheoryweresupertemporal
principlespertainingto no existingeconomicorderper se, but to an ideal system.At root,
the Austriantheoryof science was Aristotelian(Kauder 1958), but its
rationalismcoheredwithHusserl'sdefenseofpurelogicagainstpsychologism,Kant's ethics,and formalism
generally.Hans Kelson's"positive"or
normativetheoryof law, drawingon Kant and Plato, also soughtto lay
down the mostgeneraland universalconceptsand propositions,includingthe"basic norm"thatjustifiedall subsidiarylegal norms.For Kelson,
subsequenthistoricalresearchwould seek the differentiae
specificaeof
historicallegal systems(Ebenstein 1969, pp. 12-13). All the disciplines
just mentionedclaimed thattheirfundamentalprincipleswere a priori,
presentin any conceivable ethical, legal, logical, or economicsystem.
Such principleswere generatedby directintuitionor imagination,not
observationor enumeration,and were furtheriustifiedby logical completenessand fecundity.
A prioriprincipleswerethussaid to be logically
"prior"to experienceand "necessary,"meaninginconceivableof alteration. There was no roomhereforconceivingbasic postulatesas conven10

AlfredSchutz
tions or arbitraryinstrumentsof thinking,for a correspondencewas
thoughtto existbetweenreasonand experience;in economics,the chain
ofdeductionwould ultimately
about the
terminatein simplepropositions
economicmotivesof all rationalbeings(Menger[1883] 1963,pp. 86-87).
Schutz'sCritiqueof the AustrianTradition
Althoughfirmly
committedto Menger'soverallapproach,Schutzfound
theAustrianpositionin therevivedMethodenstreit
handicappedon two
scores. On the one hand, marginalismlacked a credibletheoryof intersubjectiveunderstanding;
it had no way ofshowinghow economicactors
knewthemotivesofotheractors,shortofassuminguniversalmotivation
discernibleby introspection.
On theotherhand, it lacked a viable theory
of conceptformation.Marginalismhad to show that its postulatesand
definitions
were both empiricallymeaningfuland necessaryyetfounded
neitheron intellectualintuition,whichthe logicalpositivistshad shown
to be unreliable,nor on historicalcases and trends,whichMengerhad
disallowed for the constructionof pure theory.Schutz's genius lay in
seeingWeber'sideal typeas a solutionto bothproblems.Let us takeeach
in turn.
Menger'ssubjectiveconceptionof value impliedthat understanding
thepreferences
to economicaction(Kaufmann
ofotherswas fundamental
1933, p. 390n), but the Austrianshad not givena good accountof such
understanding.
Wieser,coleaderwithBohm-Bawerkofthesecondgenerationand anotherof Schutz'sprofessors
at Vienna,forexample,spokeof
"introspection"
as themethodby whicheconomicactorstookcognizance
oftheintentions
ofotheractorsin themarket(Kauder 1965,pp. 122-24;
see also Schumpeter1954,pp. 1057-59), an altogether
primitiveaccount.
For one thing,theintrospecting
partyknowsonlyhis or herown motives
and intentions,which vary accordingto circumstancesquite different
fromthosethatthesecondpartymaybe experiencing.
Even if,as Wieser
presumed,the preferences
of bothpartieswere identical,the contingencies determining
the other'sleast-valuedutilitiescould not possiblybe
knownby introspection.
Thus Wieser'sdescriptionviolatedthefirstrule
ofobjectivity,reliability
(on thenecessityofinvariantmotives,however,
see Schutz[1967], p. 239). Wieseralso failedto distinguishbetweenthe
informalunderstandingsof consociatesin face-to-faceinteractionand
understandingas the methodologicaltool of a detachedobserver.The
latterrequiresan instrument
thatis notonlyreliablebut also relevantto
the"one-sidedabstraction"from"fullempiricalreality"ofwhichMenger
spoke (see Menger[1883] 1963, pp. 62, 73, 79). Ironically,the Austrian
accountof understanding
fellintothe same romantic-intuitionist
trap as
its archenemy,historicism.Clearly,Weber'sintroduction
of ideal types
11

AmericanJournalof Sociology
(formulatedwith the theoreticalinterestof the social scientistin mind)
into the processof understandingwas a major improvement,
although
Schutzwould raise theself-samecriticisms
ofWeberas well. It is important to keep in mind when readingDer sinnhafteAufbauder sozialen
Welt that Schutz's criticismsof Weber's conceptof Verstehenconceal
even strongercriticismsof the Austrianaccount.5
Withrespectto thesecondtenet,apriorism,Schutzwishedto preserve
theidea thatthefoundationsofany abstract-deductive
scienceare necessary and nonempirical,possessing"universalvalidity"independentof
variationsin historicalor empiricalcases subsumedbeneaththem.But,
unlikeMengerand Mises, who adopted theAristotelianview thatthese
were real essences knowable by pure or categoricalintuition(Kauder
1958), Schutz moved toward an understandingof such premisesas
formal-logicalrequirementsof deductivityitself.Essentialismand intuitionismwere epistemologicalstandpointsthatthe logical empiricists,
the mathematicaleconomists,and Kaufmannhad begun to challenge.
Following Kaufmann's lead, Schutz substitutedHusserl's theoryof
generalizationand formalizationfordirectintuitionand spoke of marginal utilityas "the definingprincipleof the whole field[ofeconomics],"
the"highestinterpretive
schemewhichdefinesonce and forall thenature
oftheconstructs
whichmaybe used" withinthediscipline(1967, p. 248).
Likewise, Kelson's basic normwas interpreted
as an assumptionnecessaryforlegal cognitionto take place at all. In thisview, whichI would
attributeto Kaufmann(1925, p. 649), real essencesare replacedby heuristicprinciplesofgreatgenerality
placed at thehead ofa deductivechain.
They are a prioribyvirtueoftheirformal-logical
position,and theymerit
is
such statusby virtueoftheirdeductivefecundity.
Theoryconstruction
the applicationof generalconceptsand laws to new problemswithinthe
field. Theoreticalinterest,then, determinesthe directionsof growth,
whereasthe originalprinciplesretaintheiruniversalvalidity.While not
preparedto call these"conventions,"Schutz propoundeda moreprovisional approach to foundationsthan did Mengeror Mises.
Der sinnhafteAufbaudehistoricized
Weber'sideal typeto fitintothis
new formal-logical
framework.Beforeshowinghow Schutz'sreconstruction circumventedessentialismand intuitionism,let me summarize
Schutz's attitudetowardthe apriorismof the Austriantraditionin two
points.
was an objectof derisioneven withinthe Mises
5 Wieser'stheoryof introspection
thelyric,"So
circle.Kauder tellsof a songwrittenby Felix Kaufmanncontaining
"It is understandhandleIch unddas istjedermann"[thusI act and thatis everyone].
able," Kauder continues,"thatshortlyafterWieser'sdeathSchiutz'smorecautious
were
prevailed"(1965,p. 122).DittieslikeKaufmann's
ofintrospection
interpretation
occasions,a suresignofthecohesiveness
collectedintoa songbookforcommemorative
of the Miseskreis.
12

AlfredSchutz
Schutzrejectedhistoricism's
First,withrespectto theMethodenstreit,
attemptto foundeconomicson statisticalconceptsderivedfromobserved
variationsin actuallyexistingeconomicsystems.Historicism,he says,
"fallsinto errorwhen it getsout of its fieldand triesto reducethe noncategoriesofideal objectsto historical
temporal(or better,supertemporal)
categories"(1967, p. 212). AgreementwithMengeroverSchmollerin the
testoftheAustrianschool,and Schutz
famousdisputewas a membership
foundno groundsfor disagreeingwith the claim that the foundations
of economicswere "supertemporal"or a prioriprinciples.Schutzquotes
his formerprofessorapprovingly:"Economic principlesare, in Mises's
words,'not a statementofwhat usuallyhappens,but ofwhatnecessarily
musthappen' " (1967, p. 245).
was to thea prioricharacterof
Second, as genuineas his commitment
economictheory,Schutz neverthelessdetached himselffromthe naive
essentialismand intuitionism
defendedbyMengerand Mises. Kaufmann
based
had begunto assemblethe elementsof an alternativeformulation
on Husserl's Formal and TranscendentalLogic and logical positivism's
rethinkingof the nature of a priori propositions.6From Kaufmann,
Schutzadoptedtheidea thatthelaw ofmarginalutilitywas nota permanentpropertyofeconomicconductas such but "a stipulationthatmerely
marksout the fixedboundariesof the onlyarea withinwhicheconomic
acts can by definitiontake place" (1967, p. 245 n. 45). Thus, while he
could agreewithMises that"an actionrunningcontraryto the'principle
of marginalutility'. . . is inconceivable"(1967, p. 245), thisis onlytrue
of
"so longas one conceivestheprincipleofmarginalutilityas a definition
the purelyformalactionas such" (p. 245). In morecontemporary
terms,
thea prioriconceptsand laws pertainto a formalmodelthatis thewillful
construction
ofthesocial scientist.They are "necessary"in thesensethat,
theirbeing definedin any other
being part of the model's architecture,
way would be "inconceivable."Thus, at the most general level, the
definitions
and propositionsin the model serveas the "highestinterpretive scheme"forthe entirediscipline.
From the discussion above one can see how closely the problem6 Perhaps the most important work in this regard is Kaufmann's The Infinite in
Mathematics, which Schutz proofread in draftin 1930 (Helling 1984, p. 153). In it
Kaufmann displays a thoroughunderstandingof the epistemologicalissues leading to
the developmentof axiomatics and metamathematics([1930] 1978, pp. 42-67). Characteristically,he avers that Husserl had anticipatedthe axiomatic turnin his concepts
of formalization and generalization (see n. 7). He also clearly distinguishes the
phenomenologicalconception of the a priori fromthe Aristotelianin a way that directlymirrorsSchutz's interpretationof the a priori characterof the law of marginal
utility(Kaufmann [1930] 1978, pp. 18-26). Helling's essay on Schutz and Kaufmann,
which came to my attentionafterthis paper was written,confirmsmuch of what is
here implied about Kaufmann's role in shaping Schutz's interpretationof deductive
methodology(see Helling 1984, pp. 147, 152-57).

13

AmericanJournalof Sociology
statementof Schutz's firstbook was tied to the need to shore up the
epistemologicalself-understanding
of Austrianmarginalism.Schutzwas
on the forefront
of the formalistrevolution,yethe maintainedthe Austrianemphasison subjectivevaluation. The refurbished
ideal typewas
thesolutionto bothofSchutz'sdifficulties
withtheAustriantradition.On
the one hand, by definingVerstehenas the imputationof invariantmotives couched as ideal types,Schutz replaced empathicintuitionwith
methodologicalcanons of reliability.On the otherhand, ideal typesreplaced real essencesas the"supertemporal"
constructs
ofuniversalvalidityin deductivescience.We will see now how Max Weber'smethodology
was revisedto accommodatethe new formalistic
environment.
THE RECONSTRUCTION
CONCEPTS

OF WEBER'S METHODOLOGICAL

Having suggestedthatWeber'sideal typecouldprovidea priorias wellas

empiricalconcepts,Schutzhad now to showhow thiswas possible.Much
of the methodologicalargumentin Der sinnhafteAufbauder sozialen
Weltis dedicatedto persuadinga skepticalaudienceof thecompatibility
of Weber and marginalism.Since Schutz was committedto preserving
marginalism'sdistinctivetradition,therecould be no questionof adopting Weber in toto and uncritically.An epistemologicalreformwas required. The reformwould eliminatethe "historical"aspectsof the ideal
typeopposed by the Austrianschool. To be acceptableto Schutz'saudience, Weber'sideal typehad to be liftedfromit neo-Kantiangroundand
transplantedintomorefamiliarepistemologicalsoil.
In proposingthat Weber's methodologywas compatiblewith marginalism,Schutz was not entirelyswimmingagainstthe current,forthe
Austrianshad by the mid-1920salreadypartiallyexemptedWeberfrom
the damningcharge of historicism.Several factorscontributedto this.
First,in 1908, Weber had defendedthe law of marginalutilityagainst
criticsseekingan empiricalpsychologyas its foundation.Accusingthe
criticsof psychologism,Weber endorsedmarginalism's"one-sidedabstractionof economicfactorsfromcomplexsocial reality"(Weber[1908]
1975, pp. 32-34). Second, as editorof the plannedseries,Grundrissder
Sozialokonomik,Weber disregardednationalistsentimentand solicited
Austriancontributions:
Wieser'sTheoriedergesellschaftlichen
Wirtschaft
and Schumpeter'sEpochen der Dogmen-und Methodengeschichte
were
publishedunderWeber's auspices in 1914 (Schumpeter1954, p. 819n).
Perhaps partlydue to thisinteraction,Weber'sown views on economic
theoryswung away fromthe Ricardian frameworktoward the marginalist(see Clarke 1982, p. 204-20). Finally,Mises himselfdrewattention to commonties withWeber on such issues as value-freesocial sci14

AlfredSchutz
ence, methodologicalindividualism,and the subjective conceptionof
value ([1933] 1960,pp. 18, 105). Weber'sbrieftenureat theUniversity
of
Vienna, duringwhich Mises and Weber became "good friends"(Mises
1978,p. 70), not to mentionthetremendousreceptionaccordedhis posthumouspublications,mayhave contributed
to thisacceptance.Whereas,
a decade earlier,the Austrianshad paid no attentionto Weber (even
Wieser'sTheoriedergesellschaftlichen
made nota singlereferWirtschaft
ence to his work),by theearly1920stheywerewillingto accepthimas a
of universalhistorywho, with appropriateadjustmentsin
practitioner
thedirectionofhypothetical-deductive
method,could becomea powerful
championof systematictheoryin sociology(see Mises [1933] 1960, pp.
74-91).
Like otherswithinhis circle,Schutz opposed historicism
in law and
economicsas adamantlyas Husserlopposedpsychologism
in logic(1967,
p. 212). Schutz has no apparentinterestin Weber's theoryof bureaucracy,sociologyof religion,politicalsociology,or generaleconomichistory;he may never have read The ProtestantEthic and the Spirit of
Capitalism(Wagner,personalcommunication).
Schutzwas interested
exclusivelyin the methodology,the definitions
of basic concepts,and the
value-freeconceptionofsociology.I have suggestedthatthisinterestwas
nurturedby the epistemologicaldebates withintheAustrianschoolthat
brokeout afterMises reinstituted
the seminarin 1922.
The yearthattheseminarresumedMises publishedan essayreviewing
themajorissuesin theMethodenstreit.
In manyways,thisessaywas the
foilagainstwhichSchutz'sreconstruction
of theideal typewas directed.
It is citedno fewerthan 10 timesin Der sinnhafte
Aufbau,always deferentially.In thatpaper, Mises endorsedWeber'ssubjectiveapproachbut
nevertheless
placed himin thecamp ofthehistoricalschool.Significantly,
Mises characterizedthe ideal typeas a conceptsuitableforcomparative
historyor sociologybut notfortheoryconstruction
in economics.Having
complimented
Weber'smethodological
sophistication
relativeto thearchhistoricist
Gustav Schmoller,Mises was preparedto resealthe boundary
betweenhistoryand theory,withtheoryidentifiedexclusivelywith deductionsfroma prioripropositions.
In arguingthus,Mises reliedlargelyon Weber'searlierMethodenlehre,
ratherthanon Wirtschaft
und Gesellschaft.
Schutz,however,feltthatthe
ideal typesin Weber's most systematicwork possessednot "historical"
but "ideal validity"(1967, pp. 243-44). Properlyreconstructed,
they
could describeeven the a prioriconceptsof pure law and economics,
hence,the subject matterof any scienceof humanaction,for"What is
trueforthe 'theoretical'social sciencesis generallytrueforall the social
sciences"(1967, p. 248).
Paragraph49 ofDer sinnhafte
Aujbau dersozialenWeltis dedicatedto
15

AmericanJournalof Sociology
a demonstrationof the applicabilityof the ideal type to those "lawconstructing
(or nomothetic)
social sciences. . . [that]are able to provide
us withtheuniversallyvalid knowledgepriorto all experience"(1967, p.
242). As the penultimateparagraphof the book, it is the end toward
whichthereconstruction
of Verstehenand theideal typeis themeans. In
it, Schutz claims to have so reformulated
the ideal typethat"even the
examplescitedbyMises-the economicprinciple,thebasic laws ofprice
formation,and so forth-are in our sense ideal types"(1967, p. 244).
Mises's aprioristicconceptof objectivity(necessity,or inconceivability
of
alternativeprinciples),Schutz continues,"is, therefore,
the same as the
conceptof objectivitywe ourselvesput forwardin our discussionof the
objective and subjective contextsof meaning"(1967, p. 245). In that
discussionSchutzagreedthat"an actionrunningcounterto the'principle
of marginalutility'is inconceivable"(1967, p. 245). Littlewonderthat,
whenhis book on epistemological
problemswas publishedin 1933,Mises
attacheda footnoteto his chapteron Weber,saying,"Max Weber'sepistemologyhas been continuedand revisedby AlfredSchutz . .. in a way
which seeks to dispose of the judgmentof the logical characterof economicpropositionsto whichI objected"([1933] 1960, p. 125n).
These commentsreinforcethe point made earlier,that Schutz preservedAustrianapriorismwhile changingits epistemologicalunderpinnings.It is also important
to notetheaccuracyofSchutz'sclaimthatthese
are ideal types"in our sense," not Weber's. The Schutzianideal typeis
distinctly
different
fromtheWeberian.To getat the difference,
we need
to followSchutz'sexchangewithMises a bitfurther.
We willfirstsee how
theideal typecan be made to provideuniversalvalidity.Then we willsee
how Schutzappliedthisinsightto theriftbetweenhistoryand theorythat
Mises threatenedto renew.
Anonymity
and the Ideal Type
In "Soziologieund Geschichte,"Mises claimedthatWebermisunderstood
thelaw ofmarginalutility,confusingitsa prioriconstructof"thehuman
of actuallyexistingeconomicsystems.
economy"withthe characteristics
Schutz agreed:
Misesis right
whenhecriticizes
themarginal
Weberforinterpreting
utility
in toonarrowa fashion,
so thatit appearsto describean economy
theory
runentirely
He justlyreto thecalculations
ofentrepreneurs.
according
marksthatWeberis hereconfusing
themarginai
modelwiththatof
utility
The latter,he pointsout,has in minda more
classicalpoliticaleconomy.
man."Moderntheoretconcrete
andlessanonymous
conceptof"economic
ical economics,
on theotherhand,startsnotfromthebehaviorof the
in otherwords,fromthe
but fromthatof theconsumer,
businessman
behaviorofanyoneand everyone.
[1967,pp. 244-45]
16

AlfredSchutz
The notionofthe consumeras an anonymous"anyoneand everyone,"
is centralto Schutz'sreconciliaindeed,the whole conceptof anonymity
to
tionof the ideal typewithmarginalistapriorism.In contradistinction
connectedto theneoWeber,whoseconceptoftheideal typeis intimately
Kantian epistemologicalcontextin which he worked(see Burger 1976,
pp. 3-11), Schutz called all generalconcepts"ideal types"(see Prendergast 1977). Thus, he respondedto Mises as follows:"Mises' criticism
thereforedoes not rule out the applicabilityof ideal typesas such to
economicactivity.For how could ideal typesbe excludedfromthisarea,
since all scientificknowledgeis ideal-typicalin character?On the contrary,Mises' argumentturnsout to be a defenseagainstthe intrusionof
intoeconomand too littleanonymity
ideal typesoftoo greatconcreteness
ics. And withthiswe mustagree" (Schutz 1967, p. 246).
knowledgeis ideal-typicalin character"would have
That "all scientific
come as a surpriseto Weber, who saw it as the exclusivemethodof the
culturalsciences. Be that as it may, Schutz's point is as clear as it is
inseparablefromthe long-standingdistinctionbetweenthe theoretical
and historicaldisciplines.To say thattheconsumeris a pureanonymous
"one"-an image thatbringsto mindthe originalgeometricanalogybehindthewholeaprioristicapproach-is to createa personalideal type,a
generalconceptionof economicman, thatis strippedof all but the most
requiredof any
irreducibleculturaland psychologicaldifferentiations
of economicaction. For Schutz,thea priorifounconceivabledefinition
dation of any abstract-deductive
social science is a formalmodel comof the typicalagents,plans, and conditionsofaction
posed of definitions
in its subject area. The more generalizingthe science, the fewerthe
predicatesand differencesembodied in the definitionsof the formal
model; the more concreteor "historical"the discipline,the greaterthe
The
leadingto greaterspecificity.
numberof predicatesand differences,
to
greatervolume of distinctionsnaturallywould forcethe investigator
thatis, to workon a subnarrowthe scope of his or her investigation,
model of the overall theory.Theoreticalinterestdeterminesthe level of
concreteness.
WhereMises soughtto demarcatethe subjectmattersand methodsof
the social sciences,Schutz wished to build linkagesbetweenthem.For
Schutz,all social sciencesare concernedwith"theorderingof subjective
of theory(1967,
withinan objectivemeaning-context"
meaning-contexts
betweenthemare due solelyto therelativespecificity
p. 244). Differences
of the personaland course-of-action
typesemployed.The most anonymous personal ideal types ("the consumer")and the most generalized
types("thelaw of marginalutility")make up thedefinicourse-of-action
tionsin the formalmodelsof the abstract-deductive
sciences.The more
concretetypes("theVenetianmerchant-banker,"
"theItalian innovation
17

AmericanJournalof Sociology
of double-entry
bookkeeping")belongto thehistoricalauxiliariesofeach
purediscipline,whereassociologyhas thetask of rootingout thecharactertypes,plans, and conditionsof actionthatstimulatetheoreticalinterest itself(1967, p. 248).
The insightthatthe ideal typesof historicalindividualsare filledwith
particularizing
content,while the basic conceptsof the deductivedisciplines are ideal types of highest"anonymity,"apparentlystems from
Kaufmann(see Schutz 1967, pp. 186n, 188n). In Der sinnhafteAufbau,
Schutz tracesthe generalityof the ideal typeto the temporalstreamof
consciousness.By stages, "monothetic"acts bring"objectivemeaningcomplexes"into being, until by "formalizationand generalization"the
most anonymoustypes are constructed(1967, p. 244). At any time,
theoreticalinterestcan direct attentionto more concretecontextsof
meaningso thata scale of concretenesscan be postulated,withdifferent
disciplineslocated along the continuum.Thus historyand theoryare
reconciled,the Methodenstreit
is settledto the satisfactionof the Ausof thesocial sciences
trians,and an importantfirststepin theunification
is taken.
As impressiveas it is, Schutz'stelescopicview oftheideal type,accordingto whicha slidingscale ofconcreteness
oftypedictatedbytheoretical
interestdifferentiates
the social sciences, was not withoutprecedent
withinhis circle. The idea that a single methodof conceptformation
can bridgethedistancebetweenhistoryand generaltheoryby increasing
the numberof predicatesand differences
acknowledgedin a body of
definitionswas quite prevalent in economic theoryfrom Marx to
Schumpeter.Sweezycalled it the"methodof successiveapproximations"
(1946, p. 10), Sartrethe "progressive-regressive
method"(1963, pp. 2528, 91-100), and Wieserthe methodof "decliningabstraction"(Kauder
1958,p. 415). Mill's characterization
of historyas the"inversedeductive
method"([1881] 1950,pp. 342-358, 423) is a relatedconception.Schutz's
bears
versionof the methodof decliningabstraction,not surprisingly,
tracesof its immediateoriginin the Austrianschool. WhereasforMarx
and Sartrea dialecticaltotalizationis requiredto traverselevelsofanalysis, forWeiser and Schutz the procedureis entirelyanalyticaland topdown. The theoreticalsciences are given epistemologicalpriority;the
historicaldisciplinesallied to themhave thesecondarytaskofdiscovering
withthe
the "disturbingcauses" (Mill [1881] 1950, p. 429) thatinterfere
limitednumberof stipulatedconditionsunderwhichthe pure deductive
theoryholds. In additionto disturbingcauses, the historicaldisciplines
developtheirown systemsofrelevancies,thusattainingrelativeindepenis allowed
dence (Schutz 1967, pp. 211-14). No inductivegeneralization
to providegeneralconcepts,however,just as Mengerhad stipulatedin
his attackon historicism
([1883] 1963,pp. 41-49). Historymaywallow in
18

AlfredSchutz
the concrete,but it "presupposes"generalconceptsadopted fromthe
theoreticaldisciplines (Schutz 1967, p. 212). Without the abstractdeductivesciences,no "objectivecontextof meaning"can be established
in the social sciences(Schutz 1967, p. 248). By definingthe basic concepts,the abstract-deductive
sciencesenable the auxiliarydisciplinesto
discriminatebetween what is and what is not scientifically
relevant
(Schutz 1967, p. 248). Whereasthe basic propositionsof economicspossess "universalvalidity,"thestatements
in economichistoryor economic
sociology"can claim no universalvalidity,fortheydeal eitherwiththe
economicsentiments
of particularhistoricalindividualsor withtypesof
economicactivityforwhichthe economicacts in questionare evidence"
(1967, p. 137). Fromtheseremarksit is clearthatSchutz'sunderstanding
oftherelationship
fromMenoftheoryto historydiffers
onlyincidentally
ger'spositionin theMethodenstreit
(see Menger[1883] 1963,pp. 66-73).
Verstehen
If Schutzdehistoricized
Weberbyeliminating
value relevanceas a principle ofconceptformation
in thesocial sciences(substituting
in itssteadthe
moretraditionalnotionof "theoreticalinterest"),he also salvaged the a
prioricharacterofeconomicsby formalizing
itsbasic conceptsand premises. No longerconceived as real essences (irreduciblefeaturesof economicaction as such) discoveredby intuitionfromprivilegedexamples
like Menger's "human economy,"the principlesof economics,Schutz
stated,"mustbe based upon a thoroughgoing
formalization
and generalizationofmaterialthathas alreadybeenpostulatedas fixedand invariant.
It is this formalizationand generalization~whichgives the ideal types
universalvalidity"(1967, p. 244). The last questionthatthisessaymust
address is, What is this "material"that comes to the theoristalready
"postulatedas fixedand invariant"?The answerwill roundout Schutz's
programfortheunification
ofthesocial sciencesin a perhapsunexpected
way.
7 Formalization and generalization are abstractive processes that can be employed
independentlyor in tandem. Formalization eliminates the referentialdimension; it
makes the material contentindeterminatein orderto expose the formalstructureof a
propositionor systemof propositions.This is what occurs in metamathematics,when
the consistencyof an axiom systemis testedby means of a formalism.Formalizationis
the abstractive process unique to axiomatization (Husserl [1929] 1969, pp. 93-97;
Kaufmann [1930] 1978, pp. 189, 206). The anonymous "one" that Schutz uses in the
expositionof the law of marginalutilityis an abstractionofthiskind. Generalizationis
the progressivesubsumptionof a narrowercontentby a broader one that includes the
first,as in the progressionfromspecies to genus (e.g., peach to fruitto organicmatter).
The reverseprocess of specificationis likewise possible, culminatingin the individual
concrete thing bearing these properties. Husserl's analysis of generalization/
specificationis incorporatedwhole into Schutz's method of decliningabstraction.

19

AmericanJournalof Sociology
The "fixedand invariantmaterials"are personaland course-of-action
ideal typesthatspringfromeverydaylifebut undergoformalization
and
generalizationin the processof beingconvertedintobasic conceptsand
axioms. Since theyarisefromthecommonmeaningsofeverydaylife,the
methodof "understanding"
(Verstehen)assumesspecial importance.Just
as he reformed
theideal typeto fitintoa moreformalistic,
nonintuitionist
conceptionof the a priori,so heretoo Schutzrejectedany interpretation
of Verstehencontaminatedby romanticintuitionism.
To appreciateSchutz's reform,it is necessaryto recall his strongantipathyto romanticism
and historicism,
a view thathe sharedwithother
membersoftheAustrianschool. Contemporary
social phenomenologists,
payinglittleheed to theintellectualcontextofSchutz'searlywork,sometimesact as ifhistoricism
and phenomenology
arose fromsome common
source in romanticism,with Verstehenas the mediatingconcept (see
Srubar 1984,pp. 172-78). Nothingcould be less consistent
withSchutz's
view. "We mustnevercease reiterating,"
he stated,"thatthe methodof
Max Weber'ssociologyis a rationalone and thatthepositionofinterpretive sociologyshould in no way be confusedwiththat of Dilthey,who
opposes to rationalscienceanother,so-called'interpretive'
sciencebased
on metaphysicalpresuppositionsand incorrigible'intuition'" (1967,
p. 240). In Schutz's interpretation,
Verstehenretainsno referenceto
eitherempathyor introspection.Verstehenis solelythe imputationof
"objective meanings"(generalizedplans and motives)by an observer
equipped with an overlappingstock of knowledgeand schemeof relevance. Inasmuchas it has methodologicalvalue, the "reciprocity
of perspectives"is merelyan art enabling the social scientistto confirmor
registertheadequacy oftheimputation;theoperationis entirely
imaginative,sinceonly"homunculi"are involved(theseconceptswereintroduced
in lateressays; see Schutz 1962, pp. 11-13, 41-42).
fromthe direct,observaMethodologicalVerstehenis quite different
in everyday
tionalunderstanding
interaction
ofconsociatesin face-to-face
life.The latteris whollycontextual,implicit,unreliable,and inexact.By
is not tied to
contrast,methodologicalor "motivationalunderstanding"
"directlyexperiencedsocial reality"but takes the completedact as its
startingpoint,eitheras past actionor as futureplannedaction(theplan
conceivedin the futureperfecttense). For Schutz, a "higherdegreeof
scientific
clarityand exactitude"is possibleon the basis of motivational
understandingalone (1967, p. 31), because only a "meaningstructure
and
abstractedfromitsgenesis"(p. 36) has an objective(decontextualized
invariant)meaning(p. 37). (In thiscontextitis worthmentioning
Schutz's
analysis of the sign, which can also be detached fromthe subjective
contextof its constitution."A sign has an 'objectivemeaning'withinits
signsystemwhen it can be intelligibly
coordinatedto what it designates
20

AlfredSchutz
withinthat systemindependently
of whoeveris usingthe sign or interpretingit" [1967],p. 123.) By formalization
and generalization,
concepts
of pure ideal validitycan be generatedfromobjectivemeaningsof this
kind. By contrast,subjectivemeaning"is the fringeor aura emanating
fromthe subjectivecontextin the mindof the sign-user"(1967, p. 126),
whichcannotbe knownscientifically
in all its nuances(pp. 133-34). For
thisreason,accordingto Schutz,Weber was mistakenif by "subjective
meaning"he meantthe actual meaningin themindoftheactor,for"we
have no means of knowingthat the meaning-context
which we think
appropriateis at all thesame as whattheactorhas in mind"(1967,p. 27),
even by directobservation.Schutz could not be more expliciton this
point:"The complexof knowledgeof the social sciencesis based exclusively on explicit positional Acts of judgment, on constitutedideal
objectifications,
that is to say, on conclusionsof thought,and neveron
prepredicative
Acts of layinghold on (in SelbsthabeerlebteErfassungen)
the otherpersonhimself.Social science . . . nowhererefersback to the
face-to-face
experience"(1967, p. 223).
accountof
Severalpointsneed to be made here.First,the"positivistic"
in Schutz's1953essay"Conceptand TheoryFormationin
understanding
the Social Sciences" (1962, pp. 48-66), which so disturbssome critics
(e.g., Hindess 1972),stemsnot fromCarl Hempel's famousessay (Hempel 1952) but fromSchutz'searliestwritings.As I have surmised,Felix
Kaufmannis largelyresponsibleforSchutz'searlyappreciationforissues
ofreliability
concernforprocedural
(1967, p. 232). Here the"positivistic"
rulesofevidenceis weddedto theAustrianconcernforuniversalvalidity
via the notionof invariantmotives(i.e., preference
schedulesas cultural
idealizationsratherthan psychologicalstates). The phenomenologyof
internaltime-consciousness
notwithstanding,
Schutz'smajorcontribution
to themethodology
ofthesocial scienceswas this"positivistic"
rendering
of the ideal typeas a replacementconceptforWieser'saccountof introspection.
Second,Schutz'sattitudetowardthehumanitiesfollowsnaturallyfrom
his strictconceptofscience.Schutzbelievedthehumanisticdisciplinesto
be invaluable forinterpreting
human experience(1967, p. 138). But as
longas theyemployedmethodsbased on direct,emphaticunderstanding,
noneoftheirfindings
could be used to establishor overthrow
a premiseof
any deductivescience.It followsthatinterpretive
sociologywas notconceived to be a humanisticdiscipline.
Finally,one of the mostoriginalaspects of Schutz'saccomplishment,
virtuallyunrecognizedbyall commentators
save hisfriendFritzMachlup
(1955, p. 17), lies in the role of understanding
in the selectionof basic
conceptsand axioms. In justifying
thefoundingconcepts,Schutzargued
thattheyhad to be "adequate at thelevel ofmeaning"(1967, p. 236). In
21

AmericanJournalof Sociology
otherwords,it is not a matterof "verifying"
the fundamentalpostulates
and definitions
throughsometypeofempiricalprocedureor testso much
as a matterofestablishingpostulatesthatare simplifications
ofcharacter
in the
types,strategies,
plans, and conditionsofactionalreadyprominent
populationunderstudy.Thus thelaw ofmarginalutilitydefinesthefield
of economics because it can be "understood"as an idealization of
everydaydecisionmakingunderconditionsofscarcity.This is the"fixed
and invariantmaterial"that the theoristelevates to the formal-logical
ofMengerand
positionof a firstpremise.It amountsto a rationalization
Wieser'smoreemphaticconceptionof intersubjective
understanding.

CONCLUSION AND DISCUSSION

AlfredSchutz has long been recognizedas the preeminentEuropean

phenomenologist
contributing
to substantiveand methodological
issuesin
modernsocial theory.But whilehis substantivecontributions,
especially
theremarkablesynthesis
assembledbyThomas Luckmann,Structuresof
theLife-World(1973), have been incorporatedwhole or in partintosystematictheorizing(e.g., Giddens 1976),themethodological
writingshave
generatedeitherconfusionor dismay. Individual essays have been acclaimed,butthe"positivistic"
framework
supporting
themseemsdifficult
to reconcilewithphenomenology's
antinaturalistic
orientation.Gorman's
"dual vision"metaphorcapturesthe apparentcontradiction
perfectly.
This essay has attemptedto restoreunityto Schutz'smethodological
vision by drawing attentionto backgroundfactors,chieflySchutz's
decade-longaffiliation
withthe Austrianschoolof economics.The epistemologicaland methodologicalcrisisof marginalismwas theimmediate
contextof Schutz's methodologicalwork. By 1930, the school could no
longerrelyon Menger'sAristotelianconceptionof pure theory.On the
one hand, historicism
attackedMenger'sprocedureof isolatingabstraction,the quest foruniversalvalidityirrespectiveof time,place, or culture,and the claim to value freedom.On theotherhand,logicalpositivism's critiqueof synthetica prioristatementsunderminedmarginalism's
claim that its basic conceptswere both "universallyvalid priorto all
experience"and empiricallymeaningful.Unlessa new defenseof apriorism could be established,deductivetheoryin the social sciences was
endangered.
Der sinnhafteAufbauder sozialen Welt offereda theoryof concept
formationthat would solve the crisisof marginalism.Schutz acknowledged the positivistcritique by dispensingwith essentialismand intuitionism:
basic conceptswerederivedfromtheinvariantmeaningsthat
22

AlfredSchutz
consumersthemselvesassignedto theiractions;formalization
and generalizationelevated the most deductivelyfruitful
of these to axiomatic
status. Schutz acknowledgedthe historicist
critiquemoreobliquely,rejectinginductivism,particularism,
and relativismbutfindinga place for
auxiliariesin the workingout of generaltheories.Decliningabstraction,
adding new predicatesand generalizationsto the corpusof ideal types
and laws, would lead to the unification
of the social sciences.
Where does interpretive
sociologybelong in this scheme?The Austriansalways believedthateconomicswas a branchofgeneralsociology,
understoodas a universalscienceof social phenomenaas such (Menger
[1883]1963,pp. 134-38). (Generalsociologyshouldbe distinguished
from
descriptivesociology,which is a "historical"discipline.)Interpretive
sociologyis forSchutz what generalsociologywas forMenger.It examines the whole rangeof social action,abstractingfromconcretecontexts
the generalfeaturesof social relationshipsbuilt up fromWeber's four
typesof action.Whereastheeconomistreducessocial actionto one type,
the rational-instrumental,
interpretive
sociologystudiesthe interplayof
rational,value-rational,emotional,and traditionalaction.Thus interpretivesociologyspans thedomainsofall thesocial sciences,nomothetic
and
descriptive,includingits own "auxiliary,"theempiricalstudyof statistical aggregates.Its special contribution
is the analysisof the processof
culturalobjectification.
As Schutz puts it,
Thereis stilla wordto be said aboutthefieldandmethod
ofinterpretive
sociology.
The primary
taskofthisscienceis to describetheprocesses
of
meaning-establishment
andmeaning-interpretation
as thesearecarried
out
byindividuals
canbe empirical
livinginthesocialworld.Thisdescription
oreidetic;it can takeas itssubjectmatter
theindividual
orthetypical;
it
can be performed
in concrete
of everyday
situations
lifeor witha high
degreeofgenerality.
But,overand abovethis,interpretive
sociology
approachessuchculturalobjectsand seeksto understand
theirmeaning
by
applying
to themtheinterpretive
schemes
thusobtained.[1967,pp. 24849]
Interpretivesociologyis trulyan integrativediscipline.Its role is to
mediatebetweenthe descriptiveand nomotheticdisciplines,givingdue
courseto the fullrangeof humanaction. Workingat the level of premises,it encompassesand differentiates
thedomainsofsocialinvestigation.
This is as higha level of abstractionas social sciencecan reachwithout
becomingphenomenological
philosophy.Fromthislevel ofscrutiny
arise
evaluationsof the "understandability"
of the premisesof the deductive
sciencesand thedemarcationoftheirauxiliaries.Interpretive
sociologyis
the fieldthat all otherdisciplinesmusttraverseif the unification
of the
social sciencesis to becomea reality.
23

AmericanJournalof Sociology
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