“German philosophy, political theory and economics in the nineteenth century were very different from their counterparts in Britain. The dominant position of utilitarianism and classical political economy in the latter country was not reproduced in Germany, where these were held at arm’s length by the influence of Idealism and, in the closing decades of the nineteenth century, by the growing impact of Marxism. In Britain, J. S. Mill’s System of Logic (1843) unified the natural and social sciences in a framework that fitted comfortably within existing traditions in that country. Mill was Comte’s most distinguished British disciple, if sharply critical of some of his excesses.
Comte’s positivism never found a ready soil in Germany; and Dilthey’s sympathetic but critical reception of Mill’s version of the ‘moral sciences’ gave an added impulse to what came to be known as the Geisteswissenschaften (originally coined precisely as a translation of ‘moral sciences’). The tradition of the Geisteswissenschaften, or the ‘hermeneutic’ tradition, stretches back well before Dilthey, and from the middle of the eighteenth century onwards was intertwined with, but also partly set off from, the broader stream of Idealistic philosophy. Those associated with the hermeneutic viewpoint insisted upon the differentiation of the sciences of nature from the study of man. While we can ‘explain’ natural occurrences in terms of the application of causal laws, human conduct is intrinsically meaningful, and has to be ‘interpreted’ or ‘understood’ in a way which has no counterpart in nature. Such an emphasis linked closely with a stress upon the centrality of history in the study of human conduct, in economic action as in other areas, because the cultural values that lend meanings to human life, it was held, are created by specific processes of social development.