Economic Theory and Economic History: A Methodological Review of their Connection in the Development of Economic History as a Discipline

Abstract: Throughout the development of economic history as a discipline, the methodological controversy between histographical investigation and formal theorisation from economics proper, explicit and implicit, has been steadily accentuated since the well-known “battle of methods” (Methodenstreit) in the late 19th century. From the impact of theory to history, which marks the emergence of new economic history in the post-war period, as well as the reverse process from history to theory, this thesis discusses how they have interacted and fissured since the "Methodenstreit" and how they can benefit from one another. It is argued in this thesis that given the complexity and contextuality of historical reality, an attitude of historicism and a general theorisation of economic history might come out futile. A more eclectic and creative relationship between economic history and economic theory would be the most optimal way to investigate the historical fact constantly confronted with its problem swinging between uniqueness and universal law.