The roots of the performance gap between Germany and the Anglo nations can be found in a largely forgotten intellectual skirmish over fine points of economic thought. The late 19th-century debate pitted the advocates of English-style laissez-faire economics, with its emphasis on the virtues of free markets, against a cadre of German theorists who thought their country should chart its own course of state management. The Schmöllerites stood in opposition to the Mengerians. Today, Germany needs not Schmöller but Menger. FULL ARTICLE