In 1870, Paasche matriculated from the Burg Gymnasium. At the University of Halle he first studied agriculture. After military service, his studies continued, however, his attention turned to economics, statistics, and philosophy. Paasche completed his doctorate in 1875 under Johannes Conrad at the University of Halle. In 1877, his postdoctoral thesis was entitled: Über die Entwicklung der Preise und der Rente des Immobiliarbesitzes.
In 1906, he gave up his professorship to devote his time to politics. As early as 1881 to 1884 Paasche was a Liberal Union Reichstag Member for Rostock. From 1893 he was involved in both the Reichstag, as well as the Prussian State Parliament. Paasche played a central role in addressing the crisis of German sugar industry through a change of protectionist to market-consumerist policy. Since 1898, he was a member of the Central Board of the National Liberal Party, from 1903 to 1909 and from 1912 to 1918 Vice-President of the Reichstag. Paasche was very combative, as a liberal: in 1908, during the Daily Telegraph affair, he attacked the emperor, and temporarily lost the support of the party and was not reintroduced into the Prussian State Parliament. During the First World War, he spoke out against the unrestricted submarine warfare and supported a peace agreement. From 1921 to 1924 he was Reichstag Member for the German People's Party. Paasche died in 1925 in Detroit, Michigan, United States.
His son, Hans Paasche, was an officer in the Kolonialtruppe, which he left in 1909 to the youth movement. Hans was a radical reformer, pacifist and conservationist. A high treason process ended in 1918 with his admission into a mental health institution. He was released at the end of 1918, and continued as a radical journalist. In 1920, he was shot as an alleged communist conspirator.
Books by Hermann Paasche
Die Geldentwertung zu Halle a. S. in den letzten Decennien dieses Jahrhunderts. Plötz, Halle a.S. 1875
Über die Entwicklung der Preise und der Rente des Immobiliarbesitzes zu Halle a. S.. Plötz, Halle a.S. 1877
Wandlungen in der modernen Volkswirtschaft. Erhardt, Marburg 1890
Zuckerindustrie und Zuckerhandel der Welt. Fischer, Jena 1891
Kultur- und Reiseskizzen aus Nord- und Mittelamerika. Rathke, Magdeburg 1894
Die Zuckerproduktion der Welt. Teubner, Leipzig 1905