Weber’s Economic Sociology of Modern Capitalism

(lecture 2, HSS203)

Weber (1864) came to intellectual age when Marx’s work on capitalism defined the cutting edge of historical and sociological studies.

Weber’s cultural theory was influenced by his social origin in the German middle class, and his own religious root- Protestant.

Weber’s Methodology

Weber sought to develop general concepts which identified empirical processes; then to apply his concept to understand historical events, such as the rise of capitalism in the West; For Weber, sociology is a discipline dedicated to developing general concepts which can be applied to explain the particular events that historian study.

Verstehen “understanding and interpretation of meaning”

Weber believed that causality is established when a process is understood. Weber believed social scientists have advantages over nature scientists, as they themselves are participating, they can understand the social world better.

Verstehen involves knowing the subjectivity of actors; not intuition, but based on the research interviewing, field observation and reading text.

Use of Ideal type analysis

Identify the main attributes of a class of phenomena based on extensive research, distill the essence of a class of phenomena, in capitalism case, rather focusing on particular capitalists, Weber developed ideal-type of modern Calvinist entrepreneur.


Weber’s methodological individualism

Weber believed that sociology must build its theories on the basis of understanding social action at the individual level. He assumed rational action which is that actors pursue interests oriented towards utility in their economic behavior. Weber always reduces large scale of structures to the action of individuals, their action and motivation.

(Durkheim took the opposite approach; he thinks that social phenomena only can be understood in a large scale, individual’s action is decided by one’s societical contexts)

Marx’s materialism

Marx theory on emerging of capitalism thinks that economical material forces determine the political and social structures- superstructure. Industrial revolution led the changing of means of production, which also altered the relationship between bourgeois and proletariats. That class struggle finally leads to development of capitalism and the social structure and orders therein.

“The totality of these relations of production constitutes the economic structure of society, the real foundation, on which arises a legal and political superstructure and to which correspond definite forms of consciousness. The mode of production of material life conditions the general process of social, political and intellectual life. It is not the consciousness of men that determines their existence, but their social existence that determines their consciousness”

Weber disagreed with Marx’s materialism approach. Instead he sought to demonstrate that religious-cultural beliefs have an independent causal effect. He believed that ideas form interest; interest guides one’s action.

For Weber, rationalism was the essential spirit of modern capitalism. Rationalization is the process whereby an increasing number of social actions and interactions are based on considerations of efficiency or calculations rather than motivations derived from custom, tradition or emotion.

The features of capitalism society: rational calculation of profits and losses; book keeping etc.

The difference between modern and traditional capitalism:

Traditional capitalists live for substance, the economy drive was just for living, and once enough for living, the drive disappears; Modern capitalists have disciplined obligation to work as calling, to maximize profit. The link of these two, according to Weber was Protestant Reformation.

Traditional form of capitalist enterprise has the same form of capitalistic organization: the activity was of purely business like; the use of capital, turned over in the business, was indispensible; the objective of economic process, the book keeping was rational; however, it lacks of the spirit which animated the entrepreneur: the traditional manner of life; the traditional rate of profit; the amount of work; the manner of regulating the relationships with labour and the market strategy and customer services. (Ideal type of traditional capitalist firm)

Modern capitalist firms seek to engage the final customers and serve customers’ need directly; to low the cost and product maximum volume; to maximum profit as the ultimate goal.

Weber sought to show the effect of ascetic Protestantism – inner worldly orientation- extended rationalism to economy and society. Weber thinks that Western civilization decisively shaped by a methodical way of thinking, first developed by the Greeks, revived during Renaissance, though the same rationalization was developed in Asia, but was not as scientific, political, economic nor artistic form as emerged from the West.

Protestant Ethic

Weber starts with a simple observation: in countries with mixed religious composition, business leaders, skilled workers, technical workers and professional tend to be overwhelmingly Protestants.

He then proceeds to eliminate spurious correlations, such as level of cultural development. He shows that Protestants are much more heavily represented in modern firms whether in Germany or Poland, though Germany is culturally more developed than Poland.

(Cultural develop theory claims that more Protestants represented was due to the more culturally developed area or nations; however, Weber was enable to show that regardless the origin of countries, Protestants are more likely to be at top level in society, e.g., Germany and Poland,)

He rejects “inheritance theory” that differences between Protestants and Catholics predated the Reformation.

(Inheritance theory claims that the more developed economically are more favoured by natural resources and situation, in particular a majority of wealthy towns, went over to Protestantism in the sixteenth century. The results of circumstances favour the Protestants even today…Weber shows that whether economically developed or not Protestants are much more heavily represented in capitalist industries)

He finally rejects Minority Status theory which suggests ethnic and religious minorities may be driven to capitalist enterprise by society’s prejudice. Weber shows whether Protestants are in the majority or minority, they still are much more numerous than Catholics in modern capitalist enterprises in Europe.

Therefore, Weber says “Protestants have shown a special tendency to develop economic rationalism which cannot by observed to the same extend among Catholics either in the one situation or in the other. Thus the principle explanation of this difference must be sought in the permanent intrinsic character of their religious beliefs, and not only in their temporary external historical political situations.”

Weber rejects historical materialism; he thinks greed often stands in way of capitalism. Greed was present in societies that did not become capitalist. “It is not capital as Marx argued, but the spirit of capitalism that enabled Western capitalism developed.” A new type of workers saw working as calling for God, a new type of entrepreneur that saw money making as an end itself. Both are able to free themselves from traditional practices and engage in economic life with a new spirit.

Weber further rejects the idea that the spirit of capitalism is part of the rationalism of Western thought as a whole. In fact, the sense of calling in Calvinism was far from rational, but the psychological mechanism in Calvinism translated religious devotion into practical economic actions, which finally led capitalism fully developed.

Calvinism and Predestination

God’s predestination in salvation left believers in anxiety. The only way of assurance is by the way of living. The Calvinist needed to consider himself as one of chosen and good work and profits were not only the will of God but the works of God through him. It is proof of grace and sign of election. Ascetic and frugal living is desirous by God. Thus capital accumulation increases overtime. On the other hand, lazy, unwilling to work is sign of lack of grace.

In summary, the Protestant ethic is a core element of the cultural belief that gave rise to Western capitalism. In order to prove one’s worthiness of ultimate salvation, one needs to demonstrate faith through worldly action by ascetic, hard working manner with sense of calling to maximize the profit.

Weekly Reading- Week 1

The Protestant Ethic and the spirit of capitalism

By Max Weber

Chapter 5

In this chapter, Weber examined the ascetic Protestantism and other Christian religious belief and their impacts on economic behaviors and conducts.

From Richard Boxter’s “Christian Directory, who worked to promote practical ethic practice and moral life in Church, Weber presented the basic ideas of Protestant Ethic. Contrasted with many puritans writing, Boxter demonstrated open-minded and broad view towards wealth and acquisition.

1. Wealth is no longer viewed as all evil, rather, a stewardship with God.
2. Waster of time is the first in principle of deadliest sin. “Redeem the time” and “Time is money”.
3. Labour is viewed as religious duty for everyone. Wealth will not exempt one from working, “He who will not work shall not eat.” Labour is one of ways to prevent temptation and moral unworthiness.
4. Division of labour is seen as God’s divine calling. The perseverance of the individual in the place and within the limits which God had assigned to him was a religious duty, which gives the moral justification to division of labour.
5. The proof of one’s state of grace is shown through his conscious work in systemic and methodical manner. While Lutherans in general had uncertainty of their salvation, Protestants see the fruit of labour, increasing wealth, and systematically diligently working as the sign of God’s grace.
6. The profit-making endeavor is justified. The increasing wealth and success in business is favorable as in God’s favor and grace for God’s glory.

The Puritan idea of calling combines with ascetic conducts had directly influenced the development of a capitalistic way of life. “This worldly Protestant asceticism acted powerfully against the spontaneous enjoyment of possessions; it restricted consumption, especially of luxuries. On the other hand, it had the psychological effect of freeing the acquisition of goods from the inhibitions of traditionalistic ethics. It broke the bonds of the impulse of acquisition in that it not only legalized it, but looked upon it as directly willed by God. When the limitation of consumption is combined with this release of acquisitive activity, the inevitable practical result is obvious: accumulation of capital through ascetic compulsion to save”

Those religious movements had created a rational way of conducts which corresponded with a spirit of capitalism. In return, the believers had the assurance as elected into God’s kingdom. By which, the Christian belief, especially Protestant asceticism became a building block into the massive development of future economic social order. Though the first peak of religious enthusiasm faded away, the rational way of conducts and the characteristic of capitalism remain

Science as vocation

Science as a Vocation

Max Weber

This famous addressing to the university students opens with the comparison of German vs. American university system focusing on how they affected young scholars contemplating academic careers. In American, the scholar begins with a position "assistant" with fixed salary, and is required to teach a large crowd of students, while the German counterpart has to earn the right to teach. Though the German scholars have no salary to begin with, they have to be independently wealthy, which is accounts for a "plutocratic" element in the recruitment of German university faculty. German system has bee Americanized.

Still it is matter of fate that individual ability cannot really control;-
The selective procedure involves plurality of corporate organizations, and the young scholar is expected to be both good teacher and scholar.

Science as vocation, one must have P132
- Suitable external condition, as above mentioned
- inward calling, passionate desire
- power of idea, scientific inspiration depends upon destinies, like a “gift”
- commitment

The difference the work of art and work of science.p137
- work of art may reach to some degree of perfection and is genuine fulfillment is never surpassed, one may have difference on appreciation, but the work of art will never be outstripped by another work.
- Scientific works are in the chain of progress, each work of science is to be surpassed and outdated. The gratification comes from the “knowledge”, maybe outdated, yet remains important as a means of training. Ad infinuitum.

Therefore, one engages in science for science’s sake and not merely because others, by exploiting science, bring about commercial or technical success and can be better feed. ..Scientific progress is a fraction, as the process being, the disenchantment of the world also starts.

But, no one nowadays believes that the sciences can teach us anything about the meaning of world. Modern science has become he enemy of religion.

Science does not answer the meaning of the world, the worthwhile of life and how a person can and should live his life because science is not “free presupposition”.
- consider medicine
- aesthetic
- jurisprudence
- historical and cultural science
- sociology, history, economic and political science

Duty of a teacher:
- academic and intellectual integrity
- serve students with his knowledge and scientific experience and not to imprint upon them his personal political views, eliminating personal sympathies
- -teach his students to recognize the inconvenient facts
- provide the necessary choices.

Disenchanted world:

What does Weber mean when he speaks about “disenchanted world”?

Human destines to struggles, to crave leader rather than teacher. What modern man gains from the ongoing process of intellectualization and rationalization, is just the conviction the he could understand the conditions of his life if he wanted to.


What science can do:- p150

1. positively contribute practical and personal life for technology controls and changes life
2. provide the method of thinking, the tools, and training for thought,
3. gain clarity, i.e. use scientific experience as means in order to carry out one’s conviction practically. “ as soon as truly ultimate problems are at stake for us, we come to the aim of clarity, and we come to the limits of science.” P151

Practical stand can be derived with inner consistency hence comprised the integrity. “You serve this god and offend another”

Science is a vocation organized in special disciplines in service of self-clarification and knowledge of interrelated facts, is not the gift of grace of seers and prophets dispensing sacred values and revelation, not does it partake of the contemplation of sages and philosophers about the meaning of the universe. P152

But “whether science is a worth while vocation for somebody and whether science itself has an objectively valuable vocation” are value judgments which nothing can be said in lecture room.

Is Theology a science? Is science anti religious?
What’s Weber personal religious view?

I am of the view that he was troubled by apparently “anti-religious” scientific rationalization and intellectualization in his time, and he was moaning the need to address “meaning of life” and meaning of universe in scientific manner, however, he felt helpless when encountered so called “intellectual sacrifice”
Is that really a sacrifice?

“Reason and faith walk side by side, when reach the end of seashore, reason stops but faith continues on..”

The Basic Sociological Terms

By Max Weber

Sociology is a science concerning itself with the interpretive understanding of social action and with a causal explanation of its courses and consequences.

Action:- the acting behaviour attaches a subjective meaning to his behaviour

Social:- the subjective meaning takes account of the behaviour of others and is oriented in its course.

Meaning:- the first part refers to actual existing meaning in the given concrete case of a particular actor

Subjective meaning:- (pure type) is the hypothetical actor or actors in a given type of action.

The line between Meaningful action and reactive behaviour to which no subjective meaning is attached, is not clear.

All interpretation of meaning, strives fro clarity and verifiable accuracy of insight and comprehension. This is the base of Understanding, which can be rational or an emotionally empathic or artistically appreciative quality.
(..to be continued)

Protestant and Spirit of Capitalism

“The protestant ethic and the spirit of capitalism”

Max Weber

Asceticism Protestantism
Concept of wealth
Concept of labour

Division of labour leads to specialization is a calling requires systematic, methodical character; his calling is an exercise in ascetic virtue, a proof of his state of grace through conscientiousness.

Thus the ascetic importance of a calling provided an ethical justification of modern specialized division of labour.

Protestant asceticism:
o work systematic, methodical, diligently
o powerfully against the spontaneous enjoyment of possession, restricted consumption; broke bonds of impulse of acquisition, against temptation of flesh, but look forward the will of God.

[He defines "the spirit of capitalism" as the ideas and habits that favour the rational pursuit of economic gain. Weber points out that such a spirit is not limited to Western culture, when considered as the attitude of individuals, but that such individuals – heroic entrepreneurs, as he calls them – could not by themselves establish a new economic order (capitalism). Among the universal tendencies identified by Weber that those individuals had to fight were the desire to profit with minimum effort, the idea that work was a curse and a burden to be avoided, especially when it exceeded what was enough for modest life. "In order that a manner of life well adapted to the peculiarities of capitalism could come to dominate others," wrote Weber, "it had to originate somewhere, and not in isolated individuals alone, but as a way of life common to whole groups of man."

Weber showed that certain types of Protestantism – notably Calvinism – favoured rational pursuit of economic gain and worldly activities which had been given positive spiritual and moral meaning. It was not the goal of those religious ideas, but rather a byproduct – the inherent logic of those doctrines and the advice based upon them both directly and indirectly encouraged planning and self-denial in the pursuit of economic gain. A common illustration is in the cobbler, hunched over his work, who devotes his entire effort to the praise of God. In addition, the Reformation view "calling" dignified even the mundanest professions as being those that added to the common good and were blessed by God, as much as any "sacred" calling could. This Reformation view, that all the spheres of life were sacred when dedicated to God and His purposes of nurturing and furthering life, profoundly affected the view of work.]*

*http://en.wikipedia.org/wiki/Max_Weber#Achievements

In summery, the ethical valuation of good works asceticism looked upon the pursuit of wealth, the attainment of it as a fruit of labour in a calling was a sign of God’s blessing. That results of capital accumulation.

However, the constant struggle with accumulated, increased wealth, with temptation of desire, pride leads the purity of religious virtue decay.

Religious roots ---economic virtue---utilitarian worldliness---in the end lost the its religious roots.