Download Max Weber, Economic Sociology

Max Weber
(1864 – 1920)
His Influence Lives On
Todd Erickson
My Challenge Today
100 lbs of stuff into a 1 lb bag.
 His works were “works in progress”.
 Given time constraints, I will not be
able to fully support everything
here.
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Note to self: This is not an economics class.
My Objectives
For you to be able to:
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See how his ideas come together.
Understand his impact today.
Have a sense of the areas where he is
criticized.
Form your own opinions about Weber’s
influence today.
My Primary Sources
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Robert Green – overview of the critics.
Gordon Marshall - analysis.
Wolfgang Mommsen – journal article.
Kurt Samuelsson - critiques.
Richard Swedberg – reviews economics.
Max Weber –
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Protestant Ethic and the Spirit of Capitalism
Theory of Economic & Social Organizations
Basic Background Sketch
Family cultured, upper middle class
 Father a politician
 Raised in Berlin, surrounded by
socialism, Marxism, democracy,
monarchies, dictatorships.
 Primarily agrarian commerce
 Died of pneumonia at 56
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Who Was He Anyway?
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Took a law degree
Earliest work in historical jurisprudence
Taught only economics
Studied sociology
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Of Religion
Of Politics
Wrote as an economic sociologist
Rejected Marxism Early
It did not account for the power of
ideas very well.
 It discounted people as individuals
w/ unique skills etc.
 It was too regimented.
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Popular Economics – 1880’s
The German Historical School.
 Institutional in focus.
 Holistic/historical approach - not
focusing analytically on any
mechanisms.
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Economics Not Real Enough
“Homo economicus” was not real.
 Theoretical economics too narrow.
 He required students to study
outside of economics
 Law – heavily influenced economics.
 Sociology – human behavior and the
state.
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Weber and Economics
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Economic theory deals exclusively
w/rational economic action usually
not found in reality.
(Weber. Economy and Society: An Interpretive outline of Economics.)
Sociology was too Limiting
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Existing work not rigorous.
Didn’t answer enough questions
Motivational issues unresolved.
Too narrow
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Religion
Economics
Political
Weber and Sociology
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Deals w/ broad range of actions that have
to be oriented to others.
Interaction – two people orient their
actions to each other.
Power – one person imposes their action
on the other.
Order – extended interaction creates
expectations.
Organization – an order w/specific
safeguards
(Weber. Economy and Society: An Interpretive outline of Economics.)
Introducing Economic
Sociology
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Sociological analysis of the economy.
(an innovation)
Analysis of relation of economy to noneconomic phenomena (politics, law,
religion).
Integration is a big theme of his.
Disciplines, in isolation, often can’t cope
with reality.
Major Influences on Weber
Early work on capitalism
 A trip to America.
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What is Modern Capitalism?
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Not the pursuit of money/gain or
unlimited greed. This is ancient.
It is the pursuit of “forever renewed profit
by continuous, rational capitalistic
enterprise”.
Emphasis on balance, careful
consideration, planning.
The new idea: the organisation of legally
free labour.
What Caused the Change?
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Standard answer: gold/silver from
America, commerce growth outside of
Europe, population growth, technological
improvements.
Weber’s response: conditions were
favourable – yes; but the best conditions
did not yield the best capitalism and visa
versa.
His answer: the religious revolution of the
16th century formed the seeds.
What Allows it to Continue?
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The new capitalism developed along
with a new system of legal and
administrative support. Not just
technological advancement or
religious influence. The development
was iterative – not just one driving
the other.
Religious Influence
Highest economic development
occurred where the most religious
revolution occurred.
 Problem: different religious groups
had differing amounts of economic
change. WHY?
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Religious Influence - Luther
Luther – moral justification of
worldly pursuits (but not commerce)
 Labor is now a spiritual end.
 Covetousness is less dangerous than
sloth.
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Religious Influence - Calvin
“The calling” – a task set by God &
chosen by the individual.
 A strenuous and exacting enterprise
pursued with a sense of religious
responsibility.
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Therefore… A New Attitude
All callings are equal.
 Pursuing your calling vigorously is
the sign of your election.
 You must do it well.
 Pursuit of wealth is a duty
 Added a moral dimension to wealth.
What was a human vice is now
sanctified.
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A Trip to America
Caused a transition in his thought
 Modern capitalism more prevalent in
America.
 “Everything opposed to the culture
of capitalism is going to be
demolished with irresistible force.”
(Weber)
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A Weber Quote:
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“Perhaps never before in history has it
been made so easy for a nation to
become a great civilized power, as for the
American people. Yet, according to
human foresight, it also is the last time in
the long-lasting history of mankind that
so favourable conditions for a free and
grand development will exist; right now
the areas of free soil are vanishing
throughout the world.”
A Conclusion:
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“Weber concluded that religious
groups in America practiced a sort of
social selection by co-opting as
members only those who were
considered morally worthy and
were, at the same time, respected
and professionally successful
citizens.” (Mommsen)
Another Conclusion
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Modern, rational science is taking over,
governing what society thinks is acceptable.
Personal beliefs subsumed.
Industrial capitalism and bureaucratization form
the “iron cage” binding mankind. While
Puritanism was the model, this new force has
taken over.
Bureaucracy was a key – large & skilled not
driven by nepotism. (I.E. the U.S. government).
The Danger
Weber believed:
Formal rational techniques of social
and economic organization, enforced by
marketplace mechanics, was inevitably
bound up with “material irrationalities” the erosion of relative equality, an increase
in social tensions, a weakening of
democratic forces.
Critics are Easy to Find
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A broad, unfinished vision brings critics:
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Theologians
Sociologists
Historians
Economists
Most reactions focused on accuracy of
aesthetic Protestant roots.
Some doubted his pessimism.
Hard to be dispassionate.
Tough Assumptions
Weber’s approach requires certain
assumptions –
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2.
The economy is rational.
The support structures are in place (law,
political, attitudes)
Problems include:
 Can the planning body have adequate
knowledge?
More Tough Assumptions
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Does the planning body actually adhere to the
standards laid out for them (are they rational?)
Agreed upon list of values, by which the rational
decisions are made, is never available.
Are decisions enforceable? Would require
tremendous bureaucracy. Human behaviour is
very complex – equilibrium is hard to find.
Therefore: a system of spontaneously
determined competitive prices stabilizes the
system because it makes it easier to overcome
all the irrational forces impacting it.
Some Observations
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Weber’s ideas have infiltrated
Marketing management
 Market forces based on exchange and
competition (5 Forces Model)
 The impact of religious thoughts
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• “we are good - they are bad”
More Observations
Religion probably didn’t cause it all.
 However, it had to have some
influence. The process of
capitalism’s expansion was labor
intensive. Religion was the only
vehicle to speak to the masses that
could give them the incentive to fuel
capitalism.
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Still More …
Weber foresaw trouble, but he didn’t
tell us how to get out of it.
 The Scientific Management School
was a logical outgrowth based on
Weber’s observations.
 It was also logical that Scientific
Management would not solve the
problem.
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More, More and More...
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He saw the person as important - yet
took a fatalistic view of where capitalism
was going.
Saw the person as a tool of capitalism didn’t look into what would make that
tool more effective (only the system).
Researchers wouldn’t look people as
people until the 1960’s.
What do you think?
How are large bureaucracies doing?
 Are employee’s interests subsumed?
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Do trends today prove Weber wrong?
What role does religion play in the
economy today?
 What role does religion play in
management/motivation today?
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