Max Weber

1. Max Weber (1864 – 1920) His Influence Lives On Todd Erickson

2. 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. Note to self: This is not an economics class.

3. My Objectives For you to be able to: • 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.

4. My Primary Sources • Robert Green – overview of the critics. • Gordon Marshall - analysis. • Wolfgang Mommsen – journal article. • Kurt Samuelsson - critiques. • Richard Swedberg – reviews economics. • Max Weber – • Protestant Ethic and the Spirit of Capitalism • Theory of Economic & Social Organizations

5. 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

6. Who Was He Anyway? • Took a law degree • Earliest work in historical jurisprudence • Taught only economics • Studied sociology • Of Religion • Of Politics • Wrote as an economic sociologist

7. 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.

8. Popular Economics – 1880’s • The German Historical School. • Institutional in focus. • Holistic/historical approach - not focusing analytically on any mechanisms.

9. 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.

10. Weber and Economics • Economic theory deals exclusively w/rational economic action usually not found in reality. (Weber. Economy and Society: An Interpretive outline of Economics.)

11. Sociology was too Limiting • Existing work not rigorous. • Didn’t answer enough questions • Motivational issues unresolved. • Too narrow • Religion • Economics • Political

12. Weber and Sociology • 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.)

13. Introducing Economic Sociology • Sociological analysis of the economy. (an innovation) • Analysis of relation of economy to non-economic phenomena (politics, law, religion). • Integration is a big theme of his. • Disciplines, in isolation, often can’t cope with reality.

14. Major Influences on Weber • Early work on capitalism • A trip to America.

15. What is Modern Capitalism? • 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.

16. What Caused the Change? • Standard answer: gold/silver from America, commercegrowthoutside 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.

17. What Allows it to Continue? • 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.

18. Religious Influence • Highest economic development occurred where the most religious revolution occurred. • Problem: different religious groups had differing amounts of economic change. WHY?

19. Religious Influence - Luther • Luther – moral justification of worldly pursuits (but not commerce) • Labor is now a spiritual end. • Covetousness is less dangerous than sloth.

20. 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.

21. 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.

22. 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)

23. A Weber Quote: • “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.”

24. A Conclusion: • “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)

25. Another Conclusion • 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).

26. 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.

27. Critics are Easy to Find • A broad, unfinished vision brings critics: • Theologians • Sociologists • Historians • Economists • Most reactions focused on accuracy of aesthetic Protestant roots. • Some doubted his pessimism. • Hard to be dispassionate.

28. Tough Assumptions Weber’s approach requires certain assumptions – • The economy is rational. • The support structures are in place (law, political, attitudes) Problems include: • Can the planning body have adequate knowledge?

29. More Tough Assumptions • 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.

30. Some Observations • Weber’s ideas have infiltrated • Marketing management • Market forces based on exchange and competition (5 Forces Model) • The impact of religious thoughts • “we are good - they are bad”

31. 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.

32. 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.

33. More, More and More... • 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.

34. What do you think? • How are large bureaucracies doing? • Are employee’s interests subsumed? • Do trends today prove Weber wrong? • What role does religion play in the economy today? • What role does religion play in management/motivation today?