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August 23, 2007


Tal Yeshanov

Max Weber was arguably among one of the world’s most influential political economists due to his thoughts on economics, politics, and society which help govern today’s western philosophical thoughts about capitalism. Capitalism is an economic system where the modes of production are geared toward making a profit. Weber was preoccupied with his efforts to explain the origins and trajectory of capitalism, he believed it to arise from religious practices. Weber believed capitalism would turn into a system of bureaucratic laws and regulations. Looking back on the first half of the twentieth century, the thoughts of Weber were in fact rights as capitalism did turn into a system of laws and regulations.
According to Weber capitalism arose from Protestants’ aims toward a rational means of economic gain as a way of dealing with their religious anxieties. Weber believes that the “spirit of capitalism” encompasses the notion that an individual’s ideas and habits tend to favor a rational pursuit toward economic gain. In his writing, Weber explains that this rational pursuit toward economic gain is achieved through a higher spiritual and moral meaning which is a byproduct of religious doctrines and beliefs. Capitalism evolved when the Protestants (more specifically the Calvinists), encouraged people to engage in work in order to accumulate wealth for investment in order to save themselves from damnation. It was believed that if one could attain self-confidence through economic success one would be given “the certainty of grace” (Weber, 67) and would “get rid of the fear of damnation” (Weber 69).
The origin of capitalism arises from an individual’s anxiety about their salvation; in turn they seek reassurance in order to save themselves from harm. To avoid harm, they believe it is necessary to achieve economic success, and since they did not indulge themselves they were able to use money to invest back into the economy. Not only were people able to successfully save and invest their hard earned profits, they were also great workers which in turn allowed them to earn great profits. Under the protestant work ethic, the economic state improved, profits were made and capitalism experienced its birth. Now, the first half of the twentieth century has reaped the rewards from that system of capitalism.
Weber argued that religion supported the development of capitalism in its inception, but once capitalism as a system got strong, it severed its religious ties. As capitalism grew, it “no longer [needed] the support of any religious forces” (Weber, 34). Weber argued that over time religious thoughts and practices tended to change thus causing the Protestant’s work ethics to change. This loss of religion did not mean that individuals no longer worked, it simply meant that capitalism was now to be based on individuals’ servitude to mechanized industries. People’s servitude bound them to be tied to machines and bureaucracy which still holds true in today’s modern world.
As capitalism changed its trajectory and expanded, people started to change their minds in matters pertaining to religion and started moving toward rationalism. This caused them to abandon their religious pursuit of wealth and thus meant a change to a rational means of existence- wealth. These changes in the trajectory of capitalism lead people to act in a ‘rational’ manner. According to Weber, this rationalization served as a shift from a value-oriented organization to a goal oriented organization. A value- oriented organization was ruled by traditional and charismatic authority, whereas a goal-oriented organization was ruled by a legal-rational authority under bureaucratic laws.
Bureaucracy is the administrative execution of standardized rules which served as an influential force of the legal-rational authority under the concept of rationalization. As capitalism grew, so did the growth of trade and commerce. To keep track of such production, distribution, and consumption of wealth, beauracratic controls needed to be implemented. The result of the shift toward these beauracratic controls under a legal-rational authority was regarded to as a polar night of icy darkness in which increasing rationalization leads humans to be trapped in an “iron cage”.
The “Iron Cage” is based on rules, rational control, and the bureaucratic laws. These bureaucratic laws are put in place so that individuals can work in a more efficient manner. While it was inevitable that bureaucratic rational-legal practices were implemented, the effects of these laws placed people in “iron cages”. In essence these “cages” referred to rule-based controls which caused a loss of human freedom and dignity. Bureaucracy was therefore a cost to society since people must follow the laws.
Today, during the first half of the twentieth century, capitalism is one of the Western world’s most dominant economic systems and seeing as many of the practices adopted by today’s government are congruent with Max Weber’s writing. Weber has helped shape the nature of modern western capitalism since his studies have resulted in the adoption of laws governing our modern day state. Weber’s prediction of the trajectory of capitalism was right on the money as his writings truly do reflect the occurrences of the twentieth century. This is because, people today incorporate capitalism and bureaucracy into their life not for the purpose of salvation but for the purpose of being able to live and function in society.
The adoption of capitalist laws as presented by Weber can be observed in today’s bureaucratic institutions. Institutions such as our banking structure, multinational corporations, and the money market help govern our economy. Without these much needed bureaucratic systems in place the economy would not be able to function. Businesses are not the only enterprises that depend on these capitalist bureaucratic structures; humans also greatly depend on the laws of capitalism. In order to survive in the world today, every individual must get a job, open a bank account, and pay their bills/taxes. Due to bureaucratic processes capitalism is able to thrive and grow. Weber was able to clearly articulate the concepts of capitalism that are relevant toward today’s political economy. He was able to base his writing off of many political economists. Weber was able to explain the development of the origins, trajectory, and effects of an economic system such as capitalism. Weber’s relevant thoughts about religion, economics, and sociology have left behind a legacy of greatness.

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