ABSTRACT

The chapter examines in detail critical episodes in the formation of central banks in the United Kingdom and the United States. The approach follows Max Weber's social economics and includes economic theory, economic history and the sociological analysis of economic institutions. The approach also draws on Joseph Schumpeter both as an economic theorist and as a historian of economists and economic history. Weber's eschewal of pure economic theory, unlike Schumpeter, is noted. The discipline of economics after 1920 ignored or misread Weber and interpreted economic history and institutional practice through the lens of the dominant economic theory. In doing so it contravened the structures Weber laid down in his Objektivitätsaufsatz (Objectivity essay) concerning economics as a science of social reality. The primacy of economic theory over politics, institutions, and economic history should be regarded as a liability in the public understanding of central banking.

6.1 SOCIAL ECONOMICS IN THE SENSE OF MAX WEBER

What sort of economist was Max Weber? It is now well established that Weber wrote on nearly every conceivable aspect of economic behaviour. This included economic history, the applied economics of agriculture, the stock exchange, the industrial factory, the growth of markets and the regulation of markets. These writings tended towards political economy and the role of the state: how the state could foster the nation's economy and how it could be captured by economic interests; infamously by Prussian Junkers in the Wilhelmine period Weber lived through. In addition, the place of the national economy was assessed within the burgeoning international economy of the late nineteenth century. There were few subjects of whatever provenance that did not undergo an economic analysis in his hands. On the grand comparative scale, the early modern European economy was subjected to an analysis of religious influences, the economic consequences of the Indian caste system and the Vedas were drawn, and the intervening role of magic was analysed in China's economic and technological development.

ABSTRACT

Max Weber's concept of life conduct is useful in highlighting a small discovery I made while conducting research in Erfurt, a mid-sized town in the middle of Germany: Bodenständigkeit, an untranslatable term that kept cropping up. Taking Max Weber, the sociologist, the man, and the culture critic, as a counterpoint, I delineate in this chapter the characteristics of an ideal type of this life conduct, its possible origin, and the critique it raises. Drawing on a variety of sources, I offer the example of Clueso, a popular singer from the town, and his success, as an exploration into the meaning and aspects of the word. What I uncovered characterizes a large segment of the German middle classes while challenging core statements of theories that stress singularity and distinction as the motor of social change. In revealing a lifestyle that otherwise largely goes unnoticed, Weber's notion of life conduct proves useful for research.

While conducting research on representatives of middle classes in a mid-sized German town I made a small discovery: Bodenständigkeit, an untranslatable term that kept cropping up in interviews and conversations. Drawing on Max Weber's sociology, I argue that the word hints at a particular Lebensführung (life conduct) – one, however, that happens to be at the exact opposite of the kind of lifestyle that he himself seemed to value in his own personal life. In this chapter, I use elements of Weber's sociology and the personal stance he expounded in his writings to outline an ideal type of the bodenständige life conduct. While doing so, I am attentive to the status of the word, the possible origin of this particular life conduct, and I try to address some of the critiques I was confronted with when discussing it in everyday and scholarly contexts. Alongside and beyond Weber, I draw in this chapter on various sources (interviews, clothing and fashion accessories, pop music, tattoos and dating apps) that all point to an idea that shapes everyday practices: moderation. I describe the practical, ethical as well as aesthetic dimensions of an ideal type of the bodenständige life conduct that characterizes today, I argue, a large segment of German middle classes. What I uncover challenges core statements of theories that stress singularity and distinction as motor of social change for representatives of middle classes.

ABSTRACT

This chapter considers the empirical methods used by Weber. Key concepts like Weber's ideal types, his demand for value freedom and his approach to sociological explanation referring to a systematic distinction between social structure and social action, as described in the second chapter, will be briefly reviewed. Our focus, however, will be on how Weber conceptualized experience-based methods of gaining scientific knowledge in sociology. For this purpose, some of his main works, like Psychophysik der industriellen Arbeit (Psychophysics of industrial work), will be discussed. Because Weber's empirical work has not received much attention so far, we attempt to trace his influence on later empirical social research and to identify his mark on today's empirical social research, thereby focusing on industrial sociology and the sociology of work. Our leading question in this attempt will be whether Weber can be understood as an early proponent of a mixed methods approach to gaining experience-based insights into both social structure and social action, and why his methodological works received little attention.

Max Weber is famous for the way in which he questioned the social world and approached the description and explanation of social phenomena, thereby picking up on the main sociological issues of his time. In particular, he suggested a new methodological approach to tackle major problems (see Tribe and Maurer in this volume for more details). His central tools, like the action- oriented approach and the use of abstract models (ideal types), have inspired important methodological approaches such as analytical sociology and mechanism- based approaches to sociological explanation. Whereas his methodological contributions were widely known at the time, Weber left few traces as an empirical social researcher. Nevertheless, he extensively used empirical data and developed and applied methods of empirical social research to study central questions of his time with the aim of extending our empirical knowledge about the world. We introduce this lesser known aspect of Weber and introduce him as an empirical social scientist.

Before we analyse Weber's approach and explore the research methods that he applied in his empirical studies, we look at some of the key concepts that Weber introduced into the methodology of the social sciences. We recall the most important aspects of Weber's work here, because our consideration of Weber as an empirical social researcher starts from sound reflections on his methodological concepts.

ABSTRACT

Max Weber's writings are not only very extensive, they range across law, finance, agrarian sociology, history and economics from the time of his doctoral dissertation in 1889 to posthumous publications in the early 1920s. During this span of more than 30 years he held a permanent professorial post for only ten; even if we add in his time teaching commercial law in Berlin up to 1894, in his lifetime he taught fewer than twenty full semesters. Nonetheless, he was at the time widely recognized in Germany as a leading academic and a public intellectual, his writing being characterized by a remarkable analytical coherence sustained throughout his life. While it is common to presume that the work produced in the last sixteen years of his life, from 1904 to 1920, represents a “mature phase” in his intellectual development, by tracing the course of his intellectual career from the early 1890s to the early 1920s this chapter demonstrates the lifelong consistency of his interests and argument in a body of work that shaped our understanding of modernity.

The reputation that Max Weber gained in the developing social sciences of the later twentieth century, and which echoes on today in textbooks and casual commentary, has been progressively revised since the 1980s. Central to this revision has been the publication of the Max Weber- Gesamtausgabe (Max Weber Complete Edition), which not only reprinted published writings, conference contributions and public lectures, but also a great deal of previously unknown material in ten volumes of correspondence and five volumes of lecture notes from the 1890s. Specialized editorial work has substantially altered our understanding of Weber's scholarly and academic significance on a number of fronts; importantly, the existence of the MWG itself sets new standards for discussion of Max Weber. By outlining his academic life, we can perhaps open out some of the implications of a complex, ongoing reassessment of a figure whose work remains of central importance for the humanities and social sciences.

For many, Max Weber's most familiar text is Die protestantische Ethik und der Geist des Kapitalismus (The Protestant Ethic and the Spirit of Capitalism; MWG I/18; 2002), originally two linked journal articles from 1904/05 published as a book in an English translation by Talcott Parsons in 1930.

ABSTRACT

Max Weber's historical studies on economic forms and institutions should not be treated separately from his comprehensive interest in the connection between economy and society and forms of economy and rule. His analyses of the modern economy in general, and specifically of modern bourgeois enterprise capitalism with its organization of (formally) free labour, are largely based on comparative studies of economic forms and institutions in societies far removed in time and space. A central guiding question here is that of the factors (political, economic, social, geographical, mental) that have promoted or inhibited a particular development of economic forms and institutions. This methodological procedure and its results for Weber's analysis of capitalism are illustrated in this chapter by his studies of the ancient economy, the medieval city economy and the Chinese economy, each case in relation to its respective political and social structures, on the one side, and in relation to the question of the particularity of modern capitalism on the other.

4.1 CAPITALISM AS A LIFE THEME

Capitalism was the great theme of Max Weber's life (1864–1920). Not the only one, but nevertheless the most comprehensive. As a child, he experienced the founding of the German nation state by Bismarck in 1871. His youth coincided with the great economic boom of the new German Empire, the industrialization of Germany with its social conflicts, the intensification of agrarian capitalism in East Germany, the accompanying social restructuring and the growing tensions between agrarian capitalism and industrial capitalism. How central the phenomenon of capitalism was for Germans in Weber's time is illustrated by the following statement made in 1911 by the social politician Friedrich Naumann, who was closely associated with Weber. “Just as the French have their theme: what is the great revolution?, so for a long time we [Germans] have through our national destiny as our theme: what is capitalism?” (Naumann 1911: 579; own translation). In France, where the word originated, Naumann added, capitalism remained in its first period; there was indeed much capital and many capitalists but little in the way of capitalism as such. Capitalism was also still very individualistic; what one sees, says Naumann, are “capitalists working separated from each other”. In contrast, Germany had entered its second period of capitalism, which was characterized by “the organization of capitalists” that is, capitalism as a “social structure, it is a social order” (Naumann 1911: 579).

There are three key reasons to examine Max Weber's sociological thought on the economy. The first, and most pressing motivation for producing this book, is to counter the one- sided and incomplete interpretations of his writings that have resulted in the artificial separation of his work into historical studies, methodological writings, material analyses and sociology. As a result, his ongoing interest in explaining and analysing economic topics has become detached from his later invention of a sociology, which he posited as an alternative to what contemporary economists and others had developed. Consequently, most sociologists have overlooked Weber's fascination with economic analyses and what he has to say about the economy.

Rather, Max Weber has been widely read as a sociologist, interested in topics such as religion, politics, authority, law and culture. It was Talcott Parsons, who, after visiting the University of Heidelberg in the 1930s, influenced this particular reception of Weber's work in the United States. Parsons, who himself separated economics and sociology because of their respective action models, detached Weber's work from economics through his translations (e.g. Turner 1996: 4– 5). Parsons’ interpretation of Weber was reimported after the Second World War and became influential in Germany and across Europe. It was not until an international meeting of sociologists in Heidelberg in 1964, organized to honour Weber's one hundredth birthday, that Weber's writings were revived through an inspiring comparison between his theories on capitalism and those of Karl Marx. Subsequently, various scholars began to compare Max Weber to Karl Marx and to other social theorists such as Èmile Durkheim and Georg Simmel. In the 1980s, Max Weber's methodological writings were read as a way of constructing action- based explanations. In line with this, Weber's sociology is increasingly read as a critique of highly abstract models in standard economics as well as of standard sociological approaches. As a result, a new understanding of Weber's sociology has more recently emerged that takes his methodological concerns as a starting point for a sociological perspective on the economy that focuses on the connections between society and economy.

ABSTRACT

The purpose of this chapter is to show the importance of Weber's sociology Wirtschaft und Gesellschaft (Economy and Society) for his analysis of the role of religion in the development of modern capitalism. Weber logically developed the existence of legitimate social order in pre-modern and modern societies, a theory of change, a conceptual classification of economic systems, and a theory of religions all out of his four ideal-types of action. These theoretical considerations were the preparatory work for his main task of explaining why the first instance of modern capitalism appeared in England, despite the fact that Chinese, Indian, and Muslim civilizations were much more advanced throughout long periods of human history. Weber argued that modern capitalism could not have develop directly out of adventure capitalism, because its rejection of consumption would have appeared irrational for pre-modern economic actors. Weber concluded that, at least initially, the presence of an ascetic this-worldly religion was required to motivate the transition to modern capitalism. In England modern capitalism could develop, because it had not only a favourable economic environment (free labour market and a rational law), but also a protestant ethic.

Max Weber did not believe that capitalism is a modern phenomenon. He recognized that in all cultures and in all historical periods a type of pre-modern adventure capitalism already existed. A small number of risk- taking individuals tried to amass wealth in a short period of time through trade and other risky activities. However, these activities did not lead to an accumulation of capital and therefore to explosive economic growth, because (1) those adventurers were always in the minority, with their risk- taking limited by ethical systems to interactions outside of their home community, and (2) they consumed their wealth as quickly as they obtained it (see also Bruhns in this volume). On the other hand, modern capitalism is characterized by a shift from consumption to continuous reinvestment, which from a pre- modern point of view is irrational. Max Weber thus concluded that such behaviour can only be rationally explained by a shift in one's ethical world view, now known as his Protestantische Ethik thesis (Protestant Ethic; MWG I/ 18; 1948b.).

ABSTRACT

With his famous ideal type of bureaucratic organization, Max Weber is widely recognized as the iconic founding father of organization theory. He embedded it in his threefold typology of legitimate rule. Beyond this classic theme, I argue that Weber is referring to different types of organization. Some of these have not been discussed in depth yet. In particular, his processual, action-oriented concept of organization has been lost in translation. By drawing on this concept, I develop a nuanced typology of organizational concepts, which are present in Weber's work. I situate this typology in his understanding of rulership and illustrate its value for analysing alternative organizational forms. The case of a neighbourhood house offering integration courses demonstrates that bureaucratic organization sometimes becomes relevant only in constellations with other types of organization, such as democratic self-organization. I conclude by pointing out that such a nuanced typology is important for reviving Weber's agenda of explaining institutionalized pathways in the continuous transformation of the recent economy and society.

7.1 INTRODUCTION

Although Max Weber knew about the contingencies in institutionalized forms of capitalist production, consumption, and distribution (see Maurer in this volume), he always asked which forms prevailed in practice and why these prevailed, while others did not. Practically relevant and often unquestioned relations of Herrschaft (rule or rulership) in everyday life provide the basis for large parts of his answer. Prevailing economic forms need a collective effort to stabilize. In practice, they need organization. This puts the problem of organization at the core of Weberian thought on economy and society.

Weber is widely recognized as the iconic founding father of modern organization theory (Blau & Scott 1962 ) when considering his concept of bureaucracy. Moving beyond this well- known theme, I argue for the analytical value of a general and processual understanding of organization, rising from a distinct set of interconnected actions present in Weber's writings. He pointed out that organization is more than merely organizing actors, in the sense of connecting or coordinating them (see for example the influential definition of Hernes 2014). I use “organization” here according to a largely underexplored, processual definition. Organization refers to “the continuing action it takes to assure the execution and enforcement of orders” (Weber 2019: 402) leading to obedience, to some degree, of this order by an identifiable group of persons.

ABSTRACT

This chapter emphasizes that Weber's interest in theory formation in the social sciences runs through his entire work as a common thread. It is shown how Weber developed a new, alternative step-by-step way of explaining the social world, which not only allowed him to gain new insights into social forms but also offered a new perspective on the economy, most of all on modern capitalism. The chapter outlines the central elements of Weber's sociology and how a deeper analysis of central institutions of modern capitalism can be elaborated in this framework. In light of this, the recurrent question of whether Weber is an economist or a sociologist is rephrased to ask whether today we could read Max Weber as a forerunner to economic sociology.

The question has repeatedly been asked as to whether Weber could or even should be classified as an economist or as a sociologist (Swedberg 1998: 173; see also Tribe in this volume). The question has provoked a lengthy debate, but one that has not led to any definitive conclusion. If we take a step back and ask in what respect was Weber an economist and why he transitioned to being a sociologist late in his career, we can obtain new insights. When dealing with Weber's thoughts about the economy, this question gains even more relevance, because it requires asking how Weber himself dealt with this tension and why it is an integral part of his concerns about methodology and of explanation in the social sciences. This chapter shows how economics and sociology find themselves connected in Weber's work and how this helped Max Weber solve some classical issues and can bring economic phenomena into today's sociology. Thus, the chapter dissolves the alleged dichotomy by exploring why he moved towards sociology in his methodological writings and how this inspired the outline of his sociology as part of an explanatory social science programme aiming for a deeper analysis of economic topics, especially that of modern capitalism. As a result, we may better understand why Weber late in his life saw himself as a sociologist, and why we would benefit from reading him as a sociologist intent on economic issues.

The previous chapter questioned the extent to which deindustrialization in the Global North was and is a product of import competition from the Global South and/ or the relocation of capital from North to South. While there is evidence that this might be the case in specific sectors, at an aggregate level it is problematic, and the fact is that in many cases manufactured goods are produced using less workers. It is also the case that wage stagnation and/ or loss of benefits such as pension levels is an issue across the board – in manufacturing and services and indeed in the public sector – regardless of whether or not there is intense competition from imported goods or services. The issue of more output being produced with less workers is addressed further in this chapter, as it speaks to a different potential explanation for deindus-trialization in the North, namely that it is a product of technological change, including automation.

The chapter examines this thesis, first by reiterating and further developing the debate between the “relocationists” versus the “technologists”. It then moves on to consider in more detail the debate about technological futures, including those around robotization and automation, in both the North and South. This discussion about a second machine age is related to wider debates about a second “Great Transformation”, which highlights the importance of the new post- industrial age. The third section then provides a critical assessment of this debate, and in particular introduces the powerful critique made by Benanav (2020a) of the technologists, whose wider arguments are also considered in the next chapter. The chapter concludes that while the technologists provide a useful corrective to the relocationists considered in the previous chapter, there are some serious issues not fully addressed by this perspective.

THE RELOCATION THESIS QUESTIONED: THE TECHNOLOGIST CRITIQUE

Chapter 3 considered the question of the extent to which deindustrialization in the Global North can be explained by the industrialization of the Global South. While the discussion did not reject the relocation and/ or import competition arguments outright, it did suggest that there were important reasons for questioning its central claims.