Max Weber: Selections in Translation

What, in this context, do we mean by socialism? The word has, as argued earlier, many meanings. But the opposite of socialism which usually comes to mind is the private enterprise system: that is, the system in which the provision of economic needs is in the hands of private entrepreneurs and so is effected in such a way that these entrepreneurs provide themselves, by means of contracts of sale and wage contracts, with material plant, a clerical staff and a manual labour force, and then, at their own economic risk and in expectation of profit for themselves, cause goods to be produced which they then sell on the market. This private enterprise system has been labelled in socialist theory ‘the anarchy of production’, because it allows the provisioning of those who need the goods produced to depend on the outcome of the workings of the private interest in making a profit which the individual entrepreneurs have in selling their products.

The question of which of a society's requirements should be supplied entrepreneurially – that is, by private enterprise – and which should not be supplied in this way but, in the widest sense, socialistically, that is, by planned organisation, has had various answers in the course of history. In the Middle Ages, for instance, republics like Genoa allowed their great colonial wars against Cyprus to be waged for them by limited liability companies, the so-called Maone.