Weber and the spirit of capitalism

WEBER AND THE SPIRIT OF CAPITALISM

Prof. Prabha Panth,Osmania University’

Hyderabad

01/05/2023Prabha Panth

OBJECTIVE• To trace the origins and likely course of evolution of Western

Industrial Capitalism,• Identify the “ethos” or “spirit” of capitalism.• The ‘spirit of capitalism’ does not refer to the spirit in the

metaphysical sense but rather a set of values, the spirit of hard work and progress

Causes of the emergence of Western Capitalism:• Outcome of a historically specific conjunction of events,• Rationalism – of labour and production

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CHARACTERISTICS OF CAPITALISM

• 1. Accumulation of capital: of money for its own sake. “Man is dominated by the making of money by acquisition as the ultimate purpose of his life”.• 2. Investment and reinvestment, not consumption.• 3. Historical factors leading to capitalism:

• Europe – Middle ages – dominated by Roman Catholic Church, discouraged accumulation of wealth,

• Reformation and emergence of Protestantism: chiefly Calvinism,• Attitude of people changed,• Protestantism spread during 15th and 16th centuries.

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• Protestant ethics:1. Individual should fulfil his worldly duties,2. For salvation, “good works” in worldly activity is required,3. Emphasis on “calling” – success is a sign of being saved.4. Moral energy and drive of a capitalist entrepreneur and

encouraged.5. Puritans in America, hardworking and enterprising,6. Accumulation of wealth was morally sanctioned, if

combined with a sober, industrious career.7. Wealth should not be used for luxury and self indulgence.

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RATIONALITY

• Attitude towards science etc. changed.• Rationalism towards science, religion, law and administration,• Application of new techniques and methods of production,• Use of labour,• Regulations in government. Growth of bureaucracy. Well established

political and legal framework.• Growth of nation state, importance to national interests,• Growth of national power, economic strength • Productive efficiency of capitalism,

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• Growth of urban centres, cut off from rural, different interests, and property holdings,• Growth of the market. • Laissez faire and competitive market.• Different classes with different interests.• But no class conflict, as envisaged by Marx.

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FEATURES OF CAPITALISM1. Free and open market, no artificial controls or limitations to exchange.2. Monetised economy: growth of accounting system, growth of

industrial enterprises.3. Rational accounting system, commercialisation of economy.4. Rational technology in production, growth of factory system,5. Private ownership – land, equipment, finance.6. No further evolution of capitalism, unlike Marxian theory.7. No class struggle, no exploitation. All struggle is in the market.

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EVALUATION

i. To defend capitalism against Marxian criticism,ii. Not dictatorship of the proletariat, but dictatorship of the

officials. iii. Bureaucratic rule.But warned against:

a) Sheer materialism and humans dominated by material goods,

b) Conditions of life may be dehumanised.

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CRITICISM1. Post reform Catholicism encouraged capitalist growth.

Puritans were against capital and accumulation of wealth.2. Weber’s example of only England and America. But in Europe

there is no connection between capitalism and Calvinism.3. Japan developed without Puritanism. Germany and France

with Roman Catholic base,4. No causal connection established between capitalism and

Protestantism,5. Internal struggle in capitalism is ignored.

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CRITICISM6. Accumulation for its own sake is irrational, consumption

has to increase.7. Impact of colonies and colonial wealth ignored.8. Impact of industrial revolution has been ignored.9. Merchant capitalism only in the 15-16 centuries.

Industrial capitalism of 18-19th century ignored.10. No free market, but monopoly and oligopoly dominates.

Exploitation of consumers and workers. Prabha Panth 10

Education

Weber and the spirit of capitalism