Max Weber and the Path from Political Economy to Economic Sociology

Christopher Adair-Toteff

• Publisher: Routledge
• Year: 2021
• Print ISBN: 9780367620073
• eBook ISBN: 9781000467789
• Edition: 1
• Topic: Social Sciences
• Subtopic: Sociology
• Index: Social Sciences

This book examines the largely-neglected shift in Max Weber's work from political economy to economic sociology. Considering the importance of his recognition—made during his research on the Protestant Ethic—of the reciprocal influences that exist between economics and society and the role of this realization in prompting him to rethink the study of political economy, the author sheds fresh light on his emerging belief that the study of the relationship between economic factors and social issues required a new discipline. A study that charts an important development in the thought of one of the founding figures of sociology, this volume will appeal to scholars of social theory with interests in the history of the field and the legacy of Max Weber.

1 Introduction

DOI: 10.4324/9781003107460-1

I

Max Weber has long been regarded as one of Germany’s leading sociologists and for many different reasons. Some scholars point to his two major contributions to the discipline of sociology: Economy and Society and the Protestant Ethics and the Spirit of Capitalism. Both works appear at the top of almost any list of the most important books in sociology. Other scholars point to the fact that Weber, along with Ernst Troeltsch, was responsible for the development of the sociology of religion while some others point to Weber’s contributions to establish the Deutsche Gesellschaft für Soziologie (German Society for Sociology). However, it is important to keep in mind that Weber was not trained in sociology, he held no professorship in sociology, and he had an ambivalent attitude toward it. Yet, he is rightly regarded as one of the leading founders of sociology and he has been considered as one of Germany’s leading sociologists; but for almost his entire life he regarded himself as an “economist” and not a sociologist. He never explicitly referred to himself as an “economist” because that was not a term commonly used during that time in Germany. Instead, scholars in that field, which encompassed “economics” considered themselves either “political economists” or “national economists,” and Weber referred to himself by both phrases.

This book was born out of several developments. The first was when I wrote Capitalism and Criticism. Weber on Economic History (Adair-Toteff 2013). This effort prompted me to rethink how Weber was regarded as an economic historian. The second was when I wrote the chapter on “Max Weber and the Agrarian Question” for Alan Sica’s Anthem Companion to Max Weber (Adair-Toteff 2016). The focus on Weber’s early writings on agrarian problems made me realize how important social and political factors were to his approach to economic issues. The third was when I wrote the section on “Economic Sociology” for Bryan Turner’s Wiley Blackwell Encyclopedia of Social Theory (Adair-Toteff 2018). In doing research for it, I realized that, with the exception of Richard Swedberg’s Max Weber and the Idea of Economic Sociology, there was little work done in this area (Swedberg 1998). The fourth and most recent time was when I was given the opportunity to write the chapter on “Weber’s Economic Sociology” for Alan Sica’s Routledge International Handbook of Max Weber (Adair-Toteff 2022). Research on this topic prompted me to think about writing a book on the topic, and I owe a debt of gratitude to Neil Jordan for not just accepting but endorsing the proposal for this book.

The emphasis in this book on Weber’s social economics does not mean that I disagree with the dominant conception of Weber as the leading sociologist. Because I fully recognize and appreciate what Weber has done to establish sociology and social theory as legitimate scholarly disciplines. What I have tried to do in this book is to compliment that conception of Weber with an account of his thinking as a political economist. It takes Weber’s claim that he was a political economist seriously and is an account of the path that he took from being a political economist to an economic sociologist. While this account has never been discussed, there have been a number of scholars who have influenced my thinking about Max Weber and economics. These include Richard Swedberg, Sam Whimster, Keith Tribe, and Hinnerk Bruhns. These are among the few scholars who have taken Weber’s economic thinking seriously and I have learned much from reading their works. Then there are many other Weber experts who have contributed to my general understanding of Weber’s thought. These scholars include Alan Sica, Wolfgang Schluchter, Wolfgang Mommsen, Wilhelm Hennis, Rita Aldenhoff-Hübinger, Edith Hanke, Lawrence Scaff, and more than anyone else, Stephen Turner. What I offer is by no means a definitive account of Weber’s social-economic thinking; it is one way of describing the path that I believe Weber took from a beginner in political economics to becoming the champion of social economics.

II

There are five additional chapters with two being rather long and the others less so. Chapter Two provides the context of Weber’s beginnings as a political economist. It does so by tracing the history of political economics in Germany from its beginnings in the early decades of the nineteenth century. It then covers the older German Historical school of economics before moving to the Younger school. It sets out the basic tenets of both the Older and the Younger school and contrasts them with the Austrian school of economics. While the former focuses on the Younger school of Karl Knies, Lujo Brentano, and Gustav Schmoller; the latter concentrates on Carl Menger, Eugen von Böhm-Bawerk, and Friedrich von Wieser. The chapter concludes with a brief discussion of the “Methodenstreit”; that is, the conflict over the proper method to be used in political economy. Schmoller and his followers contended that history and induction not only provide the proper understanding of economic issues but offer viable means to solve social problems. In contrast, Menger and his followers insisted that history can only offer so much to economics and that the genuine approach needs to be deductive. Menger insisted that this approach made it closer to the natural sciences, and he insisted that political economy should restrict itself to economic analyses and leave it to others to attempt to solve social and political problems. While Weber occasionally referred to himself as a member of the German Historical school, his methodology and his conviction about separating facts from values indicate that his sympathies were closer to the Austrian school.

In Chapter Three, the attention is on Max Weber and his thinking about political economics from 1892 until the end of the decade. Much of this chapter is devoted to an examination of the lectures that Weber gave first at Freiburg and then at Heidelberg. Some of his lectures were on agrarian matters while others focused on labor issues. However, as with most political/national economists, Weber lectured on the three aspects of political economy: the general theoretical approach, the financial aspect, and the practical application. As with most of his predecessors as well as his contemporaries, Weber dealt with labor issues more than capital matters. However, there is a subtle but noticeable shift in his emphasis toward the end of this period.

Chapter Four is slightly shorter than the previous one and the following one. It covers the period from 1902 to 1910. The reason that it begins with the year 1902 is because from the end of 1899 to the end of 1902, Weber was physically incapacitated and mentally exhausted. It was only at the end of 1902 and the beginning of 1903 that Weber was able to return to writing. Much of his work during this time falls outside of the focus on political economy. However, there are relevant methodological works. As Weber joined Werner Sombart and Edgar Jaffé as a co-editor of the Archiv für Sozialwissenschaft und Sozialpolitik, he began to concentrate on capitalism. Then, there was the impact of Sombart’s Der moderne Kapitalismus on Weber’s thinking and the result was the “Protestant Ethic.” There is also the protracted discussion with the publisher Paul Siebeck about a new edition of Schönberg’s Handbuch der politische Oekonomie. These discussions reveal much about Weber’s reluctance to take on that editorial task, not even as a co-editor. But they also reveal his growing dissatisfaction with the contents and the form of Schönberg’s work. Weber did not dispute the value of the earlier editions and he continued to praise some entries as worthy contributions, but he believed that Schönberg’s approach was rooted in the nineteenth-century approach to political economy with the focus on agricultural and labor issues. However, the twentieth century was dominated by modern capitalism and any new Handbuch needed to reflect these fundamental changes.

Chapter Five is another long chapter and covers the period from roughly 1910 until Weber’s death on 14 June 1920. Weber began the decade as an independent scholar but the financial repercussions of the war forced him to return to teaching, and he began the decade by continuing to work on what would become the Grundriss der Sozialökonomik. Weber and Paul Siebeck had agreed on the format and size, but both would change as Weber’s vision of it was altered. He was able to recruit some of the leading scholars, but he also ensured that some of the most promising of the younger generation were included. Weber was disappointed that many contributors were tardy in sending in their essays but his own was not “finished” for seven years after he had promised it to Siebeck. Even then, Wirtschaft und Gesellschaft was not a complete work but was composed of the first part for which Weber had checked the page proofs before his death. However, the bulk of the work was compiled posthumously by Marianne Weber from numerous older manuscripts.

Max Weber was embroiled in several legal battles during the early years of this decade. Some of these cases were personal, like the one involving Marianne’s honor. But two of them were directly or indirectly related to the Grundriss. The most relevant of these was the long-term legal battle with Schönberg’s heirs and their representative, Bernhard Harms. While they insisted that Siebeck honor Schönberg’s 1906 contract with the Siebeck firm, Weber argued that what the Siebeck company was going to be publishing was not a new edition but totally a new work. Weber may have slightly overstated his case, but the finished Grundriss der Sozialökonomik bore little resemblance in title, content, focus, and form. Thus, it was not, and should not, be regarded as a new edition of the Handbuch der Sozial Oekonomie.

Weber had anticipated writing a number of sections for the Grundriss but his dissatisfaction with Karl Bücher’s lead essay on the steps of economic development and Friedrich von Wieser’s book-length work on social-economics theory prompted him to recast his own writings. And no place is this clearer than in Part One of Wirtschaft und Gesellschaft. Of the four “chapters” that make up the first part is “Kapitel 2,” which is the one that is germane to my discussion. Of its many sections, most are relevant, but the paragraphs on labor and groups are less so. Accordingly, my focus is on capitalism, exchange, and especially money. For it is the concept of money that dominates the entire chapter and especially in the lengthy appendix devoted to Knapp’s state theory of money. While Karl Knies had published a major contribution on money in 1873 and Carl Menger had written the famous article on “Geld” in 1892, it was Knapp’s 1905 book that drew Weber’s interest. While he agreed with much that Knapp had written, Weber argued that Knapp overlooked the social implications of monetary theory and ignored the competitiveness of monetary exchange. Rather than being founded upon a stable institution of the state, money was a tool to be used in the unstable economic market place. Rather than being irrelevant, social and political factors were imperative in explaining markets, stock exchanges, and even foreign exchange and inflation.

Chapter Six is a very short chapter and has two parts. The first part is retrospective and looks back at the main ideas contained in the preceding chapters. It serves to draw certain strands of Weber’s thinking together to provide a clearer view of Weber’s transition from a political economist to a social economist. The second part is more prospective and considers the two lines of thinking that took Weber’s social economics as their starting points. Edgar Salin began as a supporter of Weber’s type of socio-economic philosophy and remained a staunch advocate of it for the remainder of his life. On the other hand, Joseph Schumpeter began as an adherent to Weber’s social economics but began to move away. Schumpeter eventually rejected Weber’s social-economic thinking and basically declared that Weber had never been an economist. How much of this was because of Schumpeter’s need to distance himself from Weber in order to secure his own place in modern economic theory is best left to others to determine. This second part concludes with a possible reconciliation between the views of Salin and Schumpeter and a hint of what a Weberian social economics of the future might look like. Whether that is a workable idea may be up to others to evaluate and it will be up to others to judge the degree of success regarding my description of Weber’s path from a political economist to an economic sociologist.

Bibliography

• Adair-Toteff, Christopher (2013) “Capitalism and Criticism. Weber on Economic History.” History of the Human Sciences. Vol. 1. 128–139.
• Adair-Toteff, Christopher (2016) “Max Weber and the Agrarian Question.” In The Anthem Companion to Max Weber. Edited by Alan Sica. London: Anthem Press. 45–66.
• Adair-Toteff, Christopher (2018) “Economic Sociology.” In The Wiley Blackwell Encyclopedia of Social Theory. Edited by Bryan S. Turner. Hoboken, N.J.: John Wiley & Son. Vol. II. 673–687.
• Adair-Toteff, Christopher (2022) “Max Weber and Economic Sociology.” In The Routledge International Handbook of Max Weber. Edited by Alan Sica. London: Routledge.
• Swedberg, Richard (1998) Max Weber and the Idea of Economic Sociology. Princeton: Princeton University Press.

2 Nineteenth-century German political economy

DOI: 10.4324/9781003107460-2

I

This chapter has an almost impossible goal and that is to attempt to distill nearly a full century of German economic thought in a single chapter of a book. However unlikely that this attempt will succeed, it is still important to attempt to do so. That is because Max Weber’s own socio-economic thinking was grounded in this history. Thus, one cannot fully understand Weber’s thoughts without some comprehension of what he had learned and to which he was reacting. This involves discussing a number of scholars and several disputes and will provide the basis for understanding the beginnings of Max Weber’s path from political economy to economic sociology.

This chapter has seven sections: section I serves as an introduction, section II covers Friedrich List and Rau, section III is devoted to the “older” German Historical school of economics, and section IV is devoted to the “younger” school. Section V covers the three main economists of the Austrian school of economics while section VI is designed to explain the “Methodenstreit”; that is, the “conflict over methods.” Section VI is the longest because it is the most relevant to understanding Weber’s path from being a political economist to becoming the economic sociologist. Section VII contains some concluding remarks.

II

Friedrich List (1789–1846) was the individual who was most likely responsible for introducing the notion of political economy in Germany, and he is often regarded as a forerunner of the German Historical school of economics.¹ Because he was a rather unexpected person to have done so, it is beneficial to spend some time on his biography.² Born in Reutlingen in southwest Germany to a family of tanners, List never received much of an education. He had finished school at ...

Table of contents

• Cover
• Half Title
• Series Page
• Title Page
• Copyright Page
• Contents
• Preface
• 1 Introduction
• 2 Nineteenth-century German political economy
• 3 Max Weber and becoming a political economist. 1890–1900
• 4 Max Weber and becoming a social economist. 1900–1910
• 5 Max Weber and “Sozial Ökonomik.” 1910–1920
• 6 Max Weber’s social economics—the path not taken
• Index