Weber's Last Theory of Capitalism: A Systematization Author(s): Randall Collins Source: American Sociological Review, Vol. 45, No. 6 (Dec., 1980), pp. 925-942 Published by: American Sociological Association Stable URL: http://www.jstor.org/stable/2094910 Accessed: 02/06/2009 08:22

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http://www.jstor.org WEBER'S LAST THEORY OF CAPITALISM: A SYSTEMATIZATION*

RANDALL COLLINS University of Virginia

AmericanSociological Review 1980, Vol. 45 (December):925-942

A systematic formulationis given of Weber's theory of the origins of large-scalecapitalism, based upon the lectures given just before his death. This last theory is predominantly institutional,unlike the emphasisupon religiousideas and motivationsin his early Protestant Ethic thesis, and unlike his analyses of the world religions. Weber's institutionaltheory involves a sequence of causal conditions. The outcome of the sequence is capitalism characterizedby the entrepreneurialorganization of capital,rationalized technology, free labor, and unrestrainedmarkets. Intermediateconditions are a calculable legal system and an economic ethic combininguniversal commercialization with the moderatepursuit of repetitive gains. These conditionsare fosteredby the bureaucraticstate and by legal citizenship,and more remotelyby a complex of administrative,military, and religiousfactors. The overall patternis one in which numerous elements must be balanced in continuous conflict if economic developmentis to take place. Weberderived much of this scheme in explicitconfrontation with Marxism.His conflict theory criticizes as well as deepens and extends a numberof Marxian themes, includinga theory of internationalcapitalism which both criticizes and complements Wallerstein'stheory of the world system.

Max Weber had many intellectualinter- scholars have treated it as Weber's dis- ests, and there has been considerablede- tinctive contribution,or Weber's distinc- bate over the question of what constitutes tive fallacy, on the origins of capitalism the central theme of his life work. Besides (e.g., Tawney, 1938; McClelland, 1961; treating the origins of capitalism, Weber Samuelsson, 1961; Cohen, 1980). Debate dealt extensively with the nature of mod- about the validity of this part of Weber's ernity and of rationality(Tenbruck, 1975; theory has tended to obscure the more Kalberg, 1979; 1980;Seidman, 1980), and fundamental historical and institutional with politics, methodology, and various theory which he presented in his later substantive areas of sociology. Amid all works. the attentionwhich has been paid to these The so-called "Weber thesis," as thus concerns, one of Weber's most significant isolated, has been taken to be essentially contributions has been largely ignored. idealist. Weber (1930:90)defines his pur- This is his mature theory of the develop- pose in The Protestant Ethic as "a contri- ment of capitalism,found in his last work bution to the manner in which ideas be- (1961), General Economic History. come effective forces in history." He This is ironic because Weber's (1930) (1930:183)polemically remarks against the first major work, The Protestant Ethic and Marxiststhat he does not intendto replace the Spirit of Capitalism, has long been the a one-sided materialismwith its opposite, most famous of all. The argumentthat the but his correctingof the balance sheet in Calvinist doctrine of predestinationgave this work concentrates largely on ideal the psychological impetus for ration- factors. The germ of Weber's institutional alized, entrepreneurialcapitalism is only a theory of capitalismcan also be found in fragmentof Weber'sfull theory. But many The Protestant Ethic (1930:58, 76).1 But it remained an undeveloped backdrop for his main focus on the role of religious * Direct all correspondence to: Randall Collins; ideas. The same may be said about his Department of Sociology; University of Virginia; Charlottesville, VA 22903. (1951; 1952;1958b) comparative studies of I am indebted to Vatro Murvar and other partici- pants at the Max Weber Symposium at the Univer- sity of Wisconsin at Milwaukee, March, 1978, and to 1 The list of institutional characteristics given on Samuel W. Kaplan, Stephen Kalberg, Guenther pp. 21-25 of the English-language edition of The Roth, Walter Goldfrank, Norbert Wiley, and Whit- Protestant Ethic (1930), however, are not in the ney Pope, for their suggestions on an earlier version 1904-5 original, but are from an introduction written of this argument. in 1920 (1930:ix-x). 925 926 AMERICAN SOCIOLOGICAL REVIEW the world religions. These broadenedcon- One important change in the General siderablythe amountof materialon social, Economic History is that Weber pays a economic, and political conditions, but good deal more attention to Marxian the main theme still stressed that diver- themes than previously. This is a signifi- gent ideas made an autonomouscontribu- cant difference from the anti-Marxist tion to the emergence of world- comments scattered through The Protes- transformingcapitalism in the Christian tant Ethic (e.g., pp. 55-56, 61, 90-91, West ratherthan elsewhere in the world.2 183). In the General Economic History, Thus, Parsons (1963; 1967) treats these Weber reduces the ideal factor to a rela- works as extendingthe early Weberthesis tively small place in his overall scheme. from Protestantismto Christianityin gen- During this same period, to be sure, eral, describing an evolution of religious Weber was preparinga new introduction ideas and their accompanying motiva- and footnotes for the reissue of The Prot- tional propensities from ancient Judaism estant Ethic among his collected religious up through the secularized achievement writings, in which he defendedhis original culture of the modern United States. thesis about Calvinism.But his claims for From these works, and from (1968)Part its importance in the overall scheme of II of Economy and Society, it is possible things were not large, and the well- to pull out an extensive picture of institu- roundedmodel which he presents in Gen- tional factors which Weber includes in his eral Economic History does not even overall theory of capitalism.But Economy mention the doctrine of predestination. and Society is organized encyclopedi- Instead, what we find is a predominantly cally, by analytically defined topics, and institutionaltheory, in which religiousor- does not pull together the theory as a ganization plays a key role in the rise of whole. There is only one place in Weber's modern capitalism but especially in con- works where he brings together the full junction with particularforms of political theory of capitalism as a historical organization. dynamic. This is in the GeneralEconomic In what follows, I will attempt to state History, and, especially, in the 70-page systematically Weber's mature theory of section comprising Part IV of that work. capitalism, as it appears in the General These lectures, deliveredin the winter and Economic History, bolstered where ap- spring of 1919-20, before Weber's death propriateby the buildingblocks presented that summer,are Weber's last word on the in Economy and Society. This argument subject of capitalism. They are also the involves a series of causes, which we will most neglected of his works; General trace backward, from the most recent to Economic History is the only one of the most remote. This model, I would Weber's majorworks that remains out of suggest, is the most comprehensive gen- print today, both in English and in Ger- eral theory of the originsof capitalismthat man. is yet available. It continues to stand up well in comparison with recent theories, 2 Cf. the closing words of The Religion of China: including Wallerstein's (1974) historical "To be sure the basic characteristics of the 'men- theory of the capitalist world-system. tality,' in this case practical attitudes towards the Weber himself was primarilyconcerned world, were deeply co-determined by political and economic destinies. Yet, in view of their autono- with the sensitizing concepts necessary mous laws, one can hardly fail to ascribe to these for an interpretationof the unique pattern attitudes effects strongly counteractive to capitalist of history and, in his methodological development" (1951:249), and of The Religion of writings, he disavowed statements in the India: "However, for the plebeian strata no ethic of form of general causal principles (cf. everyday life derived from its rationally formed mis- sionary prophecy. The appearance of such in the Burger, 1976). Nevertheless, Weber's Occident, however-above all, in the Near East- typologies contain implicitgeneralizations with the extensive consequences borne with it, was about the effects of institutional ar- conditioned by highly particular historical constella- rangements upon each other, and state- tions without which, despite differences of natural conditions, development there could easily have ments of cause-and-effect abound in his taken the course typical of Asia, particularly of substantive writings. There is nothing to India" (1958b:343). prevent us from stating his historical pic- WEBER'S LAST THEORY OF CAPITALISM: A SYSTEMATIZATION 927 ture of changing institutionalforms in a within the realm of religious solutions to more abstract and generalized manner the problem of suffering. than Weber did himself. It is clear that Weber himself used the Weber's model continues to offer a term "rationalism" in a number of dif- more sophisticated basis for a theory of ferent senses.3 But for his institutional capitalismthan any of the rival theories of theory of capitalist development, there is today. I put forwardthis formalizationof only one sense that need concern us. The Weber's maturetheory, not merely as an "rationalcapitalistic establishment," says appreciationof one of the classic works of Weber (1961:207),"is one with capital ac- the past, but to make clear the high-water counting, that is, an establishmentwhich mark of sociological theory about determines its income yielding power by capitalism. Weber's last theory is not the calculation according to the methods of last word on the subject of the rise of modern bookkeepingand the strikingof a capitalism,but if we are to surpassit, it is balance." The key term is calculability; it the high point from which we ought to occurs over and over againin those pages. build. What is distinctive about modern, large- scale, "rational" capitalism-in contrast forms-is that it is THE to earlier, partial COMPONENTS OF RATIONALIZED methodical and predictable, reducing all CAPITALISM areas of production and distribution as Capitalism, says Weber (1961:207-8, much as possible to a routine. This is also 260) is the provision of human needs by Weber's criterionfor calling bureaucracy the method of enterprise,which is to say, the most "rational"form of organization.4 by private businesses seeking profit. It is exchange carried out for positive gain, I In Part I of Economy and Society (written rather than forced contributions or 1918-20), Weber distinguishes formal and substan- traditionallyfixed gifts or trades. Like all tive rationality of economic action (1968:85-6). In of Weber's categories, capitalismis an an- "The Social Psychology of the World Religions" alytical concept; capitalism can be found (written 1913), Weber (1946:293-4) defines three as of historical as different types of rationalism: (1) a systematic world part many economies, view based on precise, abstract concepts; (2) practi- far back as ancientBabylon. It became the cal means-ends calculations; (3) a systematic indispensable form for the provision of method, including that of magic or prayer. In The everyday wants only in Western Europe Protestant Ethic (1904-5), Weber (1930:76-78) at- around the middle of the nineteenth cen- tacks the notion that the spirit of capitalism is "part of the development of rationalism as a whole," and tury. For this large-scale and econom- says he is interested in "the origin of precisely the ically predominantcapitalism, the key is irrational element which lies in this, as in every con- the "rationalpermanent enterprise" char- ception of a calling." Kalberg (1980) points out that acterized by "rational capital account- under one or another of Weber's types of rationality, ing." every action, even the most superstitious, might be called "rational." Kalberg argues that only one type The concept of "rationality"which ap- of rationality is relevant for the methodical conduct pears so often in Weber's works has been of affairs. the subject of much debate. Marxist crit- 4 It is plain that Weber (1968:85-6) is referring to ics of capitalism, as well as critics of bu- what in Economy and Society he calls "formal" ra- tionality, efficiency based on quantitative calculation reaucracy, have attacked Weber's alleged of means, rather than "substantive" rationality, the glorification of these social forms (e.g., adequacy of actions for meeting ultimate values. Hirst, 1976). On the other hand, Parsons Such values could be criteria of economic welfare, (1947), in his long introductionto the defi- whether maximal production, quality of life, or a nitional section of Economy and Society, socialist economic distribution, or they could be ethical or religious values. Weber makes it clear that gives "rationalization" both an idealist formal and substantive rationality can diverge and an evolutionary bent, as the master widely, especially in his late political writings about trend of world history, involving an inev- the dangers of bureaucracy (1946:77-128; itable upgradingof human cognitive and 1968:1393-1415). Weber himself tended to defend organizationalcapacities. Tenbruck(1975) the formal rationality of modern capitalism as coin- ciding to a fair degree with substantive rationality in claims the key to Weber's works is an meeting the value of maximizing the economic wel- inner logic of rationaldevelopment found fare of the population at large (1968:108-9). It goes 928 AMERICAN SOCIOLOGICALREVIEW For a capitalist economy to have a high say, noneconomic restrictions on the degree of predictability,it must have cer- movement of goods or of any of the fac- tain characteristics.The logic of Weber's tors of production.must be minimized. argument is first to describe these char- Such restrictionsinclude class monopolies acteristics; then to show the obstacles to upon particular items of -consumption them that were prevalent in virtually all (such as sumptuarylaws regulatingdress), societies of world history until recent or upon ownership or work (such as pro- centuries in the West; and, finally, by the hibitions on townspeople owning land, or method of comparativeanalysis, to show on knights or peasants carryingon trade; the social conditions responsible for their more extensively, caste systems in gen- emergence. eral). Other obstacles under this heading According to his argument,the compo- include transportation difficulties, war- nents of "rationalized"capitalism are as fare, and robbery-which make long- follows: distance tradinghazardous and unreliable. There must be private appropriation of Finally, there must be calculable law, all the means of production, and their both in adjudication and in public admin- concentrationunder the control of entre- istration. Laws must be couched in gen- preneurs. Land, buildings, machinery, eral terms applicable to all persons, and and materialsmust all be assembled under administeredin such a way as to make the a common management,so that decisions enforcement of economic contracts and about their acquisitionand use can be cal- rights highly predictable. Such a legal culated with maximalefficiency. All these system is implicatedin most of the above factors must be subject to sale as private characteristicsof rational capitalism: the goods on an open market. This develop- extension of private property rights over ment reaches its maximal scope when all the factors of production;the subdivision such property rights are represented by and easy transferability of such rights commercialinstruments, especially shares throughfinancial instruments and banking in ownership which are themselves operations; formal freedom for laborers; negotiable in a stock market. and legally protected markets. Within this enterprise, capital account- The picture that Weber gives us, then, ing is optimized by a technology which is is of the institutionalfoundations of the "reduced to calculation to the largest market as viewed by neoclassical eco- possible degree" (1961:208). It is in this nomics. He sees the market as providing sense that mechanizationis most signifi- the maximal amount of calculability for cant for the organization of large-scale the individualentrepreneur. Goods, labor, capitalism. and capital flow continuously to the areas Labor must be free to move about to of maximalreturn; at the same time, com- any work in response to conditions of de- petition in all markets reduces costs to mand. Weber notes that this is a formal their minimum. Thus, prices serve to and legal freedom, and that it goes along summarize all the necessary information with the economic compulsionof workers about the optimal allocation of resources to sell their labor on the market. for maximizingprofit; on this basis, entre- Capitalism is impossible without a prop- preneurs can most reliably make calcula- ertyless stratum selling its services tions for long-term production of large "under the compulsion of the whip of amounts of goods. "To sum up," says hunger" (1961:209), for only this com- Weber (1961:209),"it must be possible to pletes a mass market system for the fac- conduct the provision for needs exclu- tors of productionwhich makes it possible sively on the basis of marketopportunities to clearly calculate the costs of products and the calculation of net income.' in advance. It is, of course, the model of the Trading in the market must not be lim- laissez-faire capitalist economy that ited by irrational restrictions. That is to Weber wishes to ground. At the extreme, this is an unrealisticview of any economy without saying that this is an empirical, not an ana- that has ever existed. Webertreats it as an lytical judgment. ideal type and, hence, in a fuller exposi- WEBER'S LAST THEORY OF CAPITALISM: A SYSTEMATIZATION 929 tion would doubtless have been prepared at a reasonablecost. Thus, mechanization to see it as only partiallyrealized even in depends on the prior emergence of all the the great capitalist takeoff period of the institutionalfactors described above. nineteenthcentury. But it is worth noting Weber does not elaborate a systematic that a critique of Weber along these lines theory of technological innovation, but it could certainly not be a classical Marxian would be possible to construct one along one. The central dynamicof capitalism in these lines. He does note that all the cru- Marx'stheory, in fact, depends even more cial inventions of the period of industrial immediately than Weber's on the unre- takeoff were the result of deliberate ef- stricted competitiveness of the open forts to cheapen the costs of production market for all factors of production (cf. (1961:225-6, 231). These efforts took Sweezy, 1942). And Weber and Marx place because previous conditions had agree in claiming that the initial break- intensifiedthe capitalistpursuit of profits. through to an industrial society had to The same argument could be made, al- occur in the form of capitalism. Thus, al- thoughWeber did not make it, in regardto though Weber may have a personal bias the search for methods to improve ag- toward the neoclassical marketeconomy, riculturalproduction that took place in the both as analytical model and as political seventeenth and eighteenthcenturies. The preference,this would give no groundsfor "green revolution" which preceded (and a critique of the adequacy of his explana- made possible) the industrial revolution tion of this phase of world history. Even was not a process of mechanization(ag- for a later period, Weber is hardly dog- riculturalmechanization took place only matic. As we shall see, he recognizes the in the late nineteenth century) but was, possibility of socialism emerging, once more simply, the applicationof capitalist capitalismhas matured-although he does methods of cost accounting to hitherto not admire the prospect-and he even traditionalagriculture. Thus, it is the shift gives some indications of the forces that to the calculating practices of the might produce it. Like Germanand Aus- capitalist market economy which makes trian non-Marxisteconomists of his gener- technological innovation itself predicta- ation, Weberincludes socialism within his ble, rather than, as previously, an acci- analytical scheme. dental factor in economic life (1961:231).5 Weber's model of the modern economy the is particularlystriking with regard to THE CAUSAL CHAIN concept of the "industrial revolution." For it is not mechanizationper se that is What are the social preconditions for the key to the economic transformation, the emergence of capitalism as thus de- despite the far-reachingconsequences of scribed? shifts from agrarianto inanimate-energy- Note, first of all, that economic life, based technologies (cf. Lenski, 1966). In even in the most prosperous of agrarian Weber's scheme, technology is essentially societies, generally lacked most of these a dependent variable. The key economic traits. Property systems frequently tied characteristicof mechanizationis that it is land ownership to aristocratic status, feasible only with mass production while commercialoccupations were often (Weber, 1961:129,247). The costs of even simpler machines such as steam-powered 5 Weber does mention "rational science and in looms would make them worthless with- connectionwith it a rationaltechnology" (1961:232) out a large-scale consumers' market for as one of the features of the West importantfor cloth, as well as a large-scale producers' moderncapitalism. On the other handhe says: "It is or true that most of the inventionsof the 18th century marketin wool cotton. Similarconsider- were not made in a scientific manner.... The con- ations apply a fortiorito machineryon the nection of industrywith modernscience, especially scale of a steel rollingmill. But large-scale the systematic work of the laboratories,beginning production is impossible without a high with Justus von Liebig [i.e., Circa 1830], enabled degree of predictabilitythat markets will industryto become what it is today and so brought capitalismto its full development."On the balance,I exist for the products, and that all the think science comes out as a secondaryfactor in the factors of productionwill be forthcoming model. 930 AMERICAN SOCIOLOGICAL REVIEW prohibited to certain groups and in the Stone Age. In ancient Babylon, for monopolized by others. The labor force example, tradewas such as to disintegrate was generally unfree-being either slaves "primitive economic.fixity" to a consid- or tied to the land as serfs. Technologies erable degree (1961:232). On the other of mass production hardly existed. The hand, politically determined agrarian market was generally limited either to economies show how "specialization local areas or to long-distance trade in takes place withoutexchange" (1961:103). luxuries, due to numerous near- Nor is the pursuitof profit per se the cru- confiscatory tax barriers, unreliable and cial motive for mass capitalism; the varying coinage, warfare, robbery, and "ruthlessness" and "unscrupulousness" poor transportation.And legal systems, of the traditionalforeign trader was inca- even in literate states, tended to be char- pable of transforming the economy at acterized by patrimonial or magical- large (1961:232). Nor can population religiousprocedures, by differentialappli- growth have been the cause of Western cation to different social groups and by capitalism,for the same trend occurredin differentlocalities, and by the practicesof China without the same result officials seeking private gain. Reliable fi- (1961:258-9). Neither, finally, can the nancial transactions, includingthe opera- price revolution of the sixteenth century, tion of a banking system relatively free due to the influx of precious metals from from politicalinterference and plundering, the Americas, have been decisive (see the were particularlyhandicapped by these later discussion on Wallerstein).6 conditions. The features that Weberfinds unique to The social preconditionsfor large-scale the West constitute a causal chain.7I have capitalism, then, involved the destruction representedthis schematicallyin Figure 1. of the obstacles to the free movement or The characteristicsof rational capitalism economic transfer of labor, land, and itself are the entrepreneurialorganization goods. Other preconditionswere the cre- of capital, rationaltechnology, free labor, ation of the institutional supports for unrestrictedmarkets, and calculable law. large-scale markets, especially the appro- These make up a complex: the marketsfor priate systems of property, law, and fi- goods, labor, and capital all mesh around nance. entrepreneurialproperty using mass pro- These are not the only preconditionsof duction technology;the operationof all of capitalism, but, specifically, Weber is these factors together creates further seeking the organizational forms that pressures to both rationalize technology made capitalism a world-transforming and expand each factor market-while yet force in the West but not elsewhere. By a distributingwealth in such a way as to series of comparisons, Weber shows that further the demand. The legal system is a numberof other factors that have been both an ongoing prop for all of these fea- advanced to account for the Western tures and a causal link backwardto their takeoff cannot have been crucial. Against Sombart, he points out that standardized mass productionfor war cannot have been 6 Weber (1961:260) also mentions geographical decisive for, althougha good deal of this conditions as more favorable to capitalism in Europe than in China or India, due to transportation advan- existed in Europe in the seventeenth cen- tages in the former via the Mediterranean sea and the tury, and thereafter,it also existed in the interconnecting rivers. But he goes on (p. 261) to MogulEmpire and in Chinawithout giving discount this, in that no capitalism arose in Mediter- an impetus to capitalism (1961:229). ranean antiquity, when civilization was predomi- the enormous expendituresfor nantly coastal, whereas early modern capitalism in Similarly, Europe was born in the cities of the interior. court luxury found in both Orientand Oc- 7 Weber does not clearly describe a chain, and cident were incapable of generating a sometimes he lumps characteristics of rational mass market (1961:229-30). Against the capitalism with its preconditions. Although some of simplerarguments of Adam Smith, which these preconditions continue into the operation of modern capitalism, a logical chain of explanation, I attributethe industrialdivision of labor to believe, requires something like the separation I the extension of trade, Weber points out have given. It should be understood that Weber gives that trade can be found everywhere, even a highly condensed summary in these lectures. WEBER'S LAST THEORY OF CAPITALISM: A SYSTEMATIZATION 931

components of rationalized intermediate background ultimate capitalism conditions conditions conditions

literate administrators

favorable transportation and coaumunication entrepreneurial organization writing and record-keeping church law of capital bureaucratic implements and bureaucracy state coinage

rationalized calculable law centrally supplied technology weapons cte h | > \ ~~~~~~citizenship self-supplied, free labor disciplined army

(a) Greek civic cults

unrestricted methodical,< I (b) Judaic prophecy markets non-dualistic _ Ae, economic ethic (c) Christian proselytization

d) Reformation sects Figure 1. The Weberian Causal Chain social preconditions. At this intermediate ethic because it prevented the commer- causal level there is a second crucial fac- cialization of economic life, the external tor which, like the law, is essentially cul- ethic because it made tradingrelations too tural, although not in the sense of disem- episodic and distrustful.The lifting of this bodied ideas, but, rather, in the sense of barrierand the overcoming of this ethical beliefs expressed in institutionalized be- dualism were crucial for the development havior. This is the "lifting of the barrier of any extensive capitalism. Only this . .. between internal and external ethics" could make loans available regularlyand (1961:232). promote the buying and selling of all ser- In virtually all premodern societies vices and commoditiesfor moderategain. there are two sharply divergent sets of Through innumerable daily repetitions, ethical beliefs and practices. Within a so- such small (but regular)profits could add cial group, economic transactions are up to much more massive economic strictly controlled by rules of fairness, transactions than could either the status, and tradition: in tribal societies, custom-boundor the predatoryeconomic by ritualized exchanges with prescribed ethics of traditionalsocieties. kin; in India, by rules of caste; in medieval What, then, produced the calculable Europe, by requiredcontributions on the legal system of saleable private property manor or to the great church properties. and free labor and the universal ethic of The prohibition on usury reflected this the pursuit of moderate economic profit? internalethic, requiringan ethic of charity The next links in the causal chain are and the avoidance of calculation of gain political and religious. The bureaucratic from loans within the community(cf. Nel- state is a crucial backgrounddeterminant son, 1949).8 In regard to outsiders, how- for all legal and institutional underpin- ever, economic ethics were at the oppo- nings of capitalism. Moreover, its legal site extreme: cheating, price gouging, and system must be based on a concept of loans at exorbitantinterest were the rule. universal citizenship, which requires yet Both forms of ethic were obstacles to ra- further political preconditions. The reli- tional, large-scale capitalism: the internal gious factor operates both as a direct in- fluence on the creation of an economic 8 Hence the role of "guest peoples" such as the ethic and as a final level of causality impli- Jews and the Caursinesin ChristianEurope, or the cated in the rise of the rational-legalstate Christians in Islamic societies, or the Parsees in and of legal citizenship. India, as groups of tolerated outsiders who were The state availablefor makingloans, which otherwise would is the factor most often over- not be forthcomingwithin the controlled internal looked in Weber's theory of capitalism. economy (1961:267). Yet it is the factor to which he gave the 932 AMERICAN SOCIOLOGICAL REVIEW most attention; in Economy and Society, The sources of the bureaucratic state he devoted eight chapters of 519 pages to are, to a degree, quite familiar. In the it, as opposed to one chapter of 236 pages widely reprinted section on bureaucracy to religion, with yet another chapter-the from Economy and Society (1968:956- neglected but very important chap. XIV of 1005), Weber outlines the prerequisites: Part II-to the relations between politics literate administrators, a technology of and religion. In the General Economic long-distance transportation and com- History, he gives the state the two penul- munication, writing and record-keeping timate chapters, religion the final chapter. materials, monetary coinage. The extent For Weber, this political material was not to which these could be put into effect, an extraneous interest but, instead, the however, depended on a number of other key to all of the institutional structures of factors. Geographical conditions such as rational capitalism. Only the West devel- easy transportation in river valleys, or fa- oped the highly bureaucratized state, vorable situations for state-controlled irri- based on specialized professional admin- gation (1961:237), fostered bureaucratic istrators and on a law made and applied by centralization, as did intense military full-time professional jurists for a competition among adjacant heartlands. populace characterized by rights of Types of weapons which are centrally citizenship. It is this bureaucratic-legal (rather than individually supplied) also state that broke down feudalism and pat- favor bureaucratization. If such condi- rimonialism, freeing land and labor for the tions make central control easy, however, capitalist market. It is this state that bureaucratization need not proceed very pacified large territories, eliminated inter- deeply, and the society may be ruled by a nal market barriers, standardized taxation thin stratum of officials above a local and currencies. It is this state that structure which remains patrimonial. In provided the basis for a reliable system of China, for example, this superficial bu- banking, investment, property, and con- reaucratization constituted a long-term tracts, through a rationally calculable and obstacle to capitalism, as it froze the universally applied system of law courts. economy under the patrimonial control of One may even argue that the bureaucratic local clans. state was the proximate cause of the im- The most thorough bureaucratization, pulse to rationalization, generally-above as well as that uniquely favorable to all, via the late seventeenth- and capitalism, is that which incorporates a eighteenth-century spirit of enlightened formalistic legal code based on citizen- absolutism, which set the stage for the ship. Citizenship meant, first of all, mem- industrial revolution. bership in a city; by extension, member- There are three causal questions about ship in a state and hence holder of political the rational/legal state. Why did it rise to rights within it. This was an alien concept predominance? Where did its structural throughout most of history. In the pat- characteristics come from? How did its rimonial state, political office was a form legal system take the special form of con- of private property or personal delegation, ceiving of its subjects as holding the rights and even in most premodern quasi- of citizenship? bureaucratic states the populace at large The first question is easily answered. was only subject to the state, not holders The bureaucratic state rose to predomi- of rights within it. The latter condition nance because it is the most efficient arose only in the West. In both Mediterra- means of pacifying a large territory. It is nean antiquity and the European Middle effective externally in that it can supply a Ages, cities came under the control of larger military, with better weapons, than brotherhoods of warriors banded together can nonbureaucratic states; and it is ef- for mutual protection. Such cities had fective, internally, as it tends to be rela- their own laws and courts, administered tively safe against disintegration by civil wuar I-N 'elii -lnzl n 9 foreign wars. But historical instances of these have 9 The main exception is that revolutions can occur occurred mainly in states which have been only par- after the military breakdown of the state itself due to tially bureaucratized. (See Skocpol, 1979.) WEBER'S LAST THEORY OF CAPITALISM: A SYSTEMATIZATION 933 by the citizens themselves, all of whom East, the traditional priests held stood under it in relation of formal monopolies over communion with the equality. Such citizenship rights remained gods, whereas in Western antiquityit was historically significant after the original the officials of the city who themselves civic forms changed or disappeared.The performedthe rites (1961:238).In the one formal rights and legal procedures origi- case, the boundaries of religious com- nally applied only to a local elite, but munion reinforced preexisting group di- when cities were incorporatedinto large- visions; in the other, religious boundaries scale bureaucratic states, they provided were an explicit political tool by which the basis for a much more widely inclusive civic alliances could be established and system of adjudication.This was the case enlarged. It is at this point that the two when Rome, originally one of these main lines of Weber's chain of causality military-fraternitycities, became an em- converge. pire and, again, in the MiddleAges, when We have been tracing the causal links cities in alliancewith kings lost their inde- behind the emergence of the rational/legal pendence but contributed their legal state, which is one of the two great inter- structuresto the larger states.10 mediate conditionsof the emergenceof an Nearing the end of our chain of open market economy. The other great causality, we ask: What factors enabled intermediatecondition (noted earlier)is an this distinctive type of city to arise in the economic ethic which breaks the barrier West? Weber gives two conditions: one between internaland external economies. military, the other religious. Now we see that the religious factors that The military condition is that in the produced the citizenship revolution and West the city consisted of "an organiza- those that produced the economic ethic tion of those economically competent to are essentially the same. bear arms, to equip and trainthemselves" Our last question, then, is: What (1961:237).This was the case in the for- brought about this religious transforma- mative period of the ancient Greek and tion? Weber gives a series of reasons, Italian cities and, again, in the medieval each intensifying the effects of the last cities with their disciplined infantries (1961:238). Ethical prophecy within an- fielded by the guilds. In both cases, the cient Judaismwas important,even though money power of the cities bolstered their it did not break down ritual barriers be- military power and, hence, democratiza- tween Jews and Gentiles, because it es- tion and concomitantlegal citizenship. In tablished a traditionof hostility to magic, the Orient and in ancient Egypt, on the the main ethos within which barriers contrary, the military princes with their flourished. The transformationof Christi- armies were older than the cities and, anity from a Jewish sect into a proselytiz- hence, legally independent cities did not ing universal religion gave this tradition arise; Weber attributedthis patternto the widespread currency, while the pen- impetus to early centralizationgiven by tacostal spirit of Christianproselytization irrigation. set aside the ritual barriers among clans The second conditionis that in the East, and tribes, which still characterized the magicaltaboos preventedthe organization ancient Hellenistic cities to some degree. of militaryalliances among strangersand, The Judeo-Christianinnovations are not hence, did not allow formation of inde- the whole story, however; the earlier de- pendent cities. In India, for example, the velopment of Greek religion into the civic ritual exclusion of castes had this effect. cults had alreadydone much to make uni- More generally, in Asia and the Middle versalistic legal membershippossible. The religious factors, as we have seen, 10 Contractualforms of feudalismalso contributed entwine with political ones, and their in- somewhatto legal citizenship.Weber neglected this fluence in the directionof legal citizenship in the General Economic History, but considered it and upon an economic ethic have fluc- in Economy and Society (1968:1101). The earlier preconditions(military and religious)for contractual tuated historically.There is no steady nor feudalism and for independentcities, however, are inevitable trend toward increasing ra- essentially the same. tionalization of these spheres, but West- 934 AMERICAN SOCIOLOGICAL REVIEW ern history does contain a series of abolished the monasteries. The most ad- episodes which happen to have built up vanced section of the economy would, these effects at particularpoints in time so henceforth, be secular. Moreover, the that, eventually, a whole new economic highest ethics of a religious life could no dynamic was unleashed. On the political longer be confined to monks but had to side, the Christian cities of the Middle apply to ordinary citizens living in the Ages, drawing upon the institutional world. Calvinism and the other voluntary legacies of the ancientworld, were able to sects were the most intense version of this establish religiously sworn confraternities motivation, not because of the idea of which reestablished a legal system based Predestination (which no longer receives on citizenship. A second political factor any mention in Weber's last text) but only was fostered by religion: the Christian because they required a specific religious church provided the literate adminis- calling for admission into their ranks, trators, the educational system, and the rather than automatic and compulsory example of its own bureaucraticorganiza- membership in the politically more con- tion as bases upon which the bureaucratic servative churches. Weber's (1961: states of the West could emerge. And, on 269-70) last word on the subject of the strictly motivational side, the devel- Protestantism was simply this: opment of European Christianitygave a The developmentof the concept of the call- decisive ethical push toward rationalized ing quickly gave to the modernentrepreneur capitalism. a fabulously clear conscience-and also in- Here, at last, we seem to touch base dustriousworkers; he gave to his employees with Weber's original Protestant Ethic as the wages of their ascetic devotion to the thesis. But in the matureWeber, the thesis calling and of co-operation in his ruthless is greatly transformed. Protestantism is exploitation of them throughcapitalism the only the last intensificationof one of the prospectof eternalsalvation, which in an age when ecclesiastical disciplinetook control of chains of factors leading to rational the whole of life to an extent inconceivable capitalism. Moreover, its effect now is to us now, represented a reality quite dif- conceived to be largely negative, in the ferent from any it has today. The Catholic sense that it removes one of the last in- and Lutheranchurches also recognized and stitutionalobstacles divertingthe motiva- practicedecclesiastical discipline. But in the tional impetus of Christianityaway from Protestantascetic communitiesadmission to economic rationalization. For, in the Lord's Supperwas conditionedon ethi- medieval Christianity, the methodical, cal fitness, which again was identified with disciplined organization of life was business honor, while into the content of epitomized by the monastic com- one's faith no one inquired.Such a powerful, unconsciously refined organizationfor the munities.11 Although the monasteries production of capitalistic individuals has contributedto economic development by never existed in any other churchor religion. rationalizing agriculture and promoting their own industries,Weber generally saw them as obstacles to the full capitalist de- WEBER'S GENERAL THEORY OF HISTORY velopment of the secular economy. As Is there an overall pattern in Weber' s long as the strongest religious motivation argument? It is not a picture of a linear was siphoned off for essentially other- trend toward ever-increasing rationality. worldly ends, capitalism in general could Nor is it an evolutionary model of natural not take off (1961:267-9). Hence, the Re- selection, in the sense of random selection formationwas most significantbecause it of the more advanced forms, accumulat- ing through a series of stages. For "Weber did not live to write his plannedvolume on medieval Christianity.If he had, I believe he Weber's constant theme is that the pattern would have found that the High Middle Ages were of relations among the various factors is the most significantinstitutional turning point of all crucial in determining their effect upon on the roadto the capitalisttakeoff. His commitment economic rationalization. Any one factor to the vestiges of his Protestantismargument may tends to have have kept him from recognizingthis earlier. I will occurring by itself opposite deal with this point in a subsequent article, "The effects, overall, to those which it has in WeberianRevolution of the High Middle Ages." combination with the other factors. WEBER'S LAST THEORY OF CAPITALISM: A SYSTEMATIZATION 935 For example, self-suppliedmilitary co- Weber saw the rise of large-scale alitions produce civic organizations and capitalism,then, as the result of a series of legal systems which are favorable to combinations of conditions which had to capitalism. But if the self-armed civic occur together. This makes world history groups are too strong, the result is a series look like the result of configurationsof of guild monopolieswhich stifle capitalism events so rare as to appear accidental. by overcontrollingmarkets. Cities, on the Weber's position might well be charac- other hand, have to be balanced by the terized as historicist, in the sense of seeing bureaucraticstate. But when the state is history as a concatenation of unique too strong by itself, it, too, tends to stifle events and unrepeatable complexities. capitalism.This can happen by bolstering Once a crucial conjunctureoccurs, its re- the immobilityof labor (as in the case of sults transformeverything else-and not "the second serfdom"produced in Russia just locally but also in the largerworld of and eastern Europe as absolutist states competing states. This was true of the developed in the seventeenth and great charismaticrevelations of the world eighteenth centuries); or by directly con- religions, which shut off China, India, or trolling the division of labor by forced the West from alternative lines of devel- contributionsinstead of allowinga market opment as well as determined the ways to develop. In the areas of the world that states upon these territories would where bureaucratization was relatively interact with the rest of the world. Simi- easy, as in ancient Egypt or China, or the larly, the full-scale capitalistbreakthrough Byzantine Empire, the unrestrained itself was a once-only event, radiating power of the state stereotyped economic outward to transform all other institu- life and did not allow the dynamics of tions and societies. Hence, the original capitalism to unfold. conditions necessary for the emergenceof The same is true of the religious vari- capitalismwere not necessary for its con- ables. The creationof the great world reli- tinuation. The original religious ethic gions, with their universalism and their could fade, once the calculabilityof mas- specialized priesthoods, was crucial for sive economic transactionshad become a the possibility of breaking the ritual bar- matter of routine. Hence, late- riers among localized groups, with all the industrializingstates need not follow the consequences this might have for sub- route of classic capitalism. In the ad- sequent developments. But, in the ab- vanced societies, the skeleton of the eco- sence of other factors, this could actually nomic structuremight even be taken over bolster the obstacles to capitalism. This by socialism. happened in India, where the develop- Weber's account of the rise of ment of Hinduismfostered the caste sys- capitalism,then, is in a sense not a theory tem; the universalisticreligion set an ex- at all, in that it is not a set of universal ternal seal upon the lineup of particularis- generalizations about economic change. tic groups that happened to exist at the Nevertheless, on a more abstract level, time. Even in Christianity,where moral Weberis at least implicitlyproposing such a prophecy had a much more barrier- theory. On one level, he may be read as a breaking and world-transformingeffect, collection of separate hypotheses about the Church (in the period when it was specific processes and their effects.13The predominant) created another obstacle foregoing caveat about the necessary bal- against its capitalist implications. This ance among factors may be incorporated was the period of the High MiddleAges in by specifying that the causal variables Europe, when monasticism proliferated must operate at a given strength-that is, and, thus, channeledall the energy of reli- by turning them into quantitative gener- gious motivation into a specialized role alizations specified to a given range of and away from the economic concerns of variation. ordinarylife.12 13 One clearly formulatedproposition, for exam- 12 This was also the time when the churchtook the ple, is that armiesbased on coalitionsof self-supplied offensive againstincipient capitalism, in the form of individualsproduce citizenship rights. (For a series pronouncementsagainst usury (Weber, 1968:584-6). of such propositions,see Collins, 1975:356-64.) 936 AMERICAN SOCIOLOGICAL REVIEW On a second level, one may say that the tion implicit in Weber's theory applicable fundamental generalizations in Weber' s to economic history after the initial rise of theory of capitalism concern the crucial capitalism, it is this: The possibility for the role of balances and tensions between op- follower-societies of the non-Western posing elements. "All in all," says Weber world to acquire the dynamism of indus- in a little-known passage (1968:1192-3), trial capitalism depends on there being a "the specific roots of Occidental culture balance among class forces, and among must be sought in the tension and peculiar competing political forces and cultural balance, on the one hand, between office forces as well. In the highly industrialized charisma and monasticism, and on the societies also, the continuation of other between the contractual character of capitalism depends on continuation of the the feudal state and the autonomous bu- same conflicts. The victory of any one reaucratic hierarchy. ''14 No one element side would spell the doom of the system. must predominate if rationalization is to In this respect, as in others, Weber's increase. More concretely, since each theory is a conflict theory indeed. "element" is composed of real people the creation of struggling for precedence, AN ASSESSMENT: WEBER' S open-market economy de- a calculable, CONFRONTATION WITH MARXISM pends upon a continuous balance of power among differently organized groups. The How valid is Weber's theory? To fully formal egalitarianism of the law depends answer this question would require exten- upon balances among competing citizens sive comparative analyses and a good and among competing jurisdictions. The deal of explication of principles on dif- nondualistic economic ethic of moderated ferent levels of abstraction. These tasks avarice depends upon a compromise be- are beyond the scope of any one paper. tween the claims of in-group charity and What I can present is a confrontation be- the vicious circle of out-group rapacious- tween Weber's theory and the one rival ness. theory of capitalism which claims a com- The capitalist economy depends on this parable degree of historical and theoreti- balance. The open-market system is a cal comprehensiveness, Marxism. This is situation of institutionalized strife. Its es- especially appropriate because Weber sence is struggle, in an expanded version himself devoted a great deal of attention in of the Marxian sense, but with the qualifi- the General Economic History to the cation that this could go on continuously, points at which his analysis impinges on and indeed must, if the system is to sur- Marxist theories. vive.15 Hence, if there is any generaliza- The book begins and ends on Marxian themes. The first chapter deals with the 14 In other words, the main features of the West question of primitive agrarian communism. depend on a tension between the routinization of Characteristically, Weber finds it to be religious charisma in the church and the participa- only one variant of primitive agriculture; tory communities of monks, and on a tension be- where it does exist, it is usually the result tween the democratizing tendencies of self-supplied armies and the centralized bureaucratic state. These of fiscal organization imposed from above give us Weber's two great intermediate factors, a (1961:21-36). The closing words of the nondualistic religious ethic and calculable law, re- book speak of the threat of working class spectively. once 15 revolution which appears capitalism .... the formal rationality of money calculation is matures and work discipline loses its reli- dependent on certain quite specific substantive gious legitimation (1961:270). In between, conditions. Those which are of a particular there are numerous references to Marx- sociological importance for present purposes are the following: (1) Market struggle of economic units which are at least relatively autonomous. Money prices are the product of conflicts of inter- of man against man. "Money" is, rather, primarily est and of compromises; they thus result from a weapon in this struggle, and prices are ex- power constellations. Money is not a mere pressions of the struggle; they are instruments of "voucher for unspecified utilities," which could calculation only as estimated quantifications of be altered at will without any fundamental effect relative chances in this struggle of interests on the character of the price system as a struggle (Weber, 1968:107-8). WEBER'S LAST THEORY OF CAPITALISM: A SYSTEMATIZATION 937 ism, far more than in any other of Weber's was concerned to meet the Marxianchal- works. His attitudeis criticallyrespectful, lenge on its own grounds, leaving out as in his comment on the Engels-Bebel nothing that must be conceded, but also theory of the origins of the family: "al- turningup whatever factors the Marxists though it is untenable in detail it forms, left out. Moreover, the GermanMarxists taken as a whole, a valuable contribution had suddenly become stronger with the to the solution of the problem.Here again end of the WorldWar and the downfallof is the old truth exemplifiedthat an ingeni- the German monarchy. Weber deliv- ous error is more fruitfulfor science than ered his lectures in Munichjust after the stupid accuracy." (1961:40)16 short-livedCommunist commune of 1919, Weber's intellectual maturitycoincides and his lecture room containedmany radi- with a period of high-level debate in Ger- cal students. It is not surprising that many and Austria between Marxian and Weber was so much more explicitly con- non-Marxian economists. In the years cerned with Marxismin his last work than between 1885 and 1920 appearedEngels's in the religious studies he publishedwhile editions of the later volumes of Capital, the war was going on. as well as the principalworks of Kautsky, Weberhad one great advantageover the Hilferding,and Luxemburg.On the other Marxists. The discipline of historical side, Sombart, Bortkiewitz, and Tugan- scholarship reached its maturity around Baranowski provided what they consid- the end of the nineteenth century. Not ered to be revisions in the spirit of Marx- only had political and military history ian economics, while B6hm-Bawerk reached a high degree of comprehensive- (1898) and Schumpeter (1954) launched ness and accuracy, but so had the history explicit efforts to shore up the weaknesses of law, religion, and economic institu- of neoclassical economics vis-h-vis tions not only for Europe and the Marxism, and attacked the technical ancient Mediterraneanbut for the Orient weaknesses of Marxiantheory.'7 This pe- as well. The historical researches of the riod was in many ways the high-water twentieth century have not brought to mark in political economy for an atmos- light any great body of facts about the past phere of balanced debate is beneficial for that has radically changed our view of intellectual advance. Weber in particular world history since Weber's day. Weber was perhaps the first great master of the major institutionalfacts of world history. 16 Webergoes on to say, "A criticismof the theory By contrast, Marx, pursuinghis assiduous leads to considerationfirst of the evolution of pros- titution,in which connection,it goes withoutsaying, researchesin the 1840sand 50s, had much no ethical evaluation is involved." There follows narrower materials at his disposal (1961:40-53) a brilliantoutline of a theory of the (Hobsbawm 1964:20-7). The histories of organizationof the family as one set of variantson India, China, Japan,or Islam had scarcely sexual property relations, in which material begun to be available; the permeationof transactions and appropriationsare fundamentally involved. Later versions of this line of theory are the ancient Greco-Romanworld by reli- found in Levi-Strauss (1968), and in Collins gious institutionswas only beginningto be (1975:228-59). analyzed; and the complex civilization of 17 Thus, Bbhm-Bawerk(1898) and Schumpeter the EuropeanHigh Middle Ages was hid- (1954) developed a previously missing link in the classical and neoclassical economics, a theory of den beneath what Marx considered capitalistprofits. This they based on time-lagsin the "feudal rubbish"of the Ancien Regime of competitive process and resulting time-preference the eighteenthcentury. Marxwrote before among investment returns, displacingthe Marxian the great coming-of-age of historical theory of profit based on the exploitationof labor. scholarship;Weber, just as it reached its Bdhm-Bawerkalso made an analysis of socialist economies. He regardedthese as possiblepolitically peak. Weber thus represents for us the (as did Schumpeterand Weber),but deniedthat pro- first and in many ways still the only effort duction would be organized differently than in to make a truly informed comparative capitalism.Socialism could affect only the distribu- analysis of majorhistorical developments. tion of capitalistprofits among the populace.For the economic thought of this period, see Schumpeter It should be borne in mind that Marx (1954:800-20, 843-55, 877-85) and Sweezy and most of his followers have devoted (1942:190-213). their attention primarily to showing the 938 AMERICAN SOCIOLOGICAL REVIEW dynamics of capitalism, not to the precon- The uniqueness of Marx's discussion is ditions for its emergence. Weber's con- in two factors: primitive accumulation, cerns were almost entirely the reverse. and revolution. About the latter, Marx Hence, it is possible that the two analyses had surprisingly little to say beyond the could be complementary, Marx's taking dramatic imagery of revolution breaking up where Weber's leaves off. Only in the the bonds imposed by the property system 1970s have there been efforts comparable upon the growing engines of production to Weber's from within the Marxian tradi- (Marx, 1959: 43-4). Primitive accumula- tion, notably that of Wallerstein (1974). tion takes up nearly the whole of his his- Interestingly enough, Weber anticipated torical discussion. It means the accumu- Wallerstein's major points in the General lation of enough raw materials, tools, and Economic History. On the other side, food for laborers to live on before sub- Wallerstein's revision of Marxism is in sequent production was completed; many ways a movement toward a more hence, it is the quantitative prerequisite Weberian mode of analysis, stressing the for any takeoff into expanded economic importance of external relations among production. Such accumulation took place states. historically in two ways. One was by the The classical Marxian model of the pre- expropriation of peasants from their land, conditions for capitalism covers only a which simultaneously concentrated few points (Marx, 1967: I, 336-70, wealth in the hands of the capitalists who 713-64; II, 323-37, 593-613; 1973: 459- received the lands and required the ex- 514). Some of these are a subset of propriated masses to sell their labor on the Weber's model, while two of them are market. The other means of primitive ac- distinctive to Marx. Weber and Marx both cumulation was by usury and merchants' stressed that capitalism requires a pool of capital. Marx downplayed the importance formally free but economically property- of monetary factors by themselves, as less labor; the sale of all factors of pro- they operated only in the realm of circula- duction on the market; and the concentra- tion and did nothing to productive rela- tion of all factors in the hands of capitalist tions; but he did assert that the growth of entrepreneurs. Marx did not see the im- money capital furthered the dissolution of portance of the calculable aspect of the feudal economy once it was already technology; at times, he seemed to make under way (1967:111, 596-7). the sheer productive power of technology Of these two factors, Weber says al- the central moving force in economic most nothing explicitly about primitive changes, while at others, he downplayed accumulation. However, the entire earlier this as part of a larger economic sections of the General Economic History system-much in the way Weber did. Un- (1961:21-203) deal with the various forms like Weber, Marx gave no causal im- of appropriation of material and financial portance at all to calculable law, nor did means, which have made up, among other he see the earlier links in Weber's causal things, the capitalism that has been om- chain: economic ethics, citizenship, bu- nipresent throughout history, although not reaucratization, and their antecedents.18 in a rationalized form. The idea that there must be a specific accumulation of surplus 18 Marx (1973:459-514) gave a very general outline for the purpose of a capitalist takeoff, I of early forms of property as based on family and tribal membership, and he recognized that the an- suspect, is one that Weber would reject. cient cities were military coalitions. He missed the The assumption ought to be subjected to central organizing role of religion in these devel- proof. After all, agrarian societies already opments, and failed to see the crucial effect of the have the most extreme concentration of revolutions within the ancient cities upon the uniquely Western legal tradition. For Marx, the rise wealth at the top of the social hierarchy of of cities simply meant the growing separation of any type of society in world history town and country, an instance of dialectical antithe- (Lenski, 1966); the industrial takeoff need sis, and of the progress of the division of labor only have been fueled by a shift in the use (1967:1, 352). For the period immediately preceding the capitalist takeoff, Marx noted that the state had hastened the transition from feudalism to capitalism markets. These effects Marx subsumed under his by creating public finance and conquering foreign concept of "primitive accumulation." WEBER'S LAST THEORY OF CAPITALISM: A SYSTEMATIZATION 939 of this wealth, not by a furtherextraction of the 16th century. During this period, process. As Weber understood, and as wages remained approximately constant. subsequent research has shown, The gap between prices and wages con- capitalists do not have to rise "from stituted a vast extraction of surplus which below," having amassed their own could be invested in expanding capitalist wealth; it has been far more typical for the enterprises (Wallerstein, 1974:77-84).21 aristocracy themselves to go into This is Wallerstein's version of the primi- capitalistproduction (Stone, 1965;Moore, tive accumulation factor. 1966). 19 Wallerstein's (1974:348) second condi- Weber is somewhat more sympathetic tion also emerges from the international to the importanceof revolutions. Perhaps situation. "[C]apitalism as an economic the final conditions for the capitalist system is based on the fact that economic takeoff in Englandwere the revolutionsof factors operate within an arena larger than 1640 and 1688. These put the state under that which any political entity can totally the control of politicalgroups favorable to control. This gives capitalists a freedom of capitalism, thus fulfillingthe condition of maneuver that is structurally based." He keeping markets and finances free of "ir- (1974:355) goes on to say that the different rational" and predatorystate policies. Of states must be of different strengths, so more fundamental institutional conse- that not all states "would be in the posi- quence were the revolutions within the tion of blocking the effective operation of cities of ancient Greece and of medieval transnational economic entities whose Italy. The latter, Weber lists among "the locus were in another state." Capitalists five great revolutions that decided the in effect must have opportunities to shift destiny of the occident" (1951:62).20 For it their grounds among varied political cli- was the uprisingof the plebeianswhich re- mates to wherever the situation is most placed the charismatic law of the older favorable. patricianclass with the universalisticand Weber (1961:259) was generally aware "rationallyinstituted" law upon which so of both conditions. Regarding the effects much of the institutionaldevelopment of of gold and silver influx, however, he was capitalism was to depend (Weber, largely unfavorable. 1968:1312-3, 1325). In effect, this was a It is certainlytrue that in a given situationan revolutionin a system of property,but not increase in the supply of precious metals in the gross sense of a replacementof one may give rise to price revolutions, such as form of appropriationwith another. For that which took place after 1530 in Europe, Weber, a system of propertyis a complex and when otherfavorable conditions are pres- of daily actions-above all, the makingof ent, as when a certain form of labor organ- transfers and contracts and the adjudica- ization is in the process of development,the tion of disputes. Hence, political revo- progress may be stimulatedby the fact that lutions are most crucialwhere they set the large stocks of cash come into the hands of pattern for in a certain groups. But the case of India proves ongoing legal actions that such an importationof metal will not highly calculableform, with all the conse- alone bring about capitalism.In India in the quences noted above. period of the Roman power, an enormous Wallerstein's (1974) theory, as devel- mass of precious metal-some twenty-five oped in volume I, emphasizes two condi- millionsestertii annually-came in exchange tions in the origins of capitalism. One is for domestic goods, but this inflow gave rise the influx of bullion from the European to commercialcapitalism only to a slight ex- colonies, which caused the price inflation tent. The greaterpart of this precious metal disappearedinto the hoardsof the rajahsin- 19Weber also anticipated Barrington Moore's (1966) theory of the political consequences of dif- 21 To this, Wallerstein adds the argument that ferent propertymodes in the commercializationof surplusis furtherextracted by coerced labor on the agriculture(1961:81-94). periphery,to be consumed in the core, where how- 20 The others were "the Netherlandrevolution of ever (somewhatcontrary to the point aboutthe price the sixteenth century, the English revolutionof the revolution)labor is well enough paid to constitute a seventeenthcentury, and the Americanand French potential consumers' market for capitalist produc- revolutionsof the eighteenthcentury." tion. 940 AMERICAN SOCIOLOGICAL REVIEW stead of being converted into cash and the bourgeoisie in the modern sense of the appliedin the establishmentof enterprisesof word. Hence it is the closed national state a rational capitalistic character. This fact which afforded to capitalism its chance for proves that it depends entirely upon the na- development-and as long as the national ture of the labor system what tendency will state does not give place to a world empire result from an inflow of precious metal. capitalismwill also endure. In another passage, Weber (1961:231) Here the coincidence with Wallerstein does say that the price revolution of the is remarkable. Weber does not emphasize sixteenth and seventeenth centuries the contours of Wallerstein's world sys- "provided a powerful lever for the speci- tem, with its tiers of core, semiperiphery, fically capitalistic tendencies of seeking and periphery, but Weber does show the profit through cheapening production and central importance of mobile capital lowering the price." This came about for among militarily competing states, and he industrial (but not agricultural) products, gives a more specific analysis than Wal- because the quickened economic tempo lerstein of the mechanism by which this is put on pressures toward further ration- transformed into an advantage for alizing economic relations and inventing capitalism. cheaper technologies of production. In general, there is considerable con- Weber thus gives the influx of precious vergence, as well as complementarity, metals a place as a contributory factor, between Weber's last theory of the origins though apparently not an indispensable of capitalism, and the mature Marxian one, within the framework of economic theory which is only now emerging. institutions which had already appeared in Weber largely rejects Marxian theories of Europe at the time.22 primitive accumulation, or at least rele- Weber (1961:249) largely agrees, how- gates them to minor factors. On the other ever, with Wallerstein's argument about side, Wallerstein, as well as modern the international character of capitalism. Marxism in general, has moved the state Modern cities, he points out, into the center of the analysis. Weber had came underthe power of competingnational already gone much further in that direc- states in a conditionof perpetualstruggle for tion, so that the main Weberian criticism power in peace or war. This competitive of the Marxian tradition, even in its pres- strugglecreated the largest opportunitiesfor ent form, is that it does not yet recognize modern Western capitalism. The separate the set of institutional forms, especially as states had to compete for mobile capital, grounded in the legal system, upon which which dictated to them the conditions under capitalism has rested. which it would assist them to power. Out of For Weber, the state and the legal sys- this allianceof the state with capital,dictated by necessity, arose the nationalcitizen class, tem are by no means a superstructure of ideas determining the material organiza- tion of society. Rather, his theory of the 22 Weber's (1961:223)comment on the economic benefits of the colonies is even more negative. development of the state is to a consider- This accumulation of wealth brought about able extent an analogy to the Marxian through colonial trade has been of little theory of the economy. The key factor is significance for the development of modern the form of appropriation of the material capitalism-a fact which must be emphasized in opposition to WernerSombart. It is true that the conditions of domination. We have seen colonial trade made possible the accumulationof the significance of the organization of wealth to an enormous extent, but this did not weapons for Weber's chain of causes of furtherthe specificallyoccidental form of the or- capitalism. In this connection, Weber ganization of labor, since colonial trade itself (1961:237) remarks: restedon the principleof exploitationand not thatof securing an income through market operations. Whether the military organizationis based Furthermore,we know that in Bengalfor example, on the principleof self-equipmentor on that the Englishgarrison cost five times as muchas the money value of all goods carriedthither. It follows of military equipment by an overlord who that the marketsfor domestic industryfurnished furnishes horses, arms and provisions, is a by the colonies under the conditions of the time distinction quite as fundamentalfor social were relatively unimportant,and that the main history as the questionwhether the means of profit was derived from the transportbusiness. economic productionare the propertyof the WEBER'S LAST THEORY OF CAPITALISM: A SYSTEMATIZATION 941 worker or of a capitalisticentrepreneur . . . sumers')goods (1961:217).To decide who [T]he army equipped by the war lord, and is right on these points requires further the separation of the soldier from the considerationthan can be given here. paraphernaliaof war, [is] in a way analogous to the separation of the worker from the means of production...." CONCLUSION Similarly, state bureaucracy depends Weber's last theory is still today the upon a set of material conditions, and only comprehensive theory of the origins upon the separation of the administrator of capitalism. It is virtually alone in ac- from treatingthe office and its incomes as counting for the emergence of the full private property (1968:980-3). Weber di- range of institutional and motivational verges from the Marxiananalogy by being conditions for large-scale, world- a more thoroughgoingconflict theorist. As transformingcapitalism. Even so, it is in- we have seen, and as the quotationgiven complete. It needs to be supplementedby above on the international basis of a theory of the operation of mature capitalism bears out, for Weber the con- capitalism, and of its possible demise. ditions of rationalized organization, in And even on the home territory of political and economic spheres alike, de- Weber's theory, there remain to be car- pend upon a continuous open struggle.23 ried out the comprehensive tests that The main disagreementsbetween Marx would provide adequate proof. But and Weberhave less to do with the origins sociological science, like any other, ad- of capitalism than with its future. Weber vances by successive approximations. thought that capitalism could endure in- The theory expressed in Weber'sGeneral definitely as an economic system, al- Economic History constitutes a base line though political factors could bring it from which subsequent investigations down. 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