The spirit of capitalism, Max Weber

Max Weber, The Protestant Ethic and the Spirit ofCapitalism. New York: Scribner’s Press, 1958, pp. 47 – 78.


CHAPTER II


THE SPIRIT OF CAPITALISM

IN the title of this study is used the somewhat pretentiousphrase, the spirit of capitalism. What is to be understood byit? The attempt to give anything like a definition of it brings outcertain difficulties which are in the very nature of this type ofinvestigation.

If any object can be found to which this term can be applied withany understandable meaning, it can only be an historical individual,i.e. a complex of elements associated in historical reality which weunite into a conceptual whole from the standpoint of their culturalsignificance.

Such an historical concept, however, since it refers in itscontent to a phenomenon significant for its unique individuality,cannot be defined according to the formula genus proximum,differentia specifica, but it must be gradually put together outof the individual parts which are taken from historical reality tomake it up. Thus the final and definitive concept cannot stand at thebeginning of the investigation, but must come at the end. We must, inother words, work out in the course of the discussion, as its mostimportant result, the best conceptual formulation of what we hereunderstand by the spirit of capitalism, that is the best from thepoint of view which interests us here. This point of view (the one ofwhich we shall speak later) is, further, by no means the onlypossible one from which the historical phenomena we are investigatingcan be analysed. Other standpoints would, for this as for everyhistorical phenomenon, yield other characteristics as the essentialones. The result is that it is by no means necessary to understand bythe spirit of capitalism only what it will come to mean to us for thepurposes of our analysis. This is a necessary result of the nature ofhistorical concepts which attempt for their methodological purposesnot to grasp historical reality in abstract general formulae, but inconcrete genetic sets of relations which are inevitably of aspecifically unique and individual characters

Thus, if we try to determine the object, the analysis andhistorical explanation of which we are attempting, it cannot be inthe form of a conceptual definition, but at least in the beginningonly a provisional description of what is here meant by the spirit ofcapitalism. Such a description is, however, indispensable in orderclearly to understand the object of the investigation. For thispurpose we turn to a document of that spirit which contains what weare looking for in almost classical purity, and at the same time hasthe advantage of being free from all direct relationship to religion,being thus, for our purposes, free of preconceptions.

“Remember, that time is money. He that can earn tenshillings a day by his labour, and goes abroad, or sits idle, onehalf of that day, though he spends but sixpence during his diversionor idleness, ought not to reckon that the only expense; he hasreally spent, or rather thrown away, five shillings besides.

“Remember, that credit is money. If a man lets his moneylie in my hands after it is due, he gives me the interest, or so muchas I can make of it during that time. This amounts to a considerablesum where a man has good and large credit, and makes good use of it.

“Remember, that money is of the prolific, generating nature. Moneycan beget money, and its offspring can beget more, and so on. Fiveshillings turned is six, turned again it is seven and threepence, andso on, till it becomes a hundred pounds. The more there is of it, themore it produces every turning, so that the profits rise quicker andquicker. He that kills a breeding-sow, destroys all her offspring tothe thousandth generation. He that murders a crown, destroys all thatit might have produced, even scores of pounds.”

“Remember this saying, The good paymaster is lord of anotherman’s purse. He that is known to pay punctually and exactly tothe time he promises, may at any time, and on any occasion, raise allthe money his friends can spare. This is sometimes of great use.After industry and frugality, nothing contributes more to the raisingof a young man in the world than punctuality and justice in all hisdealings; therefore never keep borrowed money an hour beyond the timeyou promised, lest a disappointment shut up your friend’s purse forever.

“The most trifling actions that affect a man’s credit are to beregarded. The sound of your hammer at five in the morning, or eightat night, heard by a creditor, makes him easy six months longer; butif he sees you at a billiard-table, or hears your voice at a tavern,when you should be at work, he sends for his money the next day;demands it, before he can receive it, in a lump.

“It shows, besides, that you are mindful of what you owe; it makesyou appear a careful as well as an honest man, and that stillincreases your credit.

“Beware of thinking all your own that you possess, and of livingaccordingly. It is a mistake that many people who have credit fallinto. To prevent this, keep an exact account for some time both ofyour expenses and your income. If you take the pains at first tomention particulars, it will have this good effect: you will discoverhow wonderfully small, trifling expenses mount up to large sums, andwill discern what might have been, and may for the future be saved,without occasioning any great inconvenience.”

“For six pounds a year you may have the use of one hundred pounds,provided you are a man of known prudence and honesty.

“He that spends a groat a day idly, spends idly above six pounds ayear, which is the price for the use of one hundred pounds.

“He that wastes idly a groat’s worth of his time per day, one daywith another, wastes the privilege of using one hundred pounds eachday.

“He that idly loses five shillings’ worth of time, loses fiveshillings, and might as prudently throw five shillings into the sea.

“He that loses five shillings, not only loses that sum, but allthe advantage that might be made by turning it in dealing, which bythe time that a young man becomes old, will amount to a considerablesum of money.” [2]

It is Benjamin Franklin who preaches to us in these sentences, thesame which Ferdinand Kurnberger satirizes in his clever and maliciousPicture of American Culture [3] as the supposed confession offaith of the Yankee. That it is the spirit of capitalism which herespeaks in characteristic fashion, no one will doubt, however littlewe may wish to claim that everything which could be understood aspertaining to that spirit is contained in it. Let us pause a momentto consider this passage, the philosophy of which Kurnberger sums upin the words, “They make tallow out of cattle and money out of men”.The peculiarity of this philosophy of avarice appears to be the idealof the honest man of recognized credit, and above all the idea of aduty of the individual toward the increase of his capital, which isassumed as an end in itself. Truly what is here preached is notsimply a means of making one’s way in the world, but a peculiarethic. The infraction of its rules is treated not as foolishness butas forgetfulness of duty. That is the essence of the matter. It isnot mere business astuteness, that sort of thing is common enough, itis an ethos. This is the quality which interests us.

When Jacob Fugger, in speaking to a business associate who hadretired and who wanted to persuade him to do the same, since he hadmade enough money and should let others have a chance, rejected thatas pusillanimity and answered that “he (Fugger) thought otherwise, hewanted to make money as long as he could”, [4] the spirit of hisstatement is evidently quite different from that of Franklin. What inthe former case was an expression of commercial daring and a personalinclination morally neutral, [5] in the latter takes on the characterof an ethically coloured maxim for the conduct of life. The conceptspirit of capitalism is here used in this specific sense, [6] it isthe spirit of modern capitalism. For that we are here dealing onlywith Western European and American capitalism is obvious from the wayin which the problem was stated. Capitalism existed in China, India,Babylon, in the classic world, and in the Middle Ages. But in allthese cases, as we shall see, this particular ethos was lacking.

Now, all Franklin’s moral attitudes are coloured withutilitarianism. Honesty is useful, because it assures credit; so arepunctuality, industry, frugality, and that is the reason they arevirtues. A logical deduction from this would be that where, forinstance, the appearance of honesty serves the same purpose, thatwould suffice, and an unnecessary surplus of this virtue wouldevidently appear to Franklin’s eyes as unproductive waste. And as amatter of fact, the story in his autobiography of his conversion tothose virtues, [7] or the discussion of the value of a strictmaintenance of the appearance of modesty, the assiduous belittlementof one’s own deserts in order to gain general recognition later, [8]confirms this impression. According to Franklin, those virtues, likeall others, are only in so far virtues as they are actually useful tothe individual, and the surrogate of mere appearance is alwayssufficient when it accomplishes the end in view. It is a conclusionwhich is inevitable for strict utilitarianism. The impression of manyGermans that the virtues professed by Americanism are pure hypocrisyseems to have been confirmed by this striking case. But in fact thematter is not by any means so simple. Benjamin Franklin’s owncharacter, as it appears in the really unusual candidness of hisautobiography, belies that suspicion. The circumstance that heascribes his recognition of the utility of virtue to a divinerevelation which was intended to lead him in the path ofrighteousness, shows that something more than mere garnishing forpurely egocentric motives is involved.

In fact, the summum bonum of this ethic, the earning ofmore and more money, combined with the strict avoidance of allspontaneous enjoyment of life, is above all completely devoid of anyeudaemonistic, not to say hedonistic, admixture. It is thought of sopurely as an end in itself, that from the point of view of thehappiness of, or utility to, the single individual, it appearsentirely transcendental and absolutely irrational. [9] Man isdominated by the making of money, by acquisition as the ultimatepurpose of his life. Economic acquisition is no longer subordinatedto man as the means for the satisfaction of his material needs. Thisreversal of what we should call the natural relationship, soirrational from a naive point of view, is evidently as definitely aleading principle of capitalism as it is foreign to all peoples notunder capitalistic influence. At the same time it expresses a type offeeling which is closely connected with certain religious ideas. Ifwe thus ask, why should “money be made out of men”, Benjamin Franklinhimself, although he was a colourless deist, answers in hisautobiography with a quotation from the Bible, which his strictCalvinistic father drummed into him again and again in his youth:”Seest thou a man diligent in his business? He shall stand beforekings” (Prov. xxii. 29). The earning of money within the moderneconomic order is, so long as it is done legally, the result and theexpression of virtue and proficiency in a calling; and this virtueand proficiency are, as it is now not difficult to see, the realAlpha and Omega of Franklin’s ethic, as expressed in the passages wehave quoted, as well as in all his works without exception. [10]

And in truth this peculiar idea, so familiar to us to-day, but inreality so little a matter of course, of one’s duty in a calling, iswhat is most characteristic of the social ethic of capitalisticculture, and is in a sense the fundamental basis of it. It is anobligation which the individual is supposed to feel and does feeltowards the content of his professional [11] activity, no matter inwhat it consists, in particular no matter whether it appears on thesurface as a utilization of his personal powers, or only of hismaterial possessions (as capital).

Of course, this conception has not appeared only undercapitalistic conditions. On the contrary, we shall later trace itsorigins back to a time previous to the advent of capitalism. Stillless, naturally, do we maintain that a conscious acceptance of theseethical maxims on the part of the individuals, entrepreneurs orlabourers, in modern capitalistic enterprises, is a condition of thefurther existence of present-day capitalism. The capitalistic economyof the present day is an immense cosmos into which the individual isborn, and which presents itself to him, at least as an individual, asan unalterable order of things in which he must live. It forces theindividual, in so far as he is involved in the system of marketrelationships, to conform to capitalistic rules of action. Themanufacturer who in the long run acts counter to these norms, willjust as inevitably be eliminated from the economic scene as theworker who cannot or will not adapt himself to them will be throwninto the streets without a job.

Thus the capitalism of to-day, which has come to dominate economiclife, educates and selects the economic subjects which it needsthrough a process of economic survival of the fittest. But here onecan easily see the limits of the concept of selection as a means ofhistorical explanation. In order that a manner of life so welladapted to the peculiarities of capitalism could be selected at all,i.e. should come to dominate others, it had to originate somewhere,and not in isolated individuals alone, but as a way of life common towhole groups of men. This origin is what really needs explanation.Concerning the doctrine of the more naive historical materialism,that such ideas originate as a reflection or superstructure ofeconomic situations, we shall speak more in detail below. At thispoint it will suffice for our purpose to call attention to the factthat without doubt, in the country of Benjamin Franklin’s birth(Massachusetts), the spirit of capitalism (in the sense we haveattached to it) was present before the capitalistic order. There werecomplaints of a peculiarly calculating sort of profit-seeking in NewEngland, as distinguished from other parts of America, as early as1632. It is further undoubted that capitalism remained far lessdeveloped in some of the neighbouring colonies, the later SouthernStates of the United States of America, in spite of the fact thatthese latter were founded by large capitalists for business motives,while the New England colonies were founded by preachers and seminarygraduates with the help of small bourgeois, craftsmen and yoemen, forreligious reasons. In this case the causal relation is certainly thereverse of that suggested by the materialistic standpoint.

But the origin and history of such ideas is much more complex thanthe theorists of the superstructure suppose. The spirit ofcapitalism, in the sense in which we are using the term, had to fightits way to supremacy against a whole world of hostile forces. A stateof mind such as that expressed in the passages we have quoted fromFranklin, and which called forth the applause of a whole people,would both in ancient times and in the Middle Ages [12] have beenproscribed as the lowest sort of avarice and as an attitude entirelylacking in self-respect. It is, in fact, still regularly thus lookedupon by all those social groups which are least involved in oradapted to modern capitalistic conditions. This is not wholly becausethe instinct of acquisition was in those times unknown orundeveloped, as has often been said. Nor because the auri sacrafames, the greed for gold, was then, or now, less powerfuloutside of bourgeois capitalism than within its peculiar sphere, asthe illusions of modern romanticists are wont to believe. Thedifference between the capitalistic and precapitalistic spirits isnot to be found at this point. The greed of the Chinese Mandarin, theold Roman aristocrat, or the modern peasant, can stand up to anycomparison. And the auri sacra fames of a Neapolitancab-driver or barcaiuolo, and certainly of Asiaticrepresentatives of similar trades, as well as of the craftsmen ofsouthern European or Asiatic countries, is, as anyone can find outfor himself, very much more intense, and especially more unscrupulousthan that of, say, an Englishman in similar circumstances. [13]

The universal reign of absolute unscrupulousness in the pursuit ofselfish interests by the making of money has been a specificcharacteristic of precisely those countries whosebourgeois-capitalistic development, measured according to Occidentalstandards, has remained backward. As every employer knows, the lackof coscienziosita of the labourers [14] of such countries, forinstance Italy as compared with Germany, has been, and to a certainextent still is, one of the principal obstacles to their capitalisticdevelopment. Capitalism cannot make use of the labour of those whopractise the doctrine of undisciplined liberum arbitrium, anymore than it can make use of the business man who seems absolutelyunscrupulous in his dealings with others, as we can learn fromFranklin. Hence the difference does not lie in the degree ofdevelopment of any impulse to make money. The auri sacra famesis as old as the history of man. But we shall see that those whosubmitted to it without reserve as an uncontrolled impulse, such asthe Dutch sea-captain who “would go through hell for gain, eventhough he scorched his sails”, were by no means the representativesof that attitude of mind from which the specifically moderncapitalistic spirit as a mass phenomenon is derived, and that is whatmatters. At all periods of history, wherever it was possible, therehas been ruthless acquisition, bound to no ethical norms whatever.Like war and piracy, trade has often been unrestrained in itsrelations with foreigners and those outside the group. The doubleethic has permitted here what was forbidden in dealings amongbrothers.

Capitalistic acquisition as an adventure has been at home in alltypes of economic society which have known trade with the use ofmoney and which have offered it opportunities, throughcommenda, farming of taxes, State loans, financing of wars,ducal courts and officeholders. Likewise the inner attitude of theadventurer, which laughs at all ethical limitations, has beenuniversal. Absolute and conscious ruthlessness in acquisition hasoften stood in the closest connection with the strictest conformityto tradition. Moreover, with the breakdown of tradition and the moreor less complete extension of free economic enterprise, even towithin the social group, the new thing has not generally beenethically justified and encouraged, but only tolerated as a fact. Andthis fact has been treated either as ethically indifferent or asreprehensible, but unfortunately unavoidable. This has not only beenthe normal attitude of all ethical teachings, but, what is moreimportant, also that expressed in the practical action of the averageman of pre-capitalistic times, pre-capitalistic in the sense that therational utilization of capital in a permanent enterprise and therational capitalistic organization of labour had not yet becomedominant forces in the determination of economic activity. Now justthis attitude was one of the strongest inner obstacles which theadaptation of men to the conditions of an orderedbourgeois-capitalistic economy has encountered everywhere.

The most important opponent with which the spirit of capitalism,in the sense of a definite standard of life claiming ethicalsanction, has had to struggle, was that type of attitude and reactionto new situations which we may designate as traditionalism. In thiscase also every attempt at a final definition must be held inabeyance. On the other hand, we must try to make the provisionalmeaning clear by citing a few cases. We will begin from below, withthe labourers.

One of the technical means which the modern employer uses in orderto secure the greatest possible amount of work from his men is thedevice of piece-rates. In agriculture, for instance, the gathering ofthe harvest is a case where the greatest possible intensity of labouris called for, since, the weather being uncertain, the differencebetween high profit and heavy loss may depend on the speed with whichthe harvesting can be done. Hence a system of piece-rates is almostuniversal in this case. And since the interest of the employer in aspeeding up of harvesting increases with the increase of the resultsand the intensity of the work, the attempt has again and again beenmade, by increasing the piece-rates of the workmen, thereby givingthem an opportunity to earn what is for them a very high wage, tointerest them in increasing their own efficiency. But a peculiardifficulty has been met with surprising frequency: raising thepiece-rates has often had the result that not more but less has beenaccomplished in the same time, because the worker reacted to theincrease not by increasing but by decreasing the amount of his work.A man, for instance, who at the rate of 1 mark per acre mowed 2 1/2acres per day and earned 2 1/2 marks, when the rate was raised to1.25 marks per acre mowed, not 3 acres, as he might easily have done,thus earning 3.75 marks, but only 2 acres, so that he could stillearn the 2 1/2 marks to which he was accustomed. The opportunity ofearning more was less attractive than that of working less. He didnot ask: how much can I earn in a day if I do as much work aspossible ? but: how much must I work in order to earn the wage, 2 1/2marks, which I earned before and which takes care of my traditionalneeds? This is an example of what is here meant by traditionalism. Aman does not “by nature” wish to earn more and more money, but simplyto live as he is accustomed to live and to earn as much as isnecessary for that purpose. Wherever modern capitalism has begun itswork of increasing the productivity of human labour by increasing itsintensity, it has encountered the immensely stubborn resistance ofthis leading trait of pre-capitalistic labour. And to-day itencounters it the more, the more backward (from a capitalistic pointof view) the labouring forces are with which it has to deal.

Another obvious possibility, to return to our example, since theappeal to the acquisitive instinct through higher wage-rates failed,would have been to try the opposite policy, to force the worker byreduction of his wage-rates to work harder to earn the same amountthan he did before. Low wages and high profits seem even to-day to asuperficial observer to stand in correlation; everything which ispaid out in wages seems to involve a corresponding reduction ofprofits. That road capitalism has taken again and again since itsbeginning. For centuries it was an article of faith, that low wageswere productive, i.e. that they increased the material results oflabour so that, as Pieter de la Cour, on this point, as we shall see,quite in the spirit of the old Calvinism, said long ago, the peopleonly work because and so long as they are poor.

But the effectiveness of this apparently so efficient method hasits limits. [15] Of course the presence of a surplus population whichit can hire cheaply in the labour market is a necessity for thedevelopment of capitalism. But though too large a reserve army may incertain cases favour its quantitative expansion, it checks itsqualitative development, especially the transition to types ofenterprise which make more intensive use of labour. Low wages are byno means identical with cheap labour. [16] From a purely quantitativepoint of view the efficiency of labour decreases with a wage which isphysiologically insufficient, which may in the long run even mean asurvival of the unfit. The present-day average Silesian mows, when heexerts himself to the full, little more than two-thirds as much landas the better paid and nourished Pomeranian or Mecklenburger, and thePole, the further East he comes from, accomplishes progressively lessthan the German. Low wages fail even from a purely business point ofview wherever it is a question of producing goods which require anysort of skilled labour, or the use of expensive machinery which iseasily damaged, or in general wherever any great amount of sharpattention or of initiative is required. Here low wages do not pay,and their effect is the opposite of what was intended. For not onlyis a developed sense of responsibility absolutely indispensable, butin general also an attitude which, at least during working hours, isfreed from continual calculations of how the customary wage may beearned with a maximum of comfort and a minimum of exertion. Labourmust, on the contrary, be performed as if it were an absolute end initself, a calling. But such an attitude is by no means a product ofnature. It cannot be evoked by low wages or high ones alone, but canonly be the product of a long and arduous process of education.To-day, capitalism, once in the saddle, can recruit its labouringforce in all industrial countries with comparative ease. In the pastthis was in every case an extremely difficult problem. [17] And evento-day it could probably not get along without the support of apowerful ally along the way, which, as we shall see below, was athand at the time of its development.

What is meant can again best be explained by means of an example.The type of backward traditional form of labour is to-day very oftenexemplified by women workers, especially unmarried ones. An almostuniversal complaint of employers of girls, for instance German girls,is that they are almost entirely unable and unwilling to give upmethods of work inherited or once learned in favour of more efficientones, to adapt themselves to new methods, to learn and to concentratetheir intelligence, or even to use it at all. Explanations of thepossibility of making work easier, above all more profitable tothemselves, generally encounter a complete lack of understanding.Increases of piece-rates are without avail against the stone wall ofhabit. In general it is otherwise; and that is a point of no littleimportance from our view-point, only with girls having a specificallyreligious, especially a Pietistic, background. One often hears, andstatistical investigation confirms it, [18] that by far the bestchances of economic education are found among this group. The abilityof mental concentration, as well as the absolutely essential feelingof obligation to one’s job, are here most often combined with astrict economy which calculates the possibility of high earnings, anda cool self-control and frugality which enormously increaseperformance. This provides the most favourable foundation for theconception of labour as an end in itself, as a calling which isnecessary to capitalism: the chances of overcoming traditionalism aregreatest on account of the religious upbringing. This observation ofpresent-day capitalism [19] in itself suggests that it is worth whileto ask how this connection of adaptability to capitalism withreligious factors may have come about in the days of the earlydevelopment of capitalism. For that they were even then present inmuch the same form can be inferred from numerous facts. For instance,the dislike and the persecution which Methodist workmen in theeighteenth century met at the hands of their comrades were not solelynor even principally the result of their religious eccentricities,England had seen many of those and more striking ones. It restedrather, as the destruction of their tools, repeatedly mentioned inthe reports, suggests, upon their specific willingness to work as weshould say to-day.

However, let us again return to the present, and this time to theentrepreneur, in order to clarify the meaning of traditionalism inhis case.

Sombart, in his discussions of the genesis of capitalism, [20] hasdistinguished between the satisfaction of needs and acquisition asthe two great leading principles in economic history. In the formercase the attainment of the goods necessary to meet personal needs, inthe latter a struggle for profit free from the limits set by needs,have been the ends controlling the form and direction of economicactivity. What he calls the economy of needs seems at first glance tobe identical with what is here described as economic traditionalism.That may be the case if the concept of needs is limited totraditional needs. But if that is not done, a number of economictypes which must be considered capitalistic according to thedefinition of capital which Sombart gives in another part of hiswork, [21] would be excluded from the category of acquisitive economyand put into that of needs economy. Enterprises, namely, which arecarried on by private entrepreneurs by utilizing capital (money orgoods with a money value) to make a profit, purchasing the means ofproduction and selling the product, i.e. undoubted capitalisticenterprises, may at the same time have a traditionalistic character.This has, in the course even of modern economic history, not beenmerely an occasional case, but rather the rule, with continualinterruptions from repeated and increasingly powerful conquests ofthe capitalistic spirit. To be sure the capitalistic form of anenterprise and the spirit in which it is run generally stand in somesort of adequate relationship to each other, but not in one ofnecessary interdependence. Nevertheless, we provisionally use theexpression spirit of (modern) capitalism [22] to describe thatattitude which seeks profit rationally and systematically in themanner which we have illustrated by the example of Benjamin Franklin.This, however, is justified by the historical fact that that attitudeof mind has on the one hand found its most suitable expression incapitalistic enterprise, while on the other the enterprise hasderived its most suitable motive force from the spirit of capitalism.

But the two may very well occur separately. Benjamin Franklin wasfilled with the spirit of capitalism at a time when his printingbusiness did not differ in form from any handicraft enterprise. Andwe shall see that at the beginning of modern times it was by no meansthe capitalistic entrepreneurs of the commercial aristocracy, whowere either the sole or the predominant bearers of the attitude wehave here called the spirit of capitalism. [23] It was much more therising strata of the lower industrial middle classes. Even in thenineteenth century its classical representatives were not the elegantgentlemen of Liverpool and Hamburg, with their commercial fortuneshanded down for generations, but the self-made parvenus of Manchesterand Westphalia, who often rose from very modest circumstances. Asearly as the sixteenth century the situation was similar; theindustries which arose at that time were mostly created by parvenus.[24]

The management, for instance, of a bank, a wholesale exportbusiness, a large retail establishment, or of a large putting-outenterprise dealing with goods produced in homes, is certainly onlypossible in the form of a capitalistic enterprise. Nevertheless, theymay all be carried on in a traditionalistic spirit. In fact, thebusiness of a large bank of issue cannot be carried on in any otherway. The foreign trade of whole epochs has rested on the basis ofmonopolies and legal privileges of strictly traditional character. Inretail trade–and we are not here talking of the small men withoutcapital who are continually crying out for Government aid — therevolution which is making an end of the old traditionalism is stillin full swing. lt is the same development which broke up the oldputting-out system, to which modem domestic labour is related only inform. How this revolution takes place and what is its significancemay, in spite of the fact these things are so familiar, be againbrought out by a concrete example.

Until about the middle of the past century the life of aputter-out was, at least in many of the branches of the Continentaltextile industry, [25] what we should to-day consider verycomfortable. We may imagine its routine somewhat as follows: Thepeasants came with their cloth, often (in the case of linen)principally or entirely made from raw material which the peasanthimself had produced, to the town in which the putter-out lived, andafter a careful, often official, appraisal of the quality, receivedthe customary price for it. The putter-out’s customers, for marketsany appreciable distance away, were middlemen, who also came to him,generally not yet following samples, but seeking traditionalqualities, and bought from his warehouse, or, long before delivery,placed orders which were probably in turn passed on to the peasants.Personal canvassing of customers took place, if at all, only at longintervals. Otherwise correspondence sufficed, though the sending ofsamples slowly gained ground. The number of business hours was verymoderate, perhaps five to six a day, sometimes considerably less; inthe rush season, where there was one, more. Earnings were moderate;enough to lead a respectable life and in good times to put away alittle. On the whole, relations among competitors were relativelygood, with a large degree of agreement on the fundamentals ofbusiness. A long daily visit to the tavern, with often plenty todrink, and a congenial circle of friends, made life comfortable andleisurely.

The form of organization was in every respect capitalistic; theentrepreneur’s activity was of a purely business character; the useof capital, turned over in the business, was indispensable; andfinally, the objective aspect of the economic process, thebook-keeping, was rational. But it was traditionalistic business, ifone considers the spirit which animated the entrepreneur: thetraditional manner of life, the traditional rate of profit, thetraditional amount of work, the traditional manner of regulating therelationships with labour, and the essentially traditional circle ofcustomers and the manner of attracting new ones. All these dominatedthe conduct of the business, were at the basis, one may say, of theethos of this group of business men.

Now at some time this leisureliness was suddenly destroyed, andoften entirely without any essential change in the form oforganization, such as the transition to a unified factory, tomechanical weaving, etc. What happened was, on the contrary, often nomore than this: some young man from one of the putting-out familieswent out into the country, carefully chose weavers for his employ,greatly increased the rigour of his supervision of their work, andthus turned them from peasants into labourers. On the other hand, hewould begin to change his marketing methods by so far as possiblegoing directly to the final consumer, would take the details into hisown hands, would personally solicit customers, visiting them everyyear, and above all would adapt the quality of the product directlyto their needs and wishes. At the same time he began to introduce theprinciple of low prices and large turnover. There was repeated whateverywhere and always is the result of such a process ofrationalization: those who would not follow suit had to go out ofbusiness. The idyllic state collapsed under the pressure of a bittercompetitive struggle, respectable fortunes were made, and not lentout at interest, but always reinvested in the business. The oldleisurely and comfortable attitude toward life gave way to a hardfrugality in which some participated and came to the top, becausethey did not wish to consume but to earn, while others who wished tokeep on with the old ways were forced to curtail their consumption.[26]

And, what is most important in this connection, it was notgenerally in such cases a stream of new money invested in theindustry which brought about this revolution–in several cases knownto me the whole revolutionary process was set in motion with a fewthousands of capital borrowed from relations–but the new spirit, thespirit of modern capitalism, had set to work. The question of themotive forces in the expansion of modern capitalism is not in thefirst instance a question of the origin of the capital sums whichwere available for capitalistic uses, but, above all, of thedevelopment of the spirit of capitalism. Where it appears and is ableto work itself out, it produces its own capital and monetary suppliesas the means to its ends, but the reverse is not true. [27] Its entryon the scene was not generally peaceful. A flood of mistrust,sometimes of hatred, above all of moral indignation, regularlyopposed itself to the first innovator. Often–I know of several casesof the sort–regular legends of mysterious shady spots in hisprevious life have been produced. It is very easy not to recognizethat only an unusually strong character could save an entrepreneur ofthis new type from the loss of his temperate self-control and fromboth moral and economic shipwreck. Furthermore, along with clarity ofvision and ability to act, it is only by virtue of very definite andhighly developed ethical qualities that it has been possible for himto command the absolutely indispensable confidence of his customersand workmen. Nothing else could have given him the strength toovercome the innumerable obstacles, above all the infinitely moreintensive work which is demanded of the modern entrepreneur. Butthese are ethical qualities of quite a different sort from thoseadapted to the traditionalism of the past.

And, as a rule, it has been neither dare-devil and unscrupulousspeculators, economic adventurers such as we meet at all periods ofeconomic history, nor simply great financiers who have carriedthrough this change, outwardly so inconspicuous, but nevertheless sodecisive for the penetration of economic life with the new spirit. Onthe contrary, they were men who had grown up in the hard school oflife, calculating and daring at the same time, above all temperateand reliable, shrewd and completely devoted to their business, withstrictly bourgeois opinions and principles.

One is tempted to think that these personal moral qualities havenot the slightest relation to any ethical maxims, to say nothing ofreligious ideas, but that the essential relation between them isnegative. The ability to free oneself from the common tradition, asort of liberal enlightenment, seems likely to be the most suitablebasis for such a business man’s success. And to-day that is generallyprecisely the case. Any relationship between religious beliefs andconduct is generally absent, and where any exists, at least inGermany, it tends to be of the negative sort. The people filled withthe spirit of capitalism to-day tend to be indifferent, if nothostile, to the Church. The thought of the pious boredom of paradisehas little attraction for their active natures; religion appears tothem as a means of drawing people away from labour in this world. Ifyou ask them what is the meaning of their restless activity, why theyare never satisfied with what they have, thus appearing so senselessto any purely worldly view of life, they would perhaps give theanswer, if they know any at all: “to provide for my children andgrandchildren”. But more often and, since that motive is not peculiarto them, but was just as effective for the traditionalist, morecorrectly, simply: that business with its continuous work has becomea necessary part of their lives. That is in fact the only possiblemotivation, but it at the same time expresses what is, seen from theview-point of personal happiness, so irrational about this sort oflife, where a man exists for the sake of his business, instead of thereverse.

Of course, the desire for the power and recognition which the merefact of wealth brings plays its part. When the imagination of a wholepeople has once been turned toward purely quantitative bigness, as inthe United States, this romanticism of numbers exercises anirresistible appeal to the poets among business men. Otherwise it isin general not the real leaders, and especially not the permanentlysuccessful entrepreneurs, who are taken in by it. In particular, theresort to entailed estates and the nobility, with sons whose conductat the university and in the officers’ corps tries to cover up theirsocial origin, as has been the typical history of German capitalisticparvenu families, is a product of later decadence. The ideal type[28] of the capitalistic entrepreneur, as it has been representedeven in Germany by occasional outstanding examples, has no relationto such more or less refined climbers. He avoids ostentation andunnecessary expenditure, as well as conscious enjoyment of his power,and is embarrassed by the outward signs of the social recognitionwhich he receives. His manner of life is, in other words, often, andwe shall have to investigate the historical significance of just thisimportant fact, distinguished by a certain ascetic tendency, asappears clearly enough in the sermon of Franklin which we havequoted. It is, namely, by no means exceptional, but rather the rule,for him to have a sort of modesty which is essentially more honestthan the reserve which Franklin so shrewdly recommends. He getsnothing out of his wealth for himself, except the irrational sense ofhaving done his job well.

But it is just that which seems to the pre-capitalistic man soincomprehensible and mysterious, so unworthy and contemptible. Thatanyone should be able to make it the sole purpose of his life-work,to sink into the grave weighed down with a great material load ofmoney and goods, seems to him explicable only as the product of aperverse instinct, the auri sacra fames.

At present under our individualistic political, legal, andeconomic institutions, with the forms of organization and generalstructure which are peculiar to our economic order, this spirit ofcapitalism might be understandable, as has been said, purely as aresult of adaptation. The capitalistic system so needs this devotionto the calling of making money, it is an attitude toward materialgoods which is so well suited to that system, so intimately bound upwith the conditions of survival in the economic struggle forexistence, that there can to-day no longer be any question of anecessary connection of that acquisitive manner of life with anysingle Weltanschauung. In fact, it no longer needs the supportof any religious forces, and feels the attempts of religion toinfluence economic life, in so far as they can still be felt at all,to be as much an unjustified interference as its regulation by theState. In such circumstances men’s commercial and social interests dotend to determine their opinions and attitudes. Whoever does notadapt his manner of life to the conditions of capitalistic successmust go under, or at least cannot rise. But these are phenomena of atime in which modern capitalism has become dominant and has becomeemancipated from its old supports. But as it could at one timedestroy the old forms of medieval regulation of economic life only inalliance with the growing power of the modern State, the same, we maysay provisionally, may have been the case in its relations withreligious forces. Whether and in what sense that was the case, it isour task to investigate. For that the conception of money-making asan end in itself to which people were bound, as a calling, wascontrary to the ethical feelings of whole epochs, it is hardlynecessary to prove. The dogma Deo placere vix potest which wasincorporated into the canon law and applied to the activities of themerchant, and which at that time (like the passage in the gospelabout interest) [29] was considered genuine, as well as St. Thomas’scharacterization of the desire for gain as turpitudo (whichterm even included unavoidable and hence ethically justifiedprofit-making), already contained a high degree of concession on thepart of the Catholic doctrine to the financial powers with which theChurch had such intimate political relations in the Italian cities,[30] as compared with the much more radically anti-chrematistic viewsof comparatively wide circles. But even where the doctrine was stillbetter accommodated to the facts, as for instance with Anthony ofFlorence, the feeling was never quite overcome, that activitydirected to acquisition for its own sake was at bottom apudendum which was to be tolerated only because of theunalterable necessities of life in this world.

Some moralists of that time, especially of the nominalisticschool, accepted developed capitalistic business forms as inevitable,and attempted to justify them, especially commerce, as necessary. Theindustria developed in it they were able to regard, though notwithout contradictions, as a legitimate source of profit, and henceethically unobjectionable. But the dominant doctrine rejected thespirit of capitalistic acquisition as turpitudo, or at leastcould not give it a positive ethical sanction. An ethical attitudelike that of Benjamin Franklin would have been simply unthinkable.This was, above all, the attitude of capitalistic circles themselves.Their life-work was, so long as they clung to the tradition of theChurch, at best something morally indifferent. It was tolerated, butwas still, even if only on account of the continual danger ofcollision with the Church’s doctrine on usury, somewhat dangerous tosalvation. Quite considerable sums, as the sources show, went at thedeath of rich people to religious institutions as conscience money,at times even back to former debtors as usura which had beenunjustly taken from them. It was otherwise, along with heretical andother tendencies looked upon with disapproval, only in those parts ofthe commercial aristocracy which were already emancipated from thetradition. But even sceptics and people indifferent to the Churchoften reconciled themselves with it by gifts, because it was a sortof insurance against the uncertainties of what might come afterdeath, or because (at least according to the very widely held latterview) an external obedience to the commands of the Church wassufficient to insure salvation. [31] Here the either non-moral orimmoral character of their action in the opinion of the participantsthemselves comes clearly to light.

Now, how could activity, which was at best ethically tolerated,turn into a calling in the sense of Benjamin Franklin? The fact to beexplained historically is that in the most highly capitalistic centreof that time, in Florence of the fourteenth and fifteenth centuries,the money and capital market of all the great political Powers, thisattitude was considered ethically unjustifiable, or at best to betolerated. But in the backwoods small bourgeois circumstances ofPennsylvania in the eighteenth century, where business threatened forsimple lack of money to fall back into barter, where there was hardlya sign of large enterprise, where only the earliest beginnings ofbanking were to be found, the same thing was considered the essenceof moral conduct, even commanded in the name of duty. To speak hereof a reflection of material conditions in the ideal superstructurewould be patent nonsense. What was the background of ideas whichcould account for the sort of activity apparently directed towardprofit alone as a calling toward which the individual feels himselfto have an ethical obligation? For it was this idea which gave theway of life of the new entrepreneur its ethical foundation andjustification.

The attempt has been made, particularly by Sombart, in what areoften judicious and effective observations, to depict economicrationalism as the salient feature of modern economic life as awhole. Undoubtedly with justification, if by that is meant theextension of the productivity of labour which has, through thesubordination of the process of production to scientific points ofview, relieved it from its dependence upon the natural organiclimitations of the human individual. Now this process ofrationalization in the field of technique and economic organizationundoubtedly determines an important part of the ideals of life ofmodern bourgeois society. Labour in the service of a rationalorganization for the provision of humanity with material goods haswithout doubt always appeared to representatives of the capitalisticspirit as one of the most important purposes of their life-work. Itis only necessary, for instance, to read Franklin’s account of hisefforts in the service of civic improvements in Philadelphia clearlyto apprehend this obvious truth. And the joy and pride of havinggiven employment to numerous people, of having had a part in theeconomic progress of his home town in the sense referring to figuresof population and volume of trade which capitalism associated withthe word, all these things obviously are part of the specific andundoubtedly idealistic satisfactions in life to modern men ofbusiness. Similarly it is one of the fundamental characteristics ofan individualistic capitalistic economy that it is rationalized onthe basis of rigorous calculation, directed with foresight andcaution toward the economic success which is sought in sharp contrastto the hand- to-mouth existence of the peasant, and to the privilegedtraditionalism of the guild craftsman and of the adventurers’capitalism, oriented to the exploitation of political opportunitiesand irrational speculation.

It might thus seem that the development of the spirit ofcapitalism is best understood as part of the development ofrationalism as a whole, and could be deduced from the fundamentalposition of rationalism on the basic problems of life. In the processProtestantism would only have to be considered in so far as it hadformed a stage prior to the development of a purely rationalisticphilosophy. But any serious attempt to carry this thesis throughmakes it evident that such a simple way of putting the question willnot work, simply because of the fact that the history of rationalismshows a development which by no means follows parallel lines in thevarious departments of life. The rationalization of private law, forinstance, if it is thought of as a logical simplification andrearrangement of the content of the law, was achieved in the highesthitherto known degree in the Roman law of late antiquity. But itremained most backward in some of the countries with the highestdegree of economic rationalization, notably in England, where theRenaissance of Roman Law was overcome by the power of the great legalcorporations, while it has always retained its supremacy in theCatholic countries of Southern Europe. The worldly rationalphilosophy of the eighteenth century did not find favour alone oreven principally in the countries of highest capitalisticdevelopment. The doctrines of Voltaire are even to-day the commonproperty of broad upper, and what is practically more important,middle-class groups in the Romance Catholic countries. Finally, ifunder practical rationalism is understood the type of attitude whichsees and judges the world consciously in terms of the worldlyinterests of the individual ego, then this view of life was and isthe special peculiarity of the peoples of the liberumarbitrium, such as the Italians and the French are in very fleshand blood. But we have already convinced ourselves that this is by nomeans the soil in which that relationship of a man to his calling asa task, which is necessary to capitalism, has pre-eminently grown. Infact, one may–this simple proposition, which is often forgotten,should be placed at the beginning of every study which essays to dealwith rationalism–rationalize life from fundamentally different basicpoints of view and in very different directions. Rationalism is anhistorical concept which covers a whole world of different things. Itwill be our task to find out whose intellectual child the particularconcrete form of rational thought was, from which the idea of acalling and the devotion to labour in the calling has grown, whichis, as we have seen, so irrational from the standpoint of purelyeudaemonistic self-interest, but which has been and still is one ofthe most characteristic elements of our capitalistic culture. We arehere particularly interested in the origin of precisely theirrational element which lies in this, as in every conception of acalling.