Weber and Keynes – The Rational Organisation of Labour as “the Problematik of Socialism”.

Let us return to that remarkable passage we found in Weber’s Ethik in which he seems to come close to the essence, to the crux of the capitalist mode of production:

For without the rational capitalistic organization of labour, all this, so far as it was possible at all, would have nothing like the same significance, above all for the social structure and all the specific problems of the modem Occident connected with it.

Exact calculation—the basis of everything else—is only possible on a basis of free labour. (p22)

We saw earlier that Weber does not define the “content” of profit: he defines “profit” instead in purely “monetary” terms in which receipts exceed expenses. And this profit he attributes originally to exchange:

Let us now define our terms somewhat more carefully than is generally done. We will define a capitalistic economic action as one which rests on the expectation of profit by the utilization of opportunities for exchange, that is on (formally) peaceful chances of profit…

The shift from “opportunistic exchange”, which would define a capitalism that is far from “systematic” or indeed “rational” or “scientific”, to one that is founded on “the rational capitalistic organization of labour” is as obvious as it is dramatic. Weber has touched – however unwittingly – on the all-important difference between the early forms of “mercantilist” capitalism which do rely on gains derived from the greater “value” of goods exchanged for goods of “less value”, to a form of “organized capitalism” that “rationally and systematically” ensures the production of goods with “higher value” than the means of production utilized on the basis of “the rational organization of labour”!

Not only that! But Weber also makes a statement of truly earth-shattering significance:

“Exact calculation—the basis of everything else—is only possible on a basis of free labour.”
Eine exakte Kalkulation: – die Grundlage alles andern, – ist eben nur auf dem Boden freier Arbeit möglich. Und wie – und weil – keine rationale Arbeitsorganisation, so – und deshalb – hat die Welt außerhalb des modernen Okzidents auch keinen rationalen Sozialismus gekannt.

 In other words, capitalism is a social system founded on the exchange for profit (in monetary terms) between goods of “less value” for goods of “more value” on the “basis” – “the basis of everything else”! – of “exact [rational] calculation” made “only possible on a basis of [the rational organization] of free labour”! This is  the Problematik of "rational Socialism"!

Before we look at what Weber may mean by “the organization of free labour”, let us take a closer look at what he may mean by “rationality”. And here we turn to the “Author’s Preface” of the Ethik where he describes this process of “rationalization” (Rationalisierung) as being the most distinctive characteristic of what Weber calls “the Occident”. Clear and loud is here the echo of what we will find in Heidegger’s philosophy, and especially in the Einfuhrung in die Metaphysik – but here Weber is referring to the Nietzschean “self-dissolution” (Selbst-Aufhebung) of Christianity and Antiquity in the “completion” (Heidegger’s Vollendung) of Western metaphysics in the desert of Nihilism through the “scientific” Will to Truth. (We have discussed this on this site – just search “Will to Truth”.)

We have no time to go into a detailed discussion of Weberian Rationalisierung because it is not our focus here. But when Weber confronts the meaning of this “rationality” he, unlike Schumpeter who (as we saw in our piece on “Nietzsche, Schumpeter, Menger”) completely confused Weber’s use for a kind of “empirical scientific truth” – makes clear that there is neither a teleological or “scientific” meaning to this – and that indeed it cannot even be defined in terms of “systematic empirical methods” as Langlois does stupidly in his pathetic attempt to saddle Marx with the “teleology” – as if, as we are about to see, Weber had not thought that Lenin’s greatness consisted precisely in the attempt to achieve “the rational organization of labour” in Russia!

So here is the nub. The Rationalisierung is not for Weber a process of “substantive rationality” intended teleologically, nor is it a process of “systematization”, which in itself would amount to an empty “formalistic” definition. No. Let us see more closely what he means.

It is hence our first concern to work out and to explain genetically the special peculiarity of Occidental rationalism, and within this field that of the modern Occidental form. Every such attempt at explanation must, recognizing the fundamental importance of the economic factor, above all take account of the economic conditions. But at the same time the opposite correlation must not be left out of consideration. For though the development of economic rationalism is partly dependent on rational technique and law, it is at the same time determined by the ability and disposition of men to adopt certain types of practical rational conduct. When these types have been obstructed by spiritual obstacles, the

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development of rational economic conduct has also met serious inner resistance. The magical and religious forces, and the ethical ideas of duty based upon them, have in the past always been among the most important formative influences on conduct. In the studies collected here we shall be concerned with these forces.

No finality, then. No telos. Rationality of the Western kind is a “practical rational conduct” that is conditioned and determined by “non-rational”, even “magical and religious forces, and the ethical ideas of duty based upon them”. These are “forces” that Nietzsche had already explored in works that culminate on “The Genealogy of Morals” and in “The Gaya Scienza”. Weber is simply continuing from where Nietzsche left off, but in his own exquisitely genial manner. Remember that Weber was a member of the German Parliament and that his “ideas” embodied also the interests and the will of the German bourgeoisie whose very existence was now threatened by the catastrophe of the Great War and the collapse of Wilhelmine Germany together with its Zivilisation.

Hence in a universal history of culture the central problem for us is not, in the last analysis, even from a purely economic view-point, the development of capitalistic activity as such, differing in different cultures only

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in form: the adventurer type, or capitalism in trade, war, politics, or administration as sources of gain. It is rather the origin of this sober bourgeois capitalism with its rational organization of free labour. Or in terms of cultural history, the problem is that of the origin of the Western bourgeois class and of its peculiarities, a problem which is certainly closely connected with that of the origin of the capitalistic organization of labour, but is not quite the same thing. For the bourgeois as a class existed prior to the development of the peculiar modern form of capitalism, though, it is true, only in the Western hemisphere.

Just as with Keynes – whose sober reflections on the fate of his own class, the bourgeoisie, begin with the farcical Paris Conference and Versailles Treaty in 1919 – so now does Weber confront the survival and “the origin of this sober bourgeois capitalism with its rational organization of free labour”. And the specific, pressing, imponent and imposing “problem” that Keynes and Weber face, together with their bourgeois class, is “the problems [Problematik] of socialism”! No, there is no mis-spelling: there is no solecism, no typing error. Weber mentions specifically NOT “socialism as the problem”, but much rather “the problems such as those of socialism”!

Vollends fehlt der moderne Gegensatz: großindustrieller Unternehmer und freier Lohnarbeiter. Und daher konnte es auch eine Problematik von der Art, wie sie der moderne Sozialismus kennt, nicht geben.

Sandwiched in between the two last quotations from the Ethik is this passage of apocalyptic importance that ought to be read one hundred times:

And just as, or rather because, the world has known no rational organization of labour outside the modern Occident, it has known no rational socialism [precisely what Lenin is attempting in Russia!]. Of course, there has been civic economy, a civic food-supply policy, mercantilism and welfare policies of princes, rationing, regulation of economic life, protectionism, and laissez-faire theories (as in China). The world has also known socialistic and communistic experiments of various sorts : family, religious, or military communism, State socialism (in Egypt), monopolistic cartels, and consumers' organizations. But although there have everywhere been civic market privileges, companies, guilds, and all sorts of legal differences between town and country, the concept of the "bourgeois" [Burger - as opposed to "citizen"] has not existed outside the Occident, and that of the bourgeoisie outside the modern Occident. Similarly, the proletariat as a class could not exist, because there was no rational organization of free labour under regular discipline [die rationale Organisation freier Arbeit als Betrieb] .

Class struggles between creditor and debtor classes; landowners and the landless, serfs, or tenants; trading interests and consumers or landlords, have existed everywhere in various combinations. But even the Western mediaeval struggles between putters-out and their workers exist elsewhere only in beginnings. The modern conflict of the large-scale industrial entrepreneur and free-wage labourers was entirely lacking. And thus there could be no such problems as those of socialism.

Aber ebenso wie – trotzdem es doch überall einmal städtische Marktprivilegien, Zünfte, Gilden und allerhand rechtliche Scheidungen zwischen Stadt und Land in der verschiedensten Form gab, – doch der Begriff des »Bürgers« überall außer im Okzident und der Begriff der »Bourgeoisie« überall außer im modernen Okzident fehlte, so fehlte auch das »Proletariat« als Klasse und mußte fehlen, weil eben die rationale Organisation freier Arbeit als Betrieb fehlte. »Klassenkämpfe« zwischen Gläubiger- und Schuldnerschichten, Grundbesitzern und Besitzlosen oder Fronknechten oder Pächtern, Handelsinteressenten und Konsumenten oder Grundbesitzern, hat es in verschiedener Konstellation überall längst gegeben. Aber schon die okzidental-mittelalterlichen Kämpfe zwischen Verlegern und Verlegten finden sich anderwärts nur in Ansätzen. Vollends fehlt der moderne Gegensatz: großindustrieller Unternehmer und freier Lohnarbeiter. Und daher konnte es auch eine Problematik von der Art, wie sie der moderne Sozialismus kennt, nicht geben.

It is not “socialism” that is so much the problem. The Sozialismus is already integrated in the German Parliament (Regierung) through the existence and breath-takingly “rational political organization” of the German proletariat by the Social Democratic Party of Germany! The problem is not “socialism”, but rather “the problems” that the Sozialismus has in “organizing rationally” the integration of the proletariat as “free labour” within the system of political command by the “sober Western bourgeois class”! And this was precisely, exactly, specifically the very “problem”, but formulated in a philosophical framework, that Nietzsche devoted his entire “super-human” philosophical effort (“Kampf”, struggle, he called it) to addressing!

The problems of Socialism have to do precisely with this: with the ability of the political parties of the working class – the Social Democratic or “Labour” (!) parties – to represent and channel and integrate the antagonistic push of the working class – careful! This is what Weber calls “rational organization of free labour under regular discipline” - against the wage relation within the political institutions and organs such as the Parliament and the State (!) that represent instead the interests of the bourgeoisie!

And this is exactly, precisely, specifically and certainly “the Problematik such as that of socialism” that Keynes confronts in the “General Theory”: the absorption of the antagonistic push of the working class against the wage relation in the form of aggregate and effective demand – in the form of “growth” - as a means of “controlling” this push through the “rational organization of labour” – “rational” because “measured” through the institutional means of “the money-wage” as “the fundamental unit of capitalist antagonism” so as to turn “free labour” into “organized labour under regular discipline”!!!

How Keynes addresses this problem from the stand-point, from the strategic perspective, of the bourgeoisie in the guise of “economic science”, through the construction of a Rooseveltian New Deal, the State-Plan, is something that we must now go and discover.