CAPITALISM AS RATIONALISIERUNG – Part One

Max Weber’s Volitional Theory of Capitalist Society as the Coercive Regimentation and Reification (“the Iron Cage”) of Human Needs.  

 

Written in 1920, a full sixteen years after the publication of Die protestantische Ethik, the Vorbemerkungen, meant by Weber as a compendious theoretical introduction to the sociology of religion, end up being instead a valiant attempt to identify the essence of capitalist enterprise and industry as the universally irresistible rationality of its methods and pursuits – of its productivity, of its ability to satisfy and fulfil human needs. The radical incongruence of this shift from religion as a human experience based on irrational faith and creed to the rational exact calculability of capitalist enterprise as the accumulation of social power in the form of monetary profit is so obvious and stupefying that it raises legitimate inquiries as to why this subtle yet vastly significant linkage of the two seemingly incompatible deontologies has received so little attention in the vast literature dedicated to the great German scholar. The nature and the difficulty of the problematic tackled by Weber was adumbrated by Talcott Parsons in his preface to the English translation of the Protestant Ethic by way of justification for the inclusion of the Vorbemerkungen as a general introduction: 

 

“The Introduction, which is placed before the main  

R ixThe Protestant Ethic and the Spirit of Capitalism  

essay, was written by Weber in 1920 for the whole series on the Sociology of Religion. It has been included in this translation because it gives some of the general background of ideas and problems into which Weber himself meant this particular study to fit. That has seemed particularly desirable since, in the voluminous discussion which has grown up in Germany around Weber's essay, a great deal of misplaced criticism has been due to the failure properly to appreciate the scope and limitations of the study. While it is impossible to appreciate that fully without a thorough study of Weber's sociological work as a whole, this brief introduction should suffice to prevent a great deal of misunderstanding.”  

 

Obviously, Weber sees an intense affinity between two human activities - religious experience and capitalist enterprise - which, to repeat, superficially would seem to evince an antinomic tension between irrational faith and rational accumulation of wealth. This affinity or antinomy, depending on the viewpoint, is present right in the title of Weber’s most famous study: The Protestant Work Ethic and the Spirit of Capitalism is clearly meant to draw a direct nexus between the irrational nature of both pursuits, between the commonality of their ethos, and of their libidinal drive (Trieb) or spirit – between religious fervour and capitalist acquisitiveness, between faith and materialism – on one side, and then the apparently much more calculating and rational activity that is capitalist enterprise, on the other side. Weber here is moving steadfastly away from the realm of human consciousness to the murky underworld of the Unconscious – in this he had illustrious predecessors in Nietzsche and Freud (who possessed the entire collection of the philosopher’s writings). Weber is suggesting implicitly that the very rationality of capitalism consists of a spirit (Geist) infused with and inspired by a religious ethic and indeed a conatus, appetite, a striving, whose ontological roots are incontrovertibly irrational.   

 

To his great merit, Parsons insightfully draws attention to the importance of this Weberian conflicting nexus between rationality and capitalism: 

 

The question which Weber attempts to answer is simple and fundamental. It is that of the psychological conditions which made possible the development of capitalist civilization. Capitalism, in the sense of great individual undertakings, involving the control of large financial resources, and yielding riches to their masters as a result of speculation, money-lending, commercial enterprise, buccaneering and war, is as old as history. Capitalism, as an economic system, resting on the organisation of legally free wage-earners, for the purpose of pecuniary profit, by the owner of capital or his agents, and setting its stamp on every aspect of society, is a modern phenomenon.  

 

 

The unanimously accepted, canonical interpretation of capitalism, even and especially among economic theoreticians both Classical and Neo-classical, is that it describes the rational, scientifically calculable accumulation of tangible, physical, material wealth in the form of consumer goods and services in a manner that leads to the constant growth of this materially quantifiable wealth, measurable in monetary terms, for the satisfaction of human needs and wants. The fact that this wealth also reflects social power is only consequential. Even in the greatest critic of capitalism, Karl Marx, who theorised it as a system of social relations of production founded on exploitative social power, this tangible linear progress, however dialectical, of capitalist material production for the fulfilment of human needs is not put in question – so much so that some neo-Marxist critics of the Marxian dialectic derived from Hegel have come to deride it as a “Kapital-Geist”, the Marxian version of Hegel’s eschatology of the Absolute Spirit whose teleological dialectical culmination Marx indicated as the inexorable advent and enthronement of communist society.   

 

Clearly, by focussing on the volitional and motivational aspects of capitalist enterprise, on its arcane origins in the most unfathomable abyss of the human will, in the deepest meanders of the human psyche, Weber means to counter the positive progressivist and historicist view of capitalism with a diametrically opposed stygian psychoanalytic vision of its origins in the inscrutable vortices of human instincts and appetites – in that conatus that Western philosophy had identified from its earliest beginnings as the driver (cf. the Latin verb trahere, to drag, to haul) of human historical conflict. There is no trace of a benevolent teleology in Weber’s analysis of capitalism or of human society tout court – no Hegelian reconciliation (Versohnung), no Marxian communist utopia, no positive humanistic, progressive enlightenment and triumph of Reason over Unreason, of Good over Evil. Like his contemporary and inspirer, Friedrich Nietzsche, Weber has descried “the genealogy of morals” and moved already “beyond good and evil”.  

 

Again, Parsons intuits with laudable insight the world-historical transformation that the transition from earlier modes of production to capitalist enterprise and industry entails both for human history broadly and more specifically for Weber’s theoretical endeavour: 

 

All revolutions are declared to be natural and inevitable, once they are successful, and capitalism, as the type of economic system prevailing in Western Europe and America, is clothed to-day with the unquestioned respectability of the triumphant fact. But in its youth it was a pretender, and it was only after centuries of struggle that its title was established. For it involved a code of economic conduct and a system of human relations which were sharply at variance with venerable conventions, with the accepted scheme of social ethics, and with the law, both of the church and of most European states. So questionable an innovation demanded of the pioneers who first experimented with it as much originality, self-confidence, and tenacity of purpose as is required to-day of those who would break from the net that it has woven. What influence nerved them to defy tradition? From what source did they derive the principles to replace it?   

 

As early as 1904, in the Ethik, Weber had already recognized the “anti-eudaemonian” streak of capitalist acquisitiveness. Consequently, the only and ultimate reality of human existence is irreconcilable conflict and exploitation; it is social antagonism; it is Will to Power. This is the inexorable outcome of the devastating implicit and explicit critique unleashed by Hobbes, Schopenhauer and Nietzsche against the enlightened rationalism of the Western philosophical tradition since the Platonic synthesis. In the apocalyptic dictum of Martin Heidegger, encapsulating the kernel of the negatives Denken: “At the end of metaphysics is found the writing, ‘homo est brutum bestiale’”.  

 

In this specific yet crucial regard, Parsons fails entirely to identify and comprehend the troubling historical and theoretical conundrum that Weber was struggling to tackle and untangle: 

 

The word "rationalism" is used by Weber as a term of art, to describe an economic system based, not on custom or tradition, but on the deliberate and systematic adjustment of economic means to the attainment of the objective of pecuniary profit.  

The question is why this temper triumphed over the conventional attitude which— had regarded the appetitus divitiarum infinitus, the unlimited lust for gain—as anti-social and immoral. His answer is that it was the result of movements which had their source in the religious revolution of the sixteenth century.  

 

Parsons here wrongly seems to imply that Weber associated rationality exclusively with capitalism. In reality, however, throughout his imponent oeuvre Weber always saw rationality as an objective scientific human faculty wholly independent of specific historical and social institutions. Right from the opening sentence of the Vorbemerkungen, for instance, Weber seeks to individuate the discrimen, the unique distinctive essential feature of Western rationality – and he begins his search by addressing its universality: 

  

A scholar of modern European civilization, studying any problem of universal history, is bound to ask himself to what combination of circumstances the fact should be attributed that in Western civilization, and in Western civilization only, cultural phenomena have appeared which (as we like to think) lie in a line of development having universal significance and value. (p.13, PE)  

 

The phrase “universal significance and value” refers here unequivocally to the supremacy of Western civilization, to its irresistibility - to its ability to capture and dominate other forms of civilization. Only in Western civilization, insists Weber, have cultural and socio-economic phenomena and structures appeared that have “universal significance and value” – phenomena that are accessible and overwhelmingly attractive – are irresistible - to the vast majority of human beings. Herein lies the “rationalism”, as Parsons styles it, of Western civilization: – its “reasonableness”, its compelling inducement to the endless satisfaction of human needs. Hence, whilst Weber certainly agrees that capitalism has been the world-historical carrier (Trager) or motor or vehicle for the diffusion of rationality in human societies, he unquestionably insists on the scientific – and therefore humanly “universal” – nature of this rationality. This point is emphasised with great acumen by Joseph Schumpeter in his incidental yet masterful elaboration of the Weberian concept od rationality in chapter 2 of Theorie der wirthschaftlichen Entwicklung. 

 

It is entirely obvious that Weber – like Schumpeter - in canonical neo-Kantian fashion is seeking to distil rationality from capitalist enterprise such that rationality can be predicated of capitalism as an independent, neutral-scientific value-free (wert-frei) attribute without the latter necessarily encompassing the notion of rationality within its meaning and essence. In other words, for Weber capitalist enterprise is not necessarily or intrinsically rational but becomes so because of the pursuit of profit which is, in and of itself, essentially irrational and even antieudaemonian in motivation - yet requires the adoption of rational methodical means in its (still irrational) pursuit. As we will show presently, however, rationality must encompass also its substantive aspect of satisfying human needs and aspirations – for in this and only in this can its universality find its meaning and force – again, its irresistibility. It follows that Weber’s attempt, however inchoate and tentative, to identify rational action and capitalist enterprise whilst keeping them categorically separate must fail because it is flawed ab initio. Weber’s attempt to establish a neutral formal canon of rational action to apply to capitalist enterprise fails because it is fallacious – because means and ends, form and substance, are intrinsically connected and inseparable. (Incidentally, the same applies to Schumpeter’s and “economic science’s” mistaken and barren attempt to extract and separate economic facts from the broader social reality – see chapter 1 of the Theorie.) Again, Parson’s failure to comprehend Weber’s analytical and philosophical quandary – the troublesome application of rational criteria to the scientific study and evaluation of Western civilisation and capitalism, to its Kultur and its Zivilisation - now seems devastatingly evident.  

 

 

But, if our contention is right, if the concept of rationality cannot be separated from the reality of capitalism –, then, Weber’s formal “rationality” necessarily turns into substantive rationalism or, as we prefer to call it, into Rationalisierung (“rationalisation”), that is, the institutional practice of framing the dominant aspects of social life and reality into a mechanism, an apparatus designed to maintain and reproduce the existing capitalist social relations of production. The question thus arises: wherein does the rationality of capitalist enterprise - understood now as Rationalisierung, as a political system of homologation and co-ordination of capitalist action, one that is not merely arbitrary but has an identifiable political institutional basis and framework or project (Entwurf) -, wherein resides this systematic rationalisation of capitalist command in industry? Upon which institutional foundations does it rest? What, indeed, is the essence and force of its universality, of its human supremacy or even irresistibility, and of what does it consist? Better still, is it its rationality that lends the Occident its universality, or is it the universality of the needs that the Occident and specifically capitalism produces and fulfils that bestows upon it the imprimatur, the questionable patina of rationality? And if so, in what manner, by what institutional mechanism does capitalism achieve this rational universal reach? In short, how does capitalism rationalise - now understood in the sense of “justifying”, co-ordinating and legitimizing - its activity and, with that, its entire view of the world (Welt-anschauung), its deontology, its project? 

 

To repeat, there are two components in the Western notion of Reason, and thence of rationality, - one formal and the other substantive. On the formal side, an action is rational if it is efficient, efficacious and calculable in the sense of being both measurable and predictable, and by means of these properties it allows the maximisation of its productivity. What is missing in this formal definition of rationality is (a) its substantive element, that is, the absolute necessity for an action to be “good” for it to be rational (the means must be in accordance with the end they pursue), and (b) any objective assessment of the means themselves (the end does not justify the means) – which implies necessarily that ends and means cannot be assessed separately for their rationality. - Because evidently no amount of efficiency and calculability will turn a nefarious or noxious action into a rational one: – quite the opposite! An irrational action perpetrated methodically can have far worse consequences than one executed desultorily or improperly. Yet in both cases it is not rationality that inspires the method, given that the method compenetrates the action. The notion of rational action simply cannot be confined to a purely formal set of criteria, to a method. What distinguishes methodical action is not its rationality but its predictability. The final goal of human action, its human interest, its substantive rationality, is essential to its being defined or qualified as “rational”. Similarly, the means adopted to pursue a rational end must themselves be rational substantively and not in a mere formal, calculative sense. Only by satisfying underlying human needs and aspirations - human interests - can rational action surge to that “universality of significance and value” to which Weber refers. A formally rational action whose ultimate effect is noxious to human interest can only be defined as “irrational”. The pervasive and ubiquitous separation of means and ends, of method and goal, in Western thought springs from the inability to see that logico-mathematics is a pure tool or “set of tools” of thought, a receptacle, as it were, that assumes the form or shape of whatever end or goal it is meant to pursue yet is otherwise categorically incapable of “in-form-ing” those substantive ends or goals or values. Logico-mathematics is a pure tool of thought, signifying nothing; it is purely tauto-logical, neither true nor false, unless and until it is applied to the pursuit of a specific end, purpose, goal or the observance of a value or belief or calling. In its pure formalism, logico-mathematics is tautological; and in its applications, once the form is filled with content, it categorically can be neither true nor good because truth and goodness cannot be predicated of logico-mathematical concepts either on their own or even when applied to real things or events. 

 

In Hegel’s absolute idealism, there is no conceptual room for irrationality because “whatever is real is rational, and whatever is rational is real”. The irrational is a non-being, comparable at most to the negated, superseded moments of the Idea in its dialectical extrinsication or unfolding in space and time. But after the demolition of Hegelian idealism at the hands of Schopenhauer and Nietzsche, no space is left in Weber’s worldview for Hegelian rationality as teleological destiny because the real and the ideal are separated by a hiatus irrationalis, by the inability of human reason to achieve the congruence or identity of idea and thing, of intellect and reality. After the triumph of the negatives Denken – already anticipated and adumbrated in the Fichtean critique of Hegel -, rationality can be real only in its formal instrumental sense, as the practical, efficient link between adopted means and intended ends; never in its absolute substantive ethical sense as the summum bonum of human endeavour, as the culmination of Reason.   

 

Weber’s famous distinction between Werth-rationalitat (value rationality, the selection of ends) and Zweck-rationalitat (purposive rationality, the selection of means) was meant as a desperate, last-ditch attempt to isolate an objective scientific, technical-neutral criterion of rationality that did not fall into the post-Hegelian trap of “emanationism” that formed the object of Weber’s own trenchant critique of Wilhelm Roscher and the first German Historical School . In his earliest seminal theoretical work on the methodology of the social sciences, Roscher und Knies, Weber demolishes the post-Hegelian teleological approach of his erstwhile teachers, opposing to it the neo-Kantian  Objektivität of his sociological principles. 

 

Pursuant to these methodological tenets, in the Vorbemerkungen Weber makes repeated reference to instances of rationalisation in disparate spheres of human activity such as music, architecture and religious doctrine. Yet, he only manages thereby to indicate the formal aspects of Western rationality, not its substantive real content. Nowhere is Weber either willing or able to define what the substantive notion of this Western rationality or of rationality tout court is – because the path to the Hegelian identification of reality and rationality, let alone the Kantian ethical aspiration to the domain of Pure Reason, is permanently precluded. After the negatives Denken (the philosophical doctrine from Hobbes to Schopenhauer and Nietzsche), no dialectical or rational path to Reason, to the Good, to the summum bonum is possible. All Weber can do is simply describe the conventional and instrumental, as opposed to universal or substantive, instances of rationality – that is to say, the institutional practice of rationalisation that reaches its apotheosis in the capitalist era. And the essence, the kernel of this elusive Weberian ‘rationality’ is clearly the entirely conventional and arbitrary erection on the part of human beings of hypothetical logico-mathematical models and criteria for these disparate and incommensurable, heterogeneous human activities. Again, at each twist and turn of his elusive search, Weber can only enumerate different instances of this rationality at work in its practical aspects without ever being able to define with any precision what is its essence.   

 

It is precisely this essential, substantive element of rationality, then, that is clearly, though not completely, missing from Weber’s attempt to define Western rationalism. – Not completely, because it is evident that despite his attempt to instrumentalise the Western notion of Reason by dividing rationality into Value-rationality (Wert-rationalitat) and Purposive-rationality (Zweck-rationalitat), it is ultimately impossible for Weber to do so without pointing to a substantive purpose or outcome, failing which rationality is evidently reduced to pure formality, to sheer instrumentality – again, to Rationalisierung. By referring to the “universality” of its development in the Vorbermerkungen, Weber is surreptitiously reintroducing the substantive element of rationality and rationalism – the traditional, epochal rationalism of Plato, Descartes and Kant - which the negatives Denken from Hobbes to Schumpeter had consigned to the fictitious, speculative, unscientific, unempirical sphere of metaphysics – indicting it as the most central, essential even, yet decadent and fallacious feature of Western civilisation. But because he fails or declines to explore the nature of this substantive element, of this universality, Weber ultimately ends up identifying the central feature of Western civilisation, of ‘the Occident’, as the conventional measurement – the exact calculability (exakte Kalkulation) - of reality and its hypothetical reduction to measurement. This, then, is the essence of Weber’s concept of Rationalisierung, as articulated in one of the most important passages of his entire oeuvre:  

  

It is perfectly true that 'matter-of-factness' and 'expertness' are not necessarily identical with the rule of general and abstract norms. Indeed, this does not even hold in the case of the modern administration of justice. In principle, the idea of ‘a law without gaps' is, of course, vigorously disputed. The conception of the modern judge as an automaton [m.e.] into which the files and the costs are thrown in order that it may spill forth the verdict at the bottom along with the reasons, read mechanically from codified paragraphs—this conception is angrily rejected, perhaps because a certain approximation to this type is implied by a consistent bureaucratization of justice [m.e.]. (From Max Weber, p.219)]  

 

Weber’s supreme insight on rationalisation is made superbly perspicuous, if not explicit, here: it is not the case, Weber seems to imply, that justice and the law can be reduced objectively to a measurement. But a theoretical conventional institution of law and justice can be so reduced to a human intersubjective reality by way of hypothesis, by means and measurements universally agreed by humans and universally enforced as such. Yet, given his evident failure to evince this insight, and despite his all-too-evident repeated and strenuous attempts to do so, Weber succeeds only in identifying or defining the meaning of ‘rationality’ as ‘rationalization’, as the hypothetical measurement of reality based on its conventional enforcement. Because it is impossible to define and identify a Platonic summum bonum that can serve as a final criterion of rationality (which was the millenary goal of Western rationalism), it follows that rationality can exist only as rationalisation, as the hypothetical reduction of human reality to a series of conventions.  

 

 

Let us parse carefully then, if you forgive the pun, that fatidic passage from Parsons that we quoted earlier: 

 

The question which Weber attempts to answer is simple and fundamental. It is that of the psychological conditions which made possible the development of capitalist civilization. Capitalism, in the sense of great individual undertakings, involving the control of large financial resources, and yielding riches to their masters as a result of speculation, money-lending, commercial enterprise, buccaneering and war, is as old as history. Capitalism, as an economic system, resting on the organisation of legally free wage-earners, for the purpose of pecuniary profit, by the owner of capital or his agents, and setting its stamp on every aspect of society, is a modern phenomenon.  

 

Here is the crux, the crucible and the cross of Weber’s passionate examination of capitalism: on one side we find “the psychological conditions”, the appetitus or conatus, the sacra auris fame that motivates the capitalist – a purely ideal mental force. But on the other side, opposed to this spiritual or mental entity, we find its material antithesis – namely, “an economic system” that produces tangible, material “pecuniary profit” [!] for “the owner of capital”. So here is finally the antithesis, encapsulated by Parsons with tremendous perspicacity, that perspicuously troubles Weber throughout the Vorbemerkungen: - namely, how can a social system generated and maintained on the basis of “psychological conditions” turn into a reliably self-sustaining “economic system” that seems to operate almost automatically according to broadly precise monetary and other measures, chief among them that of “profit”? The all-important question here is: how did this transformation, this alchemy of “psychological conditions” transmuting into “pecuniary profit” come about? How is it at all possible that subjective irrational intentions or drives [Triebe] can result, develop into materially quantifiable pecuniary profits? Put as bluntly as possible: how can mental attributes be transmuted, transmogryphied into materially quantifiable, calculable ones? In the next part of this enquiry, we shall see that Parsons has hit the mark by placing the emphasis on Weber’s focus, remarkably and significantly recurrent throughout the Vorbemerkungen on a specific capitalist institution: “the organisation of legally free wage-earners”!