Sunday, September 11, 2011

The Spirit of Capitalism

I have been reading Max Weber’s seminal work, The Protestant Ethic and the Spirit of Capitalism lately and it illuminates a great deal about the spirit of our times—a spirit that has been termed The Age of Greed by Jeff Madrick in his recent book of that name. And while what Madrick describes is really the transformation in the last 40 years of America from an industrialized society to a financialized one, it doesn’t address the origins that interest me here. Weber was interested in this too. His question really was not only ‘why do people work to begin with’ (primary cultures had no concept called “work” at all and only exerted themselves periodically in war or in short-term hunting and gathering), but more relevant to his time, ‘why do people in modern society identify themselves as laborers?’ How was it possible for western culture to transform itself from a traditional culture where labor hardly existed except as part of a manorial household, to post-1600s capitalist society where free laborers are yoked to paying jobs in capitalistic enterprises? More specifically, how could a state of mind that Weber finds best illustrated in Ben Franklin (a penny saved is a penny earned; time is money; credit is money—i.e. it is a duty to increase one’s capital) come to be adopted by whole societies when, in the Middle Ages and before, that state of mind would “have been proscribed as the lowest sort of avarice?” As sinful greed? To illustrate how remarkable this is, Weber compares traditional laborers with modern laborers. A farm owner, for example, who pays his workers at a piece-rate (like modern farm workers paid at so much per bushel), thinks to increase production by increasing rates. This works with modern workers, but when applied to traditional laborers, the increased rate backfires. The traditional worker, that is, not only does not increase his work rate, he decreases it—he works slower so as to still earn the same daily amount. As Weber summarizes it, “the opportunity of earning more was less attractive than that of working less.” Thus the attitude of traditionalism:

A man does not “by nature” wish to earn more and more money, but simply to live as he is accustomed to live and to earn as much as is necessary for that purpose. (60)
Weber then devotes his entire book to explaining how Protestantism, especially the Calvinist branch of the Reformation, changed this traditionalist attitude towards work. While a “surplus population which it can hire cheaply” is necessary for capitalism to develop and thrive, so, he says, is a “developed sense of responsibility.” That is, for capitalism to work, “labour must…be performed as if it were an absolute end in itself, a calling.” Far from being natural, or even the product of high or low wages, this attitude “can only be the product of a long and arduous process of education” (62). And the educating body was, originally at least, Protestantism. It is important to note that this education in work did not, at least at first, involve an education in greed, much less enjoyment. To the contrary, Weber makes clear that the essential ingredient, in the beginning, involved a kind of asceticism—not the asceticism of the monastery, but an asceticism in the world. To make labor a calling, that is, meant making labor an obligation in the service of God, of salvation. One was schooled in the idea that hard and constant work was an end in itself, the way of salvation for the average person, and that saving the money one earned was part of that obligation. In order to save, of course, one had to be frugal, buying only what was absolutely necessary. The asceticism that had been the mark of the otherworldly Catholic monastery, that is, was brought into the world. So one worked, one saved (“a penny saved is a penny earned”) and one eventually prospered. It is a commonplace that in the American colonies during the Puritan period (Boston, etc.), these essential elements were merged in such a way that prospering in business became synonymous with salvation—or rather, prospering became a sign of salvation. This is because though election (salvation) or damnation was pre-determined by God, the actual judgment was uncertain, and this uncertainty was almost intolerable. One’s prosperity thus became a sign, a way for the uncertainty to be resolved. The opposite was also true: poverty became a sign of damnation, making the poor doubly damned—both in this world and the next. The sad truth is that many Americans still maintain these essential attitudes.

Work as a calling then, work as a duty, and success in work as a sign of salvation are the essential elements of the Protestant ethic. They are also the essential elements of the spirit of capitalism. As Weber puts it,

the expansion of modern capitalism is not in the first instance a question of the origin of the capital sums which were available…but, above all, of the development of the spirit of capitalism (68).
This is not to say that Protestantism ignored the dangers of wealth. Weber cites the writings of Richard Baxter as illustrative. And there, the key to this danger involved idleness and the temptations of the flesh it exposed one to. As Weber interprets Baxter, “Waste of time is thus the first and in principle the deadliest of sins….Loss of time through sociability, idle talk, luxury, more sleep than is necessary for worthy of absolute moral condemnation” (157). A person was thus led to work constantly, to save what he earned, never to enjoy the fruits of his labor, but rather invest those savings as an entrepreneur in new opportunities for more work (and wealth). So while the ethic frowned on wealth and the luxuries it fostered, it at the same time had the “psychological effect of freeing the acquisition of goods from the inhibitions of the traditionalist ethic. It broke the bonds of the impulse of acquisition in that it not only legalized it, but looked upon it as directly willed by God” (171).

Weber ends his work with the ironic contradiction involved in this religiously inspired ethic. He quotes John Wesley, the co-founder of Methodism, as follows:

“I fear, wherever riches have increased, the essence of religion has decreased in the same proportion. Therefore I do not see how it is possible, in the nature of things, for any revival of true religion to continue long. For religion must necessarily produce both industry and frugality, and these cannot but produce riches. But as riches increase, so will pride, anger, and love of the world in all its branches….So, although the form of religion remains, the spirit is swiftly vanishing away.” (175)
The protestant entrepreneur, in this way, not only won the “feeling of God’s grace” for doing his duty in getting rich, but also a supply of “sober, conscientious, and unusually industrious workmen, who clung to their work as to a life purpose willed by God.” This ethic comforted the capitalist entrepreneur as well that the “unequal distribution of the goods of this world was a special dispensation of Divine Providence.” For had not Calvin himself said that ‘only when people, i.e. the mass of laborers and craftsmen, were poor did they remain obedient to God?’ (177). He had. So low wages, themselves, had been rationalized and justified by the divine.

The Protestant ethic, in sum, according to Weber, not only sanctified labor as a calling enabling a worker to be certain of his election, it also legalized, for the capitalist, the “exploitation of this specific willingness to work.” A Daily Double if there ever was one.

It takes little to see how these attitudes and rationalizations are still in use today. America sanctifies capitalism as literally the manifestation of both God’s will and the natural order of things. American media also lionizes those entrepreneurs who, at least according to their own myth, raise themselves by their own bootstraps to become rich—to become “elect” in modern society’s terms. Finally, American capitalism rationalizes the unequal distribution of wealth and goods in this world as simply the workings of natural or divine laws with which mere humans cannot quarrel.

To Max Weber’s credit, he ends his study with a scathing reminder that though this ethic began in the cloak of saintliness, its apotheosis in industrial capitalism became “an iron cage.” Had he known about capitalism’s most recent metamorphosis into an ongoing financial heist creating ever more inequality, his critique would have been far more savage.

Lawrence DiStasi

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