The Concept of Capitalism in Marx and Weber - Coursework Example

MARX AND WEBER: THEIR CONCEPT OF CAPITALISM AND THE CONTEMPORARY RELEVANCE OF THEIR IDEAS Introduction Karl Marx (1818-1883), the principal theorist of revolutionary socialism, believed that capitalism was an economic system that was destined to have only a brief duration of existence, and would be replaced by a “society without classes, private property or state authority” (Marx & Engels, 2002: ii). According to Max Weber (1864-1920), the core idea of capitalism is that for the sole purpose of increasing the accumulation of wealth, continual investment and reinvest-ment of capital is undertaken. Economic acquisition only for the essential objective of meeting one’s basic material needs is no longer the reason (Weber, 2001: 18). Weber adopted some of Marx’s ideas, viewing Marxism as doctrines of political thought for progressive social reform. According to both Marx and Weber, England is the “classic ground of modern rational capitalism” (Sayer, 1992: 1382). However, the Marxist or Weberian concepts of capitalism are different from that seen in England’s political history and major legal and political institutions. England becoming the home of capitalism is attributed to these deviations. The early formation of England as a national state and the continued existence of its main institutions led to the long term development of a civil society in which capitalist economy was possible. Sayer (1992: 1382) states that the correlation of Marxist and Weberian ideal types of rational capitalism with a historical sociology of capitalism in England or elsewhere need to be reconsidered. This paper proposes to compare Karl Marx and Max Weber’s concepts of Capitalism, and to identify the contemporary relevance of their ideas. Evaluation will be undertaken of the extent to which Marx and Weber’s concepts are applicable today, in the context of recent events of contemporary times in political, economic and social spheres. Discussion General Characteristics of Max Weber and Karl Marx Karl Marx’s works: Capital and the Communist Manifesto made the author a powerful force of international importance, and his ideas were studied as Marxism. The interpretations of his ideas had a significant “impact on the history of the 20th century, from the success of the Russian Revolution to the to the collapse of communism in the late 1980s” (Kivisto, 2004: 2). On the other hand, Weber’s theories of Sociology, Political Science, Economics, Economic History and political writings on relevant topics have failed to develop even within the limited area of their own fields of social science and the analysis of contemporary politics. A whole social division of people adopts Marx’s concept about historical human purpose. But Weber, even soon after his death is viewed as the obsolete advocate of political and economic liberalism. In spite of Weber’s limited influence, his work which dealt with several topics and disciplines represent all the significant criteria of life in contemporary times (Lowith, 1993: 45). Furthermore, in Weber’s most famous thesis on the relationship between what he termed as the “Protestant ethic and the spirit of capitalism” he argued that there was affinity between the Protestant theology and the universal view of capitalism. He observed that this affinity accounted for the fact that capitalism emerged in those countries where the “Protestant reformation had proven to be successful”(Kivisto, 2004: 2). Weber acquired large quantities of scientific material, and was a keen observer of the political events of his day, in the same manner as Marx. It is worth noting that both Marx and Weber had demagogic leadership qualities, appealing to the masses (Lowith, 1995: 45). Both Marx and Weber expressed personal hostility towards wrong occurrences, by forcefully attacking everything from trivialities to serious matters of state. Comparison of Karl Marx and Max Weber’s Approaches to the Concept of Capitalism Through his writings, Marx attempted to reveal the methods and reasons for which capitalism which was driven by the quest for profits, exploited the labour class, and prevented the prevalence of a “just, humane and equitable society” (Kivisto, 2004: 2). Since the theorist almost completely focused his attention on capitalism and also had an aversion to Utopian dreamers, he did not describe what the alternative and possibly non-exploitative system, which he called socialism or communism would look like. Marx’s focus on class analysis and the base-superstructure are incorporated into Weber’s earlier writing. In their research, both theorists focus on the capitalist sytem of modern economy and society. Though Marx and Weber differed in cognitive issues, doctrines and beliefs, both viewed capitalism as an all-encompassing factor which covered the economic, political and cultural history of modernity (Seidman, 1984: 386). As early as 1889, Weber has highlighted the capitalism problem in his dissertation on the history of trading companies in the Middle Ages, and forms the central theme in his work on the East Elbian social condition (1892-1895) in The Protestant Ethic, Economy and Society, his comparative studies on religion and society, and his translated lectures titled General Economic History (Seidman, 1984: 386). There are fundamental differences between Weber’s and Marx’s theories of capitalism. Besides the ideal or cultural origins of capitalism, Weber investigated the “political, legal and broad institutional preconditions and structure of capitalism” (Collins, 1980: 925). Marx reduced the ideas on the origins of capitalism to the analysis of primitive accumulation on a material basis, but Weber explained the historical development of capitalism with a multi-dimensional approach. From a material point of view, Weber believed that as a result of his study of patrilineal bureaucratic societies as in Egypt, Roman Empire and China, modern capitalism could prevail only in a highly differentiated society. From a historical view-point, the cultural and institutional development of capitalism over the long-term, is analyzed by Weber with concern and maturity (Collins, 1980: 925). According to Lowith (1993: 16), Marx and Weber’s ideas continue to be an original and powerful contribution to the development of social theory based on the central issue of modern philosophy, which is the relationship between essence and existence. Weber’s Rationalisation and Marx’s Human Self-Alienation: Though Weber believed in some of Marx’s ideologies on the capitalism problem, Weber’s writings moved to the more general problem of Occidental rationalization, which he considered to be a part of the capitalism question. The unique factor in modern Occidental culture, according to Weber, was “calculability” (Seidman, 1984: 388). Besides calculability are the efficiency and predictability factors related to capitalism, all of which help to increase profits by impacting the efficiency of the system towards more accountable profits, which can be sustained consistently for improving predictability of increased turnover. The rationalization and alienation themes of Weber and Marx respectively put forth the same historic-philosophical problem: the analytical arguments for arriving at the truth regarding freedom and domination, or the contradictory relationship between man and fate. The rationalization concept is seen as an idealistic adaptation by Weber of Marx’s alienation theory, as the continued conflict between “value rationality and instrumental rationality bereft of its Utopianism” (Weber, 1951: 258). Weber believed that an increasing rationalization of the social world was crucial to the concept of modernity. The idea of class and class struggle that Marx focused on, formed a part of Weber’s investigations. At the core of modernity lay reasoning and the need to exert control over the functioning of the world. In alignment with the earlier claim made by the French philosopher Descartes, to become the owners of the earth it was believed that certain actions were essential. The improved method of functioning was to rationally (scientifically) investigate the operations of the world, and use the power of reasoning to organize oneself and one’s institutions, so that modernisation takes place through greater rationalisation. Weber believed that rationality is the living of daily life according to rules and an overall consistent scheme, and creating a logical and efficient process of following means to ends. Rationalisation is also the “systematization of belief and action, the elimination of logical inconsistencies, the disarming of the magical and mystical” and a shift away to a more abstract or general form of thinking (Morrison, 1995: 41). According to Weber, the emergence of modern rationality is closely related to the growth of capitalism as a system of economic and social life and the development of the nation state (Morrison, 1995: 42). Marx observed that the basic origins of modern social relations lay in dominant economic interest which create and develop the modern capitalist social system. “Modern capitalism is the most powerful productive system yet evolved” which brings to the forefront man’s creative abilities, but also poses a hurdle for the growth of man’s other creative abilities. This aspect is central to the concept of modern society (Morrison, 1995: 47). The alienation concept of a young Marx seen in his early manuscripts of 1843 and 1844 encompasses several factors. The term alienation suggests a separation of entities which naturally belong together, or the introduction of hostility or indifference among things which are in a harmonious relationship with one another. Marx’s use of the concept of alienation indicates abnormalities in the occurrences that he describes, which follow these general patterns. For example, division of labour is alienating since it divides people into different categories, activities required for each specialization are developed to the detriment of each individual’s integrated wholeness as a human. According to Marx, capitalism further alienates people from one another by promoting mutual indifference to one-another’s difficulties, and pitting the interests of people against each other. Furthermore, Marx views an individual’s participation in society as a citizen, to be an alien experience of false identity, to be adopted at particular times times only. Also, the common life of the people in which they sustain themselves through material production and exchange, is alienated from the political state (Wood, 2004: 3-4). Weber revises Marx’s theories on two significant points: he defines class focusing on inequality of consumption opportunities, as opposed to the production side with its connection to exploitation. The second point of important deviation from Marx is that, according to Weber, classes are not natural communities unlike groups which share other common factors such as race, gender, religion, language, occupation, and so on. Furthermore, Weber with his multi-dimensional approach, takes both culture and politics very seriously (Janoski, 2005: 85-86). According to Weber’s theory of rationalization, the various institutions in society are interconnected. The modern age which gave significance to reason, was characterized by a rational, scientific worlview. The factors of predictability, calculability, efficiency and control resulted from rationalisation being applied to a capitallist economy. Weber was a great pessimist of his day, and he believed that the increasing progress of rationalisation and its off-shoot of bureaucratization threatened the people’s freedom. He perceived a future which would resemble an “iron cage” (Kivisto, 2004: 3). In this discussion so far we have seen that there are similarities as well as fundamental differences between Weber’s and Marx’s theories of capitalism. Their views are similar towards a capitalist system of modern economy and society, as seen in Weber’s interpretation of the bourgeois-capitalist world in terms of rationalization; and in Marx’s interpretation of capitalism in terms of alienation among people. On the other hand, Weber’s multi-dimensional approach towards capitalism including the material and historical viewpoint, as well as political, legal and broad institutional aspects is different from Marx’s approach towards capitalism based on the origins of primitive material accumulation alone. Contemporary Relevance of the Ideas of Karl Marx and Max Weber Karl Marx and Max Weber are two of the early sociologists who not only developed the basic structure of the discipline, but have an enduring influence on Sociological and Political thinking today. They are aknowledged to have had extraordinary insight into the intrinsic features and dynamics of the modern age. Economic transformations resulting from increased industrial capitalism have led to social changes which can be understood with the insights provided by the ideas of Marx and Weber. Similarly, changes in cultural characteristics and functions of modernity and postmodernity, and the political transformations caused by globalization are all explained by their concepts and ideas of capitalism (Kivisto, 2004: 1). According to Weber, “modern society, especially in the west, is growing increasingly rationalized, and the ultimate example of rationalisation is the bureaucracy” (Ritzer, 2004: 39). It is seen that Weber’s description of rationalization and bureaucratisation have accelerated, with the replacement of the bureaucracy by fast-food restaurants which are spreading through western societies as well as globally. The Weberian idea of rationalization is believed to specifically apply to the concept of the “McDonaldization” of society (Ritzer, 2004: 39). Replacing people with nonhuman technology is part of rationalisation, in order to improve “efficiency, calculability, and predictability” (Ritzer, 2004: 49). Efficiency involves making use of the consumers for doing some of the labour, instead of using hired help for the same purpose, thus choosing the optimum means to the end, as seen in self-help counters and supermarkets today. Calculability is the concept of emphasizing quantity rather than quality, thus giving more importance to larger quantities of goods, at the cost of quality. This feature is observed in all aspects of commercial industry and trade in contemporary society. The predictability factor denotes people in a rational society requiring to know “what to expect in all settings and at all times”. In contemporary society, technology has taken over many aspects of life, and even outdoor adventure activities like camping have been made less inconvenient with features to improve comfort and predictability. Similar examples are air-conditioned malls, where the weather outside is not a cause for concern; and modern suburban homes in localities which are predictable and safe (Ritzer, 2004: 44-48). The main function of capitalism, according to Marx was not the production of goods for the purpose of use, but the production of exchange value in economic terms. The capitalist mainly aims at the production of surplus value. Marx defined value as “the total amount of labour time expended in the production of a given commodity” (Walsh & Zacharias-Walsh, 2004: 9). The shift in the purpose of production of goods from use value to exchange value is the foundation of many of the dynamics of capitalism including the requirement for an endless working day. It is this transformation that is now seen in society. There is no longer a system that meets human needs, since capitalism is the accepted economic form; and it is driven by the purpose to produce value. This in turn impacts human concerns detrimentally, since they are replaced by actions to maximize surplus value. Regardless of a capitalist’s will or purpose, exploitation is an intrinsic part of capitalism. Labour power or the ability to do labour is a commodity. Marx’s approach is that when a capitalist maximizes the amount of time that a labourer will work in a day, the former would be able to maximize the rate of return that he gets for the wage he pays: thus mazimizing the rate of surplus value (Walsh & Zacharias-Walsh, 2004: 10). More than one hundred and twenty-five years ago, Karl Marx fore-saw that under the system of capitalism, workers would be increasingly at a disadvantage economically, with growth in production and profits. This is because this pattern is believed to be a part of the capitalist mode of production. Growing inequality and polarization between the labour class and the owner or landlord classes in contemporary times can be interpreted in terms of Karl Marx’s view of capitalism widening the economic gap between the rich and the poor in society. His theory reveals the contradictions and the functioning which are a part of the capitalist system which “converts all human relations into economic relations” (Kivisto, 2004: 8). Longer work days in contemporary times, emphasizes the capitalistic form of the economy. With globalization being a key phenomenon from the late twentieth century, Marx’s prediction of its impact more than one hundred and fifty years ago is seen to be true. Capitalism is converting the world into a single market with the continents: Europe, Asia, and the Americas developing into three rival trading sectors within that market. A common language such as English, common fashions and dress codes, translation of books into several languages for global use, are commonly prevalent today, due to capitalism’s global market. “Globalization is set to become the biggest political issue of the next century”, states Antonio (2003: 267). Economists point out that failure to meet the global challenges could result in social disintegration, with child labour, avoidance of corporate tax, and closed down factories becoming common. One idea of Marx that had inconsistencies, and does not have contemporary relevance is his belief that the economic system is dependent on labour as the source of all value. But his most important achievement as an economist was “placing the entrepreneur and the profit motive” centrally in the study of economic development (Antonio, 2003: 268). The contemporary relevance of Weber’s views on rationalization are seen in the contemporary rationalization of law, politics and industry and the spread of bureaucracy in modern capitalism; which influence each other mutually. The rationalization of action which is observed in all areas of western culture such as art, music, and architecture manifests in the concrete form as administrative bureaucratisation. The shift towards rationalization in the west is mainly due to the extension of the capitalist market, and other factors; “but it must not be regarded as an inevitable evolutionary trend”, states Giddens (1971: 183). Conclusion Karl Marx’s views against capitalism and advocacy of a society “without classes, private property or state authority” (Marx & Engels, 2002: ii) is meant to be an effective criticism of capitalism involving the exploitation of workers and of the “authoritarian regimes of Soviet-style state socialism” (Turner, 1999: 51). In actual fact, the authority of Marxist theory has not been universally accepted because of the failure of Marxism to predict the disintegration of East European communism and the Soviet Union. Marxist theory has to be restructured from its roots, which will entail a “fundamental re-appraisal of the scientific and political relationship between Marxism and sociology, that is between Marx and Weber”, states Turner (1999: 51). Though Marx’s theories as a social analyst impressed Weber, there is very little discussion of the work of Marx in Weber’s sociology, one of the reasons being that he would not have had access to some crucial works of Marx which were published only much later. However, the important similarity and connection between Marx’s concept of alienation and Weber’s concept of rationalization reveals that some relationship did exist between the two scholars’ ideas (Turner, 1999: 3). Further, Marx believed that the revolutionary struggles of the working class would result in social transformation. On the other hand, Weber’s work was based on concern for human dignity but the theorist remained pessimistic about the prospects of human freedom, due to the impact of rationalisation on society. Lowith (1982: 25) summed up this difference in the beliefs of Marx and Weber by stating that “Marx proposes a therapy while Weber has only a “diagnosis” to offer”. References Antonio, R.J. 2003. Marx and modernity: key readings and commentary. United Kingdom: Blackwell Publishing. Collins, R. 1980. Weber’s last theory of capitalism: a systematization. American Sociological Review, 45 (December): 925-942. Giddens, A. 1971. Capitalism and modern social theory: an analysis of the writings of Marx, Durkheim and Max Weber. United Kingdom: Cambridge University Press. Janoski, T. 2005. The handbook of political sociology. United Kingdom: Cambridge University Press. Kivisto, P. 2004. Illuminating social life: classical and contemporary theory revisited. United Kingdom: Sage Publications. Lowith, K. 1993. Max Weber and Karl Marx. London: Routledge. Marx, K. & Engels, F. 2002. The communist manifesto. England: Penguin Classics Publishers. Marx, K. & Engels, F. 2002. The holy family. England: University Press of the Pacific. Morrison, W. 1995. Theoretical criminology: from modernity to post-modernism. Great Britain: Cavendish Publishing. Ritzer, G. 2004. The Weberian theory of rationalization and the McDonaldization of contemporary society. In Illuminating social life: classical and contemporary theory revisited. P. Kivisto (ed.), Chapter 2, pp.38-58, United Kingdom: Sage Publications. Seidman, S. 1984. The main aims and thematic structures of Max Weber’s Sociology. Canadian Journal of Sociology, 9 (4): 381-404. Sayer, D. 1992. A notable administration: English state formation and the rise of capitalism. The American Journal of Sociology, 97 (5): 1382-1415. Turner, B.S. 1999. Classical Sociology. London: Sage Publications. Walsh, J.P. & Zacharias-Walsh, A. 2004. Working longer, living less: understanding Marx through the workplace today. In Illuminating social life: classical and contemporary theory revisited. P. Kivisto (ed.), Chapter 1, pp.5-32, United Kingdom: Sage Publications. . Weber, M. 2001. The protestant ethic and the spirit of capitalism. Great Britain: Routledge. Weber, M. 1951. The religion of China. New York: Free Press. Wood, A.W. 2004. Karl Marx. United Kingdom: Routledge. Read More