HIST363: Global Perspectives on Industrialization

While Max Weber is best known and recognized today as one of the leading scholars and founders of modern sociology, he also accomplished much in the field of economics. However, during his lifetime, economics was not nearly as developed as it is today.

From the point of view of economists, Weber is a representative of the "Youngest" German Historical School. His most valued contribution to the field is his famous work, The Protestant Ethic and the Spirit of Capitalism. This seminal essay discussed the differences between religions and the relative wealth of their followers. Weber's work paralleled Werner Sombart's treatise of the same phenomenon, which, however, located the rise of capitalism in Judaism. Weber acknowledged that capitalist societies had existed prior to Calvinism. However, he argued that in those cases, religious views did not support the capitalist enterprise, but rather limited it. Only the Protestant ethic, based on Calvinism, actively supported the accumulation of capital as a sign of God's grace.

Weber's other main contributions to economics (as well as to social science in general) is his work on methodology: his theories of Verstehen (known as "understanding" or "interpretative sociology") and of antipositivism (known as "humanistic sociology").

Max Weber formulated a three-component theory of stratification, with "social class," "status class," and "party class" (or political class) as conceptually distinct elements.

• Social class is based on an economically determined relationship to the market (owner, renter, employee, etc.).
• Status class is based on non-economic qualities like honor, prestige, and religion.
• Party class refers to affiliations in the political domain.

All three dimensions have consequences for what Weber called "life chances".

Weber felt that economics should be a broad science covering not only economic phenomena, but also non-economic phenomena that might influence the economy ("economically relevant phenomena") and non-economic phenomena that, to some extent, had been influenced by economic phenomena ("economically conditioned phenomena"). The name that Weber gave to this broad type of economics was "social economics". Weber's thought in this area provided a platform for productive interdisciplinary dialogue between economists and sociologists. To understand Weber's perspective, one cannot ignore the value he placed on economic history and economic sociology in the study of economic theory.