Exordium

A specifically bourgeois economic ethic Max Weber, the Protestant Ethic and Neoclassical Economic heory
What the great religious epoch of the seventeenth century bequeathed to its utilitarian successor was, however, above all an amazingly good, we may even say a pharisaically good, conscience in the acqusition of money, so long as it took place legally. Every trace of the deplacere vix potest has disappeared. A specifically bourgeois economic ethic had grown up. With the consciousness of standing in the fullness 1 ! of "od#s grace and being visibly blessed by $im, the bourgeois business man, as long as he remained within the bounds of formal correctness, as long as his moral conduct was spotless and the use to which he put his wealth was not ob%ectionable, could follow his pecuniary interests as he would and feel that he was fulfilling his duty in doing so. &he power of religious asceticism provided him in addition with sober, conscientious, and unusually industrious workmen, who clung to their work as to a life purpose willed by "od.

In this telling passage from the last chapter of Webers 'rotestant Ethic dedicated to Asceticism, the great German scholar draws a clear and unmistakable link between the world-changing emphasis of the Protestant faith on work (rbeit! as the road to sal"ation and its manifestation or reward in the outward signs of material wealth and success # the light cloak that nefariousl$ turns into an iron cage% &et in tracing this link between the Protestant 'thic and the (pirit of )apitalism and then designating the former as a specifically bourgeois economic ethic Weber unwittingl$ in"erts or, more accuratel$ as we are about to see re"erses, the real content of what trul$ constitutes the specificit$ of this bourgeois ethic% *he aim of this piece # as intrepid, I belie"e, as it is original # is to show that the Protestant Work 'thic, though it certainl$ pla$ed a historical role in the rise of the (pirit of )apitalism, most certainl$ could not pro"ide a logical coherent foundation for a specificall$ bourgeois economic ethic, and was in fact in complete opposition to and e"en in contradiction with such ethic% +$ so doing, we hope to pro"ide a re"ealing original interpretation and criti,ue of the world"iew introduced b$ the negatives )enken # a world"iew that, whilst in strident opposition to the uni"ersalistic claims of Western metaph$sics and theolog$, has come to dominate implicitl$, though not e-plicitl$, the science and ideolog$ of global capitalism% .ur thesis here is that the Protestant Work 'thic retains the )hristian and (cholastic genes of mediae"al theolog$ and /usnaturalism 0atin, %us naturale, 1atural 0aw! that will ultimatel$ form the foundations of )lassical Political 'conom$ and of the 0abour *heor$ of 2alue # both of which are emphaticall$ antithetical to an$ "ersion of a specificall$ bourgeois and capitalist! economic ethic% *he real, true and canonic bourgeois economic ethic # indeed, an entire imponent metaph$sics, as we shall show # is and could onl$ be constituted b$ what has come to be known as neoclassical

economic theor$, a theor$ that from its earl$ beginnings in the middle of the nineteenth centur$ on the back of 3obbesian and 0ockean possessi"e indi"idualism and then through its direct predecessor, the negatives )enken initiated b$ (chopenhauer, has come to dominate and permeate the entire one-dimensional uni-"erse of bourgeois orthodoeconomic science% We characteri4e this philosophical and socio-theoretical current, immensel$ influential to this da$ - though this is far from ob"ious to e"en the most percepti"e scholars in economics especiall$ - as negatives )enken or negati"e thought% *he meaning of this description will become apparent in the course of our e-position as we trace the salient aspects of the negatives )enken with special reference to the field of economic theor$ as e-pounded and articulated b$ 1eoclassical *heor$% 5or although in the world"iew of the negatives )enken labour can consume existing wealth or nature to pro"ide for indi"idual wants when it comes into contact with this nature, it can b$ no means create or produce greater wealth to satisf$ or pro"ide for human wants unless this labour can be made more producti"e b$ capital% Aphoristicall$ put, one might sa$ that for the Protestant 'thic production leads to greater wealth and possessions b$ means of labour understood as penitence toil and abstinence or parsimon$! whereas for the negatives )enken it is the renunciation of present consumption that leads to future accumulation through the di"ersion of labour to the production of capital% The essential feature that both the Protestant Ethic and the negati!es "en#en have in common is that for both labour is sacrifice and penance or toil and effort: yet the all-important difference is that for the first labour pro-duces greater wealth, regardless of whether this wealth is then saved or consumed, whereas for the second this is impossible given the essence of labour as want or provision for want, and only the renunciation of consumption, the con uering or sublimation of want, can lead to the accumulation of wealth provided that this renunciation is devoted to the production of labor-saving tools and ultimately e!change values" We wish to demonstrate here that whilst 1eoclassical economic theor$ and a fortiori the negatives )enken gi"e absolute pre-eminence to sacrifice and renunciation as the real foundation, source and origin of greater wealth or production, /ust as the Protestant 'thic did, the$ den$ most "ehementl$ that labour can be the real source and origin of greater wealth and assert rather that that source and origin is to be found in capital understood as the saving of labour or better still as the diversion of labour from immediate consumption to production goods or labour*saving tools # or, in other words, means of production or capital% Indeed, for the negatives )enken and for 1eoclassical *heor$ it is ,uite simpl$ metaph$sicall$ impossible for labour to be the source and origin of wealth of an$ description6 if an$thing, labour is seen as consumption of wealth, as want or as pro"ision for want +edarf! to ensure sur"i"al% 5or 1eoclassical *heor$ thus labour has no utilit$ and is rather dis-utilit$6 labour is effort, toil and pain - thence it cannot be the substance of or be embodied in an$ kind of wealth or goods% 1ot labour, but renunciation of consumption, which includes labour-as-consumption 7!, in fa"our of the production of labour-sa"ing tools can lead to the accumulation of wealth% 1ot onl$, then, is labour not the source of wealth-creation for the negatives )enken, but labour is e"en considered as a form of consumption of wealth

to secure its own subsistence7 5urthermore, as we will show presentl$, for the negatives )enken the accumulation of wealth must be de"oted not to consumption but to the production of .b/ecti"e 2alue or goods for e-change8 the necessar$ corollar$ of this condition is that if the increased production is not to be consumed, that part of it that is constituted b$ consumption goods can then be used onl$ toward the purchase of the labours of other indi"iduals who do not or cannot afford to sa"e%

*he protestantische Ethik as enucleated b$ Weber still e-pressl$ glorifies labour as the direct and positive source and motor of wealth-creation, that is to sa$, as the substance of all e-cept natural wealth, b$ tracing the spirit of capitalism back to the )hristian notions of human e-piation of the original sin through the ascetic dedication to work and pra$er as in the +enedictine motto # ora et labora work and pra$!% *he de"otion to work and pra$er represents a withdrawal from the world b$ subtracting time from the pursuit of worldl$ and mundane pursuits that sinfull$ pri"ilege this world and this life against the other world and the afterlife, abo"e all b$ e-alting the toil and sacrifice to which man was condemned when e-pelled from the Garden of 'den% Work and pra$er represent therefore the rightful pious means of e-piating for the original sin of mankind and its e-pulsion from hea"en% *his is an e--piation 0t% pius, pious! that is e,uall$ a red-emption 0t% red*emptio, bu$ing back! of mans sal"ation, of mans original state of hea"enl$ bliss or grace8 - e-piation and redemption that represent a renunciation of the e"anescent terrestrial world the Augustinian civitas terrena! and an a-scent back to paradise 0t% ascensio, climbing up 9to paradise or civitas )ei:!% *he task and substance of this (*skesis is therefore the withdrawal from and denigration of the world and mundane pleasures b$ the ascetic through the sheer renunciation of these pleasures and of consumption% *his )hristian deontolog$ and ethic of ascetic renunciation was articulated earl$ in the ;iddle Ages b$ the monastic sects +enedictine and 5ranciscan! and was then sharpened and e-asperated in the determinist eschatolog$ of the Puritan Protestant Work 'thic% 5or the Protestant Work 'thic, there are two aspects to the (skesis8 one is the toil represented b$ labour as penance and atonement for the original sin, and the other is the parsimon$ that de"otion to labour entails as a result of being a material di"ersion from consumption% &et, as we shall demonstrate here, this renunciation, in its German "ersion as Entsagung, a term coined b$ Goethe, will undergo a profound and radical reformulation through (chopenhauers metaph$sics and ethics as a direct and profoundl$ influential negation of )lassical German Idealism, most "irulentl$ in opposition to the uni"ersal rationalism of 3egels dialectics% (o radical was the reformulation of the )hristian and ascetic world"iew at the hands of (chopenhauer and the theoreticians that followed in his wake - from 1iet4sche to Weber and 3eidegger in philosoph$, ;ach in science, and the Austrian (chool in economics # that we can indeed speak of a re"ersal ,m*kehrung! of that world"iew whereb$ first its metaph$sics and then its ethics were thorough$ turned inside out until the$ found practical e-pression in 1eoclassical *heor$ from the earl$ marginalists to the Austrian (chool, to General ',uilibrium%

Weber percei"ed the central difficult$, the apor$ in his thesis, as these passages demonstrate8
<ationalism is a historical concept which co"ers a whole world of different things% It will be our task to find out whose intellectual child the particular concrete form of rational thought was, from which the idea of a calling and the devotion to labour in the calling has grown, which is, as we ha"e seen, so irrational from the standpoint of purely eudaemonistic self*interest , but which has been and still is one of the most characteristic elements of our capitalistic culture% We are here particularl$ interested in the origin of precisel$ the irrational element which lies in this, as in e"er$ conception of a calling% -orbermerkung, pp%=>-?!%
In fact, the summum bonum of 9this: ethic, the earning of more and more mone$, combined with the strict a"oidance of all spontaneous en/o$ment of life, is abo"e all completel$ de"oid of an$ eudaemonistic, not to sa$ hedonistic, admi-ture% It is thought of so purel$ as an end in itself, that from the point of "iew of the happiness of, or utilit$ to, the single indi"idual, it appears entirel$ transcendental and absolutel$ irrational% ;an is dominated b$ the making of mone$, b$ ac,uisition as the ultimate purpose of his life% 'conomic ac,uisition is no longer subordinated to man as the means for the satisfaction of his material needs% *his re"ersal of what we should call the natural relationship, so irrational from a nai"e point of "iew, is e"identl$ as definitel$ a leading principle of capitalism as it is foreign to all peoples not under capitalistic influence% At the same time it e-presses a t$pe of feeling which is closel$ connected with certain religious ideas% 'E, beginning of )h%@, *he (pirit of )apitalism%!

5or Weber, capitalist industr$ is supremel$ rational in that it relies on the arithmetical surplus of profit o"er costs in the process of production and market e-change of goods% Its rationalit$ is purel$ instrumental or purposi"e, .weck*rationalitat! and not substanti"e Wert*rationalitat! because it is made tangible b$ the abilit$ of the capitalist to calculate precisely the profitabilit$ of his enterprise through the medium of mone$% It is this /alkulation that makes capitalism a supremel$ rational human endea"or for Weber% .n the other hand, apart from the fact that all callings or "ocations are irrational in the sense that the$ do not ha"e a material origin, and apart from the fact that the Protestant calling leads to the indefinite accumulation of wealth, the capitalist calling appears irrational to Weber also because, on one side, the capitalist seeks to accumulate wealth through the e-ertion of labour, and $et at the same time the de"otion to labour in the 9capitalist: callingA 9is:Airrational from the standpoint of eudaemonistic self*interest% In other words, Weber correctl$ points out, the entire capitalist enterprise seems wholl$ irrational and counter-producti"e from the "er$ self* interested standpoint of the capitalist7 If indeed the aim of the capitalist is the eudaemonistic self*interested one of accumulating wealth, it is then irrational to think that this can be done through the de"otion to labour or mone$ when it is blatantl$ ob"ious that such de"otion represents an indefinite renunciation of the "er$ wealth or self-interest that the de"otion to labour or to mone$ is meant to help accumulate7 And the con"erse is e"en more true and irrational8 for it is irrational in the e-treme to suppose that a de"otion to labour that is meant as e-piation for the original sin can be pursued so ascetically when one knows that it will actuall$ result in the accumulation of wealth7 Weber is sa$ing, ,uite "alidl$, that a calling that at one and the same time pursues wealth through labour when labour is ipso facto the di"ersion of time for consumption to time for production and therefore to total abnegation of the self or

renunciation of wealth # that such a calling can onl$ be classed as irrational, in complete contradiction with the calculating rationalit$ that mone$ makes mathematicall$ possible for the capitalist7 Worse still, the indefinite accumulation of wealth that is a b$-product of the de"otion to labour is irrationall$ inconsistent with its original goal of e-piation of the original sin% &his interesting 0contradiction1 between 0devotion to labour1 and 0accumulation of wealth1 should have prompted Weber to reassess the legitimacy of the link between the 'rotestant Work Ethic and the 2pirit of 3apitalism not so much in historical terms, where it may well be accurate and even legitimate 4 but above all in terms of the internal consistency of such a link, and therefore of its ability to be adopted effectively by the capitalist bourgeoisie as a lasting ideology capable of being presented not %ust as 0a specifically bourgeois economic ethic1 but indeed eventually 5in the late nineteenth century6 as an 0economic science1. Interestingl$, it was another 1eoclassical economist, the Italian 2ilfredo Pareto, who first distinguished between ideologies and their deri"ations that ma$ be functional to the interests underl$ing them and those that ma$ be d$s-functional or detract from those interests% Webers own notion of .weck* rationalitat is aimed at assessing the purposi"e rationalit$ of gi"en means at achie"ing stated aims%! Another important inconsistenc$ with the Protestant ethic is that the accumulation of wealth in capitalist industr$ is impossible as the result of purel$ indi"idual e-ertion or toil or sacrifice, but rather through the command o"er the labours of other indi"iduals # something that is clearl$ inconsistent with the status of the de"otion to labour as e-piation or sacrifice% 5or it is preposterous to suggest that one ma$ e-piate and atone for ones sins vicariously b$ accumulating the labour of others7 If indeed labour is the real motor of the accumulation of wealth, then it becomes impossible for the capitalist to e-plain the legitimac$ of his profits% As e"er$ capitalist knows, an$ accumulation of capital on an$ suitable scale is possible onl$ through the use of the labours of man$ workers, not /ust the work of the indi"idual capitalist7 As ;ar- established, capital is the concentration of workers in one place, what he called the concentration of capital distinct from the concentration of capitals which refers to the need for capitalists to e,uali4e the rate of profit across different markets%! Weber himself in the first ,uotation abo"e specified how the capitalist, apart from feeling /ustified in his profits through the Protestant Work 'thic, ac,uired also through this 'thic a workforce of unusually industrious workmen% *he contradiction here between pri"ate capitalist accumulation and the utili4ation of a large workforce that makes such pri"ate accumulation possible is entirel$ palpable7 &et another apor$ in the Protestant 'thic is that of the conflict between greater labour producti"it$ and the depreciation of the price of labour or wages% What for (mith and the Puritans # and for Weber - was wealth-creating di"ision of labour, 3egel percei"ed in (miths pin production as the parado- of greater producti"it$ of labour that does not enrich the worker7 *he problem, of course, as ;ar- will correctl$ e-plain, is that the use "alue of the higher producti"it$ of li"ing labor its wealth! is ob"iousl$ greater with speciali4ation, but the "alue-in-e-change of the labor-power of the worker is lower

as a result because the emplo$er can emplo$ fewer workers for the same output and thus lower the wages he pa$s to the fewer workers he can emplo$7 With good reason, ;ande"ille could chastise (mith with the harsh realit$ that the Publick that benefitted from Pri"ate 2ices conspicuous consumption! was not the working class whilst taking delight both in the ferit$ of humans as well as in e-posing the h$pocris$ of (miths in"isible hand a )eus absconditus or hidden God! that /ustified bourgeois enrichment and working-class immiseration as a hidden di"ine purpose% ;ande"ille could still share the condemnation of la4iness and of the charit$ halls, not for BCeistic reasons related to the Protestant work ethic for discouraging labor as an a"enue to wealth!, but for the ,uite c$nical reali4ation that the$ in"ited work-shirking on the part of proletarians to the detriment of profits and production of goods to satisf$ those pri"ate "ices that he mercilessl$ lampooned7 What ma$ appear as contradictor$ was in fact onl$ sheer c$nicism that ;ande"ille preferred to h$pocris$ # for him, h$pocris$ is the tribute that "ice pa$s to "irtue% *his conceptual inabilit$ of the Protestant 'thic to reconcile labour as the source of new wealth and the legitimac$ of capitalist profits as a separate claim to wealth also based on labour is a ma/or source of theoretical parado-es, one that afflicted e,uall$ )lassical Political 'conom$, and one that ;ar- e-posed "ehementl$ and ruthlessl$% In realit$, with the protestant ethic Weber is still unwittingl$ reprising the 0abour *heor$ of 2alue in its pre-;ar-ian form, although in his academic lectures he had adopted alread$ the marginalism of the Austrian (chool% In the -orbermekung, howe"er, he embraces )antillons notion of entrepreneurial profit whereb$ profits are the simple outcome of e-change% It is a well-known fact that Webers understanding and grasp of economic theor$ was rather limited%! (pecificall$, Weber was embracing (miths theor$ of speciali4ation as the source of new and greater wealth8 - di"ision of labour, speciali4ation, as wealth-creation, as more efficient pro-duction or labour producti"it$, and therefore labour as pro-duction% Wealth is created through growing labour producti"it$ enabled b$ e-change and therefore speciali4ation, that is, through the production of more goods for e-change and the use of fewer goods for consumption8 growth of producti"it$ through e-change is the source of wealth% In this perspecti"e, wealth is the s,uee4ing out of greater output from e-isting means of production or resources or from their re-combination b$ means of higher labour intensit$% +$ consuming less himself or b$ working harder the worker can e-change more # and b$ e-changing more he can speciali4e more so as to produce e"en more7 *he worker can be more producti"e b$ speciali4ing, producing more and consuming less in the e-change% (mith assumes fi-ed and e-ogenous technolog$% (miths theor$ does not allow for inno"ation or the role of wealth as dela$ed consumption% *hus, consuming less oneself becomes producing wealth for e-change b$ consuming less% +oth (mith and Weber single out this parsimon$ as a means of accumulating wealth and as an aspect of Asceticism in BP', pDED!% It can be seen how this protestant work ethic rationale still preserves entirely the link between labour and wealth*creation because the aim of parsimon$ is not the sa"ing of labour time through its di"ersion from consumption to production, but rather increasing the producti"it$ of labour through its intensification b$ means of specialisation%

In the (mithian world"iew, faithfull$ adopted b$ Weber to describe his conception of the Protestant Work 'thic, it is still 7abour 5(rbeit6, it is the higher producti!ity of labour that is the immediate source and cause fons et origo! of the increase of wealth% his rationale and aetiology is in all and for all the rationale of 1atural 0aw, of )lassical Political 'conom$ and of the 0abour *heor$ of 2alue from the mediae"al (choolmen such as A,uinas to (mith and to ;ar- through <icardo and F( ;ill!% It is the ancient biblical pre/udice that wealth comes onl$ in the sweat of th$ brow% (mith refers in Astronom$ to the distinction between tran,uilit$ and composure and labour and discomfort%! 0abour as toil is the price to be paid for the ac,uisition of wealth # a real cost h$pothesis% As we are about to see, this world"iew of wealth as a direct product of labor re,uires three fundamental tenets8 the first is that human needs are fairl$ homogeneous, with minor e-ceptions6 the second is that human labour, although it ma$ be as heterogeneous as there are human acti"ities, is ,uantitati"el$ homogeneous in terms of the labour-time or labour-power re,uired to satisf$ these homogeneous human needs6 and third, as a corollar$ of this, that labour therefore represents the most fundamental and per"asi"e source of human social co-operation and co-ordination to ensure the reproduction of societ$, the basis of the social s$nthesis% &his rationale and aetiology could no longer serve the bourgeoisie after the initial phase of accumulation in the 5irst Industrial <e"olution% *he central achie"ement of 1eoclassical *heor$, deri"ed fundamentall$ from the philosophical re"ersal of Western 3ellenic and Fudaeo-)hristian metaph$sics performed b$ the negatives )enken, will be the outlining of a comple- and comprehensi"e economic science that will relegate labour and the working class to their subordinate place in the market econom$% Abo"e all, b$ se"ering the social-teleological osmotic link between labour and wealth, 1eoclassical *heor$ was able to replace the Fudaeo-)hristian +eruf, so burdened with metaph$sical notions, religious tenets and moral theolog$ this was (chopenhauers, and 1iet4sches, criti,ue of Gant and 3egel!, with the positi"istic 3obbesian amoral, effecti"e Entsagung that leads to the entrepreneurial spirit ,nternehmergeist! of the captain of industr$ glorified b$ (chumpeter% *his is the specifically bourgeois economic ethic that Weber was seeking at the end of )ie protestantische Ethik but understood and traced incorrectl$% *he new link that needs to be theori4ed is that between labour as consumption of nature, sa"ing as renunciation of consumption, and thence as deli"erance from the world (chopenhauer!, on one side, and then capital as di"ersion of labour from consumption of wealth to production of labour-sa"ing tools or tools that increase labour producti"it$, utilit$ as partial satisfaction of insatiable human appetite or as gap between want and pro"ision for want, and therefore capital as store of utilit$ or "alue meant for future e-change, "alue for e-change as ob/ecti"e 9market "alidated: "alue and finall$ capital as interest-$ielding labour-sa"ing tools due to the discount of future goods% .nl$ b$ se"ering the ne-us between labour and wealth and replacing it with the link between wealth and utilit$, and onl$ b$ reversing um*kehren! the metaph$sical content of wealth and labour b$ re-defining fundamentall$ the understanding of this human realit$ will it be possible for the bourgeoisie to establish that wealth is not an ob%ective or intersub%ective entity that can grow or be accumulated but rather a

sub%ective estimation b$ atomistic indi"iduals of the utilities in e-change or marginal utilities to be deri"ed from the e-change of production and consumption goods in a temporal dimension, that is, through the sub/ecti"e discounting of present wealth as against its use in the future% 1eoclassical theor$ draws its conclusions thus from the application of abstract general principles from ph$sics and ps$cholog$% *his is the side that Weber neglects but that is present in (chopenhauer and is insightfull$ and coherentl$, though not alwa$s e-plicitl$, applied in the sphere of economic theor$ b$ +ohm-+awerk and the Austrian (chool of 'conomics, first, and then more broadl$ b$ 1eoclassical *heor$% 0et us look more intentl$ then at the 1eoclassical notions of labour and capital%