chapter  2
8 Pages

Max Weber on Capitalism and Rationality

In the second chapter of Economy and Society (1921) Weber analyses the main features of rational economic action in a capitalist society, and contrasts such action with economic orientations in other forms of society. These features are: exchange in the market (‘the archetype of all rational social action’, where transactions are determined only by the ‘purposeful pursuit of interests’); the generalized use of money, which is the most ‘perfect’ means of economic accounting, and more specifically, rational capital accounting; the rational organization of labour in production and strict factory discipline; a rational technology; the most complete possible separation of the enterprise from the household. Outside the economic sphere as such it is necessary that there should be complete calculability of the functioning of public administration and the legal order, and a reliable formal guarantee of all contracts by the political authority.