3 Schumpeter and Weber: Unternehmer-geist and leitender Geist between Freedom and Necessity The Law of Value

as reformulated in the new marginal utility theory of the Neoclassical Revolution represents the “scientific” specification by political economy of the market price mechanism as the optimal system for allocating existing scarce resources according to individual choices. The “machinery of production”, the technologies adopted in the process of production, is determined independently of the system of needs and wants that demands its “rational and systematic” utili ation through bureaucratic rule so that its technically!determined “output” or “supply” can be maximi ed to satisfy the “individual choices” as fixed by the capitalist market price mechanism aimed at “profit”. The “nature of the matter” "das #esen der $ache% for the &conomics is that it needs to determine precisely from the standpoint of the individual’s self-interest the individual contribution to the production of goods for final consumption "in $chumpeter's words (uoted below, “the community has occasion to become conscious of the economic value of its members to itself”%, which is what interests the “individual” ultimately, and what determines the “value” and “distribution” or “allocation” of privately!owned social resources between individuals in society)
Another application of this theory [marginal utility] is the next step to a height from which a wide view into the innermost working of an economy is gained. Means of production are also complementary goods. But [171] their values are not directly determined: we value them only because they somehow or other lead to consumers' goods and their value can thus from the point of view of the sub!ective theory of value be derived only from the value of these consumers' goods. But many factors of production are always involved in the production of a single consumers' good, and their productive contributions are seemingly indistinguishably intermixed. n fact, before !enger, one economist after another thought it impossible to speak of distinguishable shares of the means of production in the value of the final product with the result that further progress seemed impossible along this route, and the idea of sub"ective value appeared to be unusable. #he theory of the value of complementary commodities solves this seemingly hopeless problem. "t enables us to spea# of a determinate 'productive contribution' $%ieser& of such means of production and to find for each of them a uni'uely determined marginal utility derived from its possibilities of productive applica( tion ) that marginal utility which has become* the basic concept of the modern theory of distribution and the fundamental principle of our e+planation of the nature and magnitude of the incomes of economic groups. $%. &chumpeter, Ten Great Economists, ch. on Bohm'Bawerk.(

*s former professor of “+olitical &conomy”, #eber was well aware of and versed in the new theories of “the marginalist revolution” propagated by the *ustrian $chool against the Historismus of the old and new ,erman -istorical $chool. -e had already published

in ./01 a ma2or critical review of the old $chool, when it was led by Roscher and 3nies, critici ing heavily the “logischen Probleme” of its philo!-egelian “emanationism” in which “the economy” was interpreted in the holistic and teleological perspective of the Volksgeist that denied the possibility of a “scientific” study of economic facts in isolation from other political and social phenomena. #eber would also have been perfectly aware that the central message of all bourgeois intellectual forces ! most stridently advanced by the emerging Neoclassical Theory ! was incessantly to denounce the futility or the impossibility of $ocialism at this critical time of global conflict and in the face of the 4olshevik challenge and the spread of revolutionary worker movements in &urope. “Rational socialism” cannot escape this “beautifully closed chain of logic”5 $ocialism can only amount to or end up in the identical system of production as capitalism, with only a lot more bureaucracy and a lot less free choice. *t the very best, “rational socialism” could “minimi e” the “frictions” of the market mechanism, its “transaction costs” and the negative effects of “disturbances” or “exogenous shocks”. *t the worst, it would distort the “free individual choices” made by “free labor” by removing the ability of “labor” to determine “freely” the individual choices of workers, in such a way that “bureaucracy would rule alone” and would no longer be “kept in check” by private capitalism with its free market and free labour, through those conflictual and “ir! reconcilable” self!interests5 *lternatively, were there to be no state bureaucracy, then free market capitalism would not be able to maintain the “laws of free market competition” that determine “scientifically” its optimal level of production for the satisfaction of individual needs and wants understood as “self!interest”.
$)*+( ,e now approach the last step of the stairway that takes us to the top of Bohm'Bawerk's edifice . -e was the first to reali.e fully the significance of the length of the period of production in its two'fold aspect ' the aspect of productivity and that of the lapse of time. -e gave both aspects their exact content and their places in the foundation of the system of marginal utility analysis. /ur proof shows further that, because only an agio on present goods puts the relative demands of present and future into proper $)*0( balance with one another, the values of present and future goods can( not stand at par even in a socialist community that the value phenom( enon which is the basis of the rate of interest cannot be absent even there and hence demands the attention of a central planning board. ,rom this it follows that even in a socialist society wor#ers cannot simply receive their product since wor#ers producing present goods produce less than those who are employed on the production of future goods. #hus, whatever the community decides to do with the 1uantity of goods corresponding to that value agio, it would never accrue to the workers as a wage $but only as a profit( even though it were divided e1ually among them. #his could very well have practical conse1uences whenever, for example, the community had occasion to become conscious of the economic value of its mem( bers to itself2 in such a case it could assess the value of a worker only at the discounted value of his productivity, and since all work' ers e1ually able to work must obviously be evaluated e1ually, a

$)*0( -wo corrections of the idea of e+ploita( tion are now also in order: first one can spea# of 'e+ploitation' as a cause of profit only in the sense in which such e+ploitation would occur also in a socialist state. and the law of the e1uality of . “reification” and “facticity” 7 .$ibid. 4ut it would do so at the cost of removing in large part that very “free consumer choice” and “free labor” that capitalism makes possible5 6n no way whatsoever could the Sozialismus prevent or abolish the “separation”. not 2ust for the present but also for the future.$)*0( $ocialism may well be able to remove some of the “anarchical” features of capitalism ! which preserve in large part the “individual choices” of “free labor”.ieser(. As a conse1uence of the theory of imputation. second. since the socialist state would use its 'exploita' tive gains' in a different way2 but it is all the more important for our insight into the nature of the matter. of the worker from the means of production 7 the source of the 8arxian “alienation”. there is exploitation not only of labor. #heoretically more important. we arrive at the law of costs as a special case of the law of marginal utility. 3or moral and political "udgment this is of course irrelevant. the Trennung.. p. from control over their work in favour of a technocratic “bureaucracy” for the sake of the paramount technical and rational “efficiency” of production and the paramount satisfaction of “the system of needs and wants”. however.'surplus value' must even here emerge which would appear as an income sui generis. because these are “technically necessary” aspects of the efficient utili ation of resources for the satisfaction of the system of “conflicting and irreconcilable” individual wants and needs5 There is not and there cannot be a “capitalist” economy and a “socialist” economy) these are only formal differences in “ownership” of the means of production that must give rise in any case to the “separation” of all workers. or still less remove “profit”. in accordance with the conflicting sub2ective valuations "needs and wants% of self! interested individuals5 n applying this 'theory of imputation' $. is the result ' to use a terminology that has become accepted in treatments of this topic 4 that the rate of interest is a purely economic and not a historical or legal concept.)*0( This is the task and the supreme achievement of capitalism as a mode of production based on “free labor”) ! that it “organi es rationally the factors of production”. but also of land. individually and collectively. of the ante litteram 9ukacsian and -eideggerian “loss of totality”. one “economic science”) the time for “Political &conomy” is past because politics cannot determine the rationally calculable technical efficiency of industrial production and its utili ation of resources. which owes to Bohm'Bawerk one of its most perfect formulations. the phenomenon of cost becomes a reflex of sub!ective value. chief among them “labor”. for the maximi ation of individual utilities. of “the iron cage”5 There can only be one &conomics. 6ts ultimate aim is the efficient production of consumption goods.

its #reiheit 7 precisely the con!fusion. -his is then e+tended to the case of the formation of the prices of commodities whose available 'uantities can be varied by production.<lose' =*bschluss> of 3arl 8arx's $ystem”5 $chumpeter is unable to see that the “metaphysics” of the socialist and 8arxian “labor theory of value” have now become the “metaphysics of neoclassical marginal utility”5 6t is precisely 4ohm!4awerk's attempt to identify and define a “9aw of :alue” that would allow him “to close” the “sub!ective estimation of value” with the “ob!ective manifestation of prices” that lands him inexorably into the “metaphysical” trap that nullified 8arx's own efforts in :olume Three of Das apital) for it is “impossible”. $chumpeter had celebrated at the very beginning of chapter two of the Theorie the advent of the #eberian $ationalisierung as the “overcoming” .erman 6dealism. 4ut what distinguishes “economics” from “engineering” is precisely the element of individual" sub!ective choice in the specification of “needs and wants”5 6t is therefore im!possible to certify the “scientific” status of the capitalist market economy and. Die Positive Theorie des apitals. developing the implications of the law of value for the behavior of buyers and sellers. at the same time. since the forces operating on the supply side of the mar#et are the same as those operating on the demand side the old 'law of demand and supply' turns out to be simply a corollary of the law of marginal utility. *lready in . outside of “meta!physics”. #hat all of its forms e+press themselves also in the mechanism of the e+( change economy can be shown only by a corresponding theory of price. All this is developed first for the situation with given 1uantities of exchangeable commodities with the conclusion that. 6n reviewing the theoretical masterpiece of his :iennese mentor. to (uantify mathematically what are inextricably social relations of production5 “The 9aw of :alue” 7 whether in its socialist or 8arxian or Neoclassical form 7 seeks “to reconcile” the respective “inputs” of “the factors of production” with their respective shares of income 7 to homologate “values” and “prices”. $chumpeter remarks first on “the beautifully closed chain of logic” of 4ohm!4awerk's elaboration and extension of marginalist theory 7 forgetting in the process that it was precisely the attempt by 3arl 8arx to close his “system” by “trans! forming values into prices” that had led 4ohm!4awerk to accuse the ./. to preserve its “freedom”. Bohm'Bawerk therefore turns to price theory.the cost and the value of a product is derived from the theory of value 4 never in our science has there been a more beautifully closed chain of logic.. the “closing of the system” that Niet sche had so devastatingly demolished with his criti(ue of . and his investigation culminates in that celebrated proposi' [)56] tion $for the case of bilateral competition( which has since become 'historic'7. But all this so far still refers only to the world of values. and 4ohm!4awerk in his 8achian criti(ue of 8arx's “*b!schluss” 7 echoed by #eber in his polemic against the “emanationism” of Roscher and 3nies.erman theoretician of indulging in “metaphysics” in the appropriately named article “The ..

]or value to emerge relative scarcity has to be added to utility. Bohm'Bawerk arrives$in !enger's sense."?berwindung% of “metaphysics” and the triumph of “empirical science” 7 totally mis! comprehending yet again the %ietzschean connotations of the word as applied by &eber' &hat Schumpeter overlooks in his (achian exultance is the evident and dramatic “conflict” that Bohm-Bawerk’s theory contains and exudes! @or behind 4ohm! 4awerk's “scientistic” and lucid exposition lies all the explosive conflict of capitalist society even at the level of market pricing according to consumer choice ) according to *marginal utility+ or *supply and demand+.e .ith the aid of a distinction between want categories $or want directions( and want intensities. and in a way similar to .e. this “scientific!rational economic mechanism” is still self!consciously dependent on the conflicting self!interests of individuals and on their “historical or legal” ac(uisition of “possessions” which determine both “the relative scarcity” of commodities as well as the “increasing or decreasing (uantities of commodities in their possession”5 6t follows inexorably. that this “conflict” can never result in “e(uilibrium” and that contrary to what $chumpeter claims above it can never be “a purely economic and not a historical or legal concept”5 Auite to the contrary. -owever much the “different sub2ective valuations” of goods on the market may be based on “fair and e(ual exchange”.on the one hand by the valuations of the 'last' buyer admitted to purchase [8] and of the seller who is the 'most capable of exchanging' among the ones already e+cluded from the e+change. this “economic concept and process” must be “guided” and “governed” politically instead5 . the terrifying fact remains that the self!interests of the “individual market agents” are determined by the sheer violence of “imposition” of their sub2ective. . The full conflict and sheer violence of the market mechanism is made evident here in all its stark nakedness5 6t is “futile” to seek recourse to “the beautifully closed logic” of the Neoclassical theory reformulated by 4ohm!4awerk) the inescapable fact remains that even behind the most “beautiful and elegant e(uations” there is all the ineluctable conflict of what #eber will soon call with astonishing "8arxian5% insight “the capitalist rational organisation of free labor under the regular discipline of the factory”5 [. and on the other hand by the valuations of the seller 'least capable of e+changing' [8] among those still admitted to the exchange and of the 'first' e+cluded buyer. egoistic choices and preferences5 -he level of price is determined and limited by the level of the sub!ective valuations of the two marginal pairs' ' i. and under careful consideration of the factor of substitutability. by definition. with increasing 'uantities of the commodity in the possession [/] of an indi( vidual.ieser's( at the law of decreasing marginal utility with increasing 'coverage' of wants within each category ' i. $)9:( *s $chumpeter (uite uncritically reveals and concedes with this summation.

! but not yet5 #e have 2umped too far ahead.# the %charlatanry& of t$entieth century 1rench philosophes] rhymes $ith Arendt's anointment of %the 1ounding 1athers& of the American 5onstitution 2"ually# Arendt absurdly oversimplifies as %compassion $ith the poor and do$ntrodden& and a prelude to +talinism# 9ar4's entire analytical effort to develop a comple4 theory of social development in antithesis to the capitalist $age relation# especially in the Grundrisse ( BBBBBBBBBBBBBBB #e intimated above that #eber will soon call this conflict “the capitalist rational organisation of free labor”./]# Arendt see0s to distinguish Hobbes's %common$ealth& from Rousseau's volonte’ generale# for $hich the 1renchman $as even tagged $ith the charge of %plagiari)ing& the 2nglishman# in the sense that the latter is an introspective concept 3 the bellum civium becomes the bellum psychologicum in $hich %the e4ternal threat& is the %common enemy& of %selfishness& that stands in the $ay of %compassion& or le salut public 3 and therefore more a0in to totalitarian ideologies !e have canvassed these matters thoroughly in our %5ivil +ociety& and shall return to them in 6art 1our# but it may suffice here to observe that Arendt %over7psychologises& the nature of totalitarian movements at least in the initial stages of their sei)ure of political po$er After all# ho$ever much Robespierre's %Terror& may have leaned on Rousseau's political philosophy# this $as certainly not the case $ith the *a)i dictatorship $hich# if anything# found its geistesgeschitlich avatar in 5arl +chmitt's un"uestionably %Hobbesian& early 8urisprudence of %the totalitarian state& This palpable change in her attitude to %Anglophone& political theory as against its %continental& counterparts [though she rescues 9ontes"uieu and properly chastises# in chapter . This revealing re!formulation of the “+roblematik of rational $ocialism” indistinguishable from that of “rational capitalism” will not come out until #eber's Vorbemerkungen to the -ufsatzen zur $eligionssoziologie published in . when Parlament und $egierung is first published and then “re!worked and extended” in ././. a #eberian terminus ad .ermany and the desolate peasant steppes of Russia -n her later study# On Revolution [19. #e need to retrace our steps and continue with our linear analysis of #eber's political formulation of “the +roblematik of bureaucratic rule” in .E 7 after the /olshevik $evolution./C0.uem that we are tracing here. .D.(The horrifying spiral of bourgeois possessive individualism descending from Hobbes to the scientific administration of terror in the Third Reich is traced masterfully by Hannah Arendt in The Origins of Totalitarianism [1949] !ith une"ualled perspicacity# Arendt then goes on to trace the historical process $hereby the parallel transformation of the capillary bureaucratic administration of %the most basic needs of social life& (!eber's phrase( arising out of the capitalist %sociali)ation& turned into the *a)i and +talinist nightmares of totalitarian control and terror in both the more advanced bourgeois civil society of .

! not simply as “evolution” but as meta0morphosis. 6f “bureaucrati ation” is the fate of human social development. not simply as “growth” but as trans0crescence. 6n this re!working and extending of his previous formulations dating back to the 1thik in .ue of #estern thought and society. The 4olshevik Revolution of Gctober . 4y the time #eber returns to the theori ation of this “transition”. however. “rational and systematic”. after the publication of $chumpeter's Theorie.E the original series of five articles that had appeared in the #rankfurter 2eitung between *pril and Iune . if capitalism represents its “closest relation” and possibly its “foundation”. as Niet schean “creative destruction” "the concept appeared in Niet sche's 2arathustra long before $chumpeter made it popular%. “scientific. end of +art Gne./01. as growth0through0crisis. of its +olitics 7 and a fortiori of its “political economy” "see our %ietzscebuch./. on his “ontogeny” of economic relations and categories in #estern societies%.@or the moment. #eber understands that conflict is the very “nature of the matter” of &conomics and that he needs to theori e and devise an institutional framework capable of capturing this conflict. it is clear that it is no longer “the inexorable powerHof external goods” that interests him. the “political” realities that need to be considered are the incipient and seemingly unstoppable “democrati ation” of go ernmental rule due to the irrepressible push on the part of the urban industrial proletariat for “representation” of their interests that are no longer mere “indi idual interests” but ta!e on instead an “organi"ed” form as class interests # in the urgent instance with the formation of imponent and $sit enia erbo%& “bureaucratic” social democratic parties that reflect and e en replicate the ery “rational organi"ation of labor” that characteri"es the modern industrial wor! of the “factory” in “modern capitalism”' . #eber gives proof yet again of having grasped much more thoroughly than $chumpeter the powerful and unprecedented Niet schean criti. but rather the “rational organi ation of modern industrial work” under the pervasive aegis and control of machine0like bureaucratic “rule”. to encapsulate it and turn the energy of its antagonism into the “motor of development”. the source of real “dynamism” of bourgeois society and of the modern nation!state./. precisely this “vital” element of “conflict” needs to be re!articulated and re!inserted organically within an overall theory of crisis and trans0formation of capitalist society and industry. Of course. then the 4olshevik experiment needs to be understood and re!configured within #eber's overall interpretative and methodological 1ntwurf "framework% so that its political impact can be anticipated and even neutrali ed.D has forced #eber “to re!work and extend” for publication in . of its 3ultur and Fivilisation./. #hat troubles #eber above all is the decisive “leap forward” of the 4olshevik Revolution and the possibility of its upsetting his seemingly “inescapable fate” of bureaucracy. rational and systematic” 3rdnung of bourgeois society. The Russian Revolution and its 9eninist “variant” represent a “(uantum leap” in the linear. “The iron cage” has now meta!morphosed from the simple “seculari ation” of the ascetic “spirit of capitalism” 7 its glorification of “labor” 7 to the dependence of “the provision of the most basic needs” of society on the “rational organi ation of that labor”. #eber has discovered the one element in it that will help him reformulate his entire theory of bureaucratic rule “most closely related” to the rise of “modern capitalism” by seeking to integrate into it the $chumpeterian notions of “the trans!formation mechanism” "Ver0anderungs0 mechanismus% that characterises “capitalist development” "1ntwicklung%) “development” understood as crisis. $pecifically.D.

or is this 2ust an oxymoron. *nd it is simply “unscientific” and “irrational” to believe that these “conflicts”. of “the most basic needs of social life”' )his anti(uated analytical framewor! has been superseded and “dissol ed” -ust as completely as the old . without “development” 7 without “crisis”' )he “static” and trans*historical analysis of the ascetic origins of capitalism carried out in the !thik .reat #ar and the revolutionary workers' movements spreading rapidly throughout &urope at this time5 The (uestion is) what “ideal type” of institutional structure can both reflect the conflictual and antagonistic reality of capitalist industry and its economy and “muster” the energy of this conflict to transform its existing “static” structures into the “dynamic” motor of capitalist and national developmentM 6n short. but also the “conceptual categories” that can be used to com!prehend it) how can “science”. com0prehend. then the process of production cannot stand still5 6t will have to be “driven” by this “conflict” and by the “crises” to which it will un(uestionably give rise.rotestant wor! ethic' "*s the editor of 1conomy and Society. (uantified. under0stand "verstehen% “dynamic”. his way of reconstructing the paths of ma2or civili ations.% To prove the point. due to “scarcity” 7 a “scarcity” induced and provoked by the very “conflict” of “want and provision” 7 of the “(uantity” of “possessions”. there is no inter esse or teleological “reconciliation” of economic antagonism. put it. the “scientific”. what institutional structures can capture and “govern” the class antagonism of modern capitalism and turn it into the dynamo of its “development”M The problem is one that invests not merely the “reality”. between ob!ective factors that can be “weighed”. to grasp practically the process whereby this “conflict” can be mustered and “governed”5 There may well be no “exploitation” in the marginalist view of “economics”) certainly.unther Roth. “ alue*neutral” framewor! of "irtschaft und Gesellschaft are no longer applicable to the highly specific reality of capitalist industry and the trans*formation it has effected through the +#o ialisierung.KKK:6> work is a sociologistLs world history. and sub!ective forces impossible “to rationali e” and “calculate”.#hereas the “static e(uilibrium” scientific analysis of Neoclassical Theory describes wishfully the “e(uivalence” of these conflicting self!interests in the marketplace as indicated by “prices”. a contradictio in ad!ectoM The central problem here for #eber as for $chumpeter will be to analy e and theori e the interplay of a science of 1conomics in determining an “optimal” process of production that is managed “rationally and systematically” with the Political resolution of the “conflict” over “wants and provision” that the process of production 7 the “machine” 7 is meant to serve5 6f indeed there is “conflict” between “want and provision”. these “self!interests” can be “in e(uilibrium”% That they can be “balanced” without “evolution”. 4ut 2ust as certainly there is “conflict” because there is “self!interest”J there are “wants” that cannot be “satisfied” due to “lack of provision”. . had already . it fails to com!prehend. as $chumpeter put it earlier.” This is the principal reason why we are ignoring completely #eber's “sociological lexicon” in this work. “with all its seemingly static typologies. which involves a “system” of determinate concepts. This antithesis between static science and dynamic transformation. “vital” social processes that are by definition indeterminate and “free”M <an there be a “dynamic science” of capitalist development. if proof is needed. one need not do more than point to the profound upheavals of the . the =p. the “experience” of modern capitalism.

and indeed the theoretical “necessity”.. Oet. also close to . “nomothetic necessity” and “irrational individuality” in social science. that make it “peculiar” and “sub2ective'. that is./. ! whether it is possible to build such a social science methodically on the individual idiosyncratic in(uiry in a manner that is consistent with sociological nomothetic measurement. #eber was (uick and keen to tackle the methodological diatribe that had seen the emerging *ustrian $chool of &conomics riding high on the early acceptance of its marginal utility theory in <entral &uropean industrial capitalist circles pitted against the more established . he ultimately asserts the logical rationality of Neoclassical Theory basing himself on the historically specific characteristics of “modern capitalist society” 7 and therefore also on the full legitimacy. as we are about to see./01. is fully com!prehended. #eber openly sides with the “methodological individualism” of the *ustrian $chool.erman -istorical $chool of Roscher. whilst he recogni es the ultimately “irrational forces” that motivate human action. #eber's apparent championing of “individual freedom” very soon veers in the direction of “social necessity” in such a way that. denying that any sociological categories can legitimately or “logically” abstract from the role of “the individual” in society against the “emanationism” of the -istorical $chool that starts from broad “idealistic” concepts such as “people” or “nation”.erman industrial circles. of which #eber must have been aware even because it cites him at the very beginning of chapter two5 -aving only recently succeeded 3arl 3nies in the <hair of +olitical &conomy at -eidelberg.occupied #eber in his $oscher und nies and again in the 1thik both written and published between . of the kind of “scientific!logical” approach to the &conomics propounded by 8enger and the *ustrian $chool that would seem to contradict the very “methodological individualism” that was ostensibly its theoretical point of departure5 #e shall see soon enough that despite #eber's truly astounding and profound insight into the differentia specifica of capitalism.ustav $chmoller. #eber cuts to the (uick and singles out the central bone of contention between the two $chools around the issue of whether it is possible to reconcile “idiosyncratic =or “ideographic”> freedom” and “rational calculation”. 7 #ith the conse(uence that his own articulation of his theoretical 1ntwurf led him to oscillate and vacillate between the poles of decisionist voluntarism and Neo!3antin formalism. 3nies and -ildebrand and now led by . 6t also became the central problematic for $chumpeter in a work first published seven years later in . its ability to transform “apparently irrational” social relations into “apparently rationally calculable” ones 7 which is the formal significance of the rationalisation 7 this “trans!formation” is indeed only apparent once the ultimate significance of the $ationalisierung. BBBBBBBBBBB #e open $chumpeter's Theorie at the very start of chapter two) . 4ut #eber lacked the theoretical tools and his theori ation was historically too precocious to enable him to formulate it ade(uately. as he does in the 1thik.E/N and . its effectuality. 6n his review of the by then notoriously heated (ethodenstreit. 6ntriguingly.

&vident here is the maladroit manner and dis!comfort "not aided. is every search for a <meaning= of history. one that has clear Niet schean onto!logical "philosophical% and onto!genetic "biological% origins. -ence some warning against misunderstanding may not be out of place. . “The social process which rationali es” is an ex(uisitely #eberian expression) far from indicating that there is a “rational science” founded on “reason” and “facts” that can be opposed epistemologically and uncritically to a non!scientifc idealistic and “metaphysical rationalism”. . As the reader will see. to “scientific control”5 #hat #eber posits as a “practice”. or even the whole of mankind must show some kind of uniform unilinear development. $chumpeter mistakes for an “empirical” and “ob2ective” process that is “rational” and “factual” at once 7 forgetting thus the very basis of Niet sche's and #eber's criti(ue of Roscher and the Historismus ! certainly not that they are founded on metaphysics "5%. #he same is true of the postulate that a nation. which implies going beyond the reach of both ?reason@ and ?facts@.#he social process which rationali. has made “possible” a scientific “empirical treatment” of “social development "&ntwicklung%”.+5( The footnote at “rationali es” was expanded for the &nglish translation and reads as follows) #his is used in !ax . ?metaphysical@.ation. but rather that they fail to “(uestion critically” the necessarily meta0physical foundations of their “value!systems”.ith some it has become a habit to use the word ?rational@ in much the same sense as we do ?metaphysical@. and therefore on the “realm of science”.losely connected with the metaphysical preconception7. yet cognate. Nevertheless. and opposed to. not to such a degree that we are able to free ourselves entirely of “metaphysical” concepts 7 which is why “we must be careful in dealing with the phenomenon =of 1ntwicklung> itself”. p. Theorie. $chumpeter believes that it is possible to leave “metaphysics” behind and to focus on “both . of their “historical truth” or “meaning”. by the dis2oint prose% with which $chumpeter approaches the (uestion of the “meaning” of history. #hey are e1ually different from. #eber is saying what Niet sche intended by the ex!ertion of the #ill to +ower as an ontological dimension of life and the world that “imposes” the “rationali ation” of social processes and development in such a manner that they can be sub2ected to mathesis. which $chumpeter adopts from #eber.eber=s sense. and most of all with the word by which we designate the concept and whose associations may lead us astray in all manner of directions. of science.facts'”. 6n true 8achian empiricist fashion. beyond the realm. of their scientificity5 .reason' and . if not identical. that is. $chumpeter completely fails to see the point that #eber was making in adopting the ante litteram Niet schean concept of $ationalisierung to which he gave the name. things. The $ationalisierung. but has done so only “imperfectly”. still more with the concept with which we comprehend it.es our life and thought has led us away from the metaphysical treatment of social development and taught us to see the possibility of an empirical treatment2 but it has done its work so imperfectly that we must be careful in dealing with the phenomenon itself. and perhaps exacerbated. ?rational@ and ?empirical@ here mean. a civili. as even such a matter'of'fact mind as >oscher assumed7 $&chumpeter.

to law. content and form. of any “progressus” "as Niet sche calls it%. his thoroughgoing De0struktion "-eidegger% of #estern metaphysics and science and the related criti(ue of #estern ultur and 2ivilisation. #eber's Neo!3antian hypostati ation not only of his sociology but above all of “the scientific fields of knowledge” to which he sought to apply it 7 from economics. to hypostati e the historical ob!ect of his studies into the “scientific categories or forms” that he presumed to adopt for that study 7 ignoring thereby Niet sche's famous warning against “systemati ers”5 &ssentially. $chumpeter believes that the mere abandonment of any “linearity” in the interpretation of history. between the Dezisionismus . as the rationalization of the world that is based on human needs. ob0!ective and empirical methodology from which Roscher and the . #eber mis!interpreted "5% Niet sche's 4mwertung "trans!valuation of all values% to mean that “all values are interpretations of reality”. Oet. Sein and Sollen. is sufficient to “free” his “rational science” from the pitfalls of “metaphysics”5 4ut he would certainly have been enticed into this misapprehension by #eber's own e(uivocal notion of “ideal type” "a $immelian #orm%. and that therefore it is possible for the “scientific observer” of a given historical reality to select a hermeneutic code of interpretation "the ideal types% linking rationally the means available to its “actors” with the “pro!2ected ends” that they may envisage. this framework of analysis "&ntwurf%. that it remains suspended. then. “/t is our needs that interpret the world0 our instincts and their impulses for and against.. “soul” and “forms”. to music 7 is induced fatefully from this inability to com0prehend Niet sche's 4mwertung.” "*phorism 1E. as Niet sche would have promptly reminded #eber. this “phenomenalism and relativism” starts from the pre0supposition that such a “rational code” of interpretation is both possible and applicable 7 which Niet sche would vehemently deny on the ground that it is the very possibility and applicability of this “rational code” itself to a given historical reality 7 its effectuality ! that needs to be interpreted and explained as the mathesis universalis "9eibni %. for its corresponding “practical conduct” 7 which mostly he did not5 #eber's failure was rather that his insistence on “categori ing” his “scientific pursuit” with the introduction of the “ideal types” distracted him from the fundamental (uestion of how the $ationalisierung is possible5 This failure led him to reify.@ar from positing a scientific0rational. &ille zur (acht%.erman -istorical $chool have “diverged” with their philo!-egelian “rationalist teleology”. Niet sche and #eber attack the foundations of any “scientific” study of “the social process” or “social development” that does not see it for what it is 7 $ationalisierung. 6t should come as no surprise. the ex!pression and mani!festation of the #ille ur 8acht5 4y contrast. #eber's central failure was not that he mistook “scientificity” for “science”. form and norm% ! whilst simultaneously insisting within this limited historical domain on the scientificity or rational basis of the sociological procedure and methodology utili ed for such selection. “rationali ation of life and the world”. which was intended to preserve the historicity of sociological in(uiry by confining the reach of its categories to a specific situation "$immel's “content”% re(uiring the selection of specific means to achieve specific ends 7 whence the distinction between 2weck!rationalitat and &ert! rationalitat "purpose and goal. on the “system of needs and wants”5 6n Niet sche's own words. as we noted earlier. that is.

“rational and systematic”.positivi ation' of the 2uridical norm. This is what Niet sche attempted by challenging the scientificity of #estern science from the dawn of the bourgeois era.uisite State apparatus are part and parcel of the conceptual content of the categories of $ight" Law and State. dealing with the claim on the part of %eoclassical Theory to apply e. but he is also the heir of 8ach.DD% 7 which would be theoretically a far more consistent and Niet schean position for #eber to take.8ax #eber e -ans 3elsen' "p. 6n a nutshell. which we have enucleated in our %ietzschebuch and will illustrate more incisively in +arts Two and Three of this study on #eber. in line with its exasperation of the $ationalisierung "p. $bureaucracy& must be added to 2elsen. by discussing elsen5s claim that his !urisprudence is intended to apply both to capitalist and to socialist States. with +4aw. did not..DC%. concedes that #eber's Neo!3antian or $immelian .s notion of +apparatus. #hat #eber fails to com!prehend above all else is precisely the historical character of “the metaphysical foundations of logico!mathematical rationality” whose political origins Niet sche had made all but evident. $the famous Grundnorm& so as to e(uiparate the concepts of +3ight. 4aw and State to ha e any historical effectuality% 5obbio then comes uncannily close $at p'68& to the central thesis of this study on the meaning of $ationalisierung. in reviewing 3elsen's attack on #eber's theory of the $tate and sociology of law in . between Neo!3antism and Neoclassical &conomics5 BBBBBBBBBBBBBBB $chumpeter is a contemporary of #eber. 4obbio helps us highlight the link that we are about to trace in the following sections.formalism' enticed him to his detriment into the 3elsenian . Separately. “scientific” ! bases.of “charisma” derived from the individualist relativism and the Neo!3antian formalism of the “ideal types” necessitated by #eber's need to ground this hermeneutic relativism on logico0mathematical 7 hence. 5obbio goes on to reason $at p'67& that Weber. by exposing the immanent materiality of its “scientific categories and laws” 7 whilst all others. including 8arx.s re(uirement that +co*action. be added to the definition of +legal norm. The (uestion that needs to be answered is how political enforcement can Pcrystalli eP or PcongealP into abstract concepts and how abstract concepts Pdis!solveP themselves into political institutions. for this e(uiparation of 3ight. 4obbio perceives without actually comprehending that the notion of Right or 9aw or the $tate re(uires the existence of appropriate PinstitutionsP that Pen!forceP these abstract concepts and that indeed both enforcement and its re. 1ommenting on 2elsen. Through #eber he is linked to Niet sche.Norms'.s +co*action.ually to both capitalist and socialist 6economies5. and therefore also with that of +State. * brilliant illustration of these points is provided by Norberto 4obbio who. but he is already too much under the spell of 8achism fully to comprehend the significance of Niet scheLs radical criti(ue of bourgeois society through the tracing of the “completion” "-eidegger's Vollendung% of #estern metaphysics into “science”. $chumpeter looks at capitalism through the PscientificP prism of 8achian . but that at the same time #eber's “positivism” was premised on the fact that capitalism represents a historically specific intensification of this .

not to e9plain it) indeed. $chumpeter seeks to enucleate scientifically “the mechanism of transformation” that can account for “the phenomenon of a . 0ure economic laws are similar to the laws of mechanics which tell us how bodies with mass behave under the influence of any e+ternal 1forces1 but which do not describe the nature of those 1forces1. its reliance on “absolute frames of reference” to explain the cosmos. but rather to find the simplest mathematical Pcon!nectionP between themJ it is to describe reality. The task of the PscientistP is not to look PbeyondP or PbehindP mere phenomena.development of the economy from within'”. ch. its . so 8ach's philosophy of science does not (uestion the empirical validity of Newtonian physics. . the noumenon that pro!duces the empirical phenomena% that are dis!covered as “the laws of nature”. whose goal is to reach a static e1uilibrium and to re'establish such a state after each disturbance.5. t shows [B5)] how the economy responds to changes in those conditions coming from the outside.eschehen%. relegating these matters to the realm of “metaphysics”. "* discussion of Niet sche's vehement criti(ue of the ontological assumptions behind 8achian and Newtonian science is in our %ietzschebuch. its ability to predict real events by con!necting them by means of mathematical e(uations) what it (uestions is instead the cosmology of the Newtonian system. but relies instead on the observable behavior of individuals to formali e mathematically an *ristotelian logic of human economic action. its “substance”. description that is mathematically regular is or amounts to explanation.% Iust as 8enger's theory of marginal utility does not in(uire about the “value” of “utility”. in such a conception. the “thing!iness” of the 3antian “thing!in!itself”. pure economics almost by definition excludes the phenomenon of a 1development of the economy from within1. That is why $chumpeter never goes beyond the simple PobservationP and PanalysisP "literally. "t is the conception that there is an independent element in technical and organi2ational progress which carries its law of development in itself and mainly rests on the progress of our #nowledge. $&chumpeter. that can elevate the capitalist economy from one “level” or “8ravitationszentrum” "centre of gravity% to another 7 from one “e(ui!librium” to another.empiricism.ranted that there is a “system of forces” that at any given time allow “the economic system” to operate and function. Aure economic laws describe a particular behavior of economic agents. the uni0 verse or “reality” "the res. retrospective dissection% of the empirical behaviour of capitalist institutions and adopts uncritically the 8achian presuppositions of his :iennese academic training) According to this conception the purely economic plays only a passive role in development. #heorie( 6n the Theorie der wirtschaftlichen 1ntwicklung. it is not to discover “substances” or “values” behind “events” ".uidditas. #herefore. The task of science is to describe phenomena in the simplest and most PpredictableP manner) simple7 sigillum veri "simplicity is the seal of truth%. it may then be possible to define for that given moment in time an “e(uilibrium state” that does not “explain why” .

*n “e(ui!librium” is therefore “a balance of forces” whose nature we do not know but around which the economic system tends to gravitate. does a population reach a particular level of the economyF #hen [B99] the second problem is the followingE how does an economy make the transition from one level'which itself was viewed as the final point and point of e1uilibrium'to another levelF #his 1uestion takes us to the very essence of economic development [wirtschaftliche Entwicklung]. f the economy does reach a new state of e1uilibrium then this is achieved not by the motive forces of development. #hey always tend to swing like a pendulum around a certain level. for $chumpeter. 6n short. the waves of the economy do not return to the same level. Gevelopment has a tendency to move out of e1uilibrium. based on its entire circumstances of life. to change from one *ideal type+ to another 7 an “experience” that is both “empirical” as well as “necessary” for the simple reason that an “economy” is and must be sub2ect to historical transformation. $&chumpeter. economic e(uilibrium is not an eternally fixed mathematical identity. the ideal type changes as well. Det us grant that the first problem of economics wasE how. in a direction that completely upsets and trans0forms the “balance of forces” and even the nature of the “forces” that determined the previous “state of e(uilibrium”. t is not "ust the observable facts that change. TwE. Gevelopment. $chumpeter ends up oscillating between two untenable antinomic positions) ! on one hand. but a transformation that is nevertheless impossible to formalize as a “mechanism”5 “&(uilibrium” is either “static” or it is not an “e(ui!librium” at all5 @or the “system” to change. the scientific hypothesis of the tendency of the economic system toward “e(uilibrium” "hence the notion of “centre of gravity”% or “circular flow” "3reislauf%J and on the other hand the historical e7perience of the proneness of the economy to grow and develop.5. when altered. ppB9+'9( 4ut by insisting on the existence of a scientifically ascertainable “centre of gravity” for the capitalist economy and of its e(ually scientific “mechanism of transformation”. it must be sub2ect to “forces” that are not the “mathematical” or “mechanical” ones of “e(uilibrium”. but rather by a reaction against it.the economic system is “in e(uilibrium” but that may yet allow us to identify those “forces” that. in its deepest character. “caeteris paribus”. constitutes a disturbance of the existing static e1uilibrium and shows no tendency at all to strive again for that or any other state of e1uilibrium. determine a corresponding alteration in other “forces” affecting the “system”.leich!gewicht”. /ther forces bring development to an end. . an “e(ual weight”. a balance of forces around which the economy gravitates) hence. &(ui!librium is literally a “. #his is 1uite different from what we could call organic development2 it leads to 1uite different pathways that lead somewhere else. but rather a 8ravitations0zentrum. and by so doing create the first precondition for regaining a new e1uilibrium.e. ch. but the level itself is not always the same. -he e+planatory pattern i. “dynamic e(uilibrium” is a contradiction in terms5 $chumpeter himself rightfully contends as much) t follows from the entire outline of our line of reasoning that there is no such thing as a dynamic e1uilibrium. “a centre of gravity” around which an economic system revolves but one from which this system may well move or diverge. as it is for #alras. the previous “centre of gravity”5 Cnlike the waves of the ocean.

( -ere $chumpeter sei es on the reali ation that in point of fact there can be no such “independent element in technical and organizational progress” and that both of these must be treated as part and parcel of the social relations of production.ational progress. the forces that “trans!form” the economy. something that closely resembles #eber's own thesis of the “spirit of capitalism” "der 8eist des 3apitalismus% expounded in the 1thik published in . Grthodox economic theory. but it is also above all a stagnant one5 Oet we know that one of the vital features of capitalist industry is 7 precisely 7 its ability “to grow”. -is search immediately contra!dicts itself 7 because the “factors of development”. the “driver” of capitalist 1ntwicklung. 6t follows therefore that there must be some internal feature of capitalism that forces it to trans0cresce and that therefore constitutes its differentia specifica. both <lassical and Neoclassical. what happens first is that when a new development begins. #hen $chumpeter looks for a Ptrans!formation mechanismP ":eranderungsmechanismus% to explain the Pmeta!morphosisP of capitalist industry ! its Pdevelopment. "the expressions have a curious -egelian!8arxist ring% in the Pentrepreneurial spiritP "?nternehmer!geist% without noticing the contra0diction between 9mechanism9 and 9spirit9. a purely mechanical and adventitious factor 7 “independent” of what #eber styles “capitalist economic action”. by definition. $&chumpeter.ed by a static e1uilibrium. ibid.Actually. -hus development and e'uilibrium in the sense that we have given these terms are therefore opposites the one e+cludes the other./01. Heither is the static economy being characteri. evolution and growthP "&ntwicklung% 7 he can find it only in a sub!ective" voluntary factor.ed by a dynamic e1uilibrium2 an e1uilibrium can only exist at all in the one sense mentioned before. #he e1uilibrium of the economy is essentially a static one. *n endogenous or internal “mechanism of trans! formation” would always be re!definable in terms of those “e(ui!librium conditions” that $chumpeter's “theory” was supposed to confute and discard5 There can be no freedom in .I): *nd not only is “the e(uilibrium of the economyH essentially a static one”. that is. there is again a new disturbance in the e1uilibrium of the economy. “to develop”. that because $chumpeter takes “the economy” and “economics” as “ob2ects or phenomena of scientific analysis” that are separate and distinct from the rest of social reality. that buffet it from crisis to crisis and therefore “elevate” or “lower” it from “level” to “level” can (uite evidently not themselves constitute a “trans!formation mechanism”5 * “mechanism” will always be “static” because whatever “factors” cause it to develop must be “endogenous” and therefore. which carries its law of development in itself and mainly rests on the progress of our knowledge. then. he must then necessarily isolate them from the *trans0formation mechanism+ of the capitalist economy. $chumpeter finds “the carrier” "Trager% of the “transformation mechanism”. “re!conducible” to the e7isting definition of the system. and not be attributed to “an independent element”. nor is the dynamic economy characteri. 6t comes as no surprise. only seven years before the publication of $chumpeter's path!breaking Theorie5 @ollowing #eber's lead. treats the “forces of development” as “essentially” e7ogenous to the capitalist “system” of production) t is the conception that there is an independent element in technical and organi. including those *technical and organizational+ forces "5%.

nevertheless in practice ' with fixed given social relationships ' it leaves as good as no maneuvering room for individual freedom of will. Gne can almost feel the agony of $chumpeter's theoretical contortions as he grapples and fumbles with these complex conceptual matters) [B:J] Kconomic development is not an organic entity that forms a whole2 it rather consists of relatively separate partial developments that follow one upon the other. we win a clearer insight into that peculiar "umble of conditioning and freedom. -ere we build on what has been said in the chapter on crises. ch. Kach of these waves has a life of its own. and !ust as one cannot demonstrate with the static conception the case for philosophical determinism one cannot maintain the case against it with the dynamic conception. of the “trans!crescence” of capitalist industry 7 the “entrepreneurial spirit” and the “process of innovation” "6nnovationspro ess% that it unleashes “sub2ectively” "5% on the scientifically and mathematically definable static e.uilibrium of the capitalist economy to move it from one “centre of gravity” to another. Accordingly. since the creative work of the individual was so obviously visible. while it is completely irrelevant for the general problem of freedom of will. n particular. There can be no “trans!formation” in a “mechanism”! no internally!generated scientifically measurable “development” or “growth” from one e(uilibrium to another. #he static circular flow and the static phenomena of adaptation are dominated by a logic of things. But despite this we have shown that an element is present in the economy which cannot be e+plained by ob!ective conditions and we have put it in a precise relationship to those ob!ective conditions. .60 $#heorie. which he erroneously relegates to the Statik or exogenous components of “the mechanism”. *nd that is the exact reason why $chumpeter is unable to com!prehend in his “theory” the “real subsumption” of the “technical and organi ational processes”. within the “Dynamik” of the “system of needs and wants” "#eber's “iron cage”% that “drives” or pro!pels the “modern industrial work” or “the lifeless machine” of capitalist industry "the $immelian “@orm”% which in turn is guided by the capitalistic “rational conduct of business” 7 the living machine "$immel's “$oul”%.5( 4y identifying a sub!ective factor as the historical “carrier” "Trager% of the meta0 morphosis of the capitalist economic system. within the social relations of capitalism itself. 3f course in development the logic of things is not missing. to transport it “like a wave” from one ocean level to another !. . which economic life shows us.a system of economic analysis or “science”.e know now that the latter observation is correct. Let. this observation does not contradict the theorems of statics.e can precisely describe the place and function of this work. $chumpeter is also validating and sharpening #eber's original thesis in the 1thik of the “religious ascetic origins of capitalism” in the “entrepreneurial spirit”. #his can be demonstrated and yet it was always a point of criticism. . development of the economy occurs in a wavelike fashion.ith this we really get closer to reality. .

and between “@orms” and “content”. unlike #eber. an inscrutable *ristotelian “entelechy”% does not and cannot e7plain the determination of “market prices”.uiescence in his own theoretical answer to it can be found once again in &rnst 8achLs philosophy of science. understood in a teleological or moral sense. between “$oul” and “@orms”. by 8enger's own admission.et he does not even suspect that it may be 9profitability9 that makes the 9entrepreneurial spirit9 a matter of life or death for every 9capitalist9" whether an *entrepreneur+ or not. Put differently" Schumpeter interprets 9profits9 as a function of and reward for the 9entrepreneurial spirit9' . are simply PinterestP or “rents” charged by PcapitalistsP for advancing their Pworking capitalP to the entrepreneur. *ll other PprofitsP. and yet the mere proof of a simple mathematical connection between individual prices and the a7iomatically assumed marginal utilities of individuals is sufficient to prove the mathematical e7istence of an economic e(uilibrium and to found the new “science of Neoclassical &conomics”. *gain. to the simple Ppleasure of successP. $chumpeter does not see the $ationalisierung as a political process but simply as a Pscientific developmentP. #eber himself will mock the evident contra!diction between the scientific proof of capitalist collapse proffered in The <ommunist (anifesto . from his PenterpriseP. 9ukacs and -eidegger 7 that is to say. the 4nternehmer08ewinn "the entrepreneurial profit% is the only PprofitP that is worthy of the name for him. BBBBBBBBB The timeless mathematical *scientific+ description of the capitalist economy clashes irremediably here with the living e7perience of its e7istence. beyond the PrewardP for his PenterpriseP. this failure is largely due to the fact that. the Neo!3antian dualism of “knowledge” and “experience”. 6ndeed. This is a leitmotiv of the period that will preoccupy #ilhelmine culture from Niet sche to -usserl. as the subtitle to the Theorie loudly suggests. 6n other words.4ut the reason for $chumpeter's agonising ambi!valence and ambiguity over the dualism of “freedom and necessity” and his ac. and its replacement with the strictly empirical scientific principles of the &conomics applicable to human organisation and industry. so now $chumpeter concludes that the empirical derivation by the PentrepreneurP of a PprofitP from his Pinnovative leadershipP. combined with the existence of a pool of financial capital made available by “capitalists” is sufficient to establish the e7istence of a “8echanismus” that trans!forms the capitalist economy. $chumpeter does not look at the PmotiveP behind the activity of the entrepreneur except to allude to a vague Niet schean Pwill to con(uerP. of “living spirit” and “ob2ective process” or “machine”. $chumpeter never even attempts to locate the source of PprofitsP beyond the mere Pinnovation processP of the entrepreneur. as the supersession of the &nlightenment notion of PprogressP. The Pempirical observationP of entrepreneurs in capitalist industry and their empirical connection to the provision of PfinanceP by PcapitalistsP is all that counts) both factors can be reconciled as parts of “one mechanismP for the trans!formation of capitalist industry through PinnovationP and Pcreative destructionP. :ust as in marginalist theory the a7iomatic assumption of “utility” "a “metaphysical” notion at best.

7new needs and desires as such mean nothing.erman 6dealism leads to the “freedom from the will” of the Demokratisierung and its “$ocialist utopia”./C0. its “&ntwicklung”. To the Niet schean #eber. #eber correctly re2ects the proposition that in any case “science” could ever explain “rationally” the “trans!crescence” of the economic system.Qer $o ialismus' delivered in Iune ./. @or whilst he accepts that “the economy” can never be in “e(uilibrium”. 7. "t is not its motor. conditioning necessity of the “system of wants and needs” and the social antagonism of the capitalist wage relation ! on the part of $chumpeter./ formed by Parlament und $egierung and the two 8unich lectures.erman -istorical $chool's Historismus 7 of the -egelian “+rovidence” "#eis!heit% and of the idolatry of “%reiheit”. that triumph of the =ndividualitat against which Niet sche had devoted much of his critical genius with devastating effect5 6t is this =ndividualitat. of the #reiheit that #eber's initial formulation of the $ationalisierung in the 1thik and in $oscher und nies had failed fully to comprehend but that 7 what is one of our central theses in this piece 7 he will begin to tackle seriously with the articulation of the interaction between the +olitical and the &conomics in “the triptych” of . But even then if there were an original cause in the development of needs and desires this would still re'uire creativity and energetic activity in order to create anything new of importance7 6t is at this fateful 2uncture that #eber takes his distance from $chumpeter. -he development of wants which we observe in reality is a conse'uential creation of the economic development that has already been present. The profound. #he amplification of needs is a conse1uence and symptom of development. which until recently had been mocked or re"ected or had "ust remained unnoticed./. and often does not even know [+B+] what it is all about7.D to .hat we want to show now becomes obvious. the “personality” of the “entrepreneur” that #eber could never entertain approvingly. nsofar as truly new needs and desires exist they will not have a practical effect on the economy.E./. he himself exhibits in this blunt statement in the Theorie) #he leader personality7 never happens as a response to present or revealed needs. "ts acceptance is always a case of compulsion being e+ercised on a reluctant mass which is not really interested in the new. almost absurd in0comprehension of this vital reality 7 the overwhelming. . even as he obviously “stands on the shoulders” of the *ustrian's evolutionary problematic. this proposition would smack unacceptably of the 2e2une “sub2ectivism” and “emanationism” of the . and then finally with the Vorbermerkungen written in .with its prophecy of the inevitable advent of human socialist freedom 7 applying thus the Niet schean demolition of #estern metaphysical transcendentalism and “sub2ectivity”. the “freedom of the will” whose dialectical reconciliation in . . #eber re2ects dismissively $chumpeter's thesis that it is the “entrepreneur” with his “creativity and energetic activity” who is solely or even chiefly “responsible” for the meta!morphosis of “the system” and that *new needs and desires as such mean nothing+. #he issue is always to obtrude the new. -he fact that the human economy has remained constant over centuries heavily weighs in favor of our argument. in the lecture on .

it is the conflict inherent and intrinsic to the ery notion of “want” and of “self*interest” that creates the “ob-ecti e con*ditions and circum*stances” that allow the emergence of the “entrepreneurial spirit”. the essence of capitalism and of the &conomics. There is only a coherent application of *iet)schean immanentist %ontology of thought& to the phenomenology of the social $orld *or is there any :irrationalism' in the post7*iet)schean %<e7stru0tion& [Heidegger's term] of the philosophia perennis and scientism of the #ufklarung and its .ower” at the very crest of this surging wave of conflict that transports with itself the entrepreneur and the rest of the capitalist “economy and society”% “The nature of the matter”.erman -dealist apotheosis ( Not only does Weber reali"e with unmatchable acuity that the “creative entrepreneur” is not “responsible” for the phenomenon of capitalist “de elopment” and the concomitant crises that it ineluctably inflicts on the “economic system”0 but also and abo e all else he sees that the “entrepreneur” is “responsible” instead in a Niet"schean sense diametrically opposed to the one suggested by Schumpeter% @or the entrepreneur can be merely the “carrier” of a “trans!formation” of the economy that must originate endogenously from its very foundations. Ho$ever much these "uite erroneous vie$s may be 8ustified on the basis of the static typology contained in the Ethik and in !eber's later classificatory efforts# it is very $ide of the mar0 $hen it comes to his incisive reformulation of the "roblematik of capitalism in his later $ritings There is no %charismatic voluntarism& in this methodological stance# no :5aesarism'. of his “Will to . from its “ground” 7 that is to say. from its “#ants and +rovisions”. must consist then in the historically novel and specific manner in which capitalism “organi es” this “conflict”5 This signifies the end of +olitical &conomy not only as the market0based mirage entertained by %eoclassical Theory of a *rigorous science of 1conomics+ devoid of political conflict. but also as the utopia embraced by liberalism and socialism of a *free public sphere of Politics+ devoid of economic antagonism' The “personality” that truly counts. 4ut not as a “mechanism of transformation” such as $chumpeter had sought on the mistaken assumption that “wants” are “static”5 Gn the contrary. from its “system of needs and wants”. the “machine” 7 the “motor” of the “mechanism of transformation” that $chumpeter was so desperately seeking ! is emphatically not the “entrepreneur” with his “creative .(The concept of :freedom' in . the =ndividualitat that “drives” the “system”.erman -dealism is canvassed $ith supreme mastery from the vie$point of the negatives Denken by Heidegger in his Schelling’s ‘Essence of uman !reedom’ -t is interesting to advert here to the incomprehension of !eber's entire theoretical orientation on the part of those critics 3 of all persuasions 3 $ho $ave his concept of %charisma& as conclusive evidence of a :voluntaristic strea0' or :sub8ectivism' in !eber's methodology# and the even greater incomprehension of those epigones $ho ma0e %charisma& the central concept in !eber's entire sociology.

ibidem( 4ut in pointing to the “personality” and “leadership” of the entrepreneur. the true “spirit” of capitalism $howe er “soul*less” it may ha e become now& is e9actly and precisely that “conflict” inherent to “the system of needs and wants”. $chumpeter himself had foreshadowed this problem during his discussion of his “problematic” in the (uotations we selected above) n other words. 6n regard to this point. in a manner that responds “rationally” to the politically “free” specification of their conflicting “needs and wants” by the workers through the market mechanism "filter. there is no true economic development. This is the more so. but only development that conforms to one pattern of imagination or does not conform to it.uire a form of mediation and governance ) of “political responsibility”5 ! that is absolutely inaccessible to the *entrepreneur+ or indeed even to the *bureaucracy+. has “unleashed”. even within the confines of the =nnovations0prozess. its “individuality” under the iron law of “sociali ation”. no development emanating from the economy itself. but that these “trans!formations” occasion profound “shocks” and “crises” that cannot be limited or confined to “the economy” alone. but it is also that “scientific research” that becomes increasingly subsumed to the “political needs and wants” of “the system” rather than be dictated by the narrow needs of industry or the exogeneity of “pure research”. synthesis% so that these may be “provided for” most efficiently. finance capital. $&chumpeter. and that therefore re. in any event economic development brings about e+traeconomic effects in the social realm that have further repercussions within the economy. intended as “labor force” or “labor power”. * million times “No5” )he real “motor”. the “passive” consumer ! to change through the =nnovationsprozess facilitated by the mechanism of capitalist financial institutions. it is not merely “the entrepreneurial function” that loses its “autonomy”. as the differentia specifica of capitalism. the “freer” that “free labor” becomes 7 precisely by reason of its Demokratisierung and the constitution of the proletariat as a class "5% with its own “socialist democratic” political parties that defies and prongs the state bureaucracy out of its inertia. 6n other words. the antithetical dualism between “+arteienwesen” "the nature of parties or party system% and “4eamtentum” "bureaucracy%5 To be sure. that capitalism has “freed”. osmosis. out of its myopic search for “scientific e(uilibrium”5 6t is no accident that the sub!title to Parlament und $egierung refers specifically to the binary interplay.individuality” causing the inertia of “the system of needs and wants” ! the “rentier” capitalist. $chumpeter neglected these essential “e7traeconomic effects” of modern capitalist industry and society that #eber is already theori ing from the standpoint of political sociology and . Let. to the “iron cage”. #his kind of development expresses itself everywhere in national life. 6n fact. #eber can detect now another ma2or fallacy or oversight in $chumpeter's limited and flawed analysis in the fact that the “entrepreneur” may well be the “material functional carrier” of “trans!formations” to the structure and orientation of “enterprise”. there may well be no scientifically ascertainable “mechanism of development” for the simple reason that scientific activity itself "5% has lost its “autonomy” from that “rational organi ation of free labor” that is capitalist enterprise. “trustified” capitalism. has “ ented and released” by institutionali"ing &ureaucratically “the rational organi"ation of free la&or”% The most effective way to organi e a society is to utili e its “labor”.

/. BBBBBBBBBB ./) 7 "a% the ineluctable presence of “conflict” in the relationship between market effective demand "or “wants”% and its “provision” through development and growthJ "b% the problematic of bureaucratic!technical and scientific!technological capitalist organi ation of this irreducible and irrepressible conflictJ and then "c% the articulation of the forms of political organi ation able to mediate the inevitable “dis!e(uilibria” and “crises” that “development” inevitably engenders so as to “govern” these effectively.ermany” "neu0 geordneten Qeutschland%.that 3eynes will start to dress up in economic garb after the +aris <onference of . This is the gigantic task that #eber would now tackle with his overall “program” or &ntwurf of Parlamentarisierung for the effective $egierung of a “re0constructed .

Sign up to vote on this title
UsefulNot useful