Gane, Nicholas - Max Weber and Contemporary Capitalism

Max Weber and Contemporary Capitalism
Also by Nicholas Gane
MAX WEBER AND POSTMODERN THEORY

THE FUTURE OF SOCIAL THEORY
NEW MEDIA: The Key Concepts (with David Beer)
Max Weber and
Contemporary Capitalism
Nicholas Gane
University of York, UK
© Nicholas Gane 2012
Softcover reprint of the hardcover 1st edition 2012 978-0-230-24203-6
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Contents
Acknowledgements viii
1. Introduction 1
2. Method 13
3. Capitalism 30
4. Markets 50
5. Neoliberalism 72
6. Class 95
7. Modernity 113
8. Conclusion 133
Bibliography 142
Index 150
vii
Acknowledgements
This book has benefited greatly from discussions with the following
colleagues and friends, some of whom also provided comments on this
manuscript: David Beer, Roger Burrows, Mike Featherstone, Mike Gane,
Beverly Geesin, David Hill, Daryl Martin, Thomas Kemple, Chris Renwick,
Thomas Rodgers, and Couze Venn. For a number of years I have taught
undergraduate modules at the University of York on ‘The Sociology of
Max Weber’ and more recently ‘Max Weber, Culture and Modernity’.
The ideas presented in this book have no doubt been shaped by the
lively debates in these classes, which have pushed me, year-on-year,
to think about the contemporary significance of Weber’s work. Finally,
I would like to thank Antonia Luther-Jones for her love and patience,
which made the completion of this book possible.
Chapter 2 of this book reworks material published previously as ‘Concepts
and the “New” Empiricism’ in European Journal of Social Theory, 12, 1, 2009,
pp.83–97. Chapter 5 is a revised and updated version of ‘Max Weber as
Social Theorist: “Class, Status, Party”’, European Journal of Social Theory, 8,
2, 2005, pp.211–26.
viii
1
Introduction
Why write, or for that matter read, another book about Max Weber?
Given that there are hundreds of texts that address every conceivable
aspect of this great thinker’s life and work, what more is there left to
say? My answer may at first seem surprising, that this is not a book
about Max Weber. To clarify: this is not a book that centres on Weber’s
life or his underlying personality. And it is not a book about Weber’s
work per se. It does not seek either to establish the truth of Weber’s pub-
lished writings, or to reconstruct unpublished or planned work in ways
that he would have intended. There are many existing books that do
precisely this, and do it very well. Rather, the aim of the present book
is to do something different: to revisit and rework key concepts and
ideas from the writings of Weber in order to think sociologically about
the social and cultural dynamics of contemporary capitalism. This
book is not a celebration of Weber’s life or work but rather an attempt
to use his writings to consider possible ways of analysing and under-
standing the present. This is not to say that Weber’s ideas and concepts
are timeless and untouchable. They are, of course, framed by specific
historical and political contexts, and for this reason, among others,
Weber’s work has its uses and limitations. Limits, however, as Michel
Foucault has so powerfully demonstrated, can be both constraining
and empowering. The limits of a Weberian reading of capitalism, class
or modernity, for example, need not signal the endpoint of a body of
concepts and ideas, but rather an opportunity for re-thinking them in
inventive ways in the face of challenges presented by the complexities
of contemporary capitalism. More seductively, one might ask what lies
beyond the theoretical and conceptual limits of Weber’s writings, and
where the transgression of such limits might take contemporary socio-
logical analysis and theory. Such questions lie at the heart of this book,
which, above all, explores the possibilities contained in Weber’s work
for thinking sociologically about capitalism today.
N. Gane, Max Weber and Contemporary Capitalism

2 Max Weber and Contemporary Capitalism
This project is, in many ways, a continuation of a previous work

– Max Weber and Postmodern Theory (Gane, 2002) – which sought to
open up possibilities for analysing the logic and trajectory of Western
culture by reading between Weber, in particular his analysis of the
rationalisation and disenchantment of the world, and the work of
three so-called ‘postmodern’ thinkers: Jean-François Lyotard, Michel
Foucault and Jean Baudrillard. The aim was to explore tensions between
the value-positions advanced by these thinkers, and to ask of the chal-
lenges and opportunities these presented to sociological thought. The
value-incommensurabilities of Weber’s own work were of particular
interest as, arguably, there is not just one Weber but many: a Weber
who stands for clarity through science and a Weber for whom science
renders the world increasingly meaningless; a pro-enlightenment
Weber and a Weber for whom disenchantment and bureaucratic dom-
ination are the tragic outcomes of modernisation; a Kantian or Nietzschean
Weber; and a nationalist or a liberal Weber. These positions, which can
be mapped and explored as different trajectories of modern and post-
modern thinking, were read against each other in order to address the
complex dynamics of contemporary social life and culture. Weber’s
‘Intermediate Reflection’ (Zwischenbetrachtung) (1970:323–59) – a bridg-
ing essay located at the end of the first volume of the Sociology of
Religion – was taken to be of particular significance. This short text
addresses the differentiation and de-differentiation of culture, and
perhaps even the collapsing of boundaries which once separated Kant’s
classical tripartite division of knowledge into science, morality and art.
Max Weber and Postmodern Theory focussed on three particular life-
orders and their value-spheres that, read together, lie beyond the reach
of Kant’s critical philosophy: the aesthetic, the political and the erotic.
Lyotard, Foucault and Baudrillard were used, respectively, to ask ques-
tions about the fate of these spheres, and by extension the logic and tra-
jectory of Western culture more generally. This exercise concluded by
asking of the limits of modern and postmodern thinking, and, briefly,
of the possibilities that remain for social theory beyond the so-called
postmodern turn.
The present book picks up where Max Weber and Postmodern Theory
ended. The postmodern is a term that hardly features in social science
today. There are many explanations for why this is the case, but the
one advanced by Zygmunt Bauman, who in the early 1990s sat at the
forefront of postmodern sociology, is among the most convincing. He
reflects: ‘The “postmodern” has done its preliminary, site-clearing job:
it aroused vigilance and sent the exploration in the right direction. It
Introduction 3
could not do much more, and so after that it outlived its usefulness; or
rather, it worked itself out of a job’ (Bauman in Gane, 2004:17). This
statement suggests that while postmodernism was effective in decon-
structing, or in some cases simply dismantling, the foundations of
modern thought, it offered little constructive in its place. The post-
modern was at best a mode of critical thinking that sought to expose
the hidden presuppositions and powers that underpin science, culture
and even theory itself. At its worst, it was little more than a playful or
merely a stylistic exercise that mimicked many of the principles of
market capitalism and neoliberalism it sought to oppose, including the
neglect of key social structures and institutions – such as the state and
class – that had been focal points of previous forms of sociological
theory and analysis. Given that the postmodern is now long dead, at
least in name, one question which remains is what is to take its place?
What is to be the basis of post-postmodern theory? One answer, which
dates from the mid-90s and is associated most prominently with the
writings of Ulrich Beck and Anthony Giddens is ‘reflexive’ modern
thinking. Such thinking, which talks not of postmodernity but of a
‘new’ or second modernity focusses on the risks or consequences of
industrial modernity that have now taken centre-stage, as well as pro-
cesses of individualisation that have shifted structural powers and
responsibilities downwards from institutions to individuals. This focus
is central to the recent work of Bauman, which addresses the spread of
consumerism through all aspects of everyday life, and the associated
emergence of transient or ‘liquid’ forms of sociality. This rethinking of
modernity and modernisation by figures such as Beck and Bauman
draws upon and develops a number of Weberian ideas, even if the
authors concerned state otherwise. This is something that will be con-
sidered further in Chapter 7. But for the moment, it can be observed
that Beck and Bauman say very little about the big themes addressed
by Weber that are the subject of this book, most notably method, cap-
italism and class, and in this sense their work replicates some of the
same problems that are commonly attributed to postmodern theory.
For this reason, among others, it will be argued that reflexive or liquid
modern accounts are limited in their scope and potential usage, and
that their underlying theoretical frameworks need to be rethought or
perhaps left behind.
So how might we move forward? Bauman’s depiction of postmodern
sociology performing as ‘site clearing’ job is a provocative one, for it
raises in turn the question of the ground upon which sociological theory
is built. The central argument of the present book is that theory is built
upon concepts. These are the basic building blocks, or what Donna
Haraway (2004:335) calls ‘thinking technologies’, through which socio-
logical thought proceeds. All meaningful sociological analysis involves
conceptual work of some kind: from the sociology of ‘gender’ through
to theories of ‘class’ or the ‘global’. One of the most important inter-
ventions on the question of the conceptual basis of sociological
thought is C. Wright Mills’ The Sociological Imagination (1959), which
advances a strong critique of ‘grand theory’ that fetishises concepts
rather than creates them in response to, and out of, problems posed by
the empirical world. Such a practice of concept formation, of which
Weber is a master, requires creativity and above all imagination, some-
thing that is all too often missing from sociological work today. A
common strategy is instead to take a short-cut by drawing ready-made
concepts from the writings of a select body of thinkers – more than
often Beck, Bauman, Bourdieu or Giddens (see Outhwaite, 2009) –
rather than re-forge or invent them anew. For Mills, the main problem
of grand theory is the tendency to start with a meta-concept or process
that is then stamped on every aspect of the so-called ‘empirical’ world
that is under study. This is especially the case in instances where theo-
rists attempt to invent a new type of ‘society’ or ‘modernity’ under which
all empirical details and complexities can be subsumed: ‘risk’ society
(Beck), ‘network’ or ‘information’ society (Castells), ‘liquid’ modernity
(Bauman), ‘high’ or ‘late’ modernity (Giddens), to name but a few. Such
work, viewed from a Millsian perspective, blocks rather than exercises the
sociological imagination for it reduces the intricacies of sociality and
culture to a pre-existing and overarching concept that subsequently has
limited explanatory value (see Gane, 2012). The present book attempts to
do something different, for, following Weber (see below and Chapter 6),
it does not start with a meta-concept of society, or any other meta-
concept for that matter, but rather seeks to develop a network of mobile
and flexible concepts that have heuristic value for studying the social and
cultural underpinnings of contemporary capitalism. In so doing, capitalism
is treated as something that is to be explained rather than presupposed,
and because of this more than one overriding concept is needed to tackle
its empirical complexities. Indeed, as argued in Chapter 3, capitalism,
or in Weber’s terms capitalistic activity, can take many different forms,
and can only be explained through the deployment of a range of other
associated concepts (each with their own materialities), including, in this
book, neoliberalism, market and class.
A core argument of this book, then, is that one of the challenges of
working beyond the postmodern turn, the impetus of which has now
Introduction 5
long faded, is the concrete task of forging inventive conceptual tools to

aid present-relevant sociological analysis. Weber’s writings are to be
treated as a resource for such work for two main reasons. First, as stated
above, Weber steered away from the types of grand concepts and con-
ceptual fetishism critiqued by Mills, and it is perhaps for this reason
that Mills holds Weber’s ‘classic’ theory in such high regard in The
Sociological Imagination. One striking illustration of the novelty of
Weber’s approach comes in the opening chapter of Economy and Society
– the chapter which gives the basic conceptual exposition upon which
Weber’s sociology is built – where there is no reference to a concept of
society (an irony given the title of the book). This subtlety is missed by
thinkers such as Ulrich Beck who legitimate the newness of their own
positions by arguing that Weber’s work is invalidated by a ‘method-
ological nationalism’ or a ‘container’ theory of society that is no longer
useful in a increasingly globalised world. Chapter 6, which centres on
the concepts of class and status, will respond to this reading by arguing
that Weber talks not of a meta-concept of society but rather of com-
munal and associative forms of sociality or socialisation that need not
be bounded by the nation-state.
Second, and following on from this, Weber, of all the classical theo-
rists, grounded his sociology in a methodology of concept formation.
Chapter 2 will address this methodology by moving away from time-
worn debates such as those about the rights and wrongs of value-
freedom to look instead at the role of concepts in Weber’s work. It will
be argued that Weber avoids the trappings of conceptual fetishism by
presenting concepts as heuristic tools that are not meant to erase the
complexity of the empirical worlds from which they are drawn. Weber’s
theory of concept formation was once the focus of much debate but
has recently drifted into neglect. This chapter will attempt to revitalise
this aspect of Weber’s methodology by taking an unusual and perhaps
even heretical step: it will seek to draw parallels and contrasts between
his writings on concepts and the position advanced by Gilles Deleuze
and Félix Guattari in their final co-authored book What Is Philosophy?
Deleuze and Guattari are widely celebrated as being among the most
radical and innovative philosophers of the 20th century, but perhaps
surprisingly a practice of ‘creating concepts’ (1994:5) lies at the heart of
their work. Deleuze and Guattari argue that conceptual work, contrary
to common belief, underpins all meaningful empirical thought, and
is what makes philosophy, more broadly, possible. It will be shown
that many of their key arguments about concepts – in particular, that
they are pedagogical, multiple, networked and problem oriented – are
anticipated by Weber’s methodological writings. One question this

poses is whether concept formation is a practice that belongs to the
domain of philosophy, as argued by Deleuze and Guattari, or if it is a
key part of social scientific work, as suggested by Weber. Further ques-
tions follow. If the former, then what is the relation of philosophy and
sociology? Should philosophy supply the concepts which sociologists
then put to work? If the latter, what role might concept formation play
in reinvigorating sociological analysis and theory today?
This opening methodological consideration frames the conceptual
work performed in the following chapters. Chapter 3 turns to the key
theme of the book: capitalism – analysis of which is all but absent from
the reflexive or liquid modern thinking of figures such as Beck and Bauman.
This chapter will ask what the work of Weber can offer in this context.
Weber’s economic sociology, which is rarely read in close detail, pro-
vides a strong conceptual framework for addressing the complexities
of contemporary capitalism and its development. Importantly, Weber
talks not of capitalism as a single form but of different types of capitalism
that have their own internal value-orientations and logics. As Richard
Swedberg has observed, there are, for Weber, three main types of
capitalism – traditional, political and ‘rational’ – that can, in turn,
be subdivided into a further nine forms. Weber thus does not employ
capitalism as a reductive or overarching meta-concept that presides
over all aspects of social and cultural development. Rather than fetish-
ising the concept of capitalism in this way, a network of heuristic con-
cepts are advanced instead. These concepts – of traditional, political
and rational capitalism – are forged out of an engagement with the
empirical world, but at the same time, in true neo-Kantian fashion, are
said to never fully capture or even represent the complexities of the
worlds (the noumenal realm) that they are used to address. They are, to
use Deleuze and Guattari’s words, bridges between the empirical world
and thought (see Chapter 2), and as such are beginnings rather than
ends in themselves. The contemporary value of these conceptual open-
ings will be considered by reading between Weber and more recent
writings on computerised capitalism (as formulated in the work of
Jean-François Lyotard); knowing capitalism (Nigel Thrift); and meta-
physical or intensive capitalism (Scott Lash). These seemingly new types
of capitalism both extend and present a challenge to Weber’s con-
ceptual matrix. Lyotard, for example, addresses the role technology
plays in speeding-up capitalist systems of exchange, focussing in par-
ticular on the instrumental reduction of knowledge, and more gen-
erally culture, to ‘bits’ of information that can easily be transmitted,
Introduction 7
received and consumed. Thrift extends Lyotard’s position on the com-

modification of culture by exploring the dynamics of what he calls
‘soft’ capitalism. One of the key elements of this type of capitalism is
that it internalises the ideas and concepts of even the most radical
intellectual work in order to make sense of its own practices. This is said
to include social theory, which ‘now has a direct line to capitalism’
(Thrift, 2005:33). Scott Lash, meanwhile, asks of the connection between
capitalism and metaphysics. He argues that while Weber spoke primarily
of ‘physical’ capitalism, capitalism today is increasingly metaphysical
in basis, for it is characterised by the ‘hyper-abstraction of market capital-
ization and derivatives’, and by financial practices and instruments that
either ‘bet on the future’ or bet on or against other bets on the future
(Lash, 2007:19). These three types of capitalism – computerised, knowing,
metaphysical – will be assessed in turn and will be used to explore
the limits and continued uses of Weber’s economic sociology. A guiding
question through this exercise is whether computerised, knowing and
metaphysical capitalism are variants, respectively, of rational, political
and traditional capitalism, or if instead they demand a reworking of
Weber’s earlier conceptual framework.
Many of these themes will be addressed in further detail in Chapter 4,
which turns to the analysis of markets. Financial markets lie at the very
heart of capitalist society and culture – something that has become all
too apparent following the financial crisis of 2007 – and yet they have
received comparatively little attention within mainstream sociology.
This chapter, by way of response, will read Weber’s economic sociology
alongside his detailed essays on stock and commodity exchanges (see
2000a, 2000b). Through the course of such writings Weber advances a
definition of the market that is deceptively simple. A market, he argues,
is a space in which there is a struggle between different buyers and
sellers over the price at which an exchange is to take place. One of the
most intriguing aspects of this definition, which will form the focal
point of Chapter 5 on neoliberalism, is that a market is not simply
about exchange but competition. A question which follows is whether
markets are intrinsically social in basis. For Richard Swedberg the
answer is yes: for Weber they have a ‘social core’, insofar as they
consist of ‘repeated acts of exchange – that is of interactions that are
simultaneously directed at two different types of actors…one’s exchange
partner (with whom one bargains) and one’s competitors (who are outbid)’
(1998:42). This Weberian position will be placed into question by asking
whether markets are indeed social or whether they are rather made up of
crowds that are characterised by ‘unconscious, non-rational imitation in
the sense of instinctive and affective behaviour’ (Arnoldi and Borch,

2007:164). This returns us to a key section of Weber’s ‘Basic Sociological
Terms’ at the outset of Economy and Society (1978:22–4) in which a
difficult and perhaps untenable distinction is drawn between the ‘“imita-
tion” of the action of others’, as addressed by Gabriel Tarde, which is little
more than reactive behaviour, and social action that is orientated in
a meaningful way to the actions of others. On the basis of this tricky
distinction it will be argued that, even in times of crisis, markets are
characterised less by impulsive and emotional crowd behaviours than
by instrumental and value-rational actions that are often highly strategic
in basis. Markets are, moreover, underpinned by values and involve com-
plex relations of power; something that will be illustrated and explored
through brief analysis of a recent market event: the Flash Crash of
6th May, 2010.
Chapter 5 will use the work of Michel Foucault, and in particular
his lectures on biopolitics (Foucault, 2008), to consider connections
between the market and the state by examining the political economy
of neoliberalism. Foucault’s writings are illuminating as they explain
neoliberalism not simply in terms of laissez-faireist practices or as an
ideology of anti-government, but as a mode of governmentality that
involves ‘permanent vigilance, activity, and intervention’ (2008:132).
Foucault argues that liberal political economy, particularly as it is
formulated in its classical form by figures such as Jeremy Bentham,
is based upon a Panoptic or disciplinary model of power in which the
rationale of the state is to watch over or supervise the market, and in
which intervention is necessary only to create and protect market free-
doms. Neoliberalism, in Foucault’s account, reverses this configuration
as power is now said to flow from the market to the state, or rather
‘[t]he economy produces legitimacy for the state that is its guarantor’
(2008:84). Foucault traces this new arrangement to post-war Germany
and to the school of Freiburg economists, most notably Walter Eucken
and Wilhelm Röpke, who clustered around the journal Ordo. Foucault
positions Weber as a key figure in this history. He argues that Weber
‘displaced Marx’s problem’ by focussing on the ‘irrational rationality of
capitalist society’, and that because of this his work can be treated as
the starting point for two seemingly opposed schools: the Frankfurt
School of critical theory and the Freiburg School of neoliberal political
economy. This chapter will respond to Foucault by arguing that this
presentation of Weber’s influence on the latter school, and on the emer-
gence of neoliberal thought more generally, is not entirely correct. First,
Foucault overstates the line of continuity between Weber’s work and
Introduction 9
the so-called ordoliberals of post-war Germany, many of whom were,

as we shall see, openly hostile to Weber’s sociology. Second, Foucault’s
account neglects the impact of late-19th century Austrian economics
upon Weber’s ideal-typical methodology, and the subsequent impact
this methodology had upon the epistemological foundations of early neo-
liberal thought. These connections will be explored by reading between
Weber and the work of Ludwig von Mises, and in particular his now
neglected book Epistemological Problems of Economics, the argument of
which is framed by an engagement with Weber’s writings on sociological
method.
Chapter 6 turns to the question of class. Weber’s work has long been
central to debates over the basis of, and connections between, class
and status, but this chapter will centre on a key argument that, surpris-
ingly, has been rarely addressed: that Weber conceives as class pri-
marily as an economic category or ‘market situation’. This is important
for class, at least in the first instance, is defined as being non-social in
form: it is a ‘situation’ that may lead, but not necessarily so, to social-
isation through competition and/or exchange (as detailed in Weber’s
sociology of the market). This position goes against the grain as most
commentators start with the presupposition that there is something
called ‘social class’ before subsequently reading this presupposition
into an interpretation or analysis of Weber’s work. This practice is
perhaps the consequence of imposing a Marxist framework – one that
starts with the declaration that the social is born out of collective rela-
tions of production – onto a reading of Weber. What is different about
Weber’s work is that it defines class in radically non-Marxist terms, for
class is treated not as a sociality that is the necessary outcome of
productive labour or as a romantic form of communal belonging, but
as a form of associative sociality that is potentially born out of com-
petition. In Weber’s reading, class is an instrumental arrangement: it
describes a situation and one’s resulting life-chances within a market.
Against this backdrop, the connection of class to the ‘social’ is placed
into question, for while Weber is commonly read as a social theorist,
what theorisation of the social does he advance? One answer is that
Weber does not frame his analysis of class in terms of a notion of ‘society’.
This, as stated above, has important consequences regarding the degree
to which social actions and relationships are bounded by a container
theory of the nation-state, particularly as Weber’s analysis examines not
just class but also status: the realm of communal socialisation. Weber was
one of the first thinkers to introduce this notion of status, along with
related ideas of lifestyle and relations of consumption, into sociology.
Today, through Weber it is possible to pose important questions about

the connection between social standing and material wealth, and to
consider the possibility of conceiving of the social without tying it, as
in the work of neoliberal thinkers such as Ludwig von Mises (see
Chapter 5), to an underlying set of economic values or principles.
Chapter 7 will return to the theme of modernity. In the late-1980s/
early-1990s this concept lay at the heart of debates over the logic and
fate of Western capitalism; a theoretical development in large inspired
by the work of Weber, and in particular by his writings on religion and
culture. One reason for this was that Weber presented alternative ways
of thinking about culture to those advanced within the discipline of
cultural studies, which in the United Kingdom tended to be Marxist in
orientation. Weber’s work could also be used as a resource for thinking
about the potentialities and limitations of the postmodern turn. But by
the late-1990s this excitement around Weber’s sociology of culture had
largely waned, and instead thinkers such as Ulrich Beck developed
alternative theories of modernity and new approaches to the study
of globalisation that were hostile to various aspects of Weber’s work.
Nevertheless, Beck’s analysis of what he calls a second or reflexive
modernity in many ways remains tied to a Weberian framework. For
whereas Weber’s Protestant Ethic explores the unintended consequences
of value-rational action, Beck’s Risk Society examines the unintended
consequences of the instrumental rationality of industrial modernity:
the pollutants or so-called ‘bads’. Beck’s analysis of the distribution
of these ‘bads’ flips between a Marxist and Weberian model of class,
centring on the one hand on ownership, and on the other on stra-
tification. This chapter will use the writings of Weber to explore the
limits of Beck’s position, before performing a similar exercise in rela-
tion to Zygmunt Bauman writings on liquid modernity. Bauman, like
Beck, argues that contemporary societies are characterised by a second
modernity, and by far-reaching processes of individualisation which
are rendering social bonds ever more transient and fluid (without,
however, saying exactly where these societies exactly are). This descrip-
tion of ‘liquidity’, which is built upon a dismissal of Weber’s concepts
of instrumental and value-rationality (see Bauman, 2000:60–1), is
accompanied by a theory of the downward movement of powers and
responsibilities from the state to the individual; a theory of neoliberalism
in all but name. But what is missing from Bauman’s account, surpris-
ingly, is detailed attention to the complex workings of markets and to
the continued powers of the state, not to mention at a broader level
the social and cultural dynamics of contemporary capitalism. It will be
Introduction 11
argued that in each of these respects, Weber’s work continues to have

something to offer.
The concluding chapter of this book begins by questioning whether
concepts of the modern or modernity are still useful for pursuing a
sociological analysis and understanding of contemporary capitalism.
A strength of modernity thinking is that it refuses to be dazzled by the
new, for instead it sees clear continuities and lines of development
from past to present (this is the attraction of the modern in second
modernity thinking against anything that constructs itself as being
‘post-’). It is possible to read Weber in this way, and to argue that his
work advances a history of the present that is in all but name a genealogy
of modernity (see, for example, Owen, 1994). This idea of genealogy
comes from Friedrich Nietzsche’s famous essay ‘On the Uses and Dis-
advantages of History for Life’ (1983:59–123), which draws a contrast
between critical (genealogical), antiquarian and monumental forms of
historical work. While genealogy has been popularised by Foucault’s
(1977a:139–64) reading of Nietzsche, this chapter observes that anti-
quarian history, which attempts to re-enact the past in the present,
is still a common practice in social theory (one prominent example
is Zygmunt Bauman’s (1999) attempt to reintroduce a model of Greek
public-private life in response to the false freedoms of contemporary
consumerism). While genealogy, as an attempt to draw the present
into question through an understanding of the past, is quite different
from antiquarian history, which has an underlying normative basis,
they are united by a practice of working from past to present; a prac-
tice that tends to be framed by an understanding of the modern or
modernity. But this is not the only way in which the present can be
called into question. It is also possible to work from the future to
the present, either through the construction of fictive devices that
are designed to expose the limits of possibility in the here and now
(such as Donna Haraway’s (1991) trope of the cyborg), or by fore-
casting possible passages to the future in order to identify and under-
stand structural logics contained in the present (a practice exemplified
by Daniel Bell’s (1987) reading of ‘The World and the United States
in 2013’) – a form of future thinking that, paradoxically, is useful
in retrospect, as it reveals past successes and failures of the socio-
logical imagination. These thought experiments might be used to
question the value of modernity-thinking, along with the idea that
the primary vehicle for sociological critique is genealogical history
– a position common to much Foucauldian social theory of the
1990s.
Finally, a further argument is advanced (one which extends the stance

taken in Chapter 2): that a sociology of the present also requires inventive
conceptual work; work in a neo-Kantian tradition that Nietzsche’s vital-
ism, which pursues ‘history in the service of life’ (1983:75), effectively
blocks. The task, as argued above, is to break from meta-conceptual forms
such as modernity, which now seem to serve little purpose (see Chapter
7), and instead construct mobile concepts that can be assembled in net-
works that can be used to forge an analysis and understanding of the
present. The task of this book is to consider how such a conceptual
network can be developed out of an engagement with Weber’s work:
from his ideal-types of capitalistic activity to a conceptual analysis of
markets, neoliberalism and class. It is on this basis that this book aims to
make a contribution, albeit a modest one, to the sociology of contem-
porary capitalism, and in so doing to work outside of, or perhaps beyond,
the limits of so-called postmodern, reflexive modern and liquid modern
theory.
2
Method
This chapter focusses on one main aspect of Max Weber’s methodology:

concept formation. Ideal-typical concepts were once central to the con-
cerns of Weber scholarship (see Burger, 1976; Oakes, 1988; Drysdale,
1996), and to sociology and the social sciences more generally, but in
recent times methodological work on the formation and uses of con-
cepts has fallen into relative neglect (concepts are barely mentioned,
for example, by Fritz Ringer in his Max Weber’s Methodology (1997)). This
is surprising given that concept formation lies at the heart of Weber’s
interpretive sociology. This chapter will return to Weber’s methodo-
logy to explore what ideal-typical concepts are and how they can be
put to work. It will do so by taking what might initially appear to be an
unusual step: reading between Weber’s ideal-typical methodology and
the empirical philosophy of Gilles Deleuze. The importance of
Deleuze’s work is that it offers a radical alternative to most existing
sociological conceptions of empiricism (a point largely missed by sec-
ondary commentators such as Alliez, 2004), but one that is in many
ways anticipated by the work of Weber. What binds Deleuze to Weber is
his argument that empiricism must be framed by a theory of the
concept. In Difference and Repetition, Deleuze writes that ‘This is the
secret of empiricism. Empiricism is by no means a reaction against con-
cepts, nor a simple appeal to lived experience. On the contrary, it
undertakes the most insane creation of concepts ever seen or heard’
(1995a:xx). This is not an isolated statement in Deleuze’s work. Elsewhere,
he terms A Thousand Plateaus ‘a book of concepts’ (Deleuze, 1995b:25) and
opens his final book (with Félix Guattari), What Is Philosophy?, with the
basic although deceptively difficult question ‘What is a Concept?’ (1994:
15–34). The questions of what concepts are and the uses to which they
might be put will form the central focus of this chapter, which will
13

attempt to do three things. First, it will turn to Deleuze’s work in order to

address the connection between concepts and empiricism. Second, it will
explore a number of key parallels between Deleuze’s philosophy and
Weber’s methodological writings. Finally, the chapter concludes by ques-
tioning Deleuze’s claim that ‘philosophy is the discipline that involves
creating concepts’ (1994:5) and that it is the philosopher who is the
‘expert in concepts and in the lack of them’ (1994:3). It will be argued,
against Deleuze, that concept formation does not belong solely to the dis-
ciplinary territory of philosophy, for not only has imaginative conceptual
work been a central feature of sociology from its outset, it continues to
be the basis upon which sociological work that is theoretical in basis and
empirically engaged can proceed.
Concepts and empiricism
The basic principles of Deleuze’s empiricism are laid out in his early
text Empiricism and Subjectivity, which was first published in 1953. This
short essay on Hume’s theory of human nature is a challenging read,
but in a preface to the English language edition written in 1989, Deleuze
lays bare his key points of interest in ‘the genius of Hume’ (1991:x). The
first of these is that Hume not only established the concept of belief, but
questioned the conditions under which belief and, by extension, know-
ledge (between which there is no clear line of demarcation for Hume)
takes form and is legitimated. Second, Hume does this by analysing
knowledge in terms of the ‘association of ideas’, thereby treating know-
ledge as ‘a practice of cultural and conventional formations (conventional
instead of contractual), rather than as a theory of the human mind’
(1991:xi). This, in turn, opens the path for a third reason for reading
Hume: ‘He created the first great logic of relations’ (1991:xi). This empha-
sis on the relationity of ideas is pivotal for Deleuze, and no doubt informs
his later writings on the rhizome (see Deleuze and Guattari, 1988). But in
his reading of Hume it takes on a particular significance: ‘all relations (not
only “matters of fact” but also relations among ideas) are external to their
terms. As a result, he constituted a multifarious world of experience based
upon the principle of the exeriority of relations’ (Deleuze, 1991:xi). The
notion of exteriority has been influential in a number of different strands
of French philosophy (see, for example, Levinas, 1969; Althusser and
Balibar, 1977), but for Deleuze it describes a relationity that is under-
pinned by what he calls association, or rather a combination of ‘contigu-
ity, resemblance, and causality’ (1991:100). Deleuze adds that association,
while making relations possible, is not enough on its own to explain
Method 15
what relations are or the liveliness of their components and contours.

There are many complications here, one of which is that there is a degree
of independence between objects and/or ideas and the relations that are
forged between them. Deleuze observes, for example, that ‘ideas do not
account for the nature of the operations that we perform on them, and
especially of the relations that we establish among them’ (1991:101). The
temptation this offers is to treat ideas and relations as transcendental
forms, but Deleuze declares that this is exactly the wrong path to take.
Instead, he returns to the question of empiricism, and argues that the task
of thought is to address the ‘given’ as something that is to be placed into
question, and to ask of the ways through which subjects constitute them-
selves, or perhaps are constituted, through encounters with the empirical
or pre-conceptual world.
But what exactly is the ‘given’? This question leads to the heart of
Hume’s, and in turn Deleuze’s, notion of empiricism. In a key passage,
Deleuze explains:
It is, says Hume, the flux of the sensible, a collection of impressions

and images, or a set of perceptions. It is the totality of that which
appears, being which equals appearance; it is also movement and
change without identity or law. We use the terms ‘imagination’ and
‘mind’ not to designate a faculty or a principle of organization, but
rather a particular set or a particular collection. Empiricism begins
from the experience of a collection, or from an animated succession
of distinct perceptions. It begins with them, insofar as they are dis-
tinct and independent. In fact, its principle, that is, the constitutive
principle giving status to experience, is not that ‘every idea derives
from an impression’ whose sense is only regulative; but rather that
‘everything separable is distinguishable and everything distinguish-
able is different’ (1991:87).
The basic argument of this passage is that empiricism is not about a simple
movement from an experience of sensory data to its representation in the
form of an idea. Rather, such data is characterised by difference and sin-
gularity and is thus not subsumable under any general law or procedure.
This means that representing what is given to our senses by subsuming it
under an idea or theory is not only undesirable but ultimately impossible.
For Deleuze, empiricism is thus to be less about the representation of a
sensible world through means of rational thought than the challenges
this world presents to thought. For Boundas, this means that ‘empiricism
is not a philosophy of the senses but a philosophy of the imagination’
(1991:7). This position might be compared to Jean-François Lyotard’s

writings on aesthetic judgement, which takes the sublime, contrary to
the beautiful, as a moment of excess that arises from the inability of
reason to be reconciled with the imagination (see Gane, 2002:109). But
Deleuze takes things in a different direction, for unlike Lyotard he
treats neither reason nor imagination in Kantian terms as faculties,
and at the same time refuses to be seduced by a Nietzschean language
of excess. Instead, he asserts the notion of difference that can be devel-
oped from the writings of Hume (and which was later to become one
of his own key concepts), along with the importance of the concept as a
device for presenting the seemingly unpresentable in thought (see
Hallward, 2006:39).
This emphasis on the role of the concept is central to Deleuze’s
empiricism but is absent from his study of Hume. However, in later
writings Deleuze makes the importance of the concept explicit: ‘I never
broke with a sort of empiricism that proceeds to a direct exposition of
concepts’ (Deleuze cited in Rajchman, 2000:21). And: ‘The concept
exists just as much in empiricism as in rationalism, but it has a com-
pletely different use and a completely different nature…’ (Deleuze and
Parnet, 1977:viii). But what, for Deleuze, are these concepts of a ‘differ-
ent’ use and nature, and how might they be put to work? These are the
central questions addressed by Deleuze and Guattari in their final col-
laborative work, What is Philosophy? In this text, it is argued that con-
ceptual work can take three main forms. The first involves the creation
of concepts that are designed to have a classificatory purpose. These are
the concepts commonly found in encyclopaedic works that are con-
structed to organise accounts of empirical materials by giving them
fixed and stable meanings. The second is concept creation in service of
the capitalist marketplace. This involves the creation of concepts to be
bought and sold, and to be prized for their capacity for ‘commercial
professional training’ (1994:12). Deleuze and Guattari are not alone in
identifying such activity. This commodification of thought is also
addressed by Lyotard in his later work, most notably in Postmodern
Fables (1997), which argues that even the most critical concepts of phi-
losophy and theory are today marketed as niche ideas that have an eco-
nomic worth. More recently, Nigel Thrift extends this position in his
analysis of an emergent ‘knowing capitalism’ that organises itself by
incorporating many of the concepts and ideas of critical social science
(an argument addressed in detail in Chapter 3). In particular, Thrift
draws attention to feedback loops between social scientific critiques of
capitalism and the ways in which capitalist culture identifies and deals
Method 17
with its internal contradictions (see Thrift, 2005:6). Deleuze and Guattari
largely anticipate this development and term it ‘an absolute disaster for
thought’ (1994:12).
This leads them to argue instead for a third type of conceptual work,
what they call a pedagogy of the concept. This is where concepts are created
neither as universals for the purpose of classification, nor as conduits
for the production of economic value, but as experimental tools that
are born out of tensions between the empirical world, for Deleuze the
realm of ‘pure difference’, and philosophical thought. This raises the
difficult question of where concepts come from. It would appear that
the conceptual and pre-conceptual worlds are intimately related (see
Thanem and Linstead, 2006), even if, because of the infinite complexity
of empirical life, they can never be aligned. James Williams detects that
for Deleuze there are ‘intimations of significance prior to well-defined
concepts and to knowledge, not the opposite. What is more, these inti-
mations are irreducible and critical elements of the concept’ (2003:32).
Concepts are never forged in abstraction as they always come from
somewhere, but at the same time they are never ready made. Villani
thus observes that ‘It is not a question of finding concepts in the public
domain, even if the latter sometimes takes on philosophical airs. Con-
cepts are never “at hand” and never fall from the sky’ (2006:228). Rather,
concepts are mobile and transient abstractions that are forged out of
our encounters with the sensory world of experience. This feeds back
into Deleuze’s theory of empiricism, which, he argues, is to be defined
according to two basic principles: first, that ‘the abstract does not explain,
but must itself be explained’, and second that ‘the aim is not to re-
discover the eternal or the universal, but to find the conditions under
which something new is produced’ (Deleuze and Parnet, 1977:vii). The
second of these principles – that empirical philosophy is a philosophy
of creation and becoming – has received more attention than the first:
the suggestion that ‘states of things’ should be analysed in ways that
‘non pre-existent concepts can be extracted from them’ (Deleuze and
Parnet, 1977:vii); a position which questions the common assumption
that the effectiveness of concepts lies in their ability to shift thought
from the abstract to the concrete. Nikolas Rose sees this as giving rise
to a form of empiricism centred on ‘a constant dynamic engagement
between thought and its object’ (Rose in Gane, 2004:176). But Deleuze
and Guattari go further than this as they argue that concepts are about
creation: the creation of precarious and unstable bridges between the
empirical world and its presentation in thought. Concepts are not fixed
but are what they call becomings: devices that draw on the complexities
of the empirical world in order to open our theoretical imagination to

things as they might be, rather than to represent or capture these com-
plexities in knowledge. Concepts deal with possibilities. For Deleuze and
Guattari they involve the creation of an event (1994:33), and as there is
no guarantee of the effectiveness of such creation, or of where it will lead,
they compare it to the throwing of a dice (see 1994:35). Such events are
intensities that condense around the problems empirical data pose to
the apparent certainties of thought. Deleuze and Guattari, however, are
careful to draw a distinction between intensity and energy: the concept
‘has no energy, only intensities; it is anenergetic (energy is not intensity
but rather the way in which the latter is deployed and nullified in an
extensive state of affairs)’ (1994:21). This statement, in turn, is accom-
panied by further paradox: ‘The concept is an incorporeal, even though it
is incarnated or effectuated in bodies’ (Deleuze and Guattari, 1994:21).
Deleuze and Weber
The question of what concepts are and how they might inform a ‘new’
empiricism, can be considered in finer detail by drawing a number of
parallels and contrasts between Deleuze’s What is Philosophy? and the
methodological writings of Max Weber. This might seem an unorthodox
approach, but there is a clear rationale for reading between these two
figures: Deleuze insists that the creation of concepts underpins all philo-
sophical practice, while Weber puts concept formation at the heart of his
sociological work. This said, there are, of course, important differences
between the philosophical positions underpinning the work of Deleuze
and Weber. There is no suggestion in Weber’s writings, for example, that
thought in general, and concepts in particular, are susceptible to com-
modification processes that emanate from, and extend the reach of, the
capitalist marketplace (this is something considered further in Chapter 3).
There is also no Freudian insistence that concepts are anenergetic forms
that emerge out of and condense around (libidinal) intensities. Instead,
Weber’s theory of concept formation is primarily neo-Kantian in orienta-
tion, and lays down the principles of a social science designed to be
value-free and objective in basis, and which gives us the means for estab-
lishing ‘adequacy’ at the levels of causality and meaning. This might
appear to place Deleuze and Weber on philosophical territories that are
mutually irreconcilable, but this in no way precludes a reading between
these two thinkers. One approach, hinted at by Gillian Rose (1984), might
be to consider the latent neo-Kantianism of ‘post-structuralist’ thought and
to connect this to Weber’s cultural sociology. This is not something that
Method 19
can be done in the present chapter. Instead, a number of key parallels and
contrasts will be drawn between Deleuze’s and Weber’s theory of con-
cepts and concept formation. To do this, Deleuze’s wilder statements, for
example that concepts are ‘traversed by a point of absolute survey at infinite
speed’ (Deleuze and Guattari, 1994:21), will be bypassed in favour of more
concrete analysis of what concepts are, how they are forged and the uses
to which they can be put.
Such questions lie at the heart of Weber’s methodological writings. The
standard reading of Weber is that in neo-Kantian fashion he draws a dis-
tinction between is and ought, fact and value. This is normally associated
with his call for objectivity or value-freedom in social scientific work. But
a further point of his argument is commonly overlooked: that ‘empirical
reality’ is so complex that it cannot be known in its entirety. This is a
point also addressed by Simmel (1997) in his writings on the tragedy of
modern culture, in which it is argued that culture is now too laden with
artefacts and values to be known in its totality. Weber’s response to this
difficulty is both neo-Kantian and Nietzschean in orientation. In arguing
that the complexity of the empirical world is largely unknowable, he
takes a neo-Kantian step, for he suggests that we can never get a firm grip
on the noumenal realm, or the realm of things-in-themselves (this is
something that we will address in further detail in Chapter 3 through
analysis of Scott Lash’s notion of metaphysical or intensive capitalism).
This separates Weber from Carl Menger (a figure who we return to in
Chapter 5; for a useful overview of Menger’s methodological position, see
Mäki, 1997; Swedberg, 1998:174–9), who in the 1880s advanced an essen-
tialist theory of ‘exact’ types that sought to achieve ‘a complete under-
standing of the social world’ (Camic et al., 2005:18). The complexity of
Weber’s position, by contrast, is expressed in the following passage:
As soon as we attempt to reflect about the way in which life confronts

us in immediate concrete situations, it presents an infinite multiplicity
of successively and coexistingly emerging and disappearing events,
both ‘within’ and ‘outside’ of ourselves. The absolute infinitude of this
multiplicity is seen to remain undiminished even when our attention
is focussed on a single ‘object’… (1949:72).
It would here be possible to mistake Weber for Deleuze. The key point
of this passage is that the empirical world, even in its most immediate,
lived sense, is simply too complex to capture fully in thought. And
even if we were to try to do so, Weber is sceptical of the likely results.
Drawing on the work of James Mill, he declares that ‘if one proceeds
from pure experience, one arrives at polytheism’ (Weber, 1970:147).

Weber’s, response is initially Nietzschean in orientation, for it treats
modern culture as an agonistic realm made up of competing, indeed
seemingly irreconcilable, value-orders and value-spheres (for the clearest
articulation of this position see the ‘Intermediate Reflection’ to his
Sociology of Religion, see Weber, 1970:323–59; Gane, 2002:30–41). Con-
fronted by the chaos of this empirical world, he argues the best we can
hope for is to address problems that are of significance to us because they
relate to our subjective value-interests (what is commonly called value-
relevance or Wertbeziehung). But, against Nietzsche and in more neo-
Kantian fashion, Weber argues that the only way that social scientists can
do this with any meaningful results is through the use of concepts. For
through the use of (ideal-typical) concepts Weber argues that a logical
and empathetic understanding of social life and culture may be gained,
and subjective judgements and personal biases be isolated from social
scientific work (a position that has been vilified by generations of Marx-
inspired thinkers, see for example Bauman in Gane, 2004:42–4).
This aim does not guide the philosophy of Deleuze and Guattari:
‘Nowhere do we claim for our concepts the title of a science’ (Deleuze
and Guattari, 1988:22). But nonetheless there are surprising points of
contact between Weber’s and Deleuze’s respective writings on con-
cepts. In Out of this World, Peter Hallward addresses Deleuze’s theory of
the concept in some detail. He states the following: ‘Every conceptual
creating injects a certain stability into the otherwise undifferentiated
flux of pure chaos in which thoughts disappear as soon as they appear’
(2006:141). And: ‘A concept renders a slice of chaos available for
thought. A conceptual creation achieves this by imposing a certain
consistency upon its various elements’ (2006:141). These statements
could quite easily belong in a secondary text on Weber. Weber states,
for example, that an ideal-typical concept
is formed through a one-side accentuation of one or several perspectives,

and through the synthesis of a variety of diffuse, discrete, individual phe-
nomena, present sometimes more, sometimes less, sometimes not at
all; subsumed by such one-sided, emphatic viewpoints so that they
form a uniform construction in thought. In its conceptual purity this
construction can never be found in reality… (2004:388).
Concepts are, for Weber, theoretical fictions that are forged through
the abstraction and accentuation of the fragments that make up the
‘polytheism’ or ‘pure difference’ of the empirical world. This position is
Method 21
largely in keeping with Deleuze’s empiricism, in which concepts are

not simply abstractions or tools that are to be used to explain concrete
phenomena, but are themselves drawn out of a confrontation with the
pre-conceptual realm of the empirical – a process which poses problems
to thought and forces it to account for itself. To repeat: ‘the abstract
does not explain, but must itself be explained’ (Deleuze and Parnet,
1977:vii). Further to this, Deleuze and Guattari follow a similar path to
Weber in presenting the concept as a fractured totality that is necessarily
removed from empirical reality: ‘The concept is a whole because it total-
izes its components, but is a fragmentary whole. Only on this condition
can it escape the mental chaos constantly threatening it, stalking it, trying
to reabsorb it’ (1994:16). Concepts, then, are defined by an artificial unity
that can never do justice to the complexity of the sensory world, and are
made up of ‘diffuse, discrete, individual’ components to which they are
not in turn reducible. Concepts or what Weber calls ideal-types can at
best be seen, in line with Deleuze and Guattari’s description, as bridges
that are always tentative and in flux: bridges that are forged out of and in
response to the immediacy of lived experience in order to take up the
impossible challenge of presenting this world in thought.
Concepts and problems
One of the key statements of the opening section of Deleuze and Guattari’s
What is Philosophy? is that ‘All concepts are connected to problems with-
out which they would have no meaning’ (1994:16). This emphasis on
meaning has a distinctly Weberian ring, as for Weber it is only when
‘reality’ becomes meaningful that it becomes constituted as culture. In his
essay ‘The “Objectivity” of Knowledge in Social Science and Social Policy’
Weber declares that ‘Empirical reality is for us “cultural” in the sense, and
to the extent that, it is related to evaluative ideas; it comprises those
elements of reality rendered meaningful by this relationship, no more’
(2004:383). Moreover, Weber observes that ‘scientific domains are consti-
tuted not by the “objective” relation between “things”, but by the rela-
tionship of problems in thought’ (2004:371). This places him on similar
ground to Deleuze, as knowledge is produced through what Weber calls the
‘setting’ of different problems that will vary according to the value-interests
of the social scientist and the components or segments of empirical
reality encountered. This means that Weber’s empiricism is not anti-
conceptual and drawn simply from the sensory data of the lived world, it
is rather driven by problems that emerge from such encounters. This pos-
ition lies at the heart of Weber’s theory of value-relevance (Wertbeziehung),
for social scientific knowledge, which can only ever be one-sided and
partial given the infinite complexity of empirical reality, is driven by values
that lead us to address certain cultural or scientific phenomena and to
pose questions about these in thought. Weber proceeds from here to
formulate (ideal-typical) concepts as a means for addressing such ques-
tions in an objective and detached manner, although whether this is
in fact possible is another matter.
Deleuze, by contrast, takes a different route as he has no discernable
interest in objectivity. Rather, he emphasises the role problems have
in creating the conditions under which new ideas and knowledge
can emerge. This might seem to place Deleuze on similar ground to
Thomas Kuhn (1962), who speaks of the force of revolutionary science,
or Jean-François Lyotard (1984) and his theory of paralogy, but Deleuze
places far greater emphasis on the role of the concept in addressing
problems in thought. He also conceives of problems and the possibility
of their solution in a quite different way to either Kuhn or Lyotard. His
inspiration is instead Henri Bergson, for whom the first act of method-
ology is ‘the stating and creating of problems’ (Deleuze, 1988:14). For
Deleuze, the formulation and definition of the key problems of thought is
central to intellectual and political freedom. There are two main reasons
for this. First, the formulation of problems, along with the conceptual
tools needed to pose and address them, opens a space for creation that
would not have been possible otherwise. He explains: ‘stating the
problem is not simply uncovering, it is inventing. Discovery, or uncov-
ering, has to do with what already exists, actually or virtually; it was
therefore certain to happen sooner or later. Invention gives being to
what did not exist; it might never have happened’ (Deleuze, 1988:15).
Second, Deleuze insists that the freedom to identify problems in thought
is pivotal, for the way in which they are presented subsequently directs
the ways in which they can be addressed and possibly resolved. He states:
‘the problem always has the solution it deserves, in terms of the way in
which it is stated…and of the means and terms at our disposal for stating
it’ (Deleuze, 1988:16). This novel approach might seem to place Deleuze
at a distance from Weber, but there are potential points of intersection.
For example, the introductory section of Weber’s ‘The “Objectivity” of
Knowledge in Social Science and Social Policy’, sets out the editorial line
of the then new journal Archiv für Socialwissensschaft und Socialpolitik, and
defines in detail the key problems and limits of the social and cultural sci-
ences (see 1949:63–8). In so doing, it opens a space of possibility within
which social or cultural scientists might work, and gives an accompanying
indication of the types of conceptual devices, in this case ideal-types, that
Method 23
might be forged. In this sense, there is perhaps a normative thread to

Weber and Deleuze’s writings, for both place problems and concepts at
the very heart of their respective fields (sociology and philosophy), and
in so doing define what these fields are and can possibly be.
Deleuze and Guattari’s argument for a pedagogy of the concept is
closely tied to their proposition that concepts gain meaning from their
application to various problems that are posed to us by the empirical
world. Problems – including, for the purposes of the present book, those
posed to us by the complexities of the contemporary capitalist world
– force us to think in new ways, and often this is only possible through
the (re-)formulation of concepts that expand the theoretical imagina-
tion. Concepts are learning devices because they force us to confront in
creative ways the difficulty and sometimes impossibility of presenting
empirical data with any clarity or feeling in thought. Weber’s latent neo-
Kantianism, as discussed above, brings him close to this position because
the noumenal realm – the realm of things in themselves – is never some-
thing that thought can capture with any certainty. For this reason, Weber
stands against the construction of universal concepts as direct represent-
ations of the world, not least because this world is never knowable in any
full sense. Instead, he constructs conceptual fictions or ideal-types that
might be of heuristic value, and in this way, concepts take on a peda-
gogical role: ‘the construction of abstract ideal-types is not an aim, but
a means’ (1949:387–9). This type of pedagogy is different from that advo-
cated by Deleuze, who, as stated above, prioritises invention over dis-
covery, along with related questions of imputation and meaning. But
there is an intriguing point of connection: Weber’s idea of the concept as
a ‘heuristic device’ (1949:102) emphasises the interplay between discov-
ery and invention. For it is only through invention, in this case the
invention of ideal-types or concepts, that discovery can take place. At the
same time, this act of invention is likely to be fired by some kind of pre-
conceptual encounter or evaluative interest. This means that discovery,
for Weber, is fundamentally a creative process, and is not simply a matter
of presenting something that is already in existence or which is given.
It is not simply an act of uncovering what is there, but rather inventing
the terms through which problems posed to us by the empirical world
can be presented in thought. This, for Weber, is precisely the value of
what he calls a concept: ‘it is not a description of reality but aims to give
unambiguous means of expression to such a description’ (1949:90).
It might be observed that this question of invention, and the related
challenge of expanding the sociological imagination to confront the
complexities of the empirical, has been addressed elsewhere by C. Wright
Mills (see Fraser, 2009; Gane, 2012). The importance of Mills’ Sociological
Imagination is not simply that it draws out underlying connections
between biography and history, as it is commonly stated in the secondary
literature, but that it makes a vigorous case for the rejection of ready-
made concepts and methods in favour of starting with problems that
arise from our lived experiences. Mills’ argument is that rather than
fetishise concepts (as in the grand theory of Talcott Parsons) or method-
ological techniques (as in the work of Paul Lazarsfeld and many sub-
sequent ‘methodologists’), theory and method are to be forged out of an
encounter with the empirical world and the problems it poses to thought.
Mills’ provocation, which in many respects is inspired by the ‘classic’
sociological theory of Weber, is that any approach that fetishises either
theory or method is mistaken on the ground that it places method or
theory first and then looks to analyse the empirical within a preconceived
framework. Such an approach is likely to be of limited heuristic value as
rather than learning from the vibrancy and complexity of the empirical it
instead subsumes it under a method or a concept (which in turn becomes
little more than a ‘sponge-word’ (1959:53): a weak analytic descriptor
that does little more than absorb the energy of the world it is employed
to study). Mills takes the reverse position: empirical problems should
always determine the subsequent formulation of appropriate concepts
and methodological techniques. Working in the spirit of Mills, Les Back
(2007) has argued that for sociology to be attentive to the empirical it
must develop an art of listening that takes us beyond existing method-
ological and theoretical dogmas, along with more nuanced literary prac-
tices through which lived experience can be inscribed. The basic point is
again that thinking should start from the richness of the empirical rather
from a ready-made theoretical or methodological position. It is precisely
this challenge that lies at the heart of philosophical (Deleuze) or socio-
logical (Mills, and I would include Weber) work. This is something we
will return to in the conclusion of this chapter.
Networks of concepts
Deleuze and Guattari push things further by situating concepts on what

they call a plane of immanence (see 1994:35–60): a non-hierarchical
network made up of individual but related strata that never in them-
selves assume a position of dominance. The importance of this is that
concepts emerge and take shape through relations forged with other con-
cepts. Deleuze and Guattari explain: ‘a concept…has a becoming that
involves its relationship with concepts on the same plane. Here concepts
Method 25
link up with each other, support one another, coordinate their contours,
articulate their respective problems and belong to the same philosophy,
even if they have separate histories’ (1994:20). Concepts, no matter how
individual and unique they might appear, never emerge in a state of
isolation, for ‘every concept relates back to other concepts’ (Deleuze and
Guattari, 1994:19). Concepts are thus not simply ‘singular, indivisible
and discrete’ as Hallward suggests (2006:141), but are relational entities
by definition, even if these relations are not always clear (leading Deleuze
and Guattari to question their ‘exoconsistency’). An example of this
is Deleuze and Guattari’s own A Thousand Plateaus (1988), which pre-
sents a dazzling array of concepts within and across of different planes
of thought that play off and ‘vibrate’ against each other. There is no
normative order to these concepts. Rather, they are assemblages that can
be drawn together and applied in different and often unforeseen ways
according to the particular empirical problems in hand (for an example
of how these concepts might be put to work, see Buchanan and Lambert,
2005).
This might seem a world away from the work of Weber, but perhaps
his Economy and Society can be read in a similar way? What is striking
about this work is that there are no meta-concepts as such, and surpris-
ingly (given the title of this work) even a concept of ‘society’ is absent
from the ‘conceptual exposition’ that opens this work (see Chapter 6).
Instead, there are multiple concepts that work along different although
related planes: concepts of social action, social relationships (which are
much neglected), rationality, power, domination and legitimacy to
name but a few. This is perhaps why Weber scholars have struggled to
identify the master-concept of Weber’s work (see Gane, 2002:5–7), for
Weber does not work with meta-conceptual forms so much as con-
ceptual assemblages or what DeLanda (2006) has called ‘possibility spaces’.
These assemblages are drawn from components of empirical reality
but in turn are abstracted and pushed into ‘one-sided accentuations’ to
form useful conceptual tools for thought. This practice lies at the heart
of Weber’s notion of the ideal-type, which he says ‘is an attempt to
analyze historically unique configurations or their individual com-
ponents by means of genetic concepts’ (Weber, 1949:93). As stated above,
these ideal-types are almost always internally differentiated into multiple
forms, and are often at their most useful when worked with and against
other concepts. Indeed, Weber’s sociology is at its liveliest where it centres
on the friction within and between its conceptual constructs (be these
types of social action or legitimate domination). This chimes with Deleuze
and Guattari’s observation that ‘[c]oncepts are centres of vibrations, each
in itself and every one in relation to all others. This is why they resonate
rather than cohere or correspond with each other’ (1994:23).
One tendency in Deleuzian scholarship is to read concepts as indi-
vidual creations of the philosopher that are marked out by clear and
identifiable differences to each other. This is the emphasis of Peter
Hallward, who states that ‘The invention of singular concepts makes it
possible for thought to proceed and develop’ (2006:141). As stated
above, a problem with this reading is that concepts are never forged in
isolation from each other, and for this reason the idea of difference
always implies at the same time relationality. Even if Hallward is right in
saying that concepts play a key role in the creation and development of
thought, this is rarely because of their singularity. More often, it is
because of their multiplicity, because of their hybrid identities and inter-
nal differences and divisions. At the very outset of What is Philosophy?
Deleuze and Guattari talk of the concept not as one but as many: ‘Every
concept is at least double or triple’ (1994:15). They illustrate this point by
observing that philosophers such as Descartes, Hegel and Feuerbach do
not begin with the same set of concepts (even if these concepts might
look similar in name: freedom, reason, mind, to name but a few), and do
not even share the same concept of beginning. More to the point, there
are instances where a theorist might employ a layering or internal differ-
entiation of a concept to address a particular set of problems in hand.
This is exactly the case in the work of Weber. When Deleuze and Guattari
talk of the doubling or tripling of concepts, this is the very strategy Weber
employs throughout Economy and Society. There is no singular conception
of capitalism, for example, but three types: traditional commercial, polit-
ical and rational (for a clear mapping of these concepts, see Swedberg,
1998:47). There is thus never capitalism for Weber, but capitalisms and,
to add another layer of complexity, different modes of capitalistic profit-
making (see Chapter 3). The same is the case for Weber’s concept of
domination. Again, there are three types: traditional, charismatic and
legal/rational (see Weber, 1978:215). And things are even more complex
with the concept of social action, where there are four types: traditional,
affectual, value-rational, instrumentally rational (we will return to these
through the analysis of markets in Chapter 4). The development of multi-
ple concepts is central to Weber’s sociology, and is a task that is every bit
as creative as the invention of concepts that are marked out by their
apparent singularity (such as assemblage, fold, difference or repetition).
An advantage of concepts that assume multiple forms is that they are
likely to be useful for addressing a wider range of problems, both through
the extension of their own internal multiplicities or through the forging
Method 27
of strategic and flexible alliances with other concepts. This is perhaps

one reason why Weber’s concepts continue to be such a force in con-
temporary sociology, and why they continue to be doubled and re-doubled
today.
Conclusion: Sociology and concepts
This chapter has explored a number of parallels between the writings

of Weber and Deleuze in order to reassert the importance of concept
formation for theoretical work that is at the same time empirically
engaged. One question this leaves us with, and which demands further
work, is whether the creation of concepts is, in fact, the exclusive task
of the philosopher as Deleuze and Guattari suggest. At the end of the
first chapter of What is Philosophy?, they declare that ‘The concept belongs
to philosophy and only philosophy’ (1994:34). It is common to find this
position reproduced without reflection in commentaries on Deleuze.
Eugene Holland, for example, states that: ‘creating concepts is the prin-
cipal task of philosophy, and part of what this entails is extracting elements
or dynamics from the works of other philosophers and combining them
in new and productive ways’ (2005:53). This position, which elevates the
status of the philosopher, is common elsewhere (a version of this argu-
ment can be found, for example, in Berlin, 1999:9), and perhaps finds
its earliest form in the philosophy of the ancient Greeks (indeed in his
lecture ‘Science as a Vocation’ Weber traces the historical value of science
back to Plato and his discovery of the concept, see 1970:141). But is this
right: do concepts, and the task of concept creation, belong solely to
philosophy? What about other disciplines that have engaged in deep
conceptual work since their inception, in particular the discipline of
sociology?
There are at least three possible ways of answering this question.
First, one might adhere to Deleuze and Guattari’s position, and see other
disciplines as posing a threat to the privileged position of philosophy.
For Deleuze and Guattari there is nothing particularly new about such
a situation, for they declare that ‘philosophy has encountered many
new rivals. To start with, the human sciences, and especially sociology,
wanted to replace it’ (Deleuze and Guattari, 1994:10). Second, and in
opposition to this position, it is possible to argue that concept formation
is not solely confined to the domain of philosophy and has been a key part
of sociological work since the discipline’s inception, particularly within the
Weberian tradition. Finally, there is another possible position: that while
conceptual work is performed as a matter of routine with sociology, the
conceptual imagination of this discipline is supplied largely by philo-

sophy. There is some truth in this, as the vocabulary of sociology today
includes concepts drawn from the work of continental philosophers
such Gilles Deleuze, Michel Foucault, and Jean Baudrillard, as well as
from philosophical writings in areas such as cybernetics and information
science (see Gane and Beer, 2008). This situation has been exacerbated by
the striking lack of inventive conceptual work within sociology in recent
years. This has led Ulrich Beck (2000b) to complain that the discipline
is today swamped by ‘zombie concepts’: concepts that live on in name
but which died long ago in terms of their usefulness. Elsewhere, Bruno
Latour (see Gane, 2004:77–90) argues that one explanation for this
development is that sociology has been too eager to break its ties with
philosophy in its quest to be ‘scientific’, and that this has limited its
empirical scope and imagination – a position which again suggests that
it is pivotal that sociology draw upon philosophy (but not necessarily
vice versa).
There is some sense to the latter two positions of the three stated above.
On one hand, sociology has been, and continues to be, a discipline that
is devoted to conceptual work. On the other hand, the conceptual ima-
gination of the discipline is not as vibrant as it could be, or as vibrant as
it was at its outset. And here lies a problem: the conceptual imagination
of sociology is currently quite limited in scope. Imaginative attempts at
concept formation are few and far between, and concepts that continue
to be pivotal, such as class, are all too often presupposed or re-hashed
rather than given a new lease of life. Contrary to Deleuze or Latour, how-
ever, it does not follow that contemporary sociologists are incapable of
concept formation or that they must look to philosophy for instruction.
As stated in Chapter 1, the problem is the temptation to take an easier
route, namely to use safe concepts that come ready-made and can easily
be applied to any empirical problem regardless of its context and com-
plexity. This is what Mills calls the fetishism of the concept: the practice
of starting from a conceptual framework that that outruns ‘any specific
and empirical problem’ (1959:58). I would argue that this is even the case
with thinkers such as Beck who decry the presence of zombie con-
cepts within the discipline but then fetishise their own concepts – such
as reflexivity and risk – by applying them ad nauseam to every aspect
of social and cultural life (we will return to Beck’s analysis of modernity
in Chapter 7). Instead, what is needed is conceptual work that gives the
discipline new tools for thinking, and in so doing enables the ‘zombie’
concepts of existing cannons to be refined, reinvented or finally laid to
rest, depending on the empirical problem in hand.
Method 29
It is here that Deleuze and Guattari’s writings on concept formation

might prove to be an inspiration even if we choose not to work with the
particular concepts they advance. Peter Hallward, commenting on the
spirit of Deleuze’s philosophy, remarks that ‘[t[he more stable, static or
blandly universal a concept the more skeletal, unremarkable or uncreative
it becomes’ (2006:140). This dictum should perhaps lie at the heart of
contemporary sociological work. There are a number of possible lines
along which such work might proceed. One is to invent new sociological
concepts that are in keeping with the empirical challenges and problems
of our times. Another lies in the possibility of reinventing or reworking
older concepts so that they are lifted from their historical settings and are
pushed in directions that are present relevant. Reda Bensmaïa argues that
Deleuze is an expert at such practice:
By detaching concepts from their original theoretical contexts, he is

able to re-evaluate them, to re-evaluate their tenor and make them
play new roles – in a word, he is able to transform them into ‘con-
ceptual personae’. In this way, philosophical concepts are never, for
Deleuze, static entities fixed once and for all, but are, rather, matters
to be further worked through and reconnected, ever called into crisis
and reinvented (2005:145).
It is indeed interesting that Deleuze so often turned back in order to

go forward, and found so much of conceptual interest in the writings
of Hume, Spinoza, Bergson and others. Perhaps there is a message here
for sociology: classical theory – and in particular, for the purposes of
the present book, the sociology of Max Weber – is far from dead. It
is dead only if it is limited to exegesis that is divorced from the value-
relevancies of empirical problems. Creative readings are instead needed
that value concepts for their potential to offer something new to our
understanding of the empirical complexities of the present. This book
is a modest attempt to engage in such conceptual work, and to use
Weber’s writings to consider the conceptual tools needed for analysis
of the social and cultural dynamics of contemporary capitalism. It is this
question of capitalism that forms the focal point of the following chapter.
3
Capitalism
The analysis of capitalism – including its historical development, its core

institutional structures, and its underlying social and cultural logics
– was central to the concerns of the classical sociological theory of Marx,
Durkheim, Weber and Simmel, and to critical sociologies, which were
mainly Marxist or Weberian in orientation, that emerged from the mid-
20th century onwards. But with the collapse of the Soviet bloc in the
late-1980s and the accompanying postmodern turn, sociological analyses
and critiques of capitalism slipped somewhat out of fashion (there were,
of course, important exceptions: Jameson, 1991; Callinicos, 1991; Lash and
Urry, 1987, 1994). This situation was reinforced by the next generation of
‘modernity’ thinkers, in particular Ulrich Beck and Zygmunt Bauman, who
rarely theorised their respective ‘reflexive’ or ‘liquid’ modernities as being
explicitly capitalist in form (see Chapter 7). Sociological theories of global-
isation, in particular those that emerged throughout the 1990s and early-
2000s, also have had a tendency to address the complexities of transnational
social and cultural forms in isolation from a broader analysis of capitalist
development (Immanuel Wallerstein’s extensive work on the capitalist
world-economy is one notable exception, see for example Wallerstein,
2001). And a comparable situation can be found in new media theory
which, inspired by figures such as Marshall McLuhan and more recently
Friedrich Kittler and Katherine Hayles, has raised important questions of
materiality and embodiment but has often done by making no reference
whatsoever to capitalist society or culture (see Gane and Beer, 2008: 106–20).
Things, however, are changing. For following the financial crisis of 2007,
which in important respects is still ongoing, capitalism, along with the
related political and economic culture of neoliberalism (see Chapter 5), is
once again back on the sociological agenda (see, for example, Lash, 2007;
Fisher, 2009; Žižek, 2009; Harvey, 2011). In the face of this development,
30

Capitalism 31
the task of the present chapter is to develop a conceptual framework

to orient the sociological analysis of contemporary capitalism; one that
will ground and in turn be extended by a sociological exploration
of the market, neoliberalism and class in the following chapters. The
argument of this chapter follows the basic methodological precept of
Chapter 2: that the analysis of capitalism, as with any empirical entity,
must start with the forging of heuristic concepts. Weber’s work remains a
useful resource for such an exercise. While attention has tended to centre
on the account of capitalism forwarded by Weber in his Sociology of
Religion, and in particular the Protestant Ethic, his economic sociology
formulates key ideal-typical concepts of capitalist activity that for the
most part have been neglected (an important exception is Swedberg,
1998:22–53). This chapter will focus specifically on these ideal-types
(political, traditional and rational), and will ask whether they are suf-
ficient tools for the analysis of the complexities of capitalism today. It will
do so by reading between Weber’s economic sociology and three types
of capitalism which are currently prominent in contemporary social and
cultural theory: computerised capitalism (Jean-François Lyotard); knowing
capitalism (Nigel Thrift); and intensive capitalism (Scott Lash). One of the
key points of interest is whether these three types can be incorporated
into Weber’s original ideal-typical framework or if, instead, a new con-
ceptual matrix needs to be formulated out of, and in response to, the
empirical complexities of capitalism today.
Capitalism: An initial conceptual framework
As argued in Chapter 2, Weber’s sociology is built upon a neo-Kantian

method of concept formation that does not seek to reduce the empirical
world to a set of totalising concepts, but instead forges concepts out of
empirical data with the aim of making possible an interpretive under-
standing of sociality and culture. Concepts are thus central to what Deleuze
and Guattari call empiricism, for they are forged out of an accentuation
of key characteristics of empirical reality with the aim of constructing
explanatory tools that help us to make sense, both in terms of causality
and meaning, of the world of which we are a part. In a complex passage,
Weber writes that the ideal-type is ‘a thought construct; not historical
reality, and most certainly not “genuine” reality. Even less is it for employ-
ment in the service of a method for which reality is reduced to an exem-
plary instance, but rather functions instead as a purely ideal limiting concept
(Grenzbegriff), against which reality is compared…’ (2004:390). Ideal-typical
concepts are thus not representations of a world that in empirical terms
is infinitely rich, but are rather, to use Deleuze and Guattari’s term,
‘bridges’ between the empirical world and our presentation of it in thought.
Given the complexity of the raw data of the empirical world, such con-
cepts are never to be static or exist in the singular, but must instead take
multiple forms. This is the opening position of Deleuze and Guattari in
What is Philosophy?: ‘There are no simple concepts…Every concept is at
least double or triple’ (2004:15). This assertion, which may at first seem
obscure, is prefigured by the work of Weber. In Weber’s ‘basic sociological
terms’ there are four ideal-types of social action: traditional, affective,
value-rational and instrumental. In his political sociology, there are three
types of ‘legitimate domination’ (Herrshaft): traditional, charismatic and
legal-rational or bureaucratic. And most importantly for the purposes of
the present chapter, in his economic sociology the concept of capitalism
is also presented as a multiplicity, for it is formulated in terms of three
main types: political, traditional and ‘rational’. These types are outlined in
a part of Economy and Society that is rarely read in close detail: Chapter 2
on the ‘Sociological Categories of Economic Action’. Whereas Chapter 1
of this great work famously lays out what Weber calls the ‘basic terms’ of
sociology (including the ideal-types of social action), this following chapter
builds on these to examine ‘sociological relationships in the economic
sphere’ (1978:63). Weber addresses such things as the ‘modes of the econ-
omic orientation of action’, ‘media of exchange, means of payment, money’,
and, most importantly for our purposes here, ‘the concept and types
of profit-making’ (1978:90–100) and ‘the principal modes of capitalistic
orientation of profit-making’ (1978:164–6).
One of the few commentators to have considered these types and modes
of profit-making is Richard Swedberg. Swedberg argues that Weber’s initial
three concepts of capitalism – traditional, political, rational – are more com-
plex than they might seem as they are extended by six ‘principal, and
distinct, modes of capitalist profit-making that can be found in history’
(Swedberg, 1998:46). ‘Political capitalism’ or what might be called ‘adven-
turer’s capitalism’ is made up of three accompanying ‘modes’ of capitalist
activity: predatory political profiteering through the ‘financing of wars,
revolutions, and party leaders’ (Swedberg, 1998:48); profiteering through
force and domination, which includes ‘tax and office farming’ and colonial
profits through ‘plantations, monopolistic and compulsory trade’ (Swedberg,
1998:47); and ‘profit through unusual deals with political authorities’,
which might involve ‘the bribing of an official to get a public concession’
(Swedberg, 1998:48). Alongside this conceptual tripling, there is ‘traditional
capitalism’, which refers to orientation to ‘profit possibilities’ through
actions such as ‘trade and speculation in different currencies’, ‘the cre-
Capitalism 33
ation of means of payment’ and ‘the professional extension of credit’

(Weber, 1978:164). Such forms of capitalistic activity are characteristic
of all primitive or small-scale money economies, and Swedberg observes
that they include traditional forms of ‘trade, usury and early banking’
(1998:49). Finally, there are two modes of ‘rational capitalism’: ‘orient-
ation to the profit possibilities in continuous buying and selling on the
market (“trade”) with free exchange’ (Weber, 1978:164), and ‘orientation
to profit opportunities’ in a range of activities such as ‘speculative trans-
actions in standardized commodities’ and ‘the promotional financing of
new enterprises in the form of sale of securities to investors’ (1978:165).
Weber observes that these modes of rational capitalism are ‘peculiar
to the modern Western World’ (1978:165), most notably because they
presuppose ‘sophisticated money and capital markets, the possibility
of investing in corporations via shares, and the existence of a rational
monetary system that is operated by the state’ (Swedberg, 1998:49).
It is tempting to tie Weber’s ideal-types of capitalistic ‘profit-making’
into an ideal-typical course of historical development. For while rational
capitalism is found exclusively in the ‘modern Western world’, the other
types of political and traditional capitalism ‘have been common all over
the world for thousands of years wherever the possibilities of exchange
and money economy have been present’ (Weber, 1978:165). At first sight,
this would suggest the movement of history through different modes
of capitalist activity and organisation: from political and traditional to
so-called ‘rational’ capitalism. But this is not strictly the case as these
types of capitalism can co-exist and run parallel to each other. It might
be argued, for example, that forms of predatory political profiteering
or institutional corruption are still common in the contemporary cap-
italist world. Weber’s position is consequently more complex than it
first appears, for it suggests that capitalism is neither sealed within an
epoch of history nor chained to a long course of necessary historical
development. Swedberg explains: ‘Instead of arguing that capitalism emerged
at a certain historical point in time and eventually will be replaced by
socialism and communism, as Marx does, Weber suggests that a number
of different types of capitalism have developed parallel to one another,
within one another, or after one another’ (1998:46). Weber’s typological
analysis is quite different from Marx’s political economy, for nowhere
‘in Economy and Society can one find a discussion or a formal definition
of what constitutes capitalism in general’ (Swedberg, 1998:46). Moreover,
the core concept of Marxist political economy – value (in the economic
sense) – is, perhaps surprisingly, absent from Weber’s account. At the
outset of Chapter 2 of Economy and Society, Weber states that in his
formulation of the basic concepts of sociology ‘it has proved possible

entirely to avoid the controversial concept of “value”’ (1978:63). This, in
turn, sets the tone for the outline of ‘sociological categories of economic
action’ that follows, which centres less on a theory of value than on
the different types and forms that capitalistic profit-making might take.
Weber’s writings on capitalism are thus intended to contribute to an
interpretive economic sociology rather than a political economy of cap-
italist structures and ‘dynamic’ processes (Weber, 1978:63). The starting
point of this interpretive sociology is the definition of a core set of ideal-
typical concepts through which future comparative work can proceed.
Weber declares, rather modestly, that this sociology ‘is not intended in
any sense to be “economic theory”. Rather, it consists only in an attempt
to define certain concepts which are frequently used and to analyze cer-
tain of the simplest sociological relationships in the economic sphere’
(1978:63).
Computerised capitalism
Weber’s ideal-types and modes of capitalist profit-making provide a

useful point of departure for the sociological analysis of contemporary
capitalism. In what follows, we will address three seemingly new types
of capitalism – computerised, knowing and intensive – before considering
the challenges they pose back to Weber’s conceptual framework. The
scope of this chapter is clearly limited, for there are no doubt wider socio-
logical, philosophical and even psychoanalytic critiques of capitalism that
could be addressed here (such as the recent work of Slavoj Žižek, 2009,
2010). But these limits are not without purpose, for not only are the three
types considered below among the most prominent in recent sociological
theory, they address different empirical aspects of capitalist development
and because of this, can be used in turn to question the ongoing value of
different elements of Weber’s conceptual schema.
The first type to be considered is computerised capitalism. One of the
most obvious and striking differences between contemporary capital-
ism and that addressed by Weber at the outset of the 20th century is
the role played today by advanced and seemingly intelligent computer-
based technologies in the mediation and operation of the capitalist
economy (something that will be considered further in Chapter 4 through
analysis of the digitalisation of financial markets). This development is
addressed en nuce by Daniel Bell (1976) in his famous Coming of Post-
Industrial Society, which detected the emergence of new economic forms
based on the production and exchange of information rather than of
Capitalism 35
hard physical commodities. It has also been the subject of more recent
work by Manuel Castells (1996), who uses the terms ‘informational cap-
italism’ to explore a new and emergent world of social and business net-
working. This theory of network society gives an historical account of the
emergence of Internet and related technologies, and also outlines shifts
in the organisation and structure of business practices, but, ironically,
says little in detail about either information or capitalism (see Gane and
Beer, 2008:35–52). For this reason, this chapter will turn instead to a
different body of work that in many ways anticipates the arguments of
thinkers such as Castells: that of Jean-François Lyotard. One reason for
this choice is that Lyotard addresses the emergence of a computerised
capitalism that is deeply performative or, to use a Weberian term, instru-
mental in basis. Lyotard advances this position in three main places in
his later work, each of which will be considered in turn: The Postmodern
Condition; The Inhuman; and Postmodern Fables.
Of these three texts, The Postmodern Condition has had the widest cir-
culation, and for that matter the greatest sociological impact. This work
opens in a similar vein to that of Daniel Bell by addressing the changing
nature of knowledge, and more broadly culture, in computerised society.
Lyotard’s thesis is that culture has been transformed by digital techno-
logy, which, like the capitalist system more generally, follows a principle
of ‘optimal performance’: ‘maximizing output (the modifications obtained)
and minimizing input (the energy expended in the process)’ (Lyotard,
1984:44). Lyotard observes an underlying connection between economic
expenditure and the production of ‘truth’, for there can be no science
without capital, and no capital without technology. His argument is
that the status and form of knowledge and by extension culture has
changed markedly, for today the chief criteria in the production of
knowledge is not its meaning or depth but its economic value. He writes:
‘Knowledge is and will be produced in order to be sold, it is and will be
consumed in order to be valorized in a new production: in both cases, the
goal is exchange’ (Lyotard, 1984:4). Knowledge has not only become a
commodity, but now structures the basis of commodity production to
such an extent that it has become ‘the principle force of production over
the last few decades’ (Lyotard, 1984:5). Lyotard argues that the goal of
such production, including the production of knowledge, is exchange,
and the success of exchange is directly proportional to its speed: the faster
and more efficiently commodities can be transmitted, exchanged and
consumed the better (this question of speed resurfaces through the ana-
lysis of markets in Chapter 4; see also Ben Agger’s (2004) work on ‘fast’
capitalism, and Gane, 2006). The economic value of knowledge, like
that of other commodities, relates to the speed at which it can be exchanged,

and thus knowledge must be packaged in the right way: for to ‘flow’
it must fit the correct ‘channels’ of communication. To move at speed
knowledge must be standardised in form: it must be digitilised, but, beyond
this, it must also be operational, or, more precisely, translated, or rather
reduced, to ‘quantities of information’ (Lyotard, 1984:4). This reduction of
quality to quantity (for once the smaller the better), demands a transforma-
tion of both the form and content of knowledge itself, for now not only
is knowledge translated into information, but this information reduced
to ‘bits’ that are easy to send, receive and thus process. The end result of
this is that ‘[k]nowledge ceases to be an end in itself: it loses its “use-value”’
(Lyotard, 1984:5).
A second and more advanced statement on the cultural dynamics of
‘computerised’ capitalism can be found in Lyotard’s The Inhuman. This
work paints a dark, perhaps Weberian, picture of a contemporary capi-
talism in which technological development opens up new possibilities
for rationalisation or even domination, and through the speeding-
up of information exchange is said to suppress the possibility of critical
thought or action. Lyotard is concerned primarily with the ways in which
technology and time combine in service of ‘the system’, and by extension
with the role technology plays in speeding-up life and culture while at
the same subjecting them to principles of efficiency, performance and
control. Extending the position of The Postmodern Condition, he observes
the tendency for knowledge to be reduced to information or ‘bits’ that
are easily transmitted and consumed; a development that reinforces the
instrumental rationality of contemporary capitalist culture. He writes:
new technologies…submit to exact calculation every inscription on

whatever support: visual and sound images, speech, musical lines,
and finally writing itself…what is really disturbing is…the impor-
tance assumed by the concept of the bit, the unit of information.
When we’re dealing with bits, there’s no longer any question of free
forms given here and now to sensibility and imagination. On the con-
trary, they are units of information conceived by computer engineer-
ing and definable at all linguistic levels – lexical, syntactic, rhetorical
and the rest. They are assembled into systems following a set of poss-
ibilities (a ‘menu’) under the control of a programmer (1991:34).
Lyotard’s argument is that the digitalisation of knowledge, rather than

encouraging expression and creativity, for the most part works towards
the opposite: to the reduction of thought to the immediate processing
Capitalism 37
of information, and to the selection of pre-programmed, and thus stan-

dardised, options from within the framework of the system. This argu-
ment is framed by a broader position: that technological development is
driven not by a desire to emancipate ‘humanity’ but rather by the instru-
mental quest for maximum efficiency and performance in all spheres
of life. The result of such development is not said to be greater pol-
itical ‘freedom’ but rather the emergence of new ‘inhuman’ forms of
control: ‘[a]ll technology…is an artefact allowing its users to stock more
information, to improve their competence and optimize their perfor-
mances’ (Lyotard, 1993:62). This emphasis on efficiency and performativity
extends to thought itself, which, Lyotard observes, ‘appears to be required
to take part in a process of rationalisation’ (1993:71, emphasis mine).
‘Taking part’ has a double meaning here, for thought contributes to, even
drives, the move for greater efficiency in its creation of new technologies,
while, at the same time, is subject to rationalisation itself through the
structures these technologies impose. This process is part of a wider homo-
genisation of all cultural forms, or what Lyotard calls the crushing of the
‘unharmonizable’ (1991:4). A key part of this process is the demand for
knowledge or rather information to be a commodity like any other: it
is to be produced, exchanged and consumed with the utmost efficiency,
and discarded, or as Lyotard says forgotten, almost as quickly. This develop-
ment is in no way said to be positive, for it works to ‘abolish local and
singular experience’, hammers ‘the mind with gross stereotypes’, and leaves
‘no place for reflection and education’ (1991:64).
Lyotard advances a third position in Postmodern Fables, in which the
above diagnosis of the instrumental nature of Western culture is accom-
panied by a more explicit statement on the commodification of thought.
A key point of interest in this text is how the logic and principles of
the capitalist market extend through culture itself (something that will
be addressed in further detail through the analysis of neoliberalism in
Chapter 5). This interest in the commodification of thought in some
respects takes Lyotard close to Frankfurt School writings on the culture
industry, but Lyotard goes beyond the writings of figures such as Adorno
and Horkheimer by considering the ways in which critical theorising
– and thus the possibility of opposition – is itself caught up in this pro-
cess. Lyotard’s most explicit statement on this question comes in his
essay ‘Marie Goes to Japan’ (1997:3–15). On the surface, this fable is
about a beleaguered intellectual called Marie who constantly travels the
world to give conference papers, or, in the terms of the fable, to sell her
culture. In so doing, she becomes a stream of cultural capital: a member
of a new ‘cultural labour force’ that gains its economic value from its
ability not simply to produce but to ‘invent, read, imagine’ (1997:3). In

line with the argument of The Inhuman, Marie observes that the binding
of economic value to speed applies to intellectual culture: ‘capital is not
time is money, but also money is time. The good stream is the one that gets
there the quickest’ (1997:4–5). According to this logic, ideas are valued
not just in terms of their creativity and invention but also, and perhaps
increasingly, on the basis of their speed of production and consumption.
The general rule is the quicker the better.
Lyotard’s fable tells us that the most effective stream of cultural capital
(according to the instrumental logic of the capitalist market) ‘gets there
almost right after it’s left. On radio and TV, they call it real or live time.
But the best thing is to anticipate its arrival, its “realization” before it gets
there. That’s money on credit. It’s time stocked up, ready to spend, before
real time’ (1997:5). The danger of slow, patient or reflective work is that it
will fall behind the times, for with the speed-up of the production and
circulation of culture it will struggle to keep pace (on the challenges this
situation poses to social theory, see Gane, 2006). This is especially so for
Marie who refuses to use new media technologies and is consequently
always a time zone behind. The Fable warns: ‘Poor Marie, you won’t get
rich, you like scribbling on your piece of paper, too bad for you. You are a
slow little stream. You will be passed by fast streams. Of expeditious
culture’ (1997:5). For just as computers are evaluated according to the
speed at which they process information, the same now holds for human
thought, for, as The Postmodern Condition predicted and Lyotard’s Fables
now warn, the most effective streams of cultural capital today are those
that can be transmitted, received and decoded (consumed) with the great-
est ease. In these ways, the inhuman (technologised time) has invaded
both the human (including life itself) and culture, and in the process has
strengthened the grip of the capitalist market. The outcome is a thor-
oughgoing rationalisationation of culture: cultural streams ‘must all go
in the right direction. They must converge’ (1997:6). One of the most
alarming aspects of this process is the capturing of even the most radical
forms of thought and identity by the capitalist market (indeed Deleuze
and Guattari observe this process even at the level of the concept, see
Chapter 2). Lyotard argues that such forms, which once existed in oppos-
ition to capitalism, have now been colonised and placed in the ‘cultural
bank’. Nothing, including critical theoretical work, can exist outside of
the reach of this process of commodification, including the concepts
and ideas of social theory and philosophy. For capitalism, he argues, has
discovered and in the process extended itself through the ‘marketplace
of singularities’ (1997:7).
Capitalism 39
Knowing capitalism
Nigel Thrift’s Knowing Capitalism advances an analysis of capitalist society

and culture that is in many ways comparable to that of the later work of
Lyotard. This book takes an initial position that is radically removed from
that of Weber, for Thrift declares that ‘the world is still enchanted. I have
no truck with accounts of capitalism that insist that capitalism has dis-
enchanted the world. The world of capitalism is best seen, I think, as one
closer to the imaginary of the medieval world of dark superstitions and
religious bliss than we choose to believe’ (2005:2). This theme of enchant-
ment is common in neo-Weberian writings that seek to explore the vitality
of contemporary consumer society (see, for example, Ritzer, 1999). Thrift’s
work, however, is quite different as it does not examine the ways through
which capitalism seeks to preserve or re-create a sense of enchantment to
stimulate consumer attention and interest. Instead, it starts from the fol-
lowing position: ‘capitalism is not just hard graft. It is also fun. People get
stuff from it – and not just more commodities. Capitalism has a kind of
crazy vitality. It doesn’t just line its pockets…It adds into the world as
well as subtracts’ (2005:1). Oddly, this idea that capitalism is ‘fun’ rather
than coercive or exploitative is not explored at length in Knowing Capital-
ism (aside for a largely descriptive chapter on the rise of the ‘supertoy’,
see 2005:182–96). Thrift focusses instead on the largely mundane value-
rationalities, processes and practices through which capitalism has
developed into a ‘reflexive’ form.
In order to address this development, he advances four ‘methodological’
rules. The first of these is that analysis of capitalism should not be con-
tained within, or reduced to, ‘large claims about “modernity”’ (Thrift,
2005:2). Thrift argues instead that where possible a ‘backward gaze’ should
be employed to think about the present from the future. This entails
‘looking back at our present time and seeing vast numbers of unresolved
issues, differences of interpretation and general confusions’ (2005:2).
Second, such work should proceed through analysis of contingency in his-
torical processes and events. In a passage that chimes with Weber’s idea of
unintended consequences, Thrift declares: ‘Capitalism could have (and has)
gone in a number of different ways and many of the ways that it has pro-
ceeded on are the cumulative result of “small” events that, at the time, no
doubt seemed to have little significance’ (2005:3). Third, capitalism is to be
read in terms of its performativity. This notion of performativity is different
to that forwarded by Lyotard, as for Thrift, capitalism is always an open and
uncertain system. Thrift observes that it ‘always engaged in experiment,
as the project is perpetually unfinished. Capitalism is therefore a highly
adaptive and constantly mutating formation; it is a set of poised systems’

(2005:3). Finally, he advises us not to be dazzled by new technological
forms but to look at routine and mundane aspects of capitalism, includ-
ing questions of maintenance and repair (see Graham and Thrift, 2007)
that have rarely been subjected to sociological analysis.
These ‘methodological’ prescriptions lead Thrift to declare the follow-
ing: ‘I regard capitalism as a set of networks which, though they may link
in many ways, form not a total system but rather a project that is per-
manently “under construction”’ (2005:3). Thrift’s subsequent analysis
starts from a broadly Lyotardian position: that there is a feedback loop
between the ‘cultural circuit of capital’ and critical or imaginative intel-
lectual work. He declares: ‘I want to understand capitalism as a vital inten-
sity, continually harvesting ideas, renewing people, reworking commodities
and recasting surfaces – for the sake of profit of course, but also because
capitalism is now in the business of harnessing unruly creative energies for
its own sake’ (2005:16–17). This mirrors the position taken by Lyotard in
Postmodern Fables, in which it is argued that everything of value that is
outside of or counter to capitalist culture is fated not just to commod-
ification, but also to deployment in service of the very system to which it
was opposed. Thrift expresses this irony in more concrete terms than
Lyotard: ‘capitalist firms have taken on some of the language and practices
of the opposition…In other words, capitalist firms are increasingly utilizing
the weapons of the weak – contextual fleeting practices – to make them-
selves strong’ (2005:4). This is a key element of what Thrift calls ‘soft capi-
talism’: an arrangement whereby capitalism draws on the language and
ideas of academia to make sense of its own practices. He argues that even
‘social theory now has a direct line to capitalism’ (2005:33). This ‘line’
works as follows: capitalist culture harvests ideas and concepts from intel-
lectual or creative work, while at the same time injecting market principles,
and with this a logic of commodification, into what were previously ‘tradi-
tional market preserves’ (2005:21) (this process of marketisation is consid-
ered further through the analysis of neoliberalism in Chapter 5). Thrift
is particularly interested in the roles of the business school and manage-
ment discourse in this process (he here extends Boltanski and Chiapello’s
extensive writings on the cadres of contemporary capitalism, see 2007:
57–101; for an overview of this connection, see Kemple, 2007). His argu-
ment, which is not exactly new (see, for example, Mills, 1959; Readings,
1996), is that ‘academia and business have come to think more alike about
thinking’ (Thrift, 2005:21). This is the case at the level of organisation,
including the contemporary university, as there is a shared ‘need to con-
struct supple institutional structures which can react swiftly to change’
Capitalism 41
(Thrift, 2005:23), and also culture, as market values begin to infiltrate

almost all aspects of intellectual and academic life. Thrift insists, how-
ever, that this situation does not signify the prominence of a single,
homogenous form of market capitalism that knows no boundaries.
Rather, ‘soft’ capitalism is said to be characterised by the working of
multiple opens systems that are always contingent and uncertain: ‘[t]here
is no one capitalism or market but only a series of different capitalisms
and markets’ that are made up of ‘institutions which are manifold, multi-
form and multiple’ (Thrift, 2005:28).
Contemporary capitalism, in this reading, is driven by the pursuit of
economic value but is at the same time said to be open and agile and thus
not reducible to a single structure or form. If there is a key feature of this
type of capitalism, however, it is its ability to harvest information, values
and practices and feed them back into its own operations. In this respect,
it is intelligent or ‘knowledgeable’ (Thrift, 2005:21). One reason for this,
as discussed above through the work of Lyotard, is the emergence of
commercial computer software that contributes to the performative logic
of capitalist culture. This is addressed by Thrift and French in a paper
entitled ‘The Automatic Production of Space’ (collected in Thrift, 2005:
153–81), which centres on a striking development: ‘in 50 years or so, the
technical substrate of Euro-American societies has changed decisively as
software has come to intervene in nearly all aspects of everyday life and
has begun to sink into its taken-for-granted background’ (2005:153).
Thrift and French do not extend Lyotard’s work on computerised cap-
italism by connecting software to new types of capitalist value and
exchange, but instead draw attention to the new landscapes of code that
sit beneath the practices and routines of everyday life. Their focal point
is the working of code in urban spaces, and more particularly the emer-
gence of what they call ‘automated spatiality’. This type of spatiality emerges
where software embedded deep within in urban infrastructures is pro-
grammed to control movements through city spaces. This meshing of
space and software is generally so fine-grained that it goes largely unnoticed
(until it breaks down). Thrift and French cite the computational power
of seemingly mundane technologies such as automobiles, lifts and CCTV
surveillance systems as examples. These increasingly ‘intelligent’ tech-
nologies lead them to declare that ‘Software signals a fundamental reorgan-
ization of the environment, a vast system of distributed cognition
through which the environment increasingly thinks for itself, an extra
layer of thinking’ (Thrift, 2005:178). This idea of an environment that
increasingly can think for itself lies at the heart of knowing capitalism: a
capitalism that we would like to know more about but which increasingly
knows more about us. For while Thrift and French do not state it explicitly,
contemporary capitalism thrives on the automatic production, storage
and algorithmic processing of data: data that is produced routinely at
little financial cost through the operation of devices such as store loyalty
cards or radio frequency identification (RFID) tags (see Gane et al., 2007;
Hayles, 2009). Such devices enable the mass logging of consumer activities,
and for this reason they, along with the data they produce, are closely
tied to the workings of contemporary capitalism. This situation, which to
some extent is anticipated by Lyotard in his theory of the commodi-
fication of data or information, is exemplified by the emergence of geo-
demographic software packages which produce fine-grained classifications
of consumer populations. One irony of such classifications is that, as pre-
dicted by Thrift, they draw heavily from sociological thinking, and in the
case of one of the leading geodemographic packages, ‘Mosaic’ (marketed
by FTSE100 company Experian), frame themselves through a Weberian
vocabulary of ideal-types (see Burrows and Gane, 2006). This is just one
example of what Thrift calls ‘soft capitalism’, or that type of capitalism
within which theoretical ideas routinely cross ‘the old boundaries between
academia and business’ (2005:24) and in which, as predicted by Lyotard,
there are no ‘creative energies’ left untouched.
Intensive capitalism
Thrift’s ideas re-surface in Scott Lash’s work on capitalism and meta-

physics (2007). This is perhaps surprising as Thrift opens Knowing Capital-
ism with the declaration that he does ‘not want to see capitalism as a kind
of metaphysical entity’ (2005:1). Lash, however, states that his position is
‘in general agreement with books like Thrift’s seminal Knowing Capital-
ism’, but adds the disclaimer that ‘whereas Thrift works the borders of
theory and the empirical’ he works rather ‘on the border between socio-
logy and philosophy’ (Lash, 2007:23). Lash’s writings on capitalism and
metaphysics are indeed more philosophical in orientation than Thrift’s
largely business-centred reflections on ‘knowing’ capitalism, but at the
same time his notion of metaphysics is framed by a distinctly sociological
resource: Max Weber’s sociology of religion. Lash writes:
Let me give some idea of what I mean by metaphysics. Max Weber

has pointed to a metaphysical, or religio-metaphysical era prior to
modernity. In this, in the world religions – Judaism, Taoism, Islam,
Christianity, Buddhism – spirit moves into a transcendental relation
to nature. Nature becomes more or less mechanical, while spirit
Capitalism 43
moves into a transcendental sphere. It is now that metaphysics emerges

(2007:2).
And at a later point he adds:
Max Weber’s oeuvre was obsessed with the metaphysical…Weber

looked at all the world religions, at the range of metaphysical cosmo-
logies and asked out of which these varieties of the metaphysical
can the physical be born? That is, which of these varieties of meta-
physics contains within it the germ of the physical? His answer was
Protestantism (2007:20).
It is not clear that Weber does in fact characterise the pre-modern world
as metaphysical, or that ideas of ‘nature’ or ‘spirit’ are central to his account.
This reading of Weber’s Sociology of Religion in many ways seems closer
to Auguste Comte’s law of the three stages, which describes a movement
from theology to metaphysics. Nonetheless, Lash argues that a religious
metaphysics underpins the emergence of what Weber called ‘rational’
capitalism. Lash attempts to theorise this metaphysical basis of contem-
porary capitalism by drawing a distinction between extensive and inten-
sive culture; a distinction that is developed in turn through engagement
with a complex array of philosophical sources, from Leibniz, Spinoza and
Kant through to Marx, Nietzsche and Deleuze.
One simple way of illustrating this distinction, which subsequently
becomes the focal point of Lash’s attention (see 2007:21, 2010:99–130), is
through reference to globalisation. Extensive culture emerges through the
expansion of capitalist production and exchange across the globe, and
brings with it ‘a gain in geographical spread’ and, arguably, a new con-
dition of cultural homogeneity. This extensity of capitalism is observed
in an early form by Karl Marx, who in his Communist Manifesto saw the
emergence of ‘a constantly expanding market’ which ‘chases the bour-
geoisie over the whole surface of the globe’ (1965:35). In these terms,
global capitalism is about ceaseless extension and expansion. Globalisa-
tion, however, is also intensive, for at the same time as expanding out-
wards it creates new intensities: new concentrations of capital, value, signs,
people, machines and commodities in concrete, lived spaces. In the lan-
guage of globalisation, there are, for example, key urban centres or global
cities (Sassen, 1993) within which these intensities are situated or through
which they flow. Globalisation is thus simultaneously about expansion
and concentration, or to use Lash’s terms extensity and intensity. Lash
gives his own example: ‘The City of London may have financial tentacles
all around the world yet the Square Mile has a density and intensity of
people that makes even pedestrian traffic difficult and lends its pace and
rhythm to the whole of London (2010:2–3). He adds: we ‘live in a culture
that is at the same time extensive and intensive. Indeed, the more globally
stretched and extensive social relations become, the more they simultan-
eously seem to take on this intensity’ (Lash, 2010:3).
Lash’s recent interest lies primarily in the second half of this equation:
the intensity of global capitalism, which has all too often been neglected.
He proceeds by developing a concept of intensity out of four philo-
sophical oppositions or distinctions. These frame his notion of intensive
capitalism, and so will be explored in turn. First, is a contrast between
homogeneity and difference that is drawn from the work of Deleuze.
Lash’s argument is that whereas in extensive culture commodity forms
are generally equivalent and therefore exchangeable, intensive culture
is marked instead by singularity and difference. The brand, in contra-
distinction to the commodity, is cited as an example: ‘Each brand con-
stitutes itself as different from every other brand. The brand only has
value, or adds value, in its difference from other brands’ (2010:3–4).
In these terms, the commodity is seen to be defined by cultural homo-
geneity and the brand by heterogeneity or difference. This is a departure
from the earlier reading of the connection of commodities and signs that
is advanced by Jean Baudrillard. For Baudrillard, there is a basic structural
homology between these two entities (see Gane, 2002) because there is an
underlying equivalence between the constituent parts of the commodity
and the sign: between exchange-value and the signifier on the one hand,
and use-value and the signified on the other. Lash, however, objects to
this political economy of the sign, and argues that Baudrillard is mistaken
in asserting this homology between the commodity and sign, for he
‘wrongly understands use-value in terms of abstract equivalence’ and
mistakes ‘use-value for exchange-value’ (2010:14). It is not clear that
Baudrillard indeed makes this mistake, but in making this criticism Lash
seeks to shift use-value (and presumably the signified as an element of
the thing-in-itself, see below) into the realm of what Baudrillard calls
the symbolic order, or what Lash, following Marcel Mauss (2001), calls
the register of gift-exchange. In so doing, Lash asserts the singularity
of the sign (in the form of a brand) and returns us to a concept that,
as stated at the outset of this chapter, is absent from Weber’s economic
sociology: value. He argues: ‘value in metaphysical capitalism is in units
not of equivalence, but of abstract inequivalence…it is not extensive like
exchange-value. It is instead intensive like number, the derivative, like
fractals and attractors. It is topological’ (Lash, 2007:14). In these terms,
Capitalism 45
value may both be extensive and intensive: it can be standardised to

enable economic exchange, or singular and intensive, thereby calling
into question the very basis of exchange itself (a question that has been
addressed in detail by Baudrillard (2002) in his little-known theory of
‘impossible’ exchange).
The second distinction that frames Lash’s analysis of intensive and
extensive culture is between the actual and the virtual. This might appear
to be a contemporary distinction, but Lash’s framework comes from Spinoza
(via the work of Antonio Negri (1991; see also Hardt, 1991)), and in parti-
cular from his two types of power: potentia or potential energy and potestas
or external domination. Lash’s argument is that entities such as brands
are virtual rather than actual, and are becomings (potentialities) rather than
beings (physical things). He explains: ‘We encounter commodities: they
are thus actual…We do not encounter brands. Brands actualize: they
generate products or commodities that we do encounter. Brands in this
sense are not actual but virtual. Brands are thus intensities that actualize
into extensities’ (2010:4). This again touches on ground covered by Jean
Baudrillard (1993), who in Symbolic Exchange and Death addresses a third-
order of simulacra in which commodities and culture increasingly are
created through models (meaning that the original, and authenticity in
Walter Benjamin’s (2008) sense, no longer exist). But Lash again takes us
in a different direction for he is not interested in models or simulation
per se, but rather intensities – in this case brands – that are generative forces
or energies that are presumably metaphysical in basis and which materialise
through the production of actual things, such as commodities.
This focus on intensity leads Lash to draw out a third, Kantian distinc-
tion between things-for-us and things-in-themselves. In Lash’s terms, the
former are extensities or phenomena that can be known through general
categories, while the latter are intensive singularities that belong in the
noumenal realm. This is the realm of radically empirical or sensory data
that can never be formally represented in knowledge, and thus knowable as
such. For the neo-Kantians, including Weber, empirical reality refers to an
infinitely complex world of actions and values that can be approached
but never captured through concepts or ideal-types (see Chapter 2). Lash,
however, takes a different line: that analysis of intensive culture ‘contra-
Kant, is about knowledge of things in themselves’ (2010:6). This marks a
point of departure not just from Weber but also from Thrift, who is more
interested in the lodging of commodities in the ‘phenomenal register’
(2005:7). Lash adds that this interest in things-in-themselves is the basis
of ‘intensive knowledge’, which is only made possible by breaking with
instrumental reason (the basis of which is mapped out by Weber and, in
turn, by Lyotard) and thinking instead about singularities in terms of

their own intrinsic terms or logic (which in Weber, one might argue,
returns us to the question of value-rationality). Lash explains:
‘Knowledge of the thing-in-itself is intensive knowledge. To know the
thing, not in terms of our own extrinsic categories but in terms of its
own intrinsic categories, is such intensive knowledge’ (2010:6). One
might ask whether things-in-themselves indeed have such categories,
or whether they are instead the drives and intensities that make up raw
empiricism. This latter line is taken by Deleuze and Guattari, who treat
the fabric of the empirical world as being fundamentally pre-conceptual
(see Chapter 2). Lash does not linger on such questions but instead
draws a fourth distinction: between life and mechanism. In so doing,
he introduces a vitalist element into intensive theory and culture. He
states: ‘Intensities…possess their own sources of energy. Extensities are
mechanical while intensities incorporate “life” and are vital’ (2010:6). By
extension, intensive culture is vital rather than mechanistic. This, in turn,
leads Lash to give Spinoza’s theory of intensive power, or potentia, a Nietz-
schean twist: ‘Extensities are mechanical while intensities incorporate
“life” and are vital…Nietzsche spoke of power not primarily acting on
bodies from the outside, but of bodies having their own “will to power”.
Against Newtonian mechanism, Nietzsche’s will to power was life itself’
(2010:6). This ties potential or becoming to an idea of the will, which,
for Lash, is driven by ‘internally generated energy’ and is therefore self-
organising in the cybernetic sense. This, in turn, completes what, for Lash,
are the four main characteristics of intensive capitalist culture: inequiva-
lence, potentiality, singularity and life.
Types and modes of capitalism: Back to and beyond Weber
It is not immediately clear how to read the above three types or modes
of capitalism in connection to Weber’s initial conceptual framework.
One possible place to start is with the ways in which each of these
thinkers offers something conceptually new in response to the empir-
ical challenges of contemporary capitalism. In the case of Lyotard this
is fairly straightforward as his work addresses the emergence of com-
puterised technologies which enhance the operation of the capitalist
system and with this extend the rationalisation and homogenisation of
culture. Lyotard explores this development by employing a conceptual
vocabulary that in some respects is close to that advanced by Weber,
particularly in his writings on instrumental rationality, but in other
ways works outside and beyond it, primarily by shifting towards a neo-
Capitalism 47
Marxist focus on commodification and exchange (something Weber

largely bypasses in his writings on markets in favour of a focus on com-
petition, see Chapters 4 and 5). In many ways, Thrift’s work is not too far
removed from Lyotard’s as it addresses the extension of the capitalist
market into realms of culture that previously lay untouched, and from
which it harvests concepts and ideas that subsequently feed back into
its own ‘cultural circuit’. It is this feedback loop, he argues, that continues
to give capitalism its vitality, and for this reason, it should never be
treated as simply a disenchanted or rationalised form. Lash’s account
questions the vitality of capitalism from a different angle, for it addresses
the complex abstract or metaphysical dimensions of capitalist economy
and culture. He cites money as a key metaphysical component of capital-
ism, for it is something that is never simply ‘concrete and particular’ as
it is also ‘always universal and abstract’ (2007:17). This is especially
the case, he argues, with the emergence of financial instruments such
as derivatives which no longer exchange money against labour power or
‘constant capital’ but instead introduce a ‘doubly abstract risk process’
through the circulation and speculation of financial capital ‘without the
mediation of anything like C, the commodity’ (a move that takes us
beyond Marx’s famous formulae of C-M-C′ and M-C-M′ to what Lash
inscribes as M-M′) (2007:17). This, in turn, raises questions not simply of
the abstract qualities of exchange, but also of another concept which, as
stated at the outset of this chapter, is missing from Weber’s economic
sociology: value.
There are, perhaps surprisingly, points at which the above analyses
of capitalism and Weber’s economic sociology intersect. For while
Lyotard’s work on commodification does not fit easily within Weber’s
conceptual framework, for it is not strictly centred on the activities of
profit-making, it does extend Weber’s position on the rationalisation of
culture, particularly in its concern for the ways in which instrumental
rationality both underpins and is propagated by new technologies of
exchange. Thrift’s work, similarly, is difficult to locate within the con-
ceptual matrix of Weber’s economic sociology, but effectively examines
the value-rationalities that are internal to the capitalist system, and which
in turn lend it its vitality and legitimacy. Lash’s work is, by contrast,
much more focussed on the second mode of what Weber calls rational
capitalism, namely ‘capitalist speculation and finance’, but he refuses to
tie this to a straightforward account of instrumental rationalism or ratio-
nalisation. First, Lash eschews Weber’s notion of instrumental reason
in an attempt to get inside the empirical fabric of capitalism, or the thing-
in-itself, with the aim of analysing its topology and its metaphysical
singularities. This takes Lash away from neo-Kantianism, and thus away
from the type of conceptual methodology outlined in Chapter 2. Second,
he argues that contemporary capitalist activity is based, increasingly, on
practices of speculation that are intrinsically risky, and which therefore
involve no easy correlation between means and ends. And third, Lash, by
way of response to Weber, asks not just of the ‘varieties of metaphysics’
that contain within them ‘the germ of the physical’, but of those meta-
physical or intensive elements that remain within, or are perhaps repro-
duced by, seemingly rational capitalist systems. This position urges us to
question whether capitalism is as ‘mechanical’ as Weber portrays at the
end of his Protestant Ethic, or whether, as he suggests in his economic
sociology, ‘the element of traditional orientation remains considerable’
(1978:69) even where there is ‘a high degree of rationalization’ of econ-
omic action (1978:69). Could it be that capitalism still requires some kind
of religious or spiritual underpinnings, as would seem to be the case in
the United States? Or as Walter Benjamin (2004) has asked, has capitalism
itself become the new religion (for an overview of Benjamin’s position,
see Deutschmann, 2001; Löwy, 2009)?
These arguments, read together, reveal something interesting about
Weber’s conceptual analysis of capitalism: that while his three types of
political, traditional and rational capitalism are still useful analytic
tools, especially when read alongside his ideal-types of social action,
the ‘modes’ of ‘economic’ and ‘capitalistic orientation’ that sit beneath
these types are somewhat restricted in scope. The value of these modes is
that they address ‘organized forms of profit-making’, but their limit is that
they say little about ‘what constitutes capitalism in general’ (Swedberg,
1998:46). The question that Lyotard, Thrift and Lash unknowingly pose
back to Weber is whether the sociological analysis of capitalism should
indeed centre on the different modes and activities of profit-making or
whether such a focus should be accompanied by conceptual analysis
of the broader cultural logics and dynamics of capitalism (as hinted by
Weber through the course of his Protestant Ethic), including detailed atten-
tion to concepts and questions of value and exchange. Thrift, in Knowing
Capitalism, declares that ‘I want to understand capitalism as a vital inten-
sity, continually harvesting ideas, renewing people, reworking commodities
and recasting surfaces – for the sake of profit, of course, but also because cap-
italism is now in the business of harnessing unruly creative energies for
its own sake’ (2005:16–17, emphasis mine). This passage suggests that cap-
italism is, as one might expect, about profit-making, but is also defined
by cultural values and processes that are not simply reducible to the ‘orien-
tation’ of different forms of economic action.
Capitalism 49
Weber, in moving from the formulation of types to modes of capital-

ism, addresses sub-types of economic action that are pursued in order to
realise different ‘profit possibilities’ or ‘opportunities’, and in so doing
pays comparatively little attention to the underlying cultural logics of
capitalism in his economic sociology. This is perhaps because the explicit
task of the second chapter of Economy and Society, in which these types
are formulated, to address ‘the sociological categories of economic action’,
and this focus on action displaces a more general concern with the cul-
tural or systemic properties of capitalism. The challenge this leaves us is
to explore the modes through which capitalism works at a broader cul-
tural level, which, like Weber’s modes of profit-making, might sit beneath
or alongside more general types of political, traditional and rational cap-
italism. The writings of Lyotard, Thrift and Lash go some way to helping
us do this, as on one hand they work within a Weberian framework by
considering the value- and instrumental rationalities of capitalist culture,
while at the same time exposing the limits of this framework by explor-
ing concepts of value and exchange that are central to the sociality and
culture of ‘profit-making’. The potentialities and limits of Weber’s econ-
omic sociology here go hand in hand. For while Weber’s ideal-types of
organised profit-making avoid the temptation to make grand statements
about capitalist society in general, this framework of political, traditional
and ‘rational’ activity is a little restrictive. What is needed, following
the advice of Deleuze and Guattari, is a network of supporting concepts
through which to work (see Gane and Beer, 2008:122–5). For this reason,
the following two chapters will seek to expand the scope of Weber’s eco-
nomic sociology, and more broadly his analysis of capitalism, by looking
at the social and cultural dynamics of markets, and following this the
political economy of neoliberalism.
4
Markets
The previous chapter explored the uses and limitations of Weber’s

ideal-types of capitalism, or more precisely ideal-types of capitalistic
profit-making, for thinking sociologically about contemporary capital-
ist society and culture. The present chapter will extend this work by
looking in detail at Weber’s sociology of the market. Weber’s writings
on markets have received comparatively little attention in the sec-
ondary literature (a notable exception is Swedberg, 1998, 2000; see also
Preda, 2009:39–45), although this is perhaps unsurprising given that
markets have not always been central to the concerns of economic
sociology (see, for example, Stinchcombe, 1983; for a commentary on
this tendency, see Cetina and Preda, 2005). The argument of this
chapter, by way of response, is that a sociology of the market is vital
for understanding the inner workings and broader cultural dynamics of
contemporary capitalism. It will be argued that Weber’s conception
of the market continues to be of significance because it addresses, in
particular, the core socialities of capitalist profit-making in terms of
exchange and competition. The connection between sociality and com-
petition is something we will return to through the analysis of neo-
liberalism in Chapter 5 and class in Chapter 6. But first, the present
chapter will outline the key arguments of Weber’s writings on markets,
before asking whether markets are sites of either meaningful social
action or mere crowd behaviour; a question that returns us to the
definition of social action advanced in the first chapter of Economy and
Society. Weber’s writings on markets will then be used to explore, albeit
briefly, the dynamics of a contemporary market event: the so-called
‘Flash Crash’ of May 6th, 2010. In conclusion, it will be argued that
while advanced computerised technologies play a pivotal role in the
operation of contemporary financial markets, the basic framework and
50

Markets 51
concepts of Weber’s economic sociology are still useful for addressing

markets as sites of power and (instrumental) rationality that are under-
pinned by values; something that is often missed by commentators
who analyse markets in terms of irrational crowd behaviours (see, for
example, Borch, 2007) and by recent materialistic approaches that
focus primarily on technical instruments or market ‘devices’ (see, for
example, Callon et al., 2007).
Weber’s sociology of the market
Weber writes about markets in at least four places: in a short section of

his ‘Sociological Categories of Economic Action’ (1978:82–5); in a frag-
ment on ‘The Market: Its Impersonality and Ethic’ (1978:635–40); and
in two pamphlets entitled ‘Commerce on the Stock and Commodity
Exchanges’ (2000a:339–71) and ‘Stock and Commodity Exchanges’
(2000b:305–38) (Swedberg (2000) also includes Weber’s ‘Outline of
General “Theoretical” Economics’, but this work is a collection of
course materials that adds little to the theory of the market advanced
in the texts listed above; see Whimster, 2007:19–28). The first of these
four pieces, which is also the shortest, lies at the heart of Weber’s eco-
nomic sociology, and opens with a definition not of the market per se
but of a ‘market situation’; a term that we will return to in detail in
Chapter 6 through the analysis of class and status. Weber writes: ‘[b]y
the “market situation” for any object of exchange is meant all the
opportunities of exchanging it for money which are known to the par-
ticipants in exchange relationships and aid their orientation in the
competitive price struggle’ (Weber, 1978:82). In these terms, markets
are not simply sites of exchange, as stated in most works of classical
economic theory, but battlegrounds born out of competition over price.
This conception of the market as a space of competition and not simply
of exchange is crucial to the political culture of neoliberalism, which
breaks from the idea that markets are natural sites of exchange and
instead asserts the necessity of state intervention to promote freedom of
competition (see Foucault (2008) and the following chapter). Competition
is a neglected concept in secondary texts on Weber’s work, but is a con-
cept that appears not only in his writings on markets but also in his ‘Basic
Sociological Terms’ in the first chapter of Economy and Society (1978:38–40),
through the course of which he distinguishes between conflict, com-
petition and selection, and declares that competition is a situation of
conflict where no ‘actual physical violence is employed’: ‘A peaceful con-
flict is “competition” insofar as it consists in a formally peaceful attempt
to attain control over opportunities and advantages which are also desired
by others’ (1978:38). In his ‘Sociological Categories of Economic Action’,
he adds to this definition that a ‘competitive process’ is one that is regu-
lated, and regulation can take many different forms that impact upon ‘the
degree of autonomy enjoyed by the parties to market relationships in the
price struggle and in competition’ (Weber, 1978:82). In these terms, com-
petition involves the struggle for control by different market players as
well as the external regulation of markets, for according to Weber’s argu-
ment it is regulation, paradoxically, that makes competition possible. The
question of control in markets will be addressed further below, but the
issue of market regulation is tied to a deeper set of questions concern-
ing the connection of the state to the market, and for this reason it is
something we will return to through the analysis of neoliberalism in the
following chapter.
Weber’s second key statement on the market can be found in a frag-
ment entitled ‘The Market: Its Impersonality and Ethic’. This fragment
begins by analysing markets from the opposite direction, for in the first
instance it addresses the sociality not of competition but of exchange.
Weber writes that ‘exchange in the market’ is ‘the archetype of all rational
social action’ or what might be called ‘consociation’ (1978:635). This
concept of consociation is a translation of the German term Vergesell-
schaftung, which is also rendered as ‘association’ in other parts of Economy
and Society, most notably in the chapter on ‘Political, Communities’
(1978:901–40), which includes the famous section on ‘Class, Status, Party’.
This idea of Vergesellschaftung will be addressed in detail in Chapter 6,
which explores differences between class and status by drawing a
contrast between associative and communal forms of sociality. In
the context of Weber’s fragment on the market, his use of this term
is clear: it refers to a form of social action that is driven by competition
for the exchange of money and commodities at the best price, or what
might be called the ‘rational, purposeful pursuit of interests’ (1978:
636). Put crudely, markets, at least in their modern form, are charac-
terised more by associative forms of sociality than by any quest for
community. This returns us to the opening pages of Economy and
Society, where Weber considers the ideal-type of rational action that is
found in ‘pure economic theory’, namely that which is ‘completely
and unequivocally directed to a single end, the maximization of eco-
nomic advantage’. Weber adds that ‘[i]n reality, action only takes
exactly this course only in unusual cases, as sometimes on the stock
market; and even then there is usually only an approximation to the
ideal-type’ (1978:9).
Markets 53
Weber develops this position in his fragment on the market by asking

whether action in a market is indeed to be treated as social action. Swedberg
helps answer this question by observing that markets, for Weber, are social
insofar as they are made up of two types of interactions: ‘between buyers
and sellers (exchange)’ and ‘between sellers and…between buyers (com-
petition)’ (2000:382). Once again, markets are not just social on the grounds
of exchange but also because of their competitive basis, or rather because
they operate through the trading of goods through barter or bargain-
ing over price, or what Weber calls dickering. Dickering, he explains, ‘is
always a social action insofar as the potential partners are guided in their
offers by the potential action of real or imaginary competitors rather
than by their own actions alone’ (1978:636). Action in a market becomes
social action whenever it is oriented in a meaningful way to one’s fellow
exchange partners and competitors. Weber adds, in an intriguing passage,
that ‘any act of exchange involving the use of money (sale) is a social
action simply because the money used derives its value from its relation
to the potential action of others’ (1978:636). The suggestion is that social
groups can emerge through the use of money as a means of payment, or
more precisely that money creates such groups through the forging of ‘mate-
rial interest relations’. Weber extends this argument by stating that ‘bare
market relationships’ are the most impersonal, rational and purposeful of all,
for they are not guided by ‘obligations of brotherliness or reverence’ but by
money, or rather the commodity and its price. He reflects: ‘The reason for
the impersonality of the market is its matter-of-factness, its orientation to
the commodity, and only to that’ (1978:636). Weber even detects this
impersonality in forms of ‘silent’ trade that involve dickering but no face-
to-face contact (see 1978:637). This notion of ‘silent’ trading is said to be
‘primitive’ in basis, but perhaps has a contemporary resonance in instances
where electronic trading has replaced face-to-face contact in designated
physical settings. This is something that will be considered further below.
The final two pieces to be considered here are earlier in origin and are
written in an accessible style ‘for those who in their daily lives are rela-
tively distant from the things described’ (Weber, 2000a:305): ‘Stock and
Commodity Exchanges’ [1894] and ‘Commerce on the Stock and Com-
modity Exchanges’ [1896] (for a contextual introduction to these essays
see Lestition, 2000; Whimster, 2007:21–2). The first of these texts opens
with a provocation: that the workings of stock and commodity markets
cannot be understood by those who start out by rejecting the existence of
such markets on ideological grounds. Weber refers specifically to ‘the
highly dangerous notion that, wherever one encounters a social institu-
tion that is not strictly “socialist” (as the exchanges are not), then one is
dealing with a wholly dispensable organisation’ (2000a:305). Weber, by

contrast, is not interested in making judgements about the intrinsic value
of stock and commodity markets, but is concerned instead with their
social properties and principles of organisation. On this basis, he starts by
observing that such markets ‘are created by modern large-scale commerce’
(2000a:305). He supports this statement by narrating the shift from a time
when the family ‘produced goods through common work and consumed
them in common’ to a modern situation where ‘the individual does not
produce the goods that he himself will use, but rather those that, according
to his expectation, others will need; and thus each individual consumes the
product of others’ labour, not of his own’ (2000a: 306). This development
is extended by the exchange of ‘articles of luxury’, and, more broadly, the
internationalisation of trade and the emergence of cities, which inserted
a pure ‘business interaction’ into ‘the old communities themselves, as
the first step toward their disintegration’ (2000a:308). Through the course
of this developmental history, Weber addresses the differences between
modern exchanges and more traditional market forms. He observes that in
such exchanges
a deal is struck over a set of goods that are not present, and often ‘in
transit’ somewhere, or often yet-to-be produced; and it takes place
between a buyer who usually does not himself wish to ‘own’ those
goods…but who wishes…to pass them along for a profit, and a seller,
who usually does not yet have those goods, usually has not produced
them, but wishes to furnish them for some earnings of his own (2000a:
309–10).
In this description, trading on modern exchanges, either in commodities

or securities (for the differences between the two, see Weber, 2000a:
311–24) has both a material and a virtual dimension, for what matters
is not simply the exchange of physical things but buying and selling at a
profit (no matter what is being traded), and for this reason price becomes
all important (see Weber’s analysis of futures trading, 2000b:347–64, and
Lash’s (2010) description of intensive capitalism in the previous chapter).
Stock and commodity exchanges, like traditional markets, are not
only places in which buyers and sellers can be matched, but moreover
sites for competition between buyers and between sellers over price. In
the case of trading in commodities, price or ‘the rate-on-the-exchange’
becomes, in Weber’s words, a ‘matter of life and death’ (2000a:325). Weber
explores the social dynamics of such competition by considering national
differences in the organisation of exchanges. In so doing, he draws
Markets 55
attention to the open or closed basis of social relationships, and to class and
status: questions that he would later address in Economy and Society (see
Chapter 6). He observes, for example, that the largest English and American
exchanges take the form of ‘closed clubs of professional exchange-traders’, as
these exchanges are ‘organized as a monopoly of the rich; professional
traders have empowered themselves alone, in the fashion of a guild, to fix
the business practices that are followed’ (Weber, 2000a:326–7). The French
bond-market, by contrast, is far more open, for while brokers or ‘transaction
agents’ occupy a privileged position in their right to conduct business on the
exchange, in principle ‘there exists no closed society of exchange-traders;
each and everyone has access to it, as to an open market…and can take part
in commercial transactions’. Indeed: ‘Occasionally one sees workers in their
blue shirts re-selling, at the exchange, the titles to the state treasury notes
they have accumulated’ (Weber, 2000a:327). The German and in particular
the Prussian and Berlin exchanges are said to lie somewhere between these
closed and open models. These different organisational models of national
exchanges are tied to different regulatory arrangements, which in turn raise
the question of their ‘supervision by the state’ (a question that will be pursued
in the following chapter on neoliberalism).
Weber concludes this survey by advancing a number of bold statements.
He declares that ‘[m]y own personal opinion…is…that honourableness and
honesty is the strength of any social organisation. On our, and all other
exchanges, the dominant force is in fact the greater quantity of money [to
be gained] and it cannot be otherwise’ (2000a:334). He argues that the plu-
tocratic qualities of commodity and equity markets should be made clear
for all to see, for these markets are not simply open and level fields but sites
potentially for domination and control: ‘[t]he exchange is the monopoly of
the rich, and nothing is more foolish than to disguise this fact by admitting
propertyless, and therefore powerless, speculators and in that way to allow
large capital holders to shift responsibility away from themselves and onto
those others’ (Weber, 2000a:334). Weber adds, finally, that ‘One must
be clear about one thing: a general, overall supervision of the exchanges
remains an empty word’ (2000a:335).
We will return to the question of financial power or ‘force’ in markets
in the final section of the present chapter, and of the role of the state in
their ‘supervision’ or regulation of markets in Chapter 6. The second of
Weber’s pamphlets – ‘Commerce on the Stock and Commodity Exchanges’
– addresses something rather different: the dynamics of futures trading.
This pamphlet reasserts the basic sociality of markets by presenting com-
petition between buyers and sellers over price as an ‘interaction’ that has
‘the character of a continuous, mutual ascent toward a meeting’ (2000b:340).
This interaction can take the form of a ‘public auction’ whereby an official
‘caller’ is surrounded by a crowd which shouts back its offers, or through
dealers in particular commodities or equities who position themselves in
a particular location at an exchange and around whom ‘a knot of people
forms’. Such configurations are variants of what are today known as
outcry markets, which, while still in existence, have since the mid-1980s
been largely replaced by electronic trading (for example, the Minneapolis
Grain Exchange made such a shift in 2008; for a technical history of
the automation of the London Stock Exchange, see Pardo-Guerra, 2010).
Weber’s focus on outcry markets nevertheless has a contemporary edge.
He addresses the practice of arbitrage, or ‘profiting from price differences
tied to location’ through ‘lightening-quick calculation’ (2000b:344) (for
a recent sociological analysis of arbitrage, see MacKenzie, 2009:85–108).
He also analyses futures trading (or what might be today also be called
derivatives trading), whereby a contract is taken on a commodity or equity
with the expectation that the price will either rise (if you are ‘long’) or fall
(if you are ‘short’) before a specific expiry date.
This latter practice is different from more traditional forms of commod-
ity or equity trading for at least two reasons. First, it involves speculation
on the basis of differences in price not between places (as in the case of
arbitrage) but over time. This means that there is ‘a certain element of
hazard’ or what Weber calls ‘a bit of gambling’ in futures trading, for it
attempts to profit from ‘future chances’ without knowing exactly what
this future will bring. The consequence of this is that such trading is
never fully rational in the instrumental sense, for it is ‘no example of pure
and simple calculation’ as its success depends ‘upon the onset of the
expected change in the general price of the specific good’ (2000b:345).
Second, futures markets, insofar as they involve purchasing contracts
rather than actual physical commodities, are accompanied by an impor-
tant development: speculation through credit. This introduces another
level of risk, for futures trading on the basis of contracts makes possible
the taking of highly leveraged positions through the deposit of a relatively
small monetary security or ‘margin’ (the concept of risk is addressed at
length in Chapter 7). Weber observes that there is often a tendency to
decrease, over time, ‘the amount of credit’ needed for such speculation. He
argues that because of this ‘[f]utures trading…leads to a tremendous “expan-
sion of the market” in the commodities and securities in which it takes place’
(Weber, 2000b:361). And he warns: ‘there is an undoubted rise in the
participation of poorly-prepared persons in the business of speculation,
thereby increasing the public’s mania for gambling and opportunities to
satisfy that mania on the exchanges’ (Weber, 2000b:364). Weber’s concern
Markets 57
with the admission of ‘less wealthy’ and ‘less professionally-knowledgeable

persons’ into futures markets is that they have the tendency to play ‘blindly
in the dark’ (2000b:361), not least because the mechanisms for fixing the
prices at which trades are constructed are hard for speculators on the
outside of the markets to see (see Weber, 2000b:363). Weber declares,
however, that futures markets per se are not the problem, and adds that the
suppression of the public desire to speculate should not be the primary
reason for their regulation. Rather, exchanges should be protected from
what he calls ‘exploitation’ and ‘unfair manipulation’. This includes, among
other practices, the manipulation of the price of securities in instances
where there is little if any liquidity, and misleading ‘inexperienced and
impressionable persons into speculative deals’ (Weber, 2000b:369). But
the imposition of such regulation is likely to be difficult, especially as any
attempt to control futures trading must be international in scope. Indeed,
Weber observes that any attempt to ‘forbid one-sidedly futures trading
by itself’’ will likely force ‘the dominating marketplace – the entity that is
really in question in such regulation’ to move abroad in order to ‘enhance
its financial power’ (2000b:368).
Crowds: Social or non-social?
Many of these statements by Weber are echoed in contemporary dis-

courses about markets and their regulation (for example, in debates about
the merits of banning the short-selling of stocks), but ‘Commerce on the
Stock and Commodity Exchanges’ raises a further question that is central
to recent writings in economic sociology: whether market movements are
the result of meaningful and for the most part instrumentally oriented
social actions or of crowd behaviours that lie outside the limits of the
social? A useful place to begin is with the following declaration: ‘trading
in futures is easily susceptible to an artificial manipulation of prices, in
the egoistic interests of great banking houses or individual speculators’
(Weber, 2000b:367). Weber continues:
On one level, this is to some degree generally the case, because futures
trading makes it easier for those who have no capital of their own to
engage in speculation. The whole horde of small speculators, armed
with practically nothing beyond good lungs, a little notebook, and
a pencil, have in general – just like the helpless public – little choice
other than blindly to follow the word given ‘from above’ – that is, by
the great banks – to buy, on a speculative gamble, as prices are driven
up by the banks’ expensive purchase offers, made for whatever reasons
of their own. Everyone realises very clearly that this rise in prices
will at some point make way for the opposite, but they hope that
this will only occur after they have realized their dealings at a profit
– so that the losses that are surely to be expected will strike someone
else, as with ‘Black Peter’ [a game in which the last one holding the
card loses] (2000b:367).
While this passage is directed specifically towards the dynamics of futures

trading, it raises important questions about the social dynamics of markets
more generally. For example, how do large financial institutions, such as
hedge-funds, exercise power in contemporary exchanges? Is it the case
that they can push the price of equities and commodities in ways that
others can only follow? These complex questions are touched on in brief
through a consideration of the so-called ‘Flash Crash’ below. First,
however, a related question is to be addressed: whether markets are char-
acterised by instrumental or value-rational forms of social action or, con-
versely, by mere crowd behaviours that according to Weber’s definition are
barely, if at all, social.
This question of the social, a-social or perhaps even anti-social dynam-
ics of crowd behaviour has recently become the subject of public debate.
On 11th August, 2011, in the wake of the most violent social disorder
seen in the United Kingdom for many years, The Guardian published a
letter entitled ‘Sociologists’ offer to unravel the riots’. This letter, written
by John Brewer and Howard Wollman (2011) – the then President and
Vice-chair of the British Sociological Association respectively, declares
that
One of the first things that disappears when considering disturbances

such as these is perspective. One loses sight of the fact that nine out of
10 local residents aren’t rioting, that nine out of 10 who are rioting
aren’t local to the area, and that nine out of 10 of these non-locals
aren’t doing it to commit crime. That is to say, it is a tiny minority
who are participating and, of those that are, it’s a tiny minority who
are doing so solely to commit crime. Crime is a motive, but crowd
behaviour is a more complex process, and it is sociology as a discipline
that best understands crowd behaviour.
Crowds are irrational. Crowds don’t have motives – that’s far too
calculating and rational. Crowd behaviour is dynamic in unpredictable
ways, and reason and motive disappear when crowds move unpredict-
ably. But has anyone made a connection with the two media events
Markets 59
that dominated media coverage on the same day – the irrationality of

crowds on the streets and of traders on the stock market? Both sorts of
behaviour are moved by emotion not reason, passions not predict-
ability, and reason disappears. Economists are lauded for their accounts
of the irrationality of the market traders, but sociologists get criticised
for suggesting that allegations of criminality are a poor account of the
irrationality of crowds.
The argument forwarded in this letter, that rioting and equity trading
are both forms of crowd behaviour that are largely irrational in basis, is
worthy of comment for the following reasons. First, it suggests that rioting
is an instance of crowd behaviour that is without motives, and thus is an
irrational action that is without underlying social or political causes. This
position is close to that taken by David Cameron and the Mayor of London,
Boris Johnson, who vigorously repelled any suggestion that violent social
unrest could have any rational basis: it was criminality pure and simple.
Second, and parallel to this, Brewer and Wollam treat trading on the
stock market as a crowd behaviour that is driven by emotion and con-
sequently as something that has little underlying rationality. However,
in the week building up to 8th August, 2011 (the most violent night
of rioting) there were a number of quite rational explanations for the
extreme volatility of world equity markets: the unprecedented downgrading
of the US credit rating; the ongoing Eurozone sovereign debt crisis; a renewed
squeeze on liquidity in the international banking system; and the looming
threat of the largest municipal bankruptcy in US history, to name but a
few. Third, Brewer and Wollman argue that sociology is the best positioned
of all disciplines to understand the irrationalities of crowd behaviour.
This confidence is at best questionable given that conceptualising crowds
as irrational, or as having seemingly irrational properties, places them
largely outside of the reach of sociology, or at least an interpretive socio-
logy that focusses on values, motives and rationality (a tendency that in
large part can be traced to Weber’s work, see below).
Christian Borch is one of the few commentators to have looked in
detail at this apparent ‘indifference towards the crowd’. He argues that it
‘may be interpreted as the result of an attempt in social theory to dispose
of a double discomfort’: the association of the crowd with irrationality,
and by extension the idea that the rationality of the individual, and with
this the very basis of individuality, is lost in the behaviour of the crowd
(2006:84). Borch attempts to place the crowd back on the sociological
agenda by revisiting a range of 19th century sociological and psycho-
logical sources, in particular the work of, Gustav Le Bon (Borch, 2006),
Georg Simmel (Borch, 2010) and Gabriel Tarde (Borch, 2007). But there is
a figure missing from Borch’s list: Max Weber. The present chapter argues
that this omission is important as Weber’s work is a useful resource for
exploring the limits of the sociality of crowd behaviour and of markets.
To demonstrate this, it is necessary to return to Weber’s ‘basic sociological
terms’, and in particular his definitions of sociology and social action.
At the outset of Economy and Society, Weber famously declares that
‘Sociology…is a science concerning itself with the interpretative under-
standing of social action and thereby with a causal explanation of its
course and consequences’. He adds: ‘We shall speak of “action” insofar as
the acting individual attaches a subjective meaning to his behaviour – be
it overt or covert, omission or acquiescence. Action is “social” insofar as
its subjective meaning takes account of the behaviour of others and is
thereby oriented in its course’ (1978:4). This foundational statement,
which has been the subject of controversy for many years, is quickly fol-
lowed by two qualifications. First, the idea of meaning in this definition
is complex as it can be of two types: ‘actually existing meaning’ or ‘theo-
retically conceived meaning’ that can be attributed to actors. Second, and
of primary interest here, Weber states that ‘The line between meaningful
action and merely reactive behaviour to which no subjective meaning is
attached, cannot be sharply drawn empirically’. Indeed, ‘A very consider-
able part of all sociologically relevant behaviour, especially purely tra-
ditional behaviour, is marginal between the two’ (1978:4–5). These are
among the most brilliant yet frustrating passages in the entirety of Weber’s
work. We get a definition of sociology as the science of social action,
which at a later point is tied to understanding at the levels of causality
and meaning, but the precise moment at which behaviour becomes action
and beyond this action becomes social is said to be far from clear. Indeed,
at what point is an action performed simply out of habit or on the basis
of an emotional impulse meaningful and by extension rational and social?
Weber’s answer, as is well-known, is to provide four ideal-types that can
be used to explore the different ways in which social action might be
oriented: instrumentally rational, value-rational, affectual, traditional. In
formulating these types, Weber addresses the limits of social action
in further detail, and states that ‘action is non-social if it is oriented solely
to inanimate objects’ and that ‘subjective attitudes constitute social action
only so far as they are oriented to the behaviour of others’ (1978:22). One
might ask, on the basis of these statements, whether the technology of
a computer-based trading platform counts as an inanimate object, and
whether trading is underpinned by subjective attitudes that are oriented
to the values and actions of others. These are questions that will be
Markets 61
touched upon below. Of immediate interest is Weber’s separation of

social action from action and mere behaviour. Weber writes that ‘[s]ocial
action is not identical either with the similar actions of many persons or
with every action influenced by other persons’ (1978:22). Here, we return
to the figure of the crowd. Weber argues that when individuals act as part
of a crowd they often do so in highly imitative and reactive ways rather
than in ways that involve the meaningful orientation of action to others.
He explains: ‘It is not proposed in the present sense to call action “social”
when it is merely the result of the effect on the individual of the exist-
ence of a crowd as such and the action is not oriented to that fact on the
level of meaning. At the same time the borderline is naturally highly
indefinite’ (1978:23). Just as the dividing line between meaningful action
and merely reactive behaviour was said to be ‘marginal’, the separation
between social action and crowd behaviour is equally unclear. Weber,
unfortunately, does not address the reasons why this separation is ‘nat-
urally highly indefinite’, but adds that ‘mere “imitation” of the action of
others, such as that on which Tarde has rightly laid emphasis, will not be
considered a case of specifically social action if it is purely reactive so that
there is no meaningful orientation to the actor imitated. The borderline
is, however, so indefinite that it is often hardly possible to discriminate’
(1978:23).
This reference to Tarde, which has largely been overlooked in com-
mentaries on Weber’s methodology (it is noted but not addressed in any
detail by Borch, 2007:566), is intriguing, for while at this point Weber
pushes crowd behaviour into the realm of the imitative or non-social, the
definitions of the social advanced by Tarde and Weber could not be fur-
ther removed. The most important difference between them is that whereas,
for Weber, imitation lies largely outside of the bounds of social action
and thus the social, Tarde in his Laws of Imitation declares that ‘society is
imitation’ (1962:74). Recently, Tarde’s work has returned to prominence,
but largely as an alternative to Durkheim instead of Weber, and as a means
for conceiving of the social in terms of association rather than society (see
Deleuze and Guattari, 1988:216–19; Latour, 2002; Latour in Gane, 2004).
Tarde’s notions of imitation and invention have also been reconsidered
(Barry and Thrift, 2007). But there are key elements of Tarde’s social
theory that have been missed. First, like Weber, Tarde does not ground
the social in a theory of exchange. Instead, he takes a position against
Rousseau’s vision of the social contract, or more precisely against ‘the
idea of the reciprocal decree, as it were, of the complex bond by which
two wills are linked together in alternate command and obedience’
(1962:371). Tarde declares that we live in the ‘empire of the coercive
decree’ (or ‘one man commands and others obey’ (1962:374)), and
observes that the problem of formulating a notion of the social on the
basis of exchange is that it presupposes, quite wrongly, a situation
of ‘mutual enlightenment’. Second, unlike Weber, Tarde conceives of
the social in terms of imitation, and adds that on the question of what
imitation actually is, ‘the sociologist should yield to the psychologist’
(1962:74). One reason for this is that Tarde, following Hyppolyte Taine,
sees the brain as ‘a repeating organ for the senses and is itself made up of
elements which repeat each other’ (1962:74). Tarde argues that memory
and habits are little more than imitation of the self and others, and treats
imitation more generally as a ‘kind of somnambulism’ (1962:87) (a com-
parable notion can be found at the outset of Marshall McLuhan’s Under-
standing Media, see 1962:11). This said, however, imitation is no simple
thing as it can take many different forms. Tarde writes, for example, of
history as ‘the career of imitations’ (1962:139), and adds that imitation
can have ‘logical and non-logical causes’ (1962:141), and be ‘vague or
precise’, ‘conscious or non-conscious’, ‘deliberate or spontaneous’ (1962:
189–92), can come from ‘within and without’ (1962:194) and can involve
the following ‘of the superior by the inferior’ (1962:213). And as for what
exactly is imitated, Tarde states that it is ‘always an idea or volition, a
judgement or a purpose, which embodies a certain amount of belief or
desire’ (1962:145).
One reason Tarde’s writings are important in the context of the present
chapter is that recently they have been applied to the study of ‘market
crowds’ (Borch, 2007; Arnoldi and Borch, 2007). Borch (2007:561) argues
that the benefit of using Tarde’s work over other classical crowd theorists
such as Gustave Le Bon, is that he does not view crowds solely in negative
terms but as both ‘a threat to society’ and ‘a figure of extreme sociality’,
and that because of this he ‘embedded his studies of crowds in a general
sociological theory’ (a claim that is only partly correct given Tarde’s (2007)
appeal to an ‘economic psychology’). Arnoldi and Borch characterise
crowd behaviour in Tardean terms as ‘above all unconscious, non-rational
imitation in the sense of instinctive and affective behaviour’. They add:
‘One of the prominent suggestions of classical crowd theory…is that
people are hypnotised to behave irrationally and affectively when they
become part of a crowd. In financial markets this would mean that
market participants imitate others, hence not only moving with the flow
of the market, but also reinforcing it’ (2007:164). The key point of this
statement is that markets are not simply ‘rational’ entities, for they are
seductive forms that exercise what some call an ‘emotional pull’ over
their participants (see Borch, 2007:557); something that is easy to see in
Markets 63
open outcry formats where there is clearly an acute sense of ‘physical co-
presence’ and affectual involvement in the act of trading (see Arnoldi and
Borch, 2007:169).
It might be tempting to draw a line of demarcation here between the
cold and deliberative rationality of capitalistic profit-making on one
hand, and the ‘explosion, panic, wildness, violence’ (Borch, 2007:557) or
‘irrational exuberance’ (Borch, 2007:559) of market crowds on the other,
but Borch instead treats crowds and, by extension, market behaviour as
rational and affectual. He argues that ‘we should see them as a complex
blend and interplay of, on one side, affect, desire and similar features
usually associated with the “irrationality” of crowds, and, on the other
side, purposive action’ (Borch, 2007:563). For Borch, what emerges from
this play of rational and irrational behaviours is, following Tarde, a ‘semi-
conscious’ state that introduces affect and emotion into economic life,
and in so doing points the ‘way for economic sociologists to move beyond
an unproductive distinction between rationality and irrationality’ (Borch,
2007:567). The question this leaves is whether this ‘semiconscious’ state
is characteristic of all market activities or whether it emerges only in
times of acute market volatility or panic? Borch initially suggests the
former (see 2007:560). But in a later article co-authored with Jakob
Arnoldi, the network theory of Harrison White (for a classic statement of
White’s position, see White, 1981) is employed to examine instances
where economic agents seek control by reducing uncertainty by ‘decou-
pling’ themselves from crowds. This leads them to conceptualise activity
in financial markets as constantly oscillating ‘between imitation and
control’ as market crowds involve ‘a lot of imitation and colluding’
(Arnoldi and Borch, 2007:174). This suggests, albeit implicitly, that both
the decoupling from and the following of crowds can be intentional and
deliberative strategies. Indeed, Arnoldi and Borch declare that ‘imitation
is due to self-interest and not to ignorance or the inability to make indi-
vidual decisions’ (2007:176). In other words, imitation need not be simply
a product of meaningless crowd behaviour or of irrationality (a concept
explored further in Chapter 7): it can be both rational and social in basis.
This idea that market activities are not simply about imitation, and
that imitation is not simply about the blind following of others, leads
us away from Tarde and his idea of the semiconscious and towards
Weber. More specifically, it returns us to a question that Weber’s work
poses but does not answer: where the dividing line is to be drawn
between meaningful social action and mere crowd behaviour. A key
but neglected insight from Weber’s work is that social action need not
be individualistic in basis for ‘social relationships’ more broadly can
involve ‘a plurality of actors’ (Weber, 1978:26–8), and that economic action

can be either formal or substantively rational in content (see Weber,
1978:85–6). The importance of this statement is that what is easily
dismissed as irrational or crowd behaviour from the outside – such as a
financial crash or, as in the letter by Brewer and Wollman, a riot – often
is meaningful in a social sense for the participants involved.
The temptation in thinking of markets in terms of crowds is to remove
deliberation on either value or instrumental grounds from the picture,
and, in the case of markets, to explain sharp movements in price in terms
of irrational, affective behaviours which sociology, for the most part, says
little about. The consequence of such a move is that many of the complex
social dimensions of markets experiencing high volatility are likely to be
missed. As Arnoldi and Borch suggest, the mass imitation of actions
cannot simply be dismissed as being affective in basis as it can result from
extensive deliberation and thus reasoned judgement. For example, as Weber
observes in his passage on ‘Black Peter’, the sign that a powerful invest-
ment bank is buying a large amount of a particular stock can lead others to
follow suit on the understanding that the price of that stock in the short
term at least is likely to rise. Such a strategy – captured colloquially by the
phrase ‘the trend is your friend’ – could be conceived as being instrumen-
tally rational in Weber’s terms insofar as it is oriented to the ‘maximum
of economic advantage’ (1978:635), even if the trade itself turns out to be
unsuccessful. Along similar lines, in times of market crisis it might also be
tempting to see markets made up of individual investors panic selling
stocks on mass because of a fear of losing everything. But selling stocks
and even realising a loss in such situations – such as the UK listed banking
stocks of Northern Rock or Bradford and Bingley – can be a highly rational
rather than impulsive or emotive decision. Indeed, what could be more
rational than selling or short-selling the stock of a bank that is effectively
insolvent? This is not to say that market participants are purely rational
actors, but that even in times of acute volatility market activities are not
simply affectual and irrational in basis, for they can be, and often still are,
underpinned by motives, values, and a reasoned sense of judgement.
Weber argues at length that the sociality of markets is born out of
exchange and competition, and this is likely to be the case even at times
when markets appear to be in crisis, and when crowd behaviour is likely
to be most apparent. Indeed, it might be argued that when markets move
sharply on high volumes of trading then exchange is at its most dense
and competition over price – be this of equities or commodities – is at its
fiercest. This takes us back to Weber’s notion of dickering, or a form of
social action where ‘potential partners are guided in their offers by the
Markets 65
potential action of real or imaginary competitors rather than by their

own actions alone’ (1978:636). Weber defines competition as a form of
‘peaceful conflict’ (1978:38), and one site of such conflict and, by exten-
sion, relations of power is the market (Swedberg is one of the few com-
mentators to have addressed this point, see 1998:34). Weber observes that
the ‘great banking houses’ have such power in markets that individual
speculators have little choice other than to follow (2000b:367) – a fact
that, again, suggests that there is a degree of reason and rationality to
imitative market activities. This is perhaps even more the case in the
contemporary world, where ever more powerful financial institutions
have such financial power and influence that they can together, and
in some cases even individually, move markets in a desired direction.
MacKenzie notes that ‘[i]n 2005, hedge funds were believed responsible
for between a quarter and a third of trading on the New York and London
Stock Exchanges, and for around half of total trading in…emerging
market government bonds’ (2009:40). Given this, market crashes should
not simply be dismissed as meaningless crowd behaviours, not least
because in times of high uncertainty, powerful financial institutions such
as hedge funds are able to sell and short-sell stock in order to pursue
instrumental strategies of profit-making on a grand scale. The US hedge
fund Paulson, for example, famously made $280 million from the col-
lapse of the Royal Bank of Scotland (see Sibun, 2009). In this light,
markets, as Arnoldi and Borch suggest, are sites not just of imitation but
also of control, and such control can only be achieved through the exer-
cise of power, or in Weberian terms (1978:926) the assertion of the will of
a financial institution ‘even against the resistance’ of other market parti-
cipants. This reading of markets in terms of competition, relations of
power and potentially even domination suggests, again, that there is
more to market activity than mere crowd behaviour.
Conclusion: From Weber to the Flash Crash (and back

again)
Many of these points can be illustrated through brief reference to one

of the most dramatic market events in recent years: what has become
known colloquially as the ‘Flash Crash’. Between roughly 2.30 and 2.47pm
on 6th May, 2010 the Dow Jones Industrial Average dropped 998.5 points
(roughly a 9% fall or $1 trillion in market value) only to recover 600 points
within the next twenty minutes. It would be easy to explain this event in
terms of crowd behaviour on the grounds that traders, seeing the price of
equities falling, imitated the behaviour of others in an immediate and
affectual way, resulting in panic selling driven by the fear of an all-out

market crash. Viewed in this way, there is no intrinsic rationality or
sociality to such an event, for it is little more than an emotional response,
on mass, to a falling market. Such an interpretation, however, would
appear to be wide of the mark.
On September 30th, 2010 the U.S. Commodity Futures Trading Com-
mission (CFTC) and U.S. Securities & Exchange Commission (SEC) pub-
lished a report on the events of the Flash Crash (see http://www.sec.gov/
news/studies/2010/marketevents-report.pdf). This report opens with a
summary of events, noting that through the course of this crash ‘Over
20,000 trades across more than 300 securities were executed at prices
more than 60% away from their values just moments before’. What
caused this to happen? The report continues: ‘At 2:32 p.m., against this
backdrop of unusually high volatility and thinning liquidity, a large fun-
damental trader (a mutual fund complex) initiated a sell program to sell a
total of 75,000 E-Mini contracts (valued at approximately $4.1 billion) as
a hedge to an existing equity position’, and with markets ‘already under
stress’ following the unfolding of the Greek debt crisis, ‘the Sell Algorithm
chosen by the large trader to only target trading volume, and neither price
nor time, executed the sell program extremely rapidly in just 20 minutes’.
What followed was a temporary but dramatic market collapse. The report
states that ‘high frequency traders’ (HFTs) – fast-moving, algorithmic
trading tools designed to operate on the basis of incoming market data
– absorbed the initial wave of selling but were overrun by the scale and
immediacy of the mutual fund sell order and themselves started to sell
in order to liquidate their positions (with further HFTs no doubt selling
in response to falling equity prices). This continued until a liquidity crisis
developed across exchanges as buyers and sellers could not be matched,
and to make matters worse ‘some market makers and other liquidity
providers widened their quote spreads, others reduced liquidity, and a sig-
nificant number withdrew completely from the market’. This situation,
however, did not last long as liquidity soon returned to the New York
exchange and the major futures and equities indices recovered to close
roughly 3% down from the prior day. ‘Nevertheless’, the report states,
‘during the 20 minute period between 2.40 and 3.00pm, over 20,000
trades…across more than 300 separate securities… were executed at prices
60% or more away from their 2.40pm prices’. The result of these events was
the second largest intra-day points swing on the Dow Jones index: 1,010
points (with a high of 10,879, a low of 9,869, and a closing price of 10,520).
How might we pursue a sociological understanding of such extra-
ordinary events? Marc Lenglet has argued that following an initial shift
Markets 67
from open-outcry markets to electronic trading, we are currently witness-

ing a ‘second revolution’ where ‘algorithms are playing a much bigger
role in the trading process than ever before’ (2011:45). The scale and pace
of this revolution is striking. Lenglet notes that ‘[b]y the end of August
2009, large banks recognized that approximately 80 per cent of their total
equity trading flows in some markets was being processed by algorithms’
(2011:47). Lenglet’s specific interest is the possibility of regulating such
markets, a question which, I would argue, takes us back to Weber’s point
that competition requires regulation; something that is illustrated by the
Flash Crash through the course of which both exchange and competition
over price became near impossible. However, there are limits to the appli-
cation of Weber’s work to the study of this contemporary scene. As Lenglet
suggests, outcry markets, which are the primary focus of Weber’s work,
are a world removed from electronic and algorithmic trading. In order to
address this seemingly new world, the focus of much economic sociology
has shifted to the underlying technologies and materialities of markets
(see, for example, Cetina and Preda, 2007; MacKenzie, 2009), or what
might be called ‘market devices’ (see Callon et al., 2007). This focus on
the technological infrastructures of markets is important, but at the same
time it has tended to displace attention to the socialities of markets as
spaces of exchange and competition (for an interesting exception that
addresses questions of performance, competition and violence, see
Hassoun, 2005). One example of this tendency is Donald MacKenzie’s
Material Markets, which conceptualises markets as agencements or socio-
technical combinations (see 2009:21), a notion drawn from the work of
Michel Callon (1998), but in so doing centres on market instruments rather
than either sociality or culture. And where there has been attention to
questions of sociality in contemporary markets, often this has been framed
by the analysis of markets as networks (largely following the work of
either Harrison White (2002) or Manuel Castells, (1996)). This focus on
networks, however, is itself not unproblematic insofar as it has a tendency
first, to reduce sociality to connections which are then rarely treated relation-
ships that have a qualitative basis and meaningful content, and second,
to neglect broader questions regarding connections between markets and
contemporary capitalist society and culture.
This brings us back to what Weber might offer to the understanding
and analysis of contemporary markets. First, Weber’s work can be devel-
oped in order to explore the ways in which markets are underpinned
by values, or to be creative with Weber’s own terms, value-judgements.
The term value could be pushed to take on a double meaning so that it
refers both to value in the economic sense, which, as has become clear
following the financial crisis of 2007, is often something difficult to quan-

tify, and to more qualitative judgements or beliefs in the intrinsic worth
of an equity or commodity that may at some point have a bearing on its
price (and in the case of technical trading based on charts one might
add that such judgements can be aesthetic in form). One possibility is to
extend Weber’s observation that economic action can be either formal
or substantively rational in content by exploring the different types of
rationality at play in market trading: from the basic instrumental logic
of raw profit-making to acts of faith in the long-term value and survival
of stocks even in times of acute financial crisis (major equities in the
banking sector, such as HBOS or Lloyds, immediately come to mind).
This latter idea of value takes us back to what Lash calls the metaphysics
of capitalism, and to notions of value that are both physical/material and
virtual in form. Against this backdrop, Weber’s work can be used to pursue
an analysis of the formal and substantive rationalities of contemporary
markets, alongside their uncertainties, risks or what economists (parti-
cularly those inspired by the work of Ronald Coase) call negative exter-
nalities, in order to ask how profit-making proceeds in highly organised
ways even when markets are seemingly in a state of crisis.
Second, Weber’s work can be used to address the extent to which markets
are characterised by rational (social) actions rather than affective crowd
behaviours. This is not to say that emotions do not play a part in markets,
or that in times of crisis there is no such thing as panic (for an excellent
historical overview of the notion of panic in markets, see Preda, 2009:
213–34). Markets, clearly, are not purely rational places. However, even
in times of acute market volatility a range of different instrumental and
value-rationalities inform trading judgements, and these should not be
reduced simply to impulsive decisions or behaviours to buy and sell. To
address this fully, it is necessary to look more closely at those boundary
lines between purely imitative or affective crowd behaviour and meaning-
ful, rational social action that are left hanging in the first chapter of
Weber’s Economy and Society. One way forward, as suggested by Arnoldi
and Borch, is to reconsider the sociological significance of imitative
actions. For while the notion of the contrarian trader is often roman-
ticised (see Smith, 1981), there may be good reason to imitate others and
follow the trend, especially where there are wild market movements such
as those seen through the course of the Flash Crash. For this reason, fur-
ther attention needs to be paid to the potential socialities and rationalities
of imitation. To do this, it is necessary to return to the point at which
Weber defers to Tarde on the question of imitation at the outset of Economy
and Society, and to ask how imitation might be addressed more thoroughly
Markets 69
in connection to the meaningful collective actions of ‘social relationships’

– a category of social action that has been widely neglected to date in
Weber scholarship.
Third, the events of the Flash Crash suggest that wild market move-
ments do not result simply from the irrational, affective decisions of
crowds but can be caused by the deliberate and strategic actions of major
market players, such as, in this case, the selling of a large number of con-
tacts within a very short time-frame. One way of explaining such actions
is to treat them as accidents resulting from a so-called ‘fat-finger’ or
a system failure. A different reading is that they are attempts to assert
control or power within a market. One explanation for the Flash Crash,
for example, is that it was caused by high-frequency traders attempting
to gain a strategic advantage over one another by purposively clogging
exchanges with huge numbers of buy and sell orders that were never
likely to be filled (see Bowley, 2010). A technique for doing this is ‘quote
stuffing’ or the sending of huge numbers of orders to overload the mar-
ket, orders which are sometimes placed outside of the current spread
with the aim of confusing competing traders and the underlying system
of trade execution more generally (for an analysis of this practice, see
http://www.nanex.net/20100506/FlashCrashAnalysis_Part4-1.html).
Again this brings us back questions of power and force in markets. A
detailed consideration of such questions lies largely outside of the bounds
of this chapter, but I would argue that Çalişkan and Callon (2010) are
only partially correct in their view that relationships of domination in
markets stem from differences in calculative equipment. One of the most
important aspects of contemporary markets, and also one of the most
difficult to explore empirically given its proprietary nature, is algorithmic
trading. In a recent article on such trading, Donald MacKenzie observes
that the speed at which market exchanges operate ‘is increasing all the
time’, and cites the example of the London Stock Exchange’s Turquoise
trading platform, which ‘can now process an order in as little as 124
microseconds’ (2011:16). This is not to say that social actions and rela-
tionships between, for example, traders and brokers have simply dis-
appeared, but rather that the technological infrastructures that underpin
markets and which to some extent mediate these relationships are rapidly
changing. MacKenzie observes that ‘[h]uman beings can, and still do, send
orders from their computers to the matching engines, but this accounts
for less than half of all US share trading. The remainder is algorithmic: it
results from share-trading computer programs’ (2011:17). As stated above,
there are clearly limits to the application of Weber’s work to the analysis of
this seemingly inhuman situation and to his apt but undeveloped notion
of faceless or ‘silent’ trading (see 1978:637). But Weber’s work is nonethe-

less important because it reminds us not to be dazzled by the speed and
seeming intelligence of technology in itself, and to consider what such
technology means in connection to the social. He argues: ‘To be devoid
of meaning is not identical with being lifeless or non-human; every arte-
fact, such as for example a machine, can be understood only in terms of
the meaning which its production and use have had or were intended to
have…’ (1978:7). In the case of trading instruments or devices, we might
ask whether they are tools for gaining power within markets over other
competing parties, and more specifically whether algorithmic trading
software has an instrumentally rational design that seeks to secure an
advantage in an ongoing struggle over price?
The limits and opportunities of Weber’s work again go hand in hand.
For while Weber’s writings are limited to the analysis of outcry markets
and on this basis seem outdated, his work draws into question the opera-
tion of seemingly ‘legitimate’ forms of power and domination in markets,
and in so doing challenges us to extend this question to the study of con-
temporary market structures. One way of doing this is to explore the
operation of power, or to use Weber’s terms the assertion of an instru-
mental logic or will, through technical forms such as algorithms. Scott
Lash is one of the few commentators to have broached this question. He
argues that a ‘society of ubiquitous media means a society in which
power is increasingly in the algorithm’, and adds that algorithms that are
‘compressed and hidden’ are the ‘pathways through which capitalist
power works’ (2010:150). From a Weberian perspective, one might ask
in return: are there values embedded within algorithms which enable
them to act competitively in the market? Or, more precisely, what are
the value-positions, rationalities and capacities for judgement that under-
pin the ‘performative environments’ (Beer, 2009:907) and ‘performative
infrastructures’ (Thrift, 2005:224) of markets and, more broadly, market
capitalism today? Stephen Graham has observed that ‘the algorithms that
support…choices, simulations, orderings, and classifications…remain
completely and utterly unscrutinized’ (2005:10). One reason for this is
that algorithms, especially those that work within market settings, are
closely guarded secrets to which few market participants, let alone socio-
logists, are likely to have access. But this does not mean that they should
be exempt from sociological interest. We might ask of the social and
cultural significance of algorithms by thinking broadly about their instru-
mental or performative logics and how they contribute to, and are under-
pinned by, what Swedberg, in the vein of Weber, calls ‘organized forms of
profit-making’ (1998:46). Following Thrift (2005), this returns us to the
Markets 71
values which are internal to the workings of the capitalist system, and
which are embedded within and play out through its market instruments.
The question this poses is of the underlying connections between values
and the creation and pursuit of economic value (that missing term in
Weber’s economic sociology); connections which are deeply embedded
within the internal workings of ‘intensive’ forms of market capitalism,
and which to some extent surface through the course of events such as
the Flash Crash. As stated in the conclusion to Chapter 3, this demands
analysis of the socialities of capitalistic profit-making and the broader
and perhaps deeper cultural logics of computerised (Lyotard), knowing
(Thrift) and intensive (Lash) capitalism. This means, in turn, addressing
the human and inhuman (in Lyotard’s sense) aspects of markets, and
therefore examining not just the explicit socialities of market activities
(for example, communications between traders and analysts, or between
brokers and clients), but also the values, rationalities and power dynamics
that increasingly are embedded within, and play out through, software and
machines.
Finally and perhaps most importantly, a lasting feature of Weber’s
economic sociology is its nuanced conceptual definition and understand-
ing of markets in terms of competition and exchange. This conceptual-
isation can be used to address the movement of the underlying logics and
dynamics of markets into contemporary social institutions such as the
state, and perhaps even into the fabric of everyday social life more gener-
ally. This task is the focus of the following chapter, which asks what
Weber’s work might bring to an understanding and analysis of the polit-
ical economy and culture of neoliberalism.
5
Neoliberalism
The previous two chapters have explored the ways in which Weber’s
writings can be used to address the underlying structures and dynamics
of contemporary capitalism and the markets which are to be found at
its core. This chapter will extend this work by turning to the question
of neoliberalism: a political economy which furthers the reach of capi-
talism by injecting market dynamics, and in particular principles of
competition, into the basic fabric of social life and culture. There are
many existing accounts of the political and intellectual trajectories of
contemporary neoliberalism (see, in particular, Peck, 2010; Hall, 2011),
but the aim of this chapter is to explore connections that to date have
been largely neglected between Weber’s economic sociology and the
emergence of early forms of neoliberal thought (notable exceptions are
Clarke, 1982; Holton and Turner, 1989:30–67). This exercise will start
by using the writings of Michel Foucault, and in particular his 1978–9
lectures on biopolitics (Foucault, 2008), as a resource for exploring the
different governmentalities that underpin liberal and neoliberal polit-
ical economy. Foucault’s work is useful because it treats neoliberalism
not simply as an ideology of laissez-faire but as a form of government-
ality that is premised upon a normative model of the market and its
relation to the state and its related institutions. But this is not the
only reason for turning to Foucault’s lectures. They position Weber as a
‘starting point’ for two competing schools of thought: the critical
theory of the Frankfurt School on one hand, and the neoliberal polit-
ical economy of ordoliberalism and the Freiburg School on the other
(see Foucault, 2008:105). This chapter will focus on the latter. It will,
first, question the line of continuity that Foucault draws between
Weber and post-war German neoliberalism, and second, explore methodo-
logical connections that Foucault neglects between Weber’s work and
72

Neoliberalism 73
the Austrian economic thought of Ludwig von Mises and Friedrich von
Hayek. This will lead, in turn, to a consideration of Weber’s position
on the regulation of the market by the state; an exercise which will
extend the analysis of his writings on stock and commodity exchanges
that was advanced in the previous chapter.
Liberalism and neoliberalism
Foucault’s 1978–9 lectures from the Collège de France, in spite of their

title, do not address biopolitics explicitly but ‘the art of government’ or
rather ‘the government of men insofar as it appears as the exercise
of political sovereignty’ (2008:2). Foucault begins with an analysis of
liberalism, although what is meant by this term is different from the
definition usually found in political philosophy for it refers instead
to a particular ‘ethos of government’ (Barry et al., 1996:8). Foucault’s
lectures on biopolitics open by tracing a shift from the raison d’êtat
characteristic of France in the Middle Ages to liberal forms of govern-
mentality that emerged in the late-18th century. The key point in this
transition is a change in the governmental connections between the
market and that state. Under the raison d’êtat of the Middle Ages, markets
were subject to ‘extremely strict and prolific regulation’ (Foucault, 2008:30),
and for this reason were sites of distributive justice. However, by the
late-18th century, the market started to appear as something that ‘obeyed
and had to obey “natural”, that is to say, spontaneous mechanisms’
(Foucault, 2008:31). The market was seen increasingly to have its own
logic and truth, and for this reason was no longer constituted in terms
of justice and jurisdiction, but rather as a ‘site of veridiction’ (2008:33).
This is the start of a new relationship between the state and market,
one in which the market increasingly is free to forge its own relation-
ships between value and price, while at same time the state is asked to
place limits on its own powers. This new situation, advocated most
famously by Adam Smith, is characterised by a ‘frugality of government’.
But this poses a problem: how can government impose limits on itself,
and do so without making the state and its powers redundant? Foucault
considers two attempts at resolving this difficulty: first, the work of
Rousseau, where the starting point is not government and its limita-
tion but rather questions of law, right and sovereignty; and second,
political philosophies which, by contrast, start with the analysis of gov-
ernment in order to establish its ‘de facto limits’, which may in turn
‘derive from history, from tradition, or from an historically determined
state of affairs’ (Foucault, 2008:40). One such approach is utilitarianism,
which attempted to limit the powers of the previous raison d’êtat by

defining the competencies of government in terms of its relation to
the market. Such thinking constructs markets as sites of unrestricted
exchange, while at the same time valuing state or public powers, includ-
ing their ability to intervene in markets, in terms of utility. Foucault calls
this ‘the fundamental question of liberalism’, and asks: ‘what is the utility
value of government and all actions of government in a society where
exchange determines the true value of things?’ (2008:46).
It is in this context that Bentham’s writings on surveillance and the
Panopticon, and with this Foucault’s (1977b) Discipline and Punish, take
on a new significance. In his lecture dated 24th January, 1979, Foucault
declares that ‘Economic freedom, liberalism in the sense I have just
been talking about, and disciplinary techniques are completely bound
up with each other’ (2008:67). This binding, which might initially
seem to be paradoxical, is rooted in the idea that liberalism does not
‘leave more white spaces of freedom’ but rather works to produce the
possibility of freedom, which, as a governmental form, it then pro-
ceeds to consume (2008:63). In order to guarantee, for example, the
freedom of the market or the free exercise of property rights, Foucault
argues that there must be government in the form of ‘control, con-
straint, and coercion’ (2008:67). Liberalism, while underpinned by the
self-limitation or ‘frugality’ of government, is thus not simply charac-
terised by laissez-faire economics or politics (see below), as it involves
the extension of government from the state to the market in order to
guarantee the ‘freedom’ of the latter. This can take at least two forms.
First, there is surveillance, as in the model of Bentham’s Panopticon.
Foucault states: ‘Government, initially limited to the function of super-
vision, is only to intervene when it sees that something is not hap-
pening according to the general mechanics of behaviour, exchange
and economic life (2008:67)’. Second, are more direct strategies of gov-
ernment that have ‘the function of producing, breathing life into, and
increasing freedom, of introducing additional freedom through addi-
tional control and intervention’ (Foucault, 2008:67). Foucault cites Roose-
velt’s welfare policies of the 1930s as an example of such practice. For
the purposes of the present chapter, it is the first of these two govern-
mental techniques – surveillance as a disciplinary measure that creates
‘freedom’ – that is of greater interest. For here Foucault develops the
arguments of Discipline and Punish into a much broader statement: the
Panopticon is ‘not a regional mechanics limited to certain institutions’
but instead is ‘the very formula of liberal government’ (2008:67). In
this context, Bentham’s writings are of interest because they extend a
Neoliberalism 75
visual model of disciplinary power into a more general art of government.

Foucault argues that this connection between discipline and government
even runs through Bentham’s (1983) late work on the constitutional
code. While this is something of a distortion of Bentham’s position, who
contrary to Foucault does not base his constitutional code explicitly upon
the disciplinary techniques of Panopticism (the only references to the
Panopticon in this code appear in footnotes on parliamentary conversa-
tion tubes and on prisons, Bentham, 1983:443–4), the thrust of Foucault’s
argument is clear: the Panopticon is more than an architecture of power
that can be broadened in any straightforward way into a theory of ‘sur-
veillance society’. Rather, it is a normative model of governance that
recasts the connection between the state and the market, and in so doing
seeks to promote conditions of ‘freedom’ through the exercise of dis-
ciplinary techniques that operate through specific forms and practices of
surveillance.
The remainder of Foucault’s lectures on biopolitics turn to the question
of neoliberalism. The concept of neoliberalism has a complex history and
has been ascribed different meanings by rival groups of political econ-
omists throughout the 20th century (for a comprehensive intellectual
history of this term, see Peck, 2008). The standard sociological definition
of this term is that it is a laissez-faire political and economic culture that
demands government and the state to be limited in their powers to inter-
vene in the market or restrict the entrepreneurial activities of individuals.
David Harvey, in his 2005 book A Brief History of Neoliberalism, provides a
useful summary:
Neoliberalism is in the first instance a theory of political economic

practices that proposes that human well-being can best be advanced
by liberating individual entrepreneurial freedoms and skills within
an institutional framework characterized by strong property rights,
free markets, and free trade. The role of the state is to create and
preserve an institutional framework appropriate to such practices
(2005:2).
Harvey adds: ‘According to theory, the neoliberal state should favour

strong individual property rights, the rule of law, and the institutions of
freely functioning markets and free trade’ (2005:64). What is striking
in these passages is that neoliberalism is not simply a normative dis-
course that seeks the devolution of power from the state downwards or
an argument for laissez-faire – a term which Hayek argues has been ‘much
abused and much misunderstood’ (1949:17) – for instead it addresses the
appropriate powers of the state and the role it should play in ensuring the
freedom of the market (see, for example, Eucken, 1951). Neoliberalism
centres precisely on the relationship between the state and the market, and
in particular: ‘where to draw the line on the role of the state in the
economy’ (Peck, 2008:26). This is a complex question that has divided
many generations of so-called neoliberal thinkers, from Hayek through to
Friedman. We will come back to Hayek and other influential figures such as
Mises below, but first it is instructive to return to Foucault’s lectures on bio-
politics to explore the shifting governmental arrangements between state
and market that underpin the emergence of contemporary forms of neo-
liberalism. The starting point for this exercise is perhaps an unlikely one:
the neoliberal political economy that became central to the post-war recon-
struction of Germany, otherwise known as ordoliberalism.
Foucault’s sweeping analysis of neoliberalism in his lectures on bio-
politics begins with a group of German political economists associated with
the journal Ordo, which was founded by Walter Eucken in 1948. This group,
also known as the Freiburg School, are of interest to Foucault because they
advanced a new normative model of the relation between the state and
market, and in so doing redefined not simply the limits of the state but
more fundamentally what a state is and how its institutions are to operate.
In liberal economic philosophy, the role of the state is to watch over the
market and to intervene only when it is necessary to protect its freedom.
This, as argued above, is reproduced in the model of the Panopticon: a form
of government for which watching, for the most part, is power enough.
However, the situation in post-war Germany posed liberalism a new prob-
lem, for a market existed but no state as such. This reversed the problem
faced by the physiocrats and the liberal economists of the 18th century,
for whom there was an already existing, legitimate state which had to be
limited in order to create the ‘necessary economic freedom’. Indeed: ‘The
problem the Germans had was to resolve the exact opposite: given a state
that does not exist, how can we get it to exist on the basis of this non-state
space of economic freedom?’ (Foucault, 2008:86–7).
The answer, for the ordoliberals, was to conceive of a ‘radically economic
state’ and to think of state-formation as a ‘commercial opening’. This effec-
tively reverses Bentham’s model of the Panopticon, for rather than the state
ensuring the legitimacy of the market, the market is now to produce legit-
imacy for the state, which in turn becomes its ‘guarantor’. Foucault argues
that what underpins this type of state-formation is the ‘guaranteed exer-
cise of an economic freedom’, and this is made possible by a ‘permanent
genesis’ or ‘circuit’ that goes ‘constantly from the economic institution to
the state’ (2008:84). The problem this posed to the ordoliberals, and which
Neoliberalism 77
subsequently prompted much debate, was how a state could be founded

upon, and yet at the same time be limited by, a principal of economic
freedom, or in Foucault’s terms how could it be the state’s ‘guarantee and
security’ (2008:102). The answer, for the ordoliberals, was that the market
economy should be the principle of the state’s ‘internal regulation from
start to finish of its existence and action’ (2008:116). Foucault explains:
instead of accepting a free market defined by the state and kept as

it were under state supervision – which was, in a way, the initial
formula of liberalism… – the ordoliberals say we should completely
turn the formula around and adopt the free market as organizing
and regulating principle of the state, from the start of existence up
to the last form of its interventions. In other words: a state under
the supervision of the market rather than a market supervised by
the state (2008:116).
Put simply, the market economy is to serve as the ‘principle, form, and
model’ of the state. This is the fundamental basis upon which the state
is said to gain its legitimacy, and, following the horrors of Nazism, how
it can be ‘made acceptable to those who most mistrusted it’ (Foucault,
2008:117).
The argument of the ordoliberals is that the state and all its institutions
should be marketised. But what, exactly, is meant here by the market?
Foucault explains that in classical liberal economics the market is theo-
rised in terms of exchange, or rather ‘free exchange between two partners
who through this exchange establish the equivalence of two values’
(2008:118). A focus on exchange (and its different forms), one might add,
can be found at the heart of most classical theories of the social: from
Marx’s political economy to Mauss’s anthropology of gift-exchange to
Rousseau’s social contract. However, the ordoliberals break with this
tradition and conceive of the market not as a site of exchange but rather
as one of competition. As discussed in Chapter 4, this is a position found
earlier in the writings of Weber, for whom the market involves an exchange
between buyers and sellers but, importantly, also competition over price
between those buying and those selling. Foucault argues that, for the
ordoliberals, the definition of the market in terms of competition has
an important consequence: the idea of laissez-faire is placed into question
on the grounds that it is nothing more than a ‘naive naturalism’. Com-
petition, he argues, ‘is absolutely not a given of nature’, for its ‘game,
mechanisms, and effects’ are ‘not at all natural phenomena’ (Foucault,
2008:120). This move is pivotal, for in these terms there is nothing
natural about markets, and because markets are not natural they cannot
be left to their own devices: they need some kind of accompanying
government or governance. In a key passage, Foucault writes:
Government must accompany the market economy from start to finish.

The market economy does not take something away from government.
Rather, it indicates, it constitutes the general index in which one must
place the rule for defining governmental action. One must govern for
the market, rather than because of the market. To that extent you can
see that the relationship defined by eighteenth century liberalism is
completely reversed (2008:121).
For the ordoliberals, markets need government, just as government needs,

as its founding principle, the market. But what type or art of government
emerges from this relationship? Foucault argues that in this configuration
government works actively to create the space for competition to take
place, and for this reason neoliberalism ‘should not be identified with
laissez-faire, but rather with permanent vigilance, activity, and intervention’
(2008:132, emphasis mine).
This position is stated clearly by Walter Eucken – a founding member of
the famous Mont Pèlerin Society and ‘something of a legend among
liberal economists’ in the post-war period (Jewkes, 1951:7) – who argues
vociferously that the ‘experience of laissez-faire goes to prove is that
the economic system cannot be left to organize itself’ (1951:93). More
specifically, Eucken declares that it is necessary to think beyond the
either-or of laissez-faire on the one hand and state planning on the
other, for instead ‘the state should influence the forms of economy, but
not itself the economic process’ (1951:95). By this, Eucken means the
following:
Concluding trade treaties, providing for an adequate monetary system,

framing laws of patent and contract – all this lies within the purview
of the state. The state should also decide the general nature of the
economic and political order and thus meaningfully integrate the
various sectors of economic policy; but it should not take upon itself
the issue of production orders regulating the day-to-day manufacture,
import and export of machines, textiles, wheat or other commodities,
nor should it attempt direct control of labour (1951:96).
The key point to take from this is passage that ordoliberalism, and neo-
liberalism more generally, does not signify the absence of government
Neoliberalism 79
or the state. Rather, for Foucault, it is an argument for the state to be

marketised to its core, and for government to work tirelessly to ensure
that competition plays a ‘regulatory role at every moment and every
point in society’, thereby promoting the ‘general regulation of society
by the market’ (2008:145).
Under conditions of ordoliberalism, the market and its principles are
simply everywhere, and nothing, conceivably, lies out of its reach (hence
it might be said to be biopolitical in form; a question which, surprisingly,
Foucault neglects through the course of his 1978–9 lectures). This means
that nothing is now sacred from the logic of marketisation: ‘the problem
is not whether there are things that you cannot touch and others that
you are entitled to touch. The problem is how you touch them’ (Foucault,
2008:133). This situation, which in many ways parallels Lyotard’s later work
on the extension of the capitalist market through the commodification of
sociality and culture (see Chapter 3), involves a reversal of Bentham’s
model of panopticism, or of a model of government in which the state is
positioned to watch over the market, which in turn is said to require a
minimum of intervention because it is something that is natural or self-
normalising. For in the neoliberal model, government is already founded
on principles that come from the market, and because of this its task is to
ensure not only that freedom of competition exists within the market,
but that this freedom extends to its own institutions and agencies – a
development that is often legitimated in the name of ‘choice’.
For the neoliberals this ‘freedom’ comes, most obviously, through the
opening up of competition through the privatisation of state activities
(see Foucault, 2008:143–4), and in line with this the promotion of a spirit
of enterprise that shifts ‘the centre of gravity of governmental action
downwards’ (Röpke cited by Foucault, 2008:148) – something that today
is central to the idea of a ‘Big Society’ and to what recent sociologists such
as Bauman and Beck call individualisation (see Chapter 7). However, in
cases where privatisation is not an immediate possibility, there is an alter-
native, yet complementary strategy that furthers the logic of Foucault’s
analysis: the introduction of techniques of measurement or audit that
enable the direct comparison of institutions through the construction of
classifications such as ‘league’ tables. At surface level this ‘audit explosion’
(Rose, 1999:153–5) can be read in terms of a shift from government based
on trust to new regimes of accountability (see, for example, Power, 1994),
but what sits beneath this notion of accountability is a demand for the
state to justify itself to the market. The way the state can satisfy this
demand, and with this prove its legitimacy, is by introducing principles
of competition from the market into all of its activities and agencies. The
question this poses is how competition is to be introduced and sub-

sequently maintained in such settings? One answer is this is made poss-
ible by active processes of (self-)government and (self-)surveillance that
come from the market and which, most commonly, take the form of
an audit. Marilyn Strathern is one of the few people to have sensed what
is at stake here. She argues that new management practices of audit are
‘a now taken-for-granted process of neo-liberal government’ and lie at the
core of its ‘ethos’. And adds: ‘Where audit is applied to public institutions
– medical, legal, educational – the state’s overt concern may be less to
impose day-to-day direction than to ensure that internal controls, in the
form of monitoring techniques, are in place’ (2000:3). Measures such
as the Research Assessment Exercise in the UK higher education sector
operate in exactly this way. They work to legitimise this sector in terms
of ‘accountability’ and ‘quality’, but most importantly work to promote
competition in ways that were previously unimaginable.
Weber and neoliberalism
Foucault’s lectures on biopolitics raise important questions about the

underlying governmentalities of liberal and neoliberal economic thought,
but how can such questions be connected to the writings of Weber? Per-
haps surprisingly, references to Weber appear at key points in Foucault’s
argument. The most telling of these comes in Foucault’s comparison
of the ordoliberals of the Freiburg School to their ‘neighbours’ at the
Frankfurt Institute of Social Research: ‘[t]here is a parallel in the dates and
equally in their fate, since part at least of the Freiburg School, like the
Frankfurt School, was dispersed and forced into exile’ (2008:105). Foucault
expands: ‘[t]here is the same type of political experience and also the
same starting point, since broadly speaking both schools started from
a problematic…which was dominant in Germany at the start of the
twentieth century and which we can call Weberianism’ (2008:105). But
what, exactly, does Foucault mean here by ‘Weberianism’? His definition
is worth quoting at length:
What I mean is that Max Weber was a starting point for both schools
and we could say, to schematize drastically, that he functioned in early
twentieth century Germany as the person who, broadly speaking, dis-
placed Marx’s problem. If Marx tried to define and analyze what could
be summed up as the contradictory logic of capital, Max Weber’s
problem, and the problem he introduced into German sociological,
economic, and political reflection at the same time is not so much the
Neoliberalism 81
contradictory logic of capital as the problem of the irrational rationality

of capitalist society. I think, again very schematically, that what char-
acterizes Max Weber’s problem is this movement from capital to
capitalism, from the logic of contradiction to the division between
the rational and irrational. And we can say roughly that the Frankfurt
School as well as the Freiburg School, Horkheimer as well as Eucken,
have simply taken up this problem in two different senses, in two
different directions (2008:105–6).
This positioning of Weber as the starting point for either a leftist

critique of the irrationalities of the underlying logic of capitalism or for
a new breed of neoliberal political economy, such as that found within
ordoliberalism, at first sight seems to make sense. For Foucault argues
that on one hand, the Frankfurt School attempted to formulate a new
‘social rationality’ that could confront and tackle the economic irra-
tionalities of capitalism, while on the other hand figures such as Eucken
and Röpke sought to negate the social irrationality of capitalism by ‘defining,
redefining, or rediscovering’ an underlying economic rationality. The
contrast is a stark one: for Frankfurt School thinkers the irrationality of
capitalism is economic in basis and can be alleviated through an alter-
native social rationality, while for the ordoliberals the reverse is held to
be true.
The influence of Weber on Frankfurt School critical theory has been
well documented (see, for example, Held, 1980:64–6; Jay, 1973:259–60),
but how accurate is Foucault’s reading of the connection between Weber
and ordoliberalism? This connection is in fact far from clear as neither
Eucken or Röpke (who was not strictly part of the Freiburg School)
use Weber’s work as a key point of reference in their writings on the
economy and the state. Eucken refers only fleetingly to Weber’s work,
and not always in ways that are complementary. In The Foundations of
Economics, published two years after the launch of the journal Ordo, Eucken
defers to Weber’s knowledge of the economic systems of the ancient
world in a brief footnote (1950:327), but elsewhere is deeply critical of his
idea that ideal-types are Utopian forms (Eucken, 1950:348), arguing that
‘[w]hat Weber has to say on the construction of ideal types is not only very
incomplete but contains serious defects’, and that ‘what he calls an “ideal-
type” is very vaguely defined’ (Eucken, 1950:348). Röpke, meanwhile,
in writings such as The German Question and Economics of the Free Society
makes only fleeting references to Weber’s notion of charismatic leadership
(1946:36) and to the Protestant Ethic, which frames what Röpke calls ‘the
moral reserves that nourish…pure business’ (1963:22).
So what, exactly, is the line of continuity that runs from Weber’s writ-
ings to the work of these early neoliberal thinkers? Foucault’s answer is
that the primary point of connection is the idea that ‘the economic must
be considered as a set of regulated activities from the very beginning’
(2008:163). This tying together of the economic and regulation paves the
way for Foucault’s observation that neoliberalism is not simply a political
economy committed to laissez-faire but also, and perhaps more impor-
tantly, a particular type of governmental arrangement which runs in
a feedback loop from the market to the state. But at this point, Weber’s
influence on ordoliberalism appears to reach its limits. First, Foucault states,
in a passage that it is hard to fathom, that the ordoliberals ‘place them-
selves strictly in line with Max Weber’s important perspective. That is to
say, like Max Weber, they situate themselves from the outset at the level
of the relations of production rather than at the level of the forces of pro-
duction’ (2008:163). It is not at all clear how Foucault reaches this under-
standing of Weber, who never explicitly situates himself at ‘the level of
the relations of production’ and if anything is more interested in relations
of status and even consumption (see 1970:193 and Chapter 6). The only
explanation for this reading seems to be that in using the distinctly un-
Weberian term ‘relations of production’, Foucault is referring to the econ-
omic not simply as ‘a mechanical or natural process that can easily be
separated out’ but instead as ‘a set of activities, which necessarily means
regulated activities’ (2008:163). This presumably means that Weber, in
treating the market in terms of competition rather than simply exchange,
does not reproduce the naturalism of liberal economic theory (this in
turn has been contested by Marxist readings of Weber such as Clarke,
1982). Second, Foucault argues that once economic activities become reg-
ulated they become part of an ‘economic-juridical ensemble’ that Eucken
calls a ‘system’, at which point the influence of Weber’s methodology is
said to give way to phenomenology, largely inspired by figures such as
Alfred Schutz (see Holton and Turner, 1989:55–6).
One puzzling feature of Foucault’s account of the connection between
Weber and neoliberalism is that it exaggerates the importance of Weber’s
theory of the economic rationalities of capitalism for the development of
ordoliberalism, while at the same time neglecting the more prominent
influence of Weber on the Austrian School, and in particular on Ludwig
Mises and Friedrich Hayek. Foucault’s argument is a fairly crude one: that
‘to a considerable extent the historical, economic, and moral analysis of
the nature of the enterprise, and the series of works on the enterprise by
Weber, Sombart, and Schumpeter actually support the neo-liberal analysis
or project’ (2008:147). The reasoning behind this statement is that for
each of these figures the emergence of advanced ‘rational’ capitalism is
Neoliberalism 83
not characterised by the ‘governmental practice’ of laissez-faire but rather

by a ‘social ethic of enterprise’, which in Weber’s case comes primarily
from the Protestant sects, and most prominently from Calvinism. This
connection between religious ethics and the enterprise culture of neo-
liberalism, in turn, opens the way for a consideration of recent forms of
German Christian Democracy (see Foucault, 2008:185–6), but in so doing
Foucault overlooks the many differences between Weber and figures such
as Sombart, and more importantly the methodological continuities between
Weber and Austrian economics that framed the emergence of early neo-
liberal thought.
Weber and Austrian economics
To provide a more complete account of the connections between

Weber and neoliberal political economy it is necessary to extend the his-
torical reach of Foucault’s account to the Methodenstreit: the dispute
over methods that began with the publication of Carl Menger’s (1963)
Problems of Economics and Sociology in 1883 – a work that in Hayek’s view
‘did more than any other single book to make clear the peculiar character
of the scientific method in the social sciences’ (1934:405). The details of
the Methodenstreit have been well documented and cannot be elaborated
in detail here (for a clear and accessible overview, see Caldwell, 2005:
64–82; Holton and Turner, 1989:34–42). In brief, the main conflict played
out between Menger, an Austrian economist whose work sought to expose
‘the errors which result from the failure to recognize the formal nature of
theoretical economics’ (see Menger, 1963:41–9), and Gustav Schmoller,
the leading representative of the Historical School, which also included
figures such as Wilhelm Roscher and Karl Knies (see Weber, 1975a).
Swedberg neatly summarises the differences between these two camps:
Schmoller said that one should start by assembling psychological

and historical data and then gradually construct economic theory
through generalizations; Menger argued, as did Weber, that even
though economics draws on several different sciences, these must be
kept distinct from one another because they analyze their subject
matter in different ways. Menger, unlike Schmoller, also wanted
to draw a sharp line between economics as a science and its use for
policy purposes (1998:179).
In addition, Schmoller viewed the economy as part of society, while

Menger viewed ‘the economy as a restricted area which must be ana-
lyzed separate from society as a whole’ (Swedberg, 1998:178).
How was Weber positioned in this controversy? This is not an easy

question, for in a sense he had a foot in both camps as his work clearly
has sympathies with that of Schmoller and Menger. On one hand, the
methodology advanced by Weber in his ‘Objectivity’ essay starts from a
comparable epistemological position to that of Schmoller: that the empir-
ical world is distinguished by its infinite richness and complexity (see
Chapter 2). His early writings, in particular his doctoral thesis on medieval
trading companies (Weber, 2003) and his work on agrarian history
(Weber, 1998), were also ‘very much within the mainstream of the His-
torical School’ (Clarke, 1982:194). Simon Clarke (1982:196) argues that
Weber’s affinities with the Historical School faded over time, and that
while ‘Weber did not simply abandon the methodological prescriptions of
the Historical School’ his later work can be placed ‘definitely on the
Austrian side of the divide’. However, if this is the case, and it is not alto-
gether clear that it is, Weber continued to have great admiration for the
‘wisdom and moderation’ of Schmoller, particularly for his work with the
Verein für Sozialpolitik and for the place he prepared ‘in our science for his-
torical thought’ (see Weber’s letter to Schmoller on his seventieth birth-
day, collected in Weber, 2008: 58–9). On the other hand, Weber is deeply
sceptical of any attempt by the Historical School to subsume the details
of history under any general or developmental law (see, for example,
1949:76–7). This position resurfaces in Weber’s (1975a) critique of
Roscher and Knies, which objects to what he calls the ‘emanationism’
and ‘panlogism’ of Hegelian philosophy, and more specifically the ten-
dency by members of the Historical School to see ‘“laws of history”
unfold and become actualized in the concrete’ (Huff, 1981:464).
Weber develops this stance more explicitly in a review entitled ‘Marginal
Utility Theory and “The Fundamental Law of Psychophysics”’ (1975b).
The task of this review is to show that marginal utility theory, or the
notion that value is tied to an increase or decrease in the consumption of
a good or service, is in no way dependent on an underlying psychological
principle such as the Weber-Fechner law or what Lujo Bretano calls ‘the
fundamental law of psychophysics’ (see Weber, 1975b:25) (for an intro-
duction to these complex debates see Zafirovski, 2001). Weber develops
this position in an uncompromising fashion. He declares that the ‘ratio-
nal theory of price formation has nothing to do with the concepts of
experimental psychology. More generally, it has nothing to do with any
“psychology” of any kind which aspires to be a “science” going beyond
everyday experience’ (1975b:33). Value, Weber argues, has no psycho-
logical basis but is instead forged ‘pragmatically’ through the use of
categories such as ends and means; an argument that Caldwell suggests
Neoliberalism 85
later became a ‘standard Austrian tenet’ (2005:91). Interestingly, through

the course of this argument, Weber defers to Carl Menger, who, he
says, ‘proposed excellent views even if they were not methodological
finished’ (1975b:33). More specifically, Weber draws upon Menger’s
(see 1963:54–65) notion of ‘exact’ and ‘real’ types to formulate instead
the idea of the ideal-type (a move which Eucken would later criticise,
see 1950:348), which he outlines as follows:
As soon as we take hold of this reality itself, in its culturally significant

components, and seek to explain it causally, economic history is imme-
diately revealed as a sum of ‘ideal-typical’ concepts. This means that its
theorems represent a series of conceptually constructed events, which
in ‘ideal purity’, are seldom, or even not at all, to be found in the
historical reality of any particular time. But on the other hand, these
theorems – since in fact their elements are derived from experience
and intensified to the point of pure rationality only in a process of
thought – are useful both as heuristic instrumentalities of analysis and
as constructive means for the representation of the empirical manifold
(1975b:34).
It is on this basis that Weber works both between and beyond Schmoller
and Menger (for a detailed account of the lasting connections between
Weber and the latter, see Clarke, 1982:197–204). For instead of working
inductively by building from history while at the same time reducing its
complexity by searching for a higher law that is somehow confirmed by
empirical reality, Weber employs types to aid a heuristic understanding
of history and of social action at the levels of causality and meaning,
and as such these types are never utilised to generalise in any positivistic
sense. This is the basis of Weber’s methodological position as outlined in
Chapter 2: ideal-types are theoretical insofar as they exist only at the level
of thought as useful heuristic devices, but, in saying this, the heuristic
value of these types rests on the fact that they move beyond empirical
reality while at the same time being ‘derived from experience’.
Weber’s writings on methodology and on economic theory and socio-
logy did not go unnoticed in Austrian circles. Indeed, Hayek considered
Weber’s writings on marginal utility theory to be ‘preeminent and of
paramount importance’ (Zafirovski, 2001:438). Hayek’s interest in Weber
did not stop here. In Individualism and Economic Order, he argues that
Menger ‘was among the first in modern times consciously to revive the
methodical individualism of Adam Smith and his school’ (1949:4). While
the connection is never made explicitly, there is a sense that, for Hayek,
the ‘methodical individualism’ of Smith is mediated by Menger and

recast in sociological form in the so-called methodological individual-
ism of the first chapter of Weber’s Economy and Society (for an argu-
ment for Weber’s ‘methodological individualism’ as an alternative to
formalist economics, see Lachmann, 1970:6–7; and Mises, 1960:40–4;
alternatively for a Marxist critique of Weber’s ‘liberal individualist
starting point’ see Clarke, 1982:204; for a response to Clarke, see Holton
and Turner, 1989:47–8). At a later point in Individualism and Economic
Order, Hayek calls Weber ‘the great German sociologist’, and argues that
he takes a position that is remarkably similar to Mises on the problem of
pricing in planned economies. He explains:
Like Mises…he [Weber] insisted that the in natura calculations proposed

by leading advocates of a planned economy could not provide a rational
solution of the problems which the authorities in such a system would
have to solve. He emphasized in particular that the rational use and the
preservation of capital could be secured only in a system based on
exchange and the use of money and that the wastes due to the imposs-
ibility of rational calculation in a completely socialized system might
be serious enough to make it impossible to maintain alive the present
populations of the more densely inhabited countries (Hayek, 1949:144).
It is perhaps because of this position on the seeming ‘impossibility of

a rational calculation in a centrally directed economy from which
prices are necessarily absent’ (Hayek, 1949:145), that Hayek intended
to study with Weber in Munich (he had been at war in Italy when
Weber taught in Vienna in 1918). This did not happen as Weber died
in June 1920, but, remarkably, Hayek was later to play a role in the
project to translate Economy and Society into English (see Swedberg, 1998:
204). Swedberg, drawing on a letter from Talcott Parsons to Frank
Knight (a key figure in the emergence of Chicago School economics, and
someone we will return to in Chapter 7), states the following:
According to Talcott Parsons (who translated Part I of Economy and

Society in 1947), Hayek wrote to him in early 1939 that a young
economist by the name of A.M. Henderson had made a draft trans-
lation of the first two chapters of Wirtschaft und Gesellshaft under his
direction and asked Parsons if he would review them (1998:302).
But Hayek’s early interest in Weber did not last. In a 1978 interview
with James Buchanan (President of the Mont Pelèrin Society from 1984
Neoliberalism 87
to 1986), he is less than generous about Weber and his legacy, for while
he recalls reading Economy and Society on its publication in 1921, he
reflects that Weber’s work had little lasting impact on economic theory.
Without explaining exactly why, he declares that Weber’s attempt at
tracing the ‘Calvinist sources of capitalism’ is mistaken, and that instead of
reading Weber’s methodology one should instead turn to Alfred Schutz,
who was an active member of Mises’ seminar group (for a statement by
Mises’ on Schutz’s work, see 1960:125–6). One interesting detail to emerge
from this interview (Buchanan, 1978) is that Hayek recalls the closeness of
Mises and Weber through the time that the latter was teaching in Vienna.
It is perhaps for this reason that the impact of Weber upon the work
of Mises is more pronounced than it is for Hayek. This is particularly the
case in Mises’ book Epistemological Problems of Economics, which addresses
among other things the concept of action, the connection of sociology
to history, the uses of ideal-types and even the question of value-neutrality.
It is instructive to address the main arguments of this book.
Mises’ Epistemological Problems is a difficult text. Its starting point is
a neo-Kantian critique of the German Historical School of economics
and of the methodological basis of historicism more generally. Mises
argues that the scope of the Methodenstreit of the 1880s was limited, for
it centred on the uses and limitations of theory while not subjecting his-
torical approaches to the same critical scrutiny (see 1960:107). For this
reason, he examines the connection of history and sociology in detail,
and more specifically the possibility of extending the theoretical logic of
the former to the epistemology of the latter. Mises frames this work by
stating that, contrary to the view of most historians, ‘concepts are always
logically prior to the understanding of the individual, the unique, and the
non-repeatable’. He explains: ‘It is impossible to speak of war and peace
unless one has a definite conception of war and peace before one turns to
the historical sources’ (1960:1). A similar move can be detected in the
work of Hayek, who declares that ‘[s]ocial theory, in the sense in which I
use the term, is…logically prior to history’ (1949:72). This position runs
counter to the method advanced in Chapter 2 of the present book, which
explored the ways in which Weber and Deleuze forge concepts out of an
encounter with the lived empirical world; concepts which are then used
to present this world in thought. Mises takes a different view, namely that
experience is of ‘heuristic importance’ because it confirms the logical status
of the concepts of history and the social sciences, and one concept in par-
ticular: action. He argues that ‘[t]he theorems of economics are derived
not from the observation of facts, but through deduction from the funda-
mental category of action, which has been expressed sometimes as the
economic principle…sometimes as the value principle or as the cost

principle’ (1960:17).
But what does Mises mean by this term action? On the surface, there
appear to be clear continuities with Weber, for Mises writes that ‘[t]he
starting point of our reasoning is not behaviour, but action, or, as it is
redundantly designated, rational action. Human action is conscious
behaviour on the part of a human being’. He adds, in a near repetition of
Weber, that ‘[c]onceptually it can be sharply and clearly distinguished
from unconscious activity, even though in some cases it is perhaps not
easy to determine whether given behaviour is to be assigned to one or the
other category’ (1960:23–4). Mises attempts to clarify this point by adding
that action is always intentional and therefore rational. In a passage that
again echoes Weber’s declaration that what is rational depends on one’s
point of view, Mises dismisses the apparent irrationalities of action by
stating that:
One is unwarranted in calling goals of action irrational simply because

they are not worth striving for from the point of view of one’s own
valuations. Such a mode of expressions leads to gross misunderstand-
ings. Instead of saying that irrationality plays a role in action, one
should accustom oneself to saying merely: There are people who aim
at different ends from those that I aim at, and people who employ dif-
ferent means from those I would employ in their situation (1960:35).
It is at this point that Mises starts to break from Weber. Unlike Hayek,
Mises is less interested in the intersubjectivity that is born out of the
understanding of actions and their orientation towards others (see, for
example, Hayek, 1949:6), than in the mean-ends rationality or what
he calls ‘the economic principle’ (Mises, 1960:80) that lies at the heart of
all human action. On this point, Mises takes an aggressive stance against
Weber. He argues that Weber ‘was neither an economist nor a sociologist,
but an historian’, and that his work was ultimately ‘inadequate’ as it
examined the theoretical logic of history but failed to do the same for
either sociology or economics (Mises, 1960:74).
Mises is critical of Weber’s work on two main grounds. First, he objects
to the technical procedures through which Weber constructs his ideal-
types (see 1960:78–9; as stated above this is also a point on which Eucken
is critical of Weber, see 1950:347–8), and to Weber’s formulation of four
types of social action at the outset of Economy and Society. In particular,
Mises refuses to adopt the distinction Weber draws between value-rational
and instrumental or means-end rationality, for he argues not only that all
Neoliberalism 89
actions employ means and ends but also that all rational conduct is
guided by values. On this basis, Mises protests that ‘what Weber calls
“valuational” behaviour cannot be fundamentally distinguished from
“rational behaviour”’ (1960:83). Mises chooses not to address the subtle
distinctions Weber draws between behaviour, action and social action
(see Chapter 4), and between different types of understanding or ratio-
nality, but instead asserts the basic rationality, in a means-end sense,
of all human action. In a key passage, he writes:
Everything that we can regard as human action, because it goes beyond

the merely reactive behaviour of the organs of the human body, is ratio-
nal: it chooses between given possibilities in order to attain the most
desirable goal. No other view is needed for a science that wants to
consider action as such, aside from the character of its goals (1960:85).
This position is tied to a second critique of Weber: that he failed to

understand what Mises calls ‘the nomothetic science of human action’
(p.78). For while Mises commends Weber for his refusal to apply the
methods or ‘laws’ of natural science to the study of history, he argues
that a science of human action must nonetheless seek to comprehend
the ‘universal’ through ‘procedures’ that are both formal and axiomatic
(see Mises, 1960:13).
Mises declares that human action is an ‘a priori category’ and as such
cannot be derived from, or reduced to, history or experience. Rather,
Mises advances a science of human action as something that, like logic
and mathematics, seeks to produce knowledge that is ‘universally valid’.
This is the starting point for nomothetic sociology, and what he later
terms praxeology. He states that ‘Weber’s basic error lies in his misun-
derstanding of the claim to universal validity made by the propositions
of sociology’. And adds: ‘The economic principle, the fundamental law
of the formation of exchange ratios, the law of returns, the law of popu-
lation, and all other like propositions are valid always and everywhere if
the conditions assumed by them are given’ (1960:85–6). It is at this point
that Mises transforms Weber’s theory of social action into something else:
into a ‘science’ that looks for a priori laws of human action (see Mises,
1960:113). Weber’s ideal-types of social action are displaced by ‘laws’ and
‘principles’ that are said to be logical in character and derived through
reason rather than from history (for Hayek’s response to this position, see
1949:47). This development forms the basis of Mises’ epistemology, and,
in turn, provides the framework for a theoretical economics that takes
the contribution of Menger a step further. For what emerges through
the course of Mises’ Epistemology is a concept of human action that is

ultimately framed by a form of economic rationality: ‘All action is
economizing with the means available for the realization of attainable
ends. The fundamental law of action is the economic principle. Every
action is under its sway’ (1960:80).
Markets and regulation
Foucault’s argument that Weber’s work is the starting point, on the

one hand, for early forms of ordoliberalism, and, on the other, for the
critique of capitalist society advanced by the Frankfurt School is attrac-
tive because of its simplicity, but this simplicity is achieved at a cost,
for it somewhat distorts the line of continuity that runs between
Weber’s work and neoliberal thought. There is no clear evidence that
Weber’s work was as influential as Foucault states in the emergence of
ordoliberalism. While figures such as Eucken and Röpke had clearly
read Weber, their economic theory barely, if at all, draws upon Weber’s
sociology. The important point that Foucault misses is that Weber’s
work was far more influential in Austrian circles, and is a key reference
point for Hayek and, in particular, Mises. One intriguing aspect of this
connection is that while Hayek and Mises had sympathy for Weber’s
critique of socialism and bureaucracy, and were broadly in support of
his application and extension of Menger’s work in his writing on mar-
ginal utility, it is his sociological method that is their primary point of
interest. It might be argued that Weber’s work was not the starting
point of Freiburg economics, as stated by Foucault, but of the underlying
epistemology of Austrian economic theory, even if many of Weber’s
methodological proposition and tools (such as the ideal-type) were later
refined and even rejected. Foucault’s argument that Weber’s work can
be seen ‘to support the neo-liberal analysis or project’ (2008:147) needs
further detail, particularly at the level of method where there are impor-
tant continuities between Weber and thinkers such as Mises, not least
their emphasis on means-ends rationality and their so-called ‘methodo-
logical individualism’, as well as important discontinuities, most notably
in their different positions on sociology as a nomothetic science and on
the different rationalities (value- and means-ends) of social action.
The sociological and political consequences of these points of con-
vergence and divergence between Weber and Austrian neoliberal thought
demand detailed consideration. This is a task that lies beyond the limits
of the present chapter. Instead, a different but related point will be addressed,
one that is missed both by Foucault and figures such as Hayek and Mises,
Neoliberalism 91
and which extends many of the arguments that were raised initially in
Chapter 4: Weber’s position on the question of market regulation. Before
turning to this question, it is first instructive to remind ourselves of the
core argument of Foucault’s lectures on biopolitics. Simply put, it is that
neoliberalism is an art of government that reverses the previous govern-
mental configuration of liberalism. For whereas the state was previously
positioned to watch over and where necessary intervene in the operations
of the market, under neoliberal conditions the market watches over the
state and its institutions and regulates these through an economic prin-
ciple of competition that in turn becomes the new standard of govern-
mentality. In this situation, the state is there to guarantee the economic
‘freedoms’ of the market while itself taking on a marketised form. Weber’s
economic sociology is an important resource for understanding this arrange-
ment as it advances an understanding of the market that is built not simply
on a theory of exchange but also, and perhaps more prominently, on a
concept of competition. But this leaves the following question: how Weber’s
work be positioned in connection to the modes of liberal and neoliberal
governmentalities that are identified and analysed by Foucault?
Weber’s early pamphlets on ‘Stock and Commodity Exchanges’ and
‘Commerce on the Stock and Commodity Exchanges’ contain a number
of strong statements on the state regulation of markets. In the first of
these works, Weber draws a number of sharp contrasts between the social
structures of different stock and commodity exchanges. He says of the
English and American exchanges, for example, that they ‘have the char-
acter of closed clubs of professional exchange-traders’, and that such
exchanges are ‘clearly and openly organized as a monopoly of the rich;
the professional traders have empowered themselves alone, in the fashion
of a guild, to fix the business practices that are followed…’. He adds that
‘[n]either the state, nor anyone else (outside the exchange) for that
matter, has any say in that matter’ (2000a:327). But Weber is not against
the regulation of such exchanges. Quite the contrary. He argues that ‘mis-
leading behaviour’, in particular by the ‘agents’ of ‘disreputable people in
commission houses’, which leads to ‘economically irrational and dangerous
“gambling on the exchanges”’, should be subjected to legal punishments
(2000a:331). However, Weber insists, such regulation should not distract
us from the fact that stock and commodity exchanges are monopolies of
the rich. To repeat from the previous chapter: ‘nothing is more foolish
than to disguise this fact by admitting propertyless, and therefore power-
less, speculators and in that way allow large capital holders to shift res-
ponsibility away from themselves and onto those others’ (Weber, 2000a:
334). This passage is followed by a further call for state regulation or in
Weber’s words an ‘energetic supervision by the state’. But Weber admits

that this demand, which is effectively a call for what Foucault terms
liberal governance, is never likely to be easily met. He gives the following
example: ‘The possibility of a seemingly unlimited intervention by the
Minister for Commerce is now made available, in Prussia, by law. It is
therefore all a matter of how the supervision ought to be exercised (2000a:
334). For without a clear legal framework which details the institutional
structures and measures through which the state regulation of markets
should proceed, then the ‘overall supervision’ of the exchanges is likely
to remain ‘an empty word’. This means that there must be clarity about
exactly which circumstances and practices should be met with state
intervention. Weber concludes: ‘It is [really] a question of which specific
procedures one can and will control – or, regulate through legislative
intervention – and, for example, which sorts of business, or which business
between which people, one wants to prevent and can actually prevent’
(2000a:335).
This is a question that Weber returns to briefly at the end of his com-
panion piece ‘Commerce on the Stock Exchanges’ published two years
later [1898]. Through the course of this text, Weber is alarmed by the
artificial manipulation of stock or commodity prices in situations where
there is limited liquidity, or where the financial power of ‘great banking
houses’ or even ‘individual speculators’ is so strong that they effectively
lead the market, thereby forcing everyone else to follow (see Weber, 2000b:
367). Weber draws attention, in particular, to the excesses of futures tra-
ding, and on the difficulties of regulating such trading within the legal
framework of the nation-state (see Weber, 2000b:368). But this does not
stop him from listing a number of ‘controls over commerce’ that could
together form a ‘rational policy’ to be pursued by Germany on the basis
of its ‘power position in the world’ (2000b:368). These include the
requirement for speculators to prove their financial resources before being
admitted to trading on exchanges, as the participation of speculators
without capital resources is ‘not useful, and even damaging’. He argues
that there should also be regulation of speculation in small securities so
as to protect traders from the manipulation and volatility of prices, and
beyond this, ‘state authorities should be given a supervisory and veto
right against the trade in any type of object upon the exchanges, and in
particular futures trading of that object’ (Weber, 2000b:369). Again, the
state is to have a ‘supervisory’ or disciplinary relation to the market, and
Weber reiterates that, partly in response to what he earlier calls ‘the
public’s mania for gambling…on the exchanges’ (2000b:364), this role
ought to include the laying of ‘penal sanctions on the act of misleading
Neoliberalism 93
inexperienced and impressionable persons into speculative deals…’

(2000b:369).
Conclusion
These passages from Weber’s writings on stock and commodity exchanges

again demonstrate the difficulty of drawing a clear line of continuity
between Weber’s work and neoliberal thought. Foucault’s lectures make
no reference to Weber’s studies of stock and commodity exchanges, and,
as observed above, overlook complex methodological connections
between Weber and leading figures in Austrian economics. One possible
defence of Foucault is that his lectures were aimed at a student audience
and were never intended for publication. The value of these lectures thus
lies not necessarily in their detail, but rather in their analysis of the more
general logics of liberal and neoliberal governmentalities, through the
course of which Weber is positioned, rightly, as a central figure. The
important step, I would argue, is to show not just that Weber’s work
can be developed into a critique of the social irrationalities of capitalism
along Frankfurt School lines (something we already know), but that it can
also be used to call into question the epistemological basis of neoliberal
political economy, which is a point that Foucault misses.
For if Foucault is right in his view that neoliberalism, as opposed to the
Frankfurt School, advances a particular idea of economic rationality in
order to address the social irrationalities of capitalism, then one attraction
of Weber’s work is that it enables us to address the logic and value of
this economic rationality. One way of doing this is to follow Adorno,
Horkheimer and possibly Lyotard (see Chapter 3) in extending Weber’s
ideas of instrumental rationality and rationalisation into a critique of
commodification, reification and capitalist culture more generally. But
there are two other angles of attack yet to be explored. First, Weber’s
economic sociology, including his conception of the market as exchange
and competition, might be used alongside his writings on stock and
commodity exchanges to explore on one hand, what is at state in the
marketisation of the state and its institutions, and on the other, the
difficulties to be confronted in regulating the market and in resisting
the encroachment of its principles into all walks of social and cultural life.
Second, and perhaps as part of this task, Weber’s work can be used to
think critically about the epistemological basis of neoliberal thought.
Such an exercise could start by exploring the limitations of an epistemol-
ogy which, as formulated by Mises, reduces different types of social action
to a conception of human action that rests on a single means-ends or
economic rationality, and which is advanced subsequently as an a priori

principle – one that is said to be ‘universally valid’ and ‘indisputable’. By
way of response, a pressing task is to question the values that are con-
cealed within and which underpin such principles. For such principles are
not purely logical as Mises insists but instead involve the elevation of a
judgement (of the character of the ‘human’) into the form of a law. As
Weber states in his lecture ‘Science as Vocation’, no science is without
presuppositions, including in this case Mises’ ‘nomothetic’ science of
human action. Given this, the task is to question the epistemology of
neoliberal economic thought in terms of its underlying politics, for such
thought is never purely logical or value-free in basis. Rather, as Walter
Eucken recognised, it ‘is a political force. It determines and orientates
economic and political action…it is a power in its own right…’ (1951:83).
6
Class
There is currently a renewed drive within sociology to reposition social

class as a category that lies at the heart of the discipline and which
‘continues to count’ (Martin, 2010:1203; see also Crow and Pope, 2008).
One striking feature of recent sociological writings on class, however,
is that while they often seek to be innovative at the level of method (see,
for example, the use of multiple correspondence analysis in Le Roux
et al., 2008), they are rarely underpinned by detailed conceptual work.
Instead, ready-made concepts of class tend to be taken from existing
thinkers, currently the most popular of which is Pierre Bourdieu, and
then applied to produce, among other things, an account of lifestyle and
habitus (Oliver and O’Reilly, 2010) or class and cultural participation
(Le Roux et al., 2008). In contrast to such approaches, the argument
of the present chapter is that, in line with the position advanced in
Chapter 2, any consideration of class should start with an exploration of
the conceptual dynamics of this term. Against this backdrop, the work of
Max Weber continues to be of value because it offers a methodological
guide to the formation of concepts, and beyond this contains a con-
ceptualisation of class that is radically different to that found within most
contemporary approaches.
The aim of this chapter is not to replace existing concepts of class with
ready-made versions that come from the writings of Weber, but rather to
think creatively about concepts that can be drawn from, developed and
potentially reworked out of texts that, on the surface, look all-too-familiar
or perhaps even a little time worn. It is with this ambition that the
present chapter turns to the section of Economy and Society entitled ‘Class,
Status, Party’. This small part of Weber’s posthumously published magnum
opus has been influential in debates about social class, class structure
and social stratification since the 1950s (Bendix and Lipset, 1953; Archer
and Giner, 1971; Goldthorpe, 1972; Giddens and Held, 1982; Lee and
95

Turner, 1996). This chapter will seek to develop an alternative reading as it

will use this text to draw into question the presupposition that class is nec-
essarily social in basis. The basic focus of ‘Class, Status, Power’ is not simply
social stratification (Brennan, 1997), but the ways in which economic
(class), social (status) and political (party) powers (and the competition for
these powers) have quite different bases and take different structural forms,
even if they share some basic interdependencies. Through the course of this
text, Weber places the underlying basis of the economic, political and social
into question by drawing lines of demarcation between each of these
spheres: class is treated as a non-social form, while status groups and parties
are seen to be modes of associative or communal socialisation that can
potentially reach beyond state boundaries. On this basis, it is proposed that
Weber’s work can be used as a resource for thinking in new ways about
the concept of class and by extension the concept of the social, particularly
as the text of ‘Class, Status, Party’, contrary to most other sociological
approaches, privileges analysis of open and closed social relationships over
grander, meta-conceptual forms such as ‘society’.
Basic concepts
Weber addresses the connection between class and status in two places
in Economy and Society: in a section entitled ‘Status Groups and Classes’
(1978:302–7) and in ‘The Distribution of Power Within the Political Com-
munity’ (1978:926–39), which contains the famous section on ‘Class,
Status, Party’. Brennan believes the latter section to be later in origin than
the former: ‘The exact dating of this essay is uncertain. But it undoubtedly
derives from the period between 1915 and 1919, that is, up to five years
before Weber’s death in 1920’ (Brennan, 1997:2). Roth, however, offers
a different view, and argues that Part Two of Economy and Society (which
includes the section ‘Class, Status, Party’) was drafted between 1910 and
1914, while Part One was written ‘years later’ (see Roth, 1978:lxv; for an
overview of the structure of Economy and Society, see Baier et al. (2000)). One
of the few things that can be stated with any certainty is that the section on
‘Class, Status, Party’ is Weber’s most detailed statement on the questions
of class and power. It is located in Part Two of Economy and Society, which is
entitled ‘The Economy and the Arena of Normative and De Facto Powers’,
and comes before the sections on ‘Domination and Legitimacy’ (Weber,
1978:941–55) and then ‘Bureaucracy’ (Weber, 1978:956–1005), which is the
reverse order of Part One, where ‘Status Groups and Classes’ is placed
immediately after Weber’s famous outline of the three types of legitimate
domination (legal-rational, traditional and charismatic) (1978:212–301).
Class 97
The structural context of these two pieces is thus complex, with the argu-
ment moving in opposite directions in each case. To make things more
difficult, both pieces are clearly not finished. ‘Class, Status, Party’ is the
more complete of the two but nevertheless ends abruptly with a short
section on political power or ‘party’, while ‘Status Groups and Classes’ con-
sists of little more than a list of points that Weber failed to work into a
complete text before his death in 1920.
In view of this, how should these two pieces be read? The present
chapter will focus on the earlier section (‘The Distribution of Power
Within the Political Community’), as the seemingly later piece on ‘Status
Groups and Classes’ is little more than a rough outline of work to be
done. This is a departure from most mainstream commentaries on class
and status, which generally use both texts as reference points, and more
specifically tend to define class as intrinsically social (Scase, 1992:1;
Crompton, 1993:45; Edgell, 1993:13) through reference to ‘Status Groups
and Classes’, before then distinguishing Weber from Marx on the grounds
that he prioritised the cultural over the economic (hence his interest
in status groups). This move, however, furthers the presupposition that
economic class is always social class instead of placing the connection
between class and the social into question. Weber does indeed talk of
social class in his later work on ‘Status Groups and Classes’ (1978:302–7),
where he declares that ‘a “social class” makes up the totality of those class
situations within which individual and generational mobility is easy and
typical’ (1978:303–4). Beyond this, he outlines four main class group-
ings: (1) the working class as a whole; (2) the petty bourgeoisie (3) the
propertyless intelligentsia and technical specialists; and (4) those pri-
vileged through property and education. This typology is commonly
referred to in texts that read Weber as a theorist of social class or social
stratification (Edgell, 1993:13), but in such cases little attention is paid
to what, exactly, the term social is to mean in this context. To answer
this question, analysis must shift to Weber’s earlier writing on ‘The
Distribution of Power Within the Political Community’ (1978:926–39), in
which it is argued that classes might develop into social groupings, but
that this is by no means inevitable. This argument is bypassed in ‘Status
Groups and Classes’ (1978:302–7), which simply lists a number of basic
class typologies and characterisations that are subsequently left unanalysed.
A reading of Weber on ‘social class’ that is developed through this later
text thus eclipses the radical moment of his earlier, more complete
position: the argument that class, at least in its first instance, is pre-
dominantly non-social in form. For this reason I would argue that Brennan
(1997:2) is mistaken in her observation that this piece simply restates
and extends the earlier arguments of ‘Class, Status, Party’. What is of

interest is the shift in these two pieces from the analysis of class to that
of social class. As stated above, Weber defines social class as ‘the totality
of those class situations within which individual and generational mobility
is easy and typical’ (1978:302). In this sense, social class could be read
as the totality of situations that are not truly social in themselves (i.e.
they are not social relationships), but this is mere guesswork as the text
of this section of Economy and Society exists only in note form.
One of the few commentators to recognise the subtleties of the text of
Weber’s ‘Class, Status, Party’ is John Scott, who uses Weber to distinguish
between ‘class situations’ and ‘social classes’ (1996). Scott observes that it
is ‘striking…that so little attention has been given to the difficulties that
stand in the way of operationalising [this] distinction’ (1996:131). Equally
striking is that so little attention has been paid to what this distinction
means for Weber’s understanding of the concept of the social, which
Scott himself does not touch upon. The work of Bryan Turner is an excep-
tion to the rule. In his book on Status, he rightly observes that: ‘By com-
parison with economic classes, status groups are characteristically social
collectivities of a communal nature which require the reproduction of
a typical lifestyle and cultural inheritance. By contrast, economic classes
are merely aggregates of individuals linked together by exchange or other
economic relations’ (1988:7). This said, Turner only briefly considers
‘Class, Status, Party’ in the course of a general introduction to classical
theories of social stratification, and fails to pursue this distinction between
the social (status) and the non-social (class) in any detail. This leads him,
in turn, to neglect the meaning of the term social in Weber’s account of
social stratification (Turner, 1988:26–9), which is said to deal with ‘three
separate dimensions, namely class, status and power’ (1988:27). As a con-
sequence, Turner ends up reversing his previous position (along with the
one taken by Weber), for he treats class subsequently as a form of social
rather than economic stratification. The question this leaves is if class is a
‘situation’ rather than an intrinsically social form, what alternative group-
ings or collectivities might count as being ‘social’ in Weber’s terms?
To address such questions, it is necessary to turn back to the ‘Basic
Sociological Terms’ of Chapter 1 of Weber’s Economy and Society, which
introduces the conceptual language of ‘Class, Status, Party’ and gives a
methodological framework for dealing with the question of the social,
and by extension questions of class and status. Nowhere in this famous
outline of sociological concepts does Weber talk of Gesellschaft or society
(an irony, given the title of the book). Rather, he talks of different types
of social action (instrumental, value-rational, affectual and traditional),
Class 99
and then of two types of social relationships: ‘communal’ (Vergemein-

schaftung) and ‘associative’ (Vergesellschaftung) (or, as translated in the
section of Economy and Society dealing with markets, relationships based
upon ‘consociation’, see 1978:635). This emphasis on social relationships
is all but absent in Weber scholarship, which has tended to focus on the
structure or meanings of social action. But for an understanding of ‘Class,
Status, Party’, the concept of relationship is pivotal, for it extends the
concept of social action to the analysis of collective or group phenomena.
Weber declares that he uses the term social relationship ‘to denote the
behaviour of a plurality of actors insofar as, in its meaningful content,
the action of each takes account of that of the others and is oriented in
these terms’ (1978:26). A social relationship then is a collective or group
encounter, one that involves orientation and adjustment to the ‘mean-
ingful behaviour’ of others. Such a relationship can be categorised into
one of two main types: communal or associative. In English translation,
the dynamism of these conceptual forms is easily lost, for ‘communal’
(Vergemeinschaftung) and ‘associative’ (Vergesellschaftung) social relation-
ships sound passive and dull. But in German the ‘ver-’ prefix and the
‘-ung’ suffix give each term a sense of process, and tie the concept of a
social relationship to the idea of socialisation – an idea that is also crucial
to the sociology of Georg Simmel (1908). For Weber, communal forms of
socialisation are characterised by powerful feelings of belonging: ‘A social
relationship will be called “communal” (Vergemeinschaftung) if and so
far as the orientation of social action – whether in the individual case,
on the average, or in the pure type – is based on a subjective feeling of
the parties, whether affectual or traditional, that they belong together’
(Weber, 1978:40). Defined in this way, communal social relationships
involve social action that is primarily affectual (‘determined by the actor’s
specific affects and feeling states’) or traditional (‘determined by ingrained
habituation’ (1978:25)). Examples might include ‘religious brotherhood,
an erotic relationship, a relation of personal loyalty, a national com-
munity, the esprit de corps of a military unit’ (1978:41). Associative social
relationships, meanwhile, are more ‘rational’ or ‘modern’ in orientation:
A social relationship will be called ‘associative’ (Vergesellschaftung)

if and insofar as the orientation of social action within it rests on a
rationally motivated adjustment of interests or a similarly motivated
agreement, whether the basis of rational judgement be absolute values
or reasons of expediency. It is especially common, though by no means
inevitable, for the associative type of relationship to rest on a rational
agreement by mutual consent. In that case the corresponding action
is, at the pole of rationality, oriented either to a value-rational belief

in one’s own obligation, or to a rational (zweckrationale) expectation
that the other party will live up to it (1978:40–1).
This gives rise to a key point of distinction: communal social relations

are based upon affectual or traditional forms of social action, whereas
associative relations are oriented towards either value-rational or instru-
mentally rational activity.
Furthermore, communal and associative social relationships may be
either ‘open’ or ‘closed’ in character (Turner, 1988:24–5). This ties Weber’s
conceptual definition of a social relationship to his analysis of legitimacy,
power and domination, for at stake here is the definition of group mem-
bership, and, by extension, control over the limits of social relationships
themselves. On the one hand, a social relationship, regardless of whether
it is communal or associative in character, will be spoken of as ‘open’
to outsiders if and insofar as its system of order does not deny parti-
cipation to anyone who wishes to join and is actually in a position to do
so (1978:43). While, on the other, ‘A relationship will…best be called
“closed” against outsiders so far as, according to its subjective meaning
and its binding rules, participation of certain persons is excluded, limited,
or subjected to conditions’ (1978:43). And because open and closed social
relationships can be either communal or associative in form, the grounds
and procedures for closure can be enormously varied, and may be ‘deter-
mined’ through any of Weber’s four basic types of social action: tradi-
tional, affectual, and rational in terms either of ‘values’ (value-rationality)
or of ‘expediency’ (instrumental rationality).
Class: The non-social
This question of the underlying basis of collective social action or social

relationships forms the basic focus of Part Two of Economy and Society,
which ranges across the study of, among others, ‘economic relationships
of organised groups’ (Weber, 1978:339–55), ‘household, neighbourhood
and kin groups’ (1978:356–69), ‘ethnic groups’ (1978:385–98) and various
‘religious groups’ (1978:399–634). But of specific interest to the present
chapter is the relatively short section on ‘political communities’ (1978:
901–39), during the course of which Weber analyses the distribution of
powers through the realms of class, status and party. Weber starts his
analysis with class, and his position is famously anti-Marxist: ‘“Economic-
ally conditioned” power is not, of course, identical with “power” as such.
On the contrary, the emergence of economic power may be the con-
Class 101
sequence of power existing on other grounds’ (1978:926). This position

stresses the structural independence but relatedness of three different
types of power: economic, political and social. Weber’s argument is that,
contra Marx, economic power is not the same thing as political or social
power, even if these types influence each other. This is because there are
instances where social power (or status) is not derived from economic
standing, where ‘naked money power’ demands the relinquishment of
social honour, and, conversely, where ‘social honour, or prestige, may
even be the basis of economic power’ (1978:926). Moreover, political
and economic powers are not the same thing, for in theory it should not
be possible to buy a political position in a democratic state. This anti-
economistic reading of power ties into the basic concepts laid down by
Weber in Chapter 1 of Economy and Society, in particular his fourfold
typology of social action. Weber observes that the pursuit of power can be
instrumental and value-rational in orientation: ‘Man does not strive for
power only in order to enrich himself economically. Power, including
economic power, may be valued for its own sake’ (1978:926). But, this
said, class power, or rather ‘social action flowing from class interest’, is,
for Weber, predominantly instrumental in orientation. This is because
class is understood primarily in terms of economic interest, or what Weber
terms ‘those interests involved in the existence of a market’ (1978:928).
Class, for Weber, thus stands at the very threshold of being ‘social’.
Weber insists that classes are not communities, even if class or market
interest might guide social action in some way. This is because, as argued
in Chapter 4 markets are sites of competition and as such tend not to
be communities forged out of a subjective feeling of belonging together
on either affectual or traditional grounds. For Weber, such a feeling of
belonging is rarely present in situations of economic interest, which nearly
always involve action motivated by profit-making (i.e. instrumental action)
rather than action oriented on traditional or affectual grounds. Class
might thus exist in itself but never necessarily for itself, as it is ultimately
an instance of economic rather than social or political stratification. For
this reason, class barely counts as being ‘social’ at the level of an associa-
tive relationship. Hence, Weber talks less of class in itself than of a ‘class
situation’. By this, he means three things: ‘(1) a number of people have
in common a specific causal component of their lifechances, insofar as
(2) this component is represented exclusively by economic interests in
the possession of goods and opportunities for income, and (3) is repre-
sented under the conditions of the commodity or labour markets’ (1978:
927). A class situation is a situation that is determined by the market, and
as such is characterised by competition and not merely by solidarity
(although, as argued in Chapter 4, competition in and through markets

can potentially form the basis of associative sociality or ‘consociation’).
A class situation, Weber argues, refers to an array of different life-chances
that arise from the uneven distribution of material property among
‘a plurality of people’: it is a situation in which ‘pure market conditions
prevail’ (1978:927). The main division in such a situation is between
those with and those without property, and, further to this, between
the ownership of property that is ‘usable for returns’ and the offering of
‘services’ in the market. In both cases, there is intensive differentiation
between these competing market positions. Those who offer services in
a market, for example, are differentiated ‘just as much according to their
kinds of services as according to the way in which they make use of these
services, in a continuous or discontinuous relation to a recipient’ (1978:
928). What this means is that a common consciousness is unlikely to be
found at the root of class interest, and is in no way destined to develop
from such interest. For while people might experience a similar economic
situation, this commonality in itself does not necessitate the emergence
of a meaningful social relationship. Weber is firm on this point: ‘a class
does not in itself constitute a community [Gemeinschaft]’ (1970:184).
Class, then, is barely social, even if social action may itself give rise to
different market situations (from which sociality through competition
might follow). This disjuncture between class and meaningful group
action, or between the economic and the political, holds not simply at
the level of communal social relationships but for associative social rela-
tionships too. For while class situation would seem to lend itself to social
relationships that are more instrumental in orientation, Weber warns
against presuming that this is the case: ‘The emergence of an association
or even of mere social action from a common class situation is by no
means a universal phenomenon’ (1978:929). This is because what is at
stake in a class situation is the ‘power of property’, not the meaningful
reciprocity which, for Weber, is unique to social action and relationships.
Communal social relationships: Status
Weber summarises the basic structural difference between class and

status as follows: ‘Whereas the genuine place of classes is within the
economic order, the place of status groups is within the social order,
that is, within the sphere of the distribution of honour’ (1978:938). Put
simply, class is a form of economic stratification or positioning within
the market, whereas status refers instead to social stratification or to
‘the distribution of honour’. The key distinction is between classes,
Class 103
which are economic rather than social forms, on one hand, and status
groups (Stände), which are social forms of community on the other. Weber
states: ‘Stände sind, im Gegensatz zu den Klassen, normalerweise Gemein-
schaften’ (1980:531) [In contrast to classes, status groups are normally
communities’] (Weber, 1970:186). This emphasis on community is lost
in the English version of Economy and Society, in which Gemeinschaften
is translated, quite wrongly, as ‘group’ (see Weber, 1978:932; a situation
which is confused further when the term Verband is also translated as
group rather than as association, see for example Aron, 1964:101), but
is vitally important for drawing a distinction between class and status. In
these terms, class is a market situation and thus not necessarily a social
relationship, while status is the outcome of communal social relationships
that give a ‘social estimation of honour’ (1978:932). In other words,
status, unlike class, involves meaningful social action that is communal
(Vergemeinschaftung), and thus predominantly traditional or affectual in
orientation. Classes, then, for Weber, are barely social in the first instance,
while status groups are, by contrast, fully social according to his definition
of the term.
The term ‘status group’ (Stände), however, is a complex one (see Brennan,
1997:162–5; Turner, 1988:5–6). This is because the term Stände means not
simply social standing or honour but also estate. In the famous section of
Economy and Society entitled ‘The Types of Legitimate Domination’
(1978:212–301), and more specifically the section on ‘Traditional Authority’
(1978:226–41), Weber discusses ‘estate-type domination’ (ständische Herr-
schaft) at some length. This type of domination is treated as a form of
patrimonialism, which is a form of authority that is traditional yet at
the same time ‘exercised by virtue of the ruler’s personal authority’
(1978:232). What distinguishes patrimonialism from patriarchalism is
that the former involves a personal staff, and in the case of ‘estate-type
domination’, this staff appropriates ‘particular powers and the corres-
ponding economic assets’ (1978:232). The ruler or lord (unlike the sultan)
has limited power over the selection of staff because this process is bound
largely by tradition. Weber hence talks of ‘patrimonial recruitment’,
which applies to the hiring of administrative staff from ‘kinsmen, slaves,
dependents who are officers of the household, especially ministeriales,
clients, coloni, freedmen’ (1978:228). This means that the hands of the
ruler are effectively tied in the process of selection because ‘positions or
seigneurial powers’ are limited to particular ‘organized’ or status groups.
This situation becomes increasingly complicated with the division of
powers [Gewaltenteilung] within estate-type domination. This happens
when ‘organized groups of persons privileged by appropriated seigneurial
powers conclude compromises with their ruler…At times the members

of such groups may participate directly on their own authority and
with their own staffs’ (Weber, 1978:237). In other words, the seigniorial
powers of the ruler are reproduced within the complex internal divisions
of the estate.
What is important here is that, first, patrimonial domination is differ-
ent from what Weber calls ‘occidental feudalism’, which is either based
on the oaths of fealty of vassals, or a prebendal system of benefices (see
1978:255–62). And second, patrimonial authority remains both personal
and traditional: it is quite different, on the one hand, from charismatic
domination, which can only be patrimonial once routinised (and takes
on an ‘economic character’) (1978:251), and on the other, to bureaucratic
domination, which proceeds through impersonal, legal-rational pro-
cedures (1978:1085–7). In regards this latter distinction, Weber states:
The patrimonial office lacks above all the bureaucratic separation of

the ‘private’ and the ‘official’ sphere. For the political administra-
tion, too, is treated as a purely personal affair of the ruler, and polit-
ical power is considered part of his personal property, which can be
exploited by means of contributions and fees (1978:1028–9).
This theory of the estate connects to Weber’s broader argument about

status groups in important ways. Status groups, like estates, tend to be
based on communal social relationships that tend towards closure. The
‘status’ or social circle is one example of this:
status honour is normally expressed by the fact that above all else
a specific style of life is expected from all those who wish to belong
to the circle. Linked with this expectation are restrictions on social
intercourse (that is, intercourse which is not subservient to economic
or any other purposes). These restrictions may confine normal mar-
riages to within the status circle and may lead to complete endo-
gamous closure. Whenever this is not a mere individual and socially
irrelevant imitation of another style of life, but consensual action of
this closing character, the status development is under way (1978:932).
This logic of closure is realised to its ‘full extent’ with ethnic segre-
gation and the formation of social castes. When this happens, a status
structure develops in which ‘ethnic communities’ close off from each
other by prohibiting exogamous marriage and by defining legitimate
social relationships on the grounds of blood ties. But Weber is careful
Class 105
not to conflate the categories of ethnicity and caste, for he argues that
when a status segregation develops into a class a new structure of exclu-
sion is born, which is by no means always the case: ‘the caste structure
transforms the horizontal and unconnected coexistences of ethnically
segregated groups into a vertical social system of super- and subordination’
(1978:934).
Estates and status groups are comparable not simply because they are
predominantly closed social structures, but because the social rela-
tionships forged within these structures are predominantly traditional or
communal in orientation. The reason for this is that relationships within
estates or status groups are personal ties based, for the most part, on reli-
gious or historical precedent, and as such are quite different from the rela-
tions or ‘situations’ found in the instrumental, so-called ‘rational’ world
of the advanced capitalist economy. In fact, status groups, with their
traditional outlook and tendency towards closure, are likely to hinder the
development of impersonal market forces (interestingly Weber refers else-
where to the English and American stock exchanges as ‘closed clubs of
professional exchange-traders’ (2000a:327; see Chapter 5) or what might
be called status groups’; see also MacKenzie, 2009:73–4). Weber describes
this tension between class (market situation) and status (traditional social
action) with great force:
As to the general effect of the status order, only one consequence

can be stated, but it is a very important one: the hindrance of the
free development of the market. This occurs first for those goods
that status groups directly withhold from free exchange by mono-
polization, which may be effected either legally or conventionally
(1978:937).
What is at stake is a basic conflict between social honour and the

‘functional’ interests of the market (which ‘knows nothing of honour’
(1978:936)). Weber observes that, for the most part, social honour is com-
pletely incompatible with ‘hard bargaining’ in the capitalist market, to
the extent that status groups tend to abhor such a practice. He states:
‘Honour abhors hard bargaining among peers and occasionally it taboos
it for the members of a status group in general. Therefore, everywhere
some status groups, and usually the most influential, consider almost any
kind of overt participation in economic acquisition as absolutely stigma-
tizing’ (1978:937). This means, in effect, that social relationships of status
are, at least in theory, incompatible with market situations or what might
be called situations of class, for social standing is not simply determined
by economic power or interest. Weber illustrates this by means of a

dramatic, if abrupt, contrast: classes are stratified according to ‘relations
to the production and acquisition of goods’ (1978:937), while status
groups are marked out by different practices and modes of consumption.
In these terms, production is characterised by economic situations or
relationships, while consumption, by contrast, plays out through social
relationships of a traditional or communal kind. On this point, Weber
could not be further from Marx, for whom the social was ultimately the
outcome of the productive cooperation of individuals (Marx, 1983:173).
‘Associative’ social relationships: Party
In contrast to classes and status communities, parties are neither non-

social nor communal in basis. They are rather organisations founded
upon associative social relationships, and, in contrast to the closed char-
acter of status groups, proceed through ‘formally free recruitment’
(1978:284). Weber (1978:285–6) states that parties might arise from ‘dis-
agreement over the charismatic quality of the leader or over the question
of who, in charismatic terms, is to be recognized as the correct leader’
(1978:285–6). He also observes that ‘traditionalistic’ parties might arise
from ‘controversy over the way in which the chief exercises his tradi-
tional authority in the sphere of his arbitrary will and grace’ (1978:286).
The basic thrust of Weber’s argument in ‘Class, Status, Party’, however,
is that parties are political bodies that reside in ‘the sphere of power’, and
as such are bodies that influence social activity in a meaningful way:
‘Their action is oriented toward the acquisition of social power, that is to
say, toward influencing social action no matter what its content might
be’ (1978:938). The words ‘whatever its content might be’ are important,
for at a structural level, modern parties are organisations that acquire
or influence social power not on the basis of value-rational action, but
through instrumentally rational means.
Weber’s primary concern is with ‘formally organised legal parties in a
polity’. What counts in this environment is not the intrinsic value-
rationality of power, but rather the instrumental struggle for ‘political
control’. This might come as something as a surprise to those who see
politics as the pursuit of values for their own worth, but, for Weber,
modern politics is highly rationalised: it involves the pursuit of power
within a formalised legal framework, and rests on the deployment
of rational means in the pursuit of clearly defined ends (even if this
process is not always straightforward, see Gane, 1997). This means
that modern parties are not communities, which are organised around
Class 107
traditional or affectual action, but rather associations, which are legal-

rational in outlook. This can be understood as an extension of Weber’s
argument elsewhere about the routinisation of charismatic authority.
On the subject of party control by charismatic leadership Weber states:
‘Almost all parties originate as a charismatic following of legitimate or
caesarist pretenders, of demagogues in the style of Pericles, Cleon or
Lassalle. If parties develop at all into routinised permanent organisations,
they generally are transformed into structures controlled by honoratiores’
(1978:1130). But in modern politics, particularly following the French
Revolution, Weber observes that parties take on an increasingly bureau-
cratic form, so that ‘in the last decades of the 19th Century…bureaucratic
organisation gains the upper hand everywhere’ (1978:1131). Weber sum-
marises the outcome of this process as follows:
The oscillation between subordination to charisma and obedience

to honoratiores was succeeded by the struggle of the bureaucratic organ-
isation with charismatic leadership. The more bureaucraticization
advances and the more substantial the interests in benefices and other
opportunities become, the more surely does the party organisation fall
into the hands of experts, whether these appear immediately as party
officials or at first as independent entrepreneurs (1978:1131).
This is not to say that charismatic leadership vanishes without trace

with the development of modern parties, as Weber himself warns against
placing charismatic, traditional and legal-rational forms of domination
into ‘a simple evolutionary line’ (1978:1133), but that parties become
increasingly legal-rational (or bureaucratic) in value-orientation and struc-
ture (and hence become characterised by associational rather than com-
munal social relationships).
In ‘Class, Status, Party’, this argument is articulated in a slightly differ-
ent way: ‘…against the actions of classes and status groups, for which this
is not necessarily the case, party-oriented social action always involves
association. For it is always directed toward a goal which is striven for in a
planned manner’ (1978:938). To take this a step further: modern parties
are founded upon associative social relationships, and seek power on the
basis of instrumental (means–ends) courses of social action. Such action,
which in the modern world is highly formalised, gives parties a bureau-
cratic leaning. Indeed, Weber observes that this development is possible
only ‘within groups that have an associational character, that is, some
rational order and a staff of persons available who are ready to enforce it’
(1978:938). In this perspective, political striving for social influence or
power takes a highly rationalised form: parties work within the legal con-
text of a polity, and are regulated (internally and externally) by ‘rational’
rules and regulations. It is no accident that modern political parties assume
this form, for Weber observes that ‘the sociological structure of parties
differs in a basic way according to the kind of social action they struggle to
influence’ (1978:938–9). In other words, the more rationalised modern
social action and social relationships are in general, the more instrumen-
tally rational party actions, associations and structures are likely to be as a
consequence.
Conclusion
Weber’s ‘Class, Status, Party’ is not simply an argument about social stra-
tification, as most secondary commentators have insisted (in particular,
Brennan, 1997), but is rather an analysis of the structural interdependencies
of, and distribution of powers between, the economic, social and political
spheres. This analysis can be used to place into question what is meant by
the basic concept of the social, and beyond this what is social rather than
economic or political about stratification. The primary methodological
move Weber makes is to analyse status groups and parties in terms of differ-
ent types of social relationships. This emphasis on relationship indicates
that, for Weber, the social is not a bounded totality, as in the form of a
‘society’ or ‘nation-state’, but is born out of reciprocal and meaningful
exchanges between groups and individuals. This allows Weber to demar-
cate the concept of class (as non-social) from that of status (communally
social) and party (instrumentally social), for the former is said, in the first
instance, to refer to an economic situation rather than a relationship, and
while class relations might emerge from such a situation this ‘is by no
means a universal phenomenon’ (Weber, 1978:929).
In view of this, the tendency to dismiss Weber on the grounds of his
conflation of the social and society, or what Beck (2000a) calls his ‘methodo-
logical nationalism’, is at best questionable. Such a move rests on the argu-
ment that Weber not only has a ‘territorial definition of modern society’
but also sees the nation-state to be the ‘container of society’ (Beck, 2000a:
24). In his lecture ‘Politics as a Vocation’, Weber indeed declares that ‘a
state is a human community that (successfully) claims the monopoly of
the legitimate use of physical force within a given territory. Note that “ter-
ritory” is one of the characteristics of the state’ (1970:78). But this assertion
of the connection between state power and ‘territory’ is a quite different
thing from saying that the social is contained within society, which, in
turn, is contained within the territorial limits of the nation-state. What is
Class 109
different and invigorating about Weber’s approach is that while a general

process of rationalisation is seen to place traditional political communities
increasingly under the control of a legal-rational (bureaucratic) state, the
powers of political communities are not simply contained within, or
reducible to, the limits of a nation or state. Weber says, for example, of the
three main divisions of power within a political community – class, status
and party – that
the fact that they presuppose a larger association, especially the frame-
work of a polity, does not mean that they are confined to it. On the
contrary, at all times it has been the order of the day that such associa-
tion (even when it aims at the use of military force in common)
reaches beyond state boundaries (1978:939).
It would thus be wrong to equate the social or even the political in Weber
simply with ‘society’ or the nation-state, for, in fact, quite the reverse is
true: both exceed, rather than are defined by, their supposed ‘containers’
(for a further engagement with the work of Beck on the question of class,
see Chapter 7). As a consequence, what we find in the work of Weber is
an array of communal and associative social relationships or forms of
socialisation that cannot be subsumed under the term ‘society’, and which
can potentially reach beyond state boundaries. While it is quite possible
for a social relationship to be closed on the basis of national interest or
identity, Weber never starts out from this position. Rather, his outline
of open and closed social relationships proceeds in terms that are never
reducible to a more general concept of ‘society’, and, as such, can quite
easily be applied to the analysis of transnational or global social actions
or relationships that cross state boundaries today.
On this basis, there are good reasons for re-reading Weber as a social
theorist, and for looking closely at his conceptualisation of the social,
rather than starting with an idea of social class or stratification which pre-
supposes rather than explains what is meant by the term ‘social’. The
radical move which underpins the argument of ‘Class, Status, Party’ is to
conceptualise class in the first instance in non-social and non-societal
terms (a point that is completely absent from the Marx–Weber literature,
including Löwith, 1993; Sayer, 1991; Dahms, 1997). Weber does this
by defining class as a market situation; a position framed by his theory
of markets, as addressed in Chapter 4. In these terms, markets are not
simply based upon the social reciprocity of exchange as they are also,
fundamentally, spaces of competition. While sociality might emerge out
of competition (what might be termed a neoliberal sociality), the fact that
two or more market participants share similar life-chances or comparable

positions or ‘situations’ within a market does not mean that any form
of social or political solidarity will necessarily follow; indeed quite the
reverse might be the case. The flipside of this argument is that Weber,
unwittingly, gives us a position against contemporary theories of post-
politics or of the death of the social that are premised on the supposed
death of class, for in ‘Class, Status, Party’ there is no necessary depen-
dency of either the social or the political on an underlying economic
order or principle. This means that both sociality and politics can operate
outside of class or what might be called a market framework. This, in
turn, also gives us a position against the neoliberal epistemology of
Mises (see Chapter 5), who argues that all forms of human action
are ultimately reducible to an economic principle. Instead, for Weber,
socialisation, and by extension social relationships, can take associative
and communal forms, and may be informed by a range of instru-
mental, value- and perhaps even traditional and affectual rationalities.
For this reason, contra Mises, what is human and/or social is never simply
economic in basis.
Finally, it might be argued that a basic typology of social change might
be drawn from ‘Class, Status, Party’ and connected to Weber’s wider argu-
ments regarding the rationalisation and disenchantment of the world.
‘Class, Status, Party’ implicitly narrates a shift from a world characterised
by traditional and value-rational social action to one of instrumentally
rational forms of social activity and organisation, or simply put a shift
from communal to associative social relationships. Bryan Turner (1988:
17–41), one of the few commentators to have recognised this point, has
addressed this developmental history in terms of a movement from ‘status
to contract’. The basic feature of this transition is the strengthening of
associative social forms, along with the predominance of instrumental
rationality through all spheres of life. The clearest illustration of this
comes in Weber’s writings on monocratic bureaucracy, in which social
relationships are predominantly both associative and instrumentally
rational in orientation and structure. Weber advises, however, that care
must be taken in applying this linear logic to the study of the social rela-
tionships of status groups and parties as a whole. This is because parties,
while becoming increasingly instrumental in value-orientation, do not
simply replace status groups in the competition for power. Rather, classes,
status groups and parties operate according to different logics and com-
pete for different types of power. In this sense, status groups continue
to exist as the fragile but enchanted or perhaps even charismatic other of
associative structures.
Class 111
One intriguing question this poses, but which lies largely outside of the
scope of the present chapter, is of the basis of social relationships that arise
through or underpin practices of consumption. Weber hints that such rela-
tionships are tied to the dynamics of status rather than class, and are thus,
presumably, communal rather than associative in form; a position that
Bauman (1998a) has vigorously opposed on the grounds that consumption
is an individualised rather than collective affair. George Ritzer (1999) has
extended Weber’s position by arguing that ‘the means of consumption’ can
only survive if they continue to possess magical or enchanting qualities.
This suggests that even where status is tied to the marketplace, its related
socialities and cultural logics are never simply reducible to purely instru-
mental or associative principles, for there is always an element of value-
rationality in play. This, again, takes us back to the question posed by Mises
in Chapter 5 of whether value-rational action involves means and ends,
and whether all instrumental actions involve values which are held under
the ‘sway’ of an ‘economic principle’. For Weber, as suggested above, this
is not necessarily the case.
Such questions are important for a contemporary rethinking of the
developmental logics of, and connections between, class, status, and
party. For if Weber’s concepts of class and status are forged out of an
encounter with empirical reality with the intention of moving beyond
pure empiricism at the level of thought (see Chapter 2), then they
must exist as flexible and mobile entities that are open to adaptation
and change in relation to the demands of the times. One question that
can be posed back to Weber’s work is as follows: while status is not
simply reducible to class, is it increasingly tied to, and an effect of,
material wealth? Is it true, for example, that in terms of status that ‘any
kind of overt participation in economic acquisition is absolutely stig-
matizing’ (1978:937)? Are social honour and esteem still incompatible
with, or now increasingly derived from, money power? One potential
answer to these questions is that class and status are collapsing in
on each other as there are now numerous instances in which the
‘economic situation of a group’s standing in the…market becomes
at the same time a situation of social standing or status’ (Burrows and
Gane, 2006:806). It is not possible to explore this situation in detail
in the current chapter, but it is worth noting that, for Weber, a formal
separation of class and status is unlikely to be found in empirical reality,
which is always more complex and messy than the concepts we use
to understand it. Read in this way, ‘Class, Status, Party’ continues to be
a useful conceptual starting point for the analysis of the competing
logics of economic, social and political forms of power. This section of
Economy and Society is also a provocation to think about competitive

market-situations, or class, as lying at the limits of the social, and at
the same time to identify and understand forms of sociality that are
not simply tied or reducible to the dynamics of the market, or to what
Mises calls an ‘economic principle’. It is in this double ambition that
the value of Weber’s writings on ‘Class, Status, Party’ ultimately lies.
7
Modernity
In the late-1980s, following the collapse of state socialism and the

accompanying decline of Marxist sociology, Weber’s writings on reli-
gion, power and culture, began to take centre-stage in sociological debates
over the basis of the institutional structures and cultural value-systems
that characterise the modern world. Many, in turn, presented Weber as
a theorist of ‘modernity’ (see, for example, Whimster and Lash, 1987;
Schluchter, 1996; C. Turner, 1992; Kalberg, 2005), in spite of the fact that
Weber himself did not once use this term. Others extended this focus
by exploring connections between Weber’s work and postmodern theory
or more broadly postmodernism (C. Turner, 1990; B. Turner, 1992:3–21;
Gane, 2002; Koshul, 2005). Such analyses used Weber to draw into ques-
tion, among other things: the polytheism of contemporary culture; ongoing
processes of rationalisation; political, aesthetic and erotic possibilities of
re-enchantment; and even the ongoing value of sociology as a discipline.
Fierce debates ensued over the differences between the modern and post-
modern, modernity and postmodernity; debates that rumbled on until
the late-1990s, when two things happened. First, the global started to dis-
place the modern as the key conceptual point of concern. This signalled a
spatial turn in the social sciences and humanities, as a focus on questions
of space, place and mobility became increasingly central to social and
cultural analysis. Second, debates around postmodernism faded from view
as others reworked the concept of the modern in order to think beyond,
or outside of, classical narratives of industrial modernisation. A number
of alternative notions of the modern emerged as a consequence, includ-
ing the high or late modern (Giddens, 1990, 1991) and the hypermodern
(Armitage, 2000; Lipovetsky and Charles, 2005). For the most part these
notions failed to have any lasting impact on the discipline, with two
notable exceptions. The first is Ulrich Beck’s theory of reflexive or risk
113

modernity; a term which became popular following a landmark exchange

over the basis of reflexive modernisation with Anthony Giddens and Scott
Lash in 1994. The second is Zygmunt Bauman’s more recent work on liquid
modernity and individualisation, which openly positions itself as an attempt
to move beyond postmodern thought (see Bauman in Gane, 2004:17).
This chapter will use Weber’s work to assess the possibilities and limits
of these types of second modernity thinking. The chapter will open by
reading between the writings of Beck and Weber. Beck dismisses Weber’s
work on the grounds that it presents a theory of rationalisation that neglects
the threats of manufactured risks and uncertainties that cannot be tamed
by, and perhaps themselves even arise from, ‘attempts at rational control’.
But Beck’s position, in spite of its declared intention, nevertheless adopts a
Weberian framework, as it draws heavily from Weber’s theory of class and
from his notion of the unintended consequences of instrumental rational-
ity. Because of this, Weber’s work gives us a position from which to assess
and engage with Beck’s theory of risk modernity. The same is the case with
Bauman’s writings on liquid modernity, which centre on processes of indi-
vidualisation through which responsibilities are passed downwards from
social institutions to the individual. One consequence of this focus is that
the continued powers of the state disappear from view. It will be argued, via
Weber, that a theory of second modernity makes little sense without an
accompanying analysis of both the state and contemporary capitalism: two
things that are largely missing from the ‘liquid’ phase of Bauman’s work.
Reflexive modernity: Beck
Ulrich Beck’s Risk Society is a remarkable book. In its first five years of pub-
lication it sold 60,000 copies, and as Scott Lash and Brian Wynne
comment in their introduction to the English translation of this work:
‘[o]nly a very few books in post-war social science have realised that sort
of figure, and most of those have been textbooks’ (1992:1). One reason
for this success is the striking argument that lies at the core of this book:
that we are currently passing through a second stage of modernisation in
which the unintended consequences of industrial modernity – its pollu-
tants or ‘bads’ – are taking centre stage. Beck writes: ‘Just as modernisation
dissolved the structure of feudal society, modernisation today is dissolving
industrial society and another modernity is coming into being’. He adds, by
extension, that ‘[t[he thesis of this book is: we are witnessing not the end
but the beginning of modernity – that is, of a modernity beyond its classical
industrial design’ (1992:10). This new or second modernity is born out of
a crisis of the expansionist principles of industrialism, and its associated
Modernity 115
intellectual heir, the Enlightenment. It is a modernity defined instead

by risk and reflexivity. But this is not reflexivity in Anthony Giddens’
sense of reflection on, and knowledge of, the problems and consequences
of modernisation, but rather reflexivity as a state of Nichtwissen, or of
‘not-knowing’ or unawareness of what these consequences might be (see
Gane, 2001). This, Beck argues, is a new situation in which the ‘threats
produced so far on the path of industrial society begin to predominate’,
and where such threats ‘not only escape sensory perception and exceed
our imaginative abilities: they also cannot be determined by science’ (Beck
in Beck et al., 1994:6). Reflexive modernisation, in this perspective, leads
to a world in which the consequences and side-effects of scientific and
technological development – be this the genetic modification of crops or
the manipulation of matter through emergent nanotechnologies – are
largely unknown; a world in which the normative capacities of science
are placed into question, and where previous certainties are displaced by
the threat of ever more catastrophic risks.
But what exactly are risks? Have risks not always been ‘a primeval
phenomenon of human action?’ (Beck, 1992:20–1). Beck’s answer is that
risks are not simply dangers, or natural threats such as earthquakes or
lightening strikes that come from outside of the social world. Moreover,
risks are not simply personal in basis, as they were for Columbus, who
‘set out to discover new countries and continents’. They are not about
‘bravery and adventure’ but something more dramatic: ‘the threat of self-
destruction of all life on Earth’ (Beck, 1992:21). As such risks are not natural,
but are produced or manufactured as the unintended consequences of
human action, and more specifically of modernisation. These unintended
consequences are potentially catastrophic because they ‘induce systematic
and often irreversible harm’ and ‘generally remain invisible’ (1992:22–3).
For Beck, risks thus present a radical challenge to the existing order of
things: they are potentially global in reach, they evade easy resolution
through the scientific and political frameworks of industrial modernity,
and because of this they challenge the ‘foundations and categories accord-
ing to which we have thought and acted to this point’ (Beck, 1992:22).
Beck explains:
Risk normally means calculable uncertainty or insecurity, so we have

the means to redefine uncertainty in a way that can produce some
kind of certainty and security again. But risk society means we don’t
have those means. It is about an age where in all fields new manu-
factured uncertainties and insecurities evolve; manufactured because
they are products of the processes of civilizing and modernisation,
and uncertain because our means to calculate them and make these
uncertainties certain again don’t work anymore (Beck in Gane,
2004:158).
This new situation of reflexive modernity calls into question the value of
existing social scientific accounts of modernisation, and in particular
those that place faith in the powers of Zweckrationalität or instrumental
rationality to bring order to, and control over, the so-called ‘natural’
world (Zweckrationalität is mistranslated in the English version of Risk
Society as ‘technical options’, see 1992:22). On this basis, Beck develops a
vocal critique of the work of Weber, and in particular his idea of rational-
isation, on the grounds that it ‘no longer grasps this late modern reality’
(1992:22). Elsewhere, Beck extends this point: ‘The category of risk stands
for a type of social thought and action that was not perceived at all
by Max Weber. It is post-traditional, and in some sense post-rational,
at least in the sense of being no longer instrumentally rational (post-
zweckrational)’ (Beck in Beck et al., 1994:9). Beck’s position, simply put, is
that Weber’s work is of little use today as it remains too attached to an
underlying theory of rationality, and because of this can tell us nothing
about the underlying logics and dynamics of reflexive modernisation and
its outcome: risk society.
This reading of Weber by Beck will be explored in further detail below,
but before doing so it is worth noting that Beck’s concept of risk is not
entirely new. A comparable concept can be found in the early work of
the economist Frank Knight (1885–1972): a founder of Chicago School
economics who taught, among others, three presidents of the influential
Mont Pèlerin Society: Milton Friedman, James Buchanan and George
Stigler (for a history of the emergence of this think-tank, see Peck, 2008).
Knight’s most famous and enduring work is Risk, Uncertainty and Profit
(1921), the majority of which was written around 1915–16 during his
time as a doctoral student at Cornell. The focal point of this book is how
profit is to be conceived in relation to differences between perfect and
actual competition, or, put crudely, differences between market competi-
tion in theory and in practice. Knight argues that the key to this ‘tangle’
lies in the distinction between risk and uncertainty. This distinction,
he argues, is to be conceptualised as follows:
Uncertainty must be taken in a sense radically distinct from the familiar

notion of Risk, from which it has never been properly separated…The
essential fact is that ‘risk’ means in some cases a quantity susceptible of
measurement, while at other times it is something distinctly not of this
Modernity 117
character…It will appear that a measureable uncertainty, or ‘risk’

proper, as we shall use the term, is so far different from an unmeasur-
able one that it is not in effect an uncertainty at all…To preserve the
distinction…between the measurable uncertainty and an unmeasur-
able one we may use the term ‘risk’ to designate the former and the
term ‘uncertainty’ for the latter (1921:19–20).
The difference between Knight’s theory of uncertainty and the concept of

risk that is central to Beck’s theory of reflexive modernisation is largely
one of semantics. For Knight, risk is defined by calculable uncertainties
that can, to some extent, be subjected to quantitative forms of measure-
ment – something that is central, for example, to the everyday work of
actuaries. Uncertainty, on the other hand, is something different: it lies in
a realm of singularities that cannot be grouped together or even known
in advance. Uncertainty is effectively what Beck calls risk or the state of
Nichtwissen or not-knowing. Knight addresses the meaning of uncertainty
in detail before turning to the ‘structures’ through which it can be analysed
and perhaps even tamed. Through the course of this account, he clarifies
and expands on his earlier distinction:
The practical difference between the two categories, risk and uncer-
tainty, is that in the former the distribution of the outcome in a group
of instances is known (either through calculation a priori or from
statistics of past experience), while in the case of uncertainty this is
not true, the reason being in general that it is impossible to form a
group of instances, because the situation dealt with is in a high degree
unique (1921:233).
Knight’s concepts of risk and uncertainty are remarkably similar to Beck’s

later notions of danger and risk. They are, however, applied in quite dif-
ferent ways, for Knight’s concept of uncertainty is bound to an economic
theory of competition and is oriented, in particular, to the field of ‘busi-
ness decisions’, whereas risk, for Beck, becomes an organising principle,
or what might be called meta-concept (see Chapter 1) for thinking about
the modernisation of politics, culture and the social world more gener-
ally. There is no equivalent notion of modernisation in the work of Knight,
but nonetheless he argues that uncertainty is a condition common to all
instances of social change. He writes: ‘Change of some kind is prerequisite
to the existence of uncertainty; in an absolutely unchanging world the
future would be accurately foreknown, since it would be exactly like the
past’ (1921:313). On this basis, Knight argues that ‘[u]ncertainty is one of
the fundamental aspects of life’. This does not mean, however, that steps
cannot be taken to tackle or ‘reduce’ uncertainty. Quite the contrary.
Knight, against the later position of Beck, outlines a number of different
options that can be pursued with this aim; options that Knight frames in
terms of business activities, but which clearly have a broader resonance
and application. He argues, for example, that uncertainty can be reduced
through the further pursuit of science: ‘we can increase our knowledge of
the future through scientific research and the accumulation and study of
the necessary data’ (Knight, 1921:347). It is also possible to ‘club’ together
‘uncertainties through large-scale organization of various forms’. This is
likely to be possible only through organisation at the level of institutions
such as the state, something that, for Knight, is likely to involve a loss
of human freedom for the many but not for the few who would gain in
political power as a result. Finally, he adds, ‘uncertainty might be further
reduced almost indefinitely by slowing up the march of progress’ (Knight,
1921:347), and, perhaps more realistically, by asking how risk is to be
distributed (see 1921:348; a question that returns in the work of Beck, see
below).
Beck refers briefly to Knight’s work on risk and uncertainty in World at
Risk (2009:16–19). In a key section of this book, Beck pits Weber against
John Maynard Keynes, terming them ‘the modern classics of sociology
and economics, respectively’. Beck’s reading of Weber is pretty much con-
sistent with that advanced in his earlier Risk Society, for he argues that
the basic thrust of Weber’s work is that ‘the logic of control triumphs in
the modern response to risk’. Some of Beck’s other statements are more
difficult to fathom. For example: ‘According to Weber, the globalisation
of risk is not bound up with colonialism or imperialism and hence is
not driven by fire or the sword. Rather, it follows the path of the unforced
force of the better argument’ (2009:17). One might respond glibly by
arguing that there are no references to either globalisation or risk in
Weber’s writings. At a deeper level, however, is Beck right to argue
that Weber’s work describes a ‘triumphal procession of rationalization’,
and is Weber’s theory of rationalisation based upon a ‘rational restriction’
of threats and uncertainties that emerge as a consequence or side-effect
of modernisation? On these points, Beck claims to depart radically from
Weber:
the idea that precisely the unseen, unwanted, incalculable, unex-

pected, uncertain, which is made permanent by risk, could become
the source of unforeseeable possibilities and threats that effectively
place in question the idea of rational control – this idea is incon-
Modernity 119
ceivable on the Weberian model. It provides the foundation of my

theory of world risk society (2009:17).
In making this statement, Beck aligns himself more with economists

such as Knight and Keynes, who, he argues, were ‘the first to deal
systematically with the uncertainty of all attempts to overcome uncer-
tainty in a rational way’, and to think through the consequences of
the ‘irreversibility of uncertainty’ (2009:17–18). From this position,
Beck pursues a critique of Weber on the grounds that rationalisation,
and its accompanying advances in scientific knowledge, produce new
forms of uncertainty that corrode ‘the cage of calculable reason’ (Beck,
2009:18) and in so doing expose, paradoxically, the limits of what can
currently be known. Moreover, any attempt at controlling risk through
rational means is likely to produce its own irrationalities and side-
effects. Beck insists: ‘all attempts at rational control give rise to new
“irrational”, incalculable, unpredictable consequences’. And he adds:
‘Control of the control of control can become a source of threats and
side effects of threats without end’ (2009:18–19).
A critical reading of Weber, then, frames Beck’s theory of reflexive
modernisation and risk society. But what leverage might Weber’s work
give over Beck’s position in return? One answer is that while Beck dis-
misses Weber in order to emphasise the unprecedented challenges posed
by reflexive modernisation, and by extension the originality of his own
position, a Weberian logic can nevertheless be detected within his argu-
ment. This logic is at play, for example, in the theory of class that under-
pins the argument of the first chapter of Risk Society: ‘On the Logic of
Wealth Distribution and Risk Distribution’ (1992:19–50). Beck dismisses
Weber’s theory of ‘successful rationalisation’ (1992:22), a notion that we
will consider in further detail below, but in the following pages repro-
duces a classic debate between Marxist and Weberian sociology over
whether class is a relational form based on the ownership of property or
rather a form of stratification based, in Weber’s terms, on one’s market
situation or life-chances (as discussed in Chapter 6; for Beck’s explicit
reading of Marx and Weber on class and individualisation, see 1992:
95–6). Beck’s argument takes a number of twists and turns. It starts out
from a pseudo-Weberian position by stating that risks are often ‘dis-
tributed in a stratified or class-specific way’, and that because of this ‘the
wealthy (in income, power or education) can purchase safety and freedom
from risk’ (1992:35). He then argues, a page later, that because risks
are predominantly global in form no one is immune from their con-
sequences, and hence ‘poverty is hierarchic, smog is democratic’ (1992:36).
This is accompanied by an idea of the boomerang effect, which, simply

put, is that ‘[s]ooner or later the risks…catch up with those who produce
or profit from them’ (1992:37). This emphasis on class as stratification
soon changes, however, as Beck shifts again to a relational model of class
based on ownership. He declares that risk positions are not class position
because risk cannot be owned as such, and because of this the ‘situation
is quite different for risk positions’ as ‘[a]nyone affected by them is badly
off, but deprives the others, the non-affected, of nothing’ (1992:40). This
pseudo-Marxist conception of class, based on ownership or in this case
non-ownership, is extended a page later where Beck speaks of the ‘pro-
letariat of the global risk society’, but in the same sentence ends up return-
ing to his original position, that risks are distributed along class lines, on
the grounds that ‘[t]here is a systematic “attraction” between extreme
poverty and extreme risk’ (1992:41). Beck thus remains caught within a
Weberian framework, for in spite of his theory of the boomerang effect of
global risk, he starts and ends with a theory of the unequal distribution
of risks that is little more than an extension of Weber’s position that a
‘class situation’ is ultimately a ‘market situation’ (1970:182).
There is a deeper sense, however, in which Beck’s theory of risk society
and reflexive modernisation extends the underlying logic of Weber’s work.
Whereas Weber, in his sociology of religion and most famously in the
Protestant Ethic, is concerned with the unintended consequences of value-
rational beliefs and actions, Beck extends this frame of argument by ques-
tioning the unintended consequences of the instrumental rationalities that
underpin industrial modernisation. For both thinkers, rationality is said to
have unexpected generative qualities: in Weber, the value-rationality of the
Protestant sects turns into its other, namely the mechanical and seemingly
spiritless machineries of modern capitalism, and in Beck, the instrumental
rationality of this first modernity gives rise to a new modernity charac-
terised by potentially catastrophic risks that emerge out of scientific attempts
to control the world. Beck hence recasts the underlying logic of Weber’s
Protestant Ethic thesis into a theory of a second modernity, while at the
same time attacking Weber for failing to see, or anticipate, the unintended
consequences of rationalisation in industrial modern settings.
One might respond to this latter charge by arguing that rationalisation,
for Weber, is not simply a one-directional movement to a world in which
rational principles of science can be applied in an unproblematic way to
control ‘nature’. Instead, Weber pays close attention to the paradoxes of
modernisation: to the gains associated with the production of technical
knowledge as well as the losses. The most famous statement on this ques-
tion is his lecture ‘Science as a Vocation’ (see Gane, 2002:45–63), where
Modernity 121
Weber argues while science is chained to the course of ‘progress’ in terms

of its capacity to produce and accumulate technical knowledge about the
world, it does not rid the world of uncertainties for it always raises new
questions and for this reason ‘asks to be “surpassed” and outdated’
(1970:138); a process which, for Weber, is likely to continue ad infinitum.
Translated into the terminology of Risk Society, this means, paradoxically,
that science produces knowledge but also a state of Nichtwissen or not-
knowing, and for precisely this reason Weber questions the underlying
value of this enterprise, asking: ‘why does one engage in doing something
that in reality never comes, and never can come, to an end?’ (1970:138).
Weber’s position is that while science promises progress in terms of the
accumulation of technical knowledge, it should not be presupposed that
this progress extends to what he calls the ‘total life of humanity’
(1970:140), for science attacks religious understandings of the world as an
‘organic cycle of life’ but is itself unable to produce ultimate values that
give either life or death meaning. This is part of a broader argument that
modernisation does not necessarily bring qualitative progress to either life
or culture, hence: ‘civilized man, placed in the midst of the continuous
enrichment of culture by ideas, knowledge, and problems, may become
“tired of life” but not “satiated with life”’ (1970:140). And Weber does
not stop here. In his political sociology, he takes this critique of enlighten-
ment in a different direction by arguing that in practice modern scientific
knowledge can be a force for domination as well as emancipation. This
development is captured in the statement that ‘[b]ureaucractic adminis-
tration means fundamentally domination through knowledge’ (Weber,
1978:225). But, in spite of this connection between power and know-
ledge, which Foucault (1980), famously, was later to address in detail,
politics, for Weber, often has unexpected outcomes and consequences.
Politics is not simply a rational science, but, as argued in Politics as a
Vocation (1970:77–128), is underpinned in the last instance by the means
of violence, and for this reason is tied to a set of ethical dilemmas or
antinomies that are near-impossible to resolve (see Gane, 1997). For this
reason, Weber’s definition of power and domination in Economy and
Society is not framed by notions of rationality and certainty but rather by
a vocabulary of ‘probability’ and ‘chance’.
Beck’s critique of Weber for overlooking the unintended consequences
and side-effects of rationalisation does not pay much attention to the
subtleties of his arguments about science, culture and politics, but may be
read alongside a broader charge that Weber’s sociology has a rationalistic
bias that neglects many of the empirical irrationalities of the everyday
social world. The key figure to have addressed this point in detail is Alan
Sica. In his Weber, Irrationality, and Social Order, Sica traces this problem
to the framework of economic thought out of which Weber’s ideal-
type methodology was born (see Chapter 5). He writes that it could be
‘strongly argued’ that Weber
comprehended the place of irrationality in social action, even to the

point of fascination. Yet he carefully imitated classical economics,
theoretically and substantively, by focusing on rational acts, letting
them fill up the familiar zweckrational and somewhat less, wertrational
categories in his typology of social action. The ‘irrational’ affektuell
and traditional spheres were thus left aside (1988:2).
There is some truth in the argument that Weber paid little attention to
affectual forms of behaviour, which for him tended to be barely rational
– in any meaningfully deliberative or value-oriented sense – and therefore
barely social in orientation. On this basis, many have questioned the
absence of attention to emotion in Weber’s work, as well as in classical
sociology more generally (on this question, see the exchange between
Gane (2005) and Davetian (2005)). But it is less clear that Weber, as Sica
suggests, leaves questions of tradition aside. Weber’s sociology of religion
addresses in detail the role of tradition in shaping history, while else-
where his political sociology formulates a concept of tradition as one of
three core types of legitimate domination.
Sica’s argument that Weber’s focus on rationality ‘imitated’ classical
economics also seems a little wide of the mark. As shown in Chapter 5,
Weber played a key role in straddling many of the divisions between the
Historical and Austrian Schools of economics, and, more specifically, he
reworked Menger’s theory of conceptual types into a broader statement
of sociological method that would later provide a point of departure for
economists such as Mises. The differences between Weber and Mises are
instructive. For whereas, for Mises, all action is fundamentally instrumen-
tal in basis, or in his words ‘[a]ll action is economizing with the means
available for the realisation of attainable ends’ (1960:80), Weber refuses to
reduce social action to a single economic type, and, beyond this, applied
a perspectival logic to the concept of rationality, arguing that ‘what is
rational from one point of view may well be irrational from another’
(1992:26; for a further statement on this point, 1978:26). It is not simply
the case, then, that Weber ‘imitated classical economics, theoretically
and substantively, by focussing on rational acts…’ (Sica, 1988:2). Rather,
as Weber explicitly states in the first chapter of Economy and Society,
the purpose of constructing rational types is not to focus exclusively on
Modernity 123
rational acts in themselves, but to enable a broader understanding of

the rationalities and irrationalities of empirical reality by comparing these
acts to a fully rational, yet purely conceptual, course of action. Weber
argues that the very purpose of using ideal-types is to consider the ways
in which ‘actual action is influenced by irrational factors of all sorts, such
as affects and errors, in that they account for the deviation from the line
of conduct which would be expected on the hypothesis that the action
were purely rational’ (1978:6). He adds: ‘Only in this respect and for
these reasons of methodological convenience is the method of sociology
“rationalistic”…It certainly does not involve a belief in the actual pre-
dominance of rational elements in human life…’ (1978:6–7; for a restate-
ment of this point see also 1978:18). It is for these reasons that a
typological method should be used with care, for first, the construction
of rational types should not be read as a statement on the under-
lying rationality of the social world, indeed if anything it is because of
the complexities and irrationalities of this world that such types are
needed, and second, there is the danger that because rational types
are being used as tools of comparison, ‘rationalistic interpretations’
are forged in instances where, in fact, they are ‘out of place’ (Weber,
1978:7).
It is perhaps such a practice of rationalistic interpretation that lies at
the root of Beck’s reading of Weber, which presents the latter as a cham-
pion of rationalisation and rationality, rather than as a thinker concerned
with the unintended consequences, unexpected outcomes, or what might
be called the risks (Beck) or uncertainties (Knight) of modernisation. This
is not to say that there are no differences between Beck’s vision of risk
society as a ‘catastrophic society’ (1992:24) and Weber’s account of the
rationalisation of Western culture, for clearly this is not the case. Rather,
the argument of the present chapter is that Beck’s theory of modernisa-
tion reproduces the underlying logic of Weber’s argument about the gen-
erative role of the unintended consequences of history, while at the same
time reading Weber in a one-dimensional way in order to emphasise
the originality of his own position. Of the many substantive points of
division between Weber and Beck, perhaps the most intriguing is that
whereas the former offers an account of the development of a specific
form of ‘rational’ capitalist modernity, there is little detailed analysis
of capitalism, or of what Weber calls capitalistic activity (see Chapter 3),
anywhere in Beck’s Risk Society. Beck simply states, without accompany-
ing explanation, that ‘the diffusion and commercialization of risks do
not break with the logic of capitalist development completely, but they
raise the latter to a new stage’ (1992:23). Unlike Knight, whose notion of
uncertainty is tied to an analysis of competition in the capitalist market-

place, it is not entirely clear what the connection between capitalism
and risk is in Beck’s work, or what the key features of this ‘new stage’
of capitalist development might be. Instead of addressing capital-
ist development and its connection to reflexive modernisation in any
detail, he observes that ‘[t]here are always losers but also winners in risk
definitions…Modernisation risks from the winners’ point of view are big
business’ (1992:23).
Beck’s more recent reflections on the connection between capitalism
and modernisation are, by comparison, more engaging (see, for example,
his analysis of ‘cosmopolitan capitalism’, 2005:59–62). His most impor-
tant text on this connection is World at Risk (2009), which describes the
emergence of a new coalition between capital and the state. He argues:
‘The goal of the strategies of capital is…to merge capital with the state in
order to open up new sources of legitimacy in the guise of the neoliberal
state’ (2009:65; for his earlier definition of the neoliberal state, see Beck,
2005:261–2). Such a coalition, he argues, is ill-equipped for dealing with
the demands of risk society, and for this reason risk presents both a cata-
strophic threat and a political opportunity. He writes:
The strategies of action opened up by global risk are abruptly over-

turning the order brought forth by the neoliberal coalition between
capital and the state. Global risks empower states and civic movements
because they uncover new sources of legitimation and options for
action for these groups of actors; on the other hand, they disempower
globalised capital because the consequences of investment decisions
give rise to global risks, destabilize markets and awaken the power of
the sleeping consumer giant (Beck, 2009:66).
Whether Beck’s diagnosis is right or if instead the recent financial crisis

will further extend the neoliberal coalition between capital and the state
is something that remains to be seen, but at the point of writing the latter
appears to be the case, with many Western states not only further mar-
ketising themselves but also pursuing a strategy of re-empowering glob-
alised capital at the cost of public sector services and resources. But such
questions about the politics and consequences of advanced market cap-
italism, and of emergent neoliberal configurations between the state and
market, lie beyond the limits of the present analysis of modernisation,
as does a consideration of the political opportunities that might arise out
of the present landscape of risk and crisis. Indeed, it is perhaps at this
point that we reach the limits of both Weber’s and Beck’s work.
Modernity 125
Liquid modernity: Bauman
Beck, however, is not the only ‘second modernity’ thinker. Zygmunt

Bauman, in his work from 2000 onwards, also advances a theory of a
second, ‘liquid’ modernity as a step beyond his earlier sociology of
postmodernism (see Bauman in Gane, 2004). Against the postmodern,
Bauman uses the term ‘liquid’ to describe a new type of modernity in
which the solid and heavy social structures of the past are displaced by
lighter forms of sociality and power that are more diffuse and transient
and less state-centred. In Bauman’s work, the metaphor of the liquid has
a quite specific meaning. It refers to the weakening of the underlying
molecular structures and bonds that underpin social ties and relation-
ships, rather than to a more general societal condition in which things
move or ‘flow’ through networks (see, for example, the work of Castells,
1996). Bauman’s primary point of interest lies in processes of individual-
isation through which powers previously assumed by the state or institu-
tions such as class or the family are devolved downwards to individuals
(an idea that is also central to the work of Beck, see Beck, 1997:94–109;
Beck and Beck-Gernsheim, 2002). Such processes lead to the emergence
of what he calls
an individualized, privatized version of modernity, with the burden

of pattern-weaving and the responsibility for failure falling primarily
on the individual’s shoulders…Solids are cast once and for all. Keeping
fluids in shape requires a lot of attention, constant vigilance and
perpetual effort – and even then the success of the effort is anything
but a foregone conclusion (Bauman, 2000:7–8).
This new situation in which the bonds between people become ever
frailer and more stretched is double-edged. For while individualisation
seems to promise unprecedented freedoms, these come at a cost, as with
the fading of the ‘solid’ institutional structures of industrial modernity,
life also becomes characterised by Unsicherheit or what Bauman calls
‘insecurity, uncertainty, unsafety’ (1999:5). The underlying theme of
Beck’s Risk Society is here extended into a more general theory of the
precariousness of contemporary social life. Bauman writes:
Safe ports for trust are few and far between, and most of the time trust
floats unanchored vainly seeking storm-protected havens. We have all
learned the hard way that even the most carefully and laboriously laid
plans have a nasty tendency to go amiss and bring results far removed
from the expected, that our earnest efforts to ‘put things in order’
often result in more chaos, formlessness and confusion, and that
our labour to eliminate contingency and accident is little more than
a game of chance (2000:135–6).
Given this emphasis on uncertainty, it comes as little surprise that Bauman,

in similar fashion to Beck (who in turn attempts to distance himself from
Bauman, see 2009:114), is hostile to Weber’s idea of rationalisation.
Bauman states, forcibly, that under conditions of liquid modernity, the
world has turned out to be ‘the exact opposite of what Max Weber anti-
cipated and confidently predicted when he selected bureaucracy as the
prototype of the society to come and portrayed it as the luminal form of
rational action’ (2000:59). The bureaucratic state, for Bauman, is a heavy
institutional structure – a ‘steely casing’ – that is nothing more than
‘a time-bound attribute’ of a form of capitalism that is now in the process
of being liquefied. Bauman adds that Weber’s accompanying notion of
rationalisation has also reached its limit, as, in line with the concept
of instrumental rationality that underpins it, it is ‘means-obsessed’. In an
advanced consumer society, he argues, it is no longer the means of action
that are the problem, but rather the difficulty of selecting an ends from
an unprecedented number of choices (a condition that Jean Baudrillard
(1990:11–12) elsewhere terms ‘hypertely’), and often in the absence of
institutional guidance. Bauman sums this condition up with the words
‘Have car, can travel’. Or more expansively: ‘The question “What can
I do?” has come to dominate action, dwarfing and elbowing out the ques-
tion “How to do best what I must or ought to do anyway?”’ (2000:61).
Bauman goes further in his critique of Weber. Not only are rational-
isation and its associated concept of instrumental rationality said to be
problematic, but also Weber’s idea of value-rationality, which Bauman
dismisses as another form of ‘goal-oriented action’ (2000:60). Bauman’s
reading of value-rationality is an odd one, as it suggests that Weber added
it to his ideal-types of social action as an afterthought, ‘under the fresh
impact of the Bolshevik revolution…which implied…that a situation
might still arise when certain people would still hang onto their ideals,
however meagre the chances of ever reaching them and however exor-
bitant the cost of trying’ (2000:60). Such a situation is not common under
conditions of liquid modernity, for Bauman, for two main reasons. First,
Bauman, in a move that chimes with the work of Mises (see Chapter 5),
depicts value-rationality as being a lesser form than instrumental social
action in Weber’s ideal-typical schema, or rather little more than a
‘diversion’ from the ‘sole legitimate concerns with the calculation of
Modernity 127
means appropriate to set ends’ (2000:60). Second, the world of liquid

modernity is not one in which people are likely to ‘hang onto their ideals’
regardless of the personal or financial costs of trying. It is rather a con-
dition characterised by instant living, and at a deeper level by a new-
found transience of consumer lifestyles and values. In his recent book
Culture in a Liquid Modern World, Bauman observes: ‘If you don’t want
to drown, you must keep surfing: that is to say, keep changing, as often
as you can, your wardrobe, furniture, appearance and habits, in short
– yourself’ (2011a:24). Again, the problem of acting in liquid modernity
is less one of finding the right means to realise a particular ends (instru-
mental social action) or of pursuing a value-position regardless of the cost
or consequences (value-rational social action), but of ‘agonising’ over the
seemingly endless choice of goals, or what Bauman calls ‘floating, seductive
ends’, that are on offer. For this reason, Bauman declares that ‘[p]resent
day light capitalism is not “value-rational” in the Weberian sense, even if
it departs from the ideal type of instrumental-rational order. From value-
rationality Weberian style, light capitalism seems to be light years away…’
(2000:60). Capitalism in the liquid modern world is said to be no
longer value-rational in orientation but rather ‘value-obsessed’ (Bauman,
2000:61).
Bauman’s theory of liquid modernisation or individualisation, which is
founded upon a critique of Weber, is in all but name an argument about
neoliberalism, as it describes and attacks both the downward movement
of ‘power’ from the state to the individual and the associated emergence
of new consumer ‘freedoms’. The term neoliberalism is an elusive one in
Bauman’s work, and appears fleetingly in key passages of his writings on
individualisation and on the decline of public-private space, or the agora.
In In Search of Politics, for example, Bauman argues that contemporary
institutional structures have been seduced by the individualising logic
of neoliberalism, and in so doing have actively contributed to their own
disempowerment. He writes: ‘Instead of joining ranks in the war against
uncertainty, virtually all effective institutionalized agencies of collective
action join the neo-liberal chorus singing the praise of unbound “market
forces” and free trade…’ (1999:28). Later, in the same book, he describes
the current ascendency of the forces of the capitalist market, or what he
calls consumerism (see Bauman, 2010:67–70), over the state and public
powers or politics. He argues:
Once the state recognises the priority and superiority of the laws of
the market over the laws of the polis, the citizen is transmuted into
the consumer, and a consumer ‘demands more and more protection
while accepting less and less the need to participate’ in the running
of the state. The overall result is the present ‘fluid conditions of
generalised anomie and rejection of the rules’ in all their versions
(1999:156).
The tragedy of consumer society is that it passes ‘freedoms’ downwards

from the state to individuals while at the same time depoliticising and
disempowering them by closing down the agora as an active space of
political engagement, and thereby leaving consumers (who, for Bauman,
are not citizens) to their own devices. Bauman responds by pursuing a
critique of individualisation, and with this a critique of ‘neo-liberal philo-
sophy’ and what he calls the ‘laissez-faireist practice of freedom’ (1999:72).
His answer is to place the idea of freedom into question by drawing a dis-
tinction between republicanism, which seeks to deploy ‘individual liberty
in the communal search for the common good’, and liberalism which
‘is inclined to alight from the republican train at the station named
laissez faire’, producing, as a consequence, ‘free yet lonely individuals’
(1999:66–7). Bauman argues, by way of response, that true freedom
is always collective rather than individual basis (see Bauman in Gane,
2004:32–5 for further detail), and for this reason is unlikely to be realised
through the pursuit of consumerist principles.
Bauman’s writings on liquid modernity and individualisation here
move beyond a Weberian framework by pursuing a critique of market
capitalism in terms of the freedoms it promises but never ultimately
delivers. One way of assessing the strengths and limits of Bauman’s pos-
ition is to read it through the analysis of liberal and neoliberal govern-
mentalities advanced by Foucault in his lectures of biopolitics, which we
addressed in Chapter 5. From this perspective, the strength of Bauman’s
work is that it addresses contemporary processes of individualisation by
pursuing a critical reading of the social and political dynamics of con-
sumerism, something that takes him beyond or at least outside of the
conceptions of power offered by Foucault and Weber. However, while
Bauman’s work on individualisation contains a brilliant critique of the
downward movement of largely illusory powers from institutions to indi-
viduals, it does so at the cost of detailed analysis of institutional struc-
tures, most notably the state, which are still central to the operation of
contemporary capitalism. What Foucault’s work brings to Bauman’s
theory of liquid modernisation is the crucial insight that neoliberalism
results not simply from processes of individualisation or from a political
economy based upon laissez-faireist principles, as it is also defined by
particular forms and practices of governance that feed from the market
Modernity 129
into the state, and, as argued in Chapter 5, introduce new structures of

classification and audit that work to promote competition. In Weberian
terms, this means that bureaucracy can potentially work in service of,
rather than against, neoliberalism.
As argued by Foucault, liberalism and neoliberalism are political
economies that involve particular governmental configurations between
state and market. But, oddly, in Bauman’s writings from Liquid Modernity
onwards there is little detailed attention to either the state or the market.
This is perhaps because in focussing primarily on the individualisation of
consumer freedoms, Bauman neglects the structural dimensions of market
capitalism (a point that has been made by Atkinson (2008) in relation to
the dynamics of social class), and in particular the marketisation of state
forms that leads to the emergence of what Beck (2005:261) calls the ‘com-
petition’ or ‘market’ state. Again, the pressing question posed by Foucault
is not simply how powers, freedoms and responsibilities are devolved
downward from the state to the individual, but also what the rationale
for, and role of, the state is to be in connection to the market (a particu-
larly pressing question in the light of state attempts to bailout market
capitalism following the 2007 financial crisis). On this question, Weber’s
work might still have something to offer, for it could be used to marry
an analysis of the state in terms of legitimacy, bureaucracy and perhaps
violence on the one hand, with a theory of the market as a site of exchange
and competition on the other. For, as argued in Chapter 5, it is out of
these complex connections between state and market, and not simply
through the dissolution of state powers, that contemporary capitalism, and
its underlying political economy of neoliberalism, operates.
But there is a twist to Bauman’s position: market capitalism does
not simply devolve consumer freedoms downwards from the state to
the individual, it also pushes power upwards to market forces that exist
outside of the legislative and political controls of the nation-state. Bauman
first outlines this idea in his book Globalisation: The Human Consequences,
in which he explores the emergence of extraterritorial forms of power
that are characterised by a spatial disengagement between labour and
capital, which now rarely, if ever, meet. Capital is said to evade territorial
state powers as it becomes ‘free-floating’ and ‘locally unbound’ (1998b:9).
Bauman addresses this development subsequently in Society Under Siege,
in which he moves beyond Weber’s definition of the modern state
‘as the institution claiming monopoly on permissible…coercion’ (2002:2)
to examine instead ‘the emaciated sovereignty and waning powers of
the state’ now that it has outsourced ‘many of its most demanding func-
tions’ to ‘manifestly non-political, “deregulated” market forces’ (2002:11).
A similar statement can be found in his more recent Liquid Times, where
Bauman writes:
Much of the power to act effectively that was previously available

to the modern state is now moving away to politically uncontrolled
(and in many ways extraterritorial) space; while politics, the ability
to decide the direction and purpose of action, is unable to operate
effectively at the planetary level since it remains, as before, local
(2007:2; for a further articulation of this point, see 2011b:23).
There is some truth to this diagnosis, for clearly state powers that
are tied to territory in the Weberian sense are limited in the face of
market forces that are, like Beck’s ‘risks’, increasingly globalised or extra-
territorial in basis. But in similar fashion to Bauman’s account of the
devolution of state powers to the individual or consumer, there is little
detail in his work about the ways that these ‘forces’ exist not only above
and outside but also, as Foucault shows, through the fabric of the state
and its related institutions (while at the same time the state continues to
act as the guarantor of market capitalism in the last instance).
The question which, especially since the financial crash of 2007, remains
unclear is whether the state has the capacity not just to bailout market
capitalism but to re-territorialise or regulate the forces of global capital.
Bauman’s position in relation to this question is intriguing for it treats
not the state but rather state-integration as a model for resistance to the
globalising tendencies of market capitalism. In Culture in Liquid Modern
World, he declares that economic globalisation would attack national sov-
ereignty ‘even more eagerly’ if it ‘were not for the bedrock of solidarity of
the European Union’ (2011a:71). At a later point in the same book,
Bauman raises the core question of the position of culture ‘between state
and market’. But rather than addressing the neoliberalisation of contem-
porary cultural forms in any detail, he simply mentions in passing that
‘cultural activity’ is today subjected to the ‘standards and criteria of
consumer markets’ (see 2011a:110). However, Bauman does refer to two
important ‘functions’ of the state that, he argues, should not be neglected:
first, ‘the function of defending markets from themselves’, and second,
‘the function of repairing the social and cultural damage which litters the
trail of market expansion…’ (2011a:115). In the face of the current crises
of market capitalism, it is with these ‘functions’ that it is necessary to
begin rather than, as in Bauman’s case, end. For what now is the ‘function’
of the state in connection to the market under conditions of advanced
neoliberalism? What, as Weber might ask, are the territorial limitations
Modernity 131
of the state to act under such conditions? How and on what basis should
the state defend markets from themselves, and how, exactly, might the
state act to identify and ‘repair’ the ‘cultural damage’ of market capital-
ism, if it is itself subject to processes of marketisation? These are pressing
questions that Bauman’s work, indirectly, helps to pose, but to which,
at least to date, it provides few answers.
Conclusion
The aim of this chapter is not to suggest that Weber’s work anticipated
the second modernity thinking of Beck and Bauman or that it provides
all the conceptual or theoretical resources needed for analysis of the social
and cultural dynamics of contemporary market capitalism. Far from it.
Beck’s theory of the potentially catastrophic consequences and side-
effects of industrial modernity, along with Bauman’s analysis of the indi-
vidualisation of advanced consumer society in many ways take us well
beyond the analysis of modernity that is advanced by Weber’s sociology.
Nevertheless, both Beck and Bauman’s writings on risk and liquid modern-
ity use Weber’s work as a point of departure, and this gives us a possible
position from which to explore the limits of second modernity thinking
by way of return. Beck extends the logic of Weber’s account of moderni-
sation by exploring the unintended consequences not of value-rationality
as in the case of the Protestant Ethic, but of instrumental rationality and,
alongside this, scientific and technological development more broadly.
Bauman, meanwhile, dismisses Weber’s notions of value- and instru-
mental rationality on the grounds that they are no longer useful concepts
for analysis of a world that is no longer ‘rational’ as such, but market-
driven and value-obsessed. Against these objections, on what grounds does
Weber’s work continue to be a useful conceptual and analytic resource?
One answer is that whereas the analysis of capitalism, both in terms of
its underlying cultural dynamics and socialities, is a primary concern for
Weber, for both Beck and Bauman it lies somewhere in the background
behind their immediate focus on reflexive and liquid modernisation. This
is not to say that risk and social ‘liquefaction’ are not important elements
of contemporary capitalist development, but that, as argued through the
course of this chapter, these connections need to be explored in far greater
detail. A problem in Bauman’s work is that, on one hand, a consideration
of the ongoing powers of the state to regulate market capitalism is bypassed
in favour of an argument for the rejuvenation of the marketplace or agora;
an argument that seemingly rejects any renewal of state powers in favour
of the transformation of consumer space by means that are not clear. On
the other, Bauman argues that the everyday life is becoming individual-
ised or marketised and that the nation-state is becoming powerless in
the face of global market forces, but nowhere addresses the underlying
question of what markets are and how they work. The social and cultural
dynamics of what might be called ‘market capitalism’ are left under-
theorised as a result. While the state all but disappears as a structural form
in the work of Bauman, a strong theory of the state, and its connection to
territory and violence, can be developed from Weber, as can a conceptual
understanding of the market as a space of exchange and competition that
is still driven by a deep-seated instrumental rationality (see Chapter 4),
even if, as we know from the events of 2007 onwards, this rationality has
unintended consequences. Weber’s work, can be used to re-open ques-
tions about contemporary connections between capitalistic activity and
emergent forms of instrumental culture (see Chapter 3), and can poten-
tially act as a platform for re-thinking the (neoliberal) state in its ever-
more complex connections to the market (see Chapter 5). It is along these
lines that Weber’s work might be read productively against the second
modernity thinking of figures such as Beck and Bauman, and, perhaps
more importantly, be used as a conceptual and theoretical resource for the
sociological analysis of contemporary capitalism. A final question this
leaves is whether a notion of the modern or of modernity should underpin
such an analysis. This is something that will be addressed through the
course of the concluding chapter of this book.
8
Conclusion
The previous chapter used Weber to draw into question the second
modern thinking of two prominent contemporary theorists – Ulrich
Beck and Zygmunt Bauman – and ended with a question that could
not be immediately resolved: whether or not concepts of the modern
and modernity remain useful devices for pursuing an interpretive and
analytical sociology of contemporary capitalism. There are many poss-
ible ways of addressing this question. One route would be to question
why ideas and concepts of the modern emerged with such force across
the social sciences throughout the late-1980s, and why Weber’s work
played such a pivotal role in this development. This question lies
largely beyond the scope of the present book, but an answer might
be that Weber’s work offered an alternative to Marxism that explained
the emergence and trajectory of Western capitalism – or effectively
modernity – in more cultural terms, while still addressing, however,
its historical, political and structural dimensions. Many also found in
Weber not just an account of the rise of Western rationalism or
capitalism, as presented by thinkers such as Schluchter (1981), but an
invigorating historical methodology that opened up new ways of think-
ing about the present by paying close and careful attention to the past. In
this spirit, David Owen, in his book Maturity and Modernity, places Weber
in a trajectory that runs from Nietzsche to Foucault on the grounds that
his work can be read as a form of genealogical understanding and crit-
ique. He argues: ‘For Weber, cultural science is concerned with how
we have become what we are, that is to say, with articulating a history
of the present’. And adds that the ‘purpose of Weber’s accounts is the
same as Nietzsche’s, namely to provide a “context of meaning” within
which the development of Menschentum may be understood and eval-
uated in terms of the fate of man in modernity’ (1994:101). But what
133

exactly is genealogy, how might it enable us to think differently about

the present, and what can it tell us about concepts such as the modern
or modernity?
Genealogy, or what some have termed ‘critical and effective’ history
(Dean, 1994), has its origins in the writings of Friedrich Nietzsche,
who, in his essay ‘On the Uses and Disadvantages of History For Life’
distinguishes critical history from what he calls monumental and anti-
quarian forms. Sociological readings of this text have tended to centre
on what Nietzsche means by ‘critical’ history and, in most cases, are
mediated by a famous essay by Michel Foucault (1977a) entitled ‘Nietzsche,
Genealogy, History’. In Nietzsche, critical history is driven by an under-
lying vitalism: it is to work ‘in service of life’, for if ‘he is to live, man
must possess and from time to time employ the strength to break up
and dissolve the past’ (1983:75). In Foucault, critical history becomes a
method for questioning assumed continuities between past and present
(including grand narratives such as ‘modernisation’), and, on this
basis, is a means for destabilising ‘metaphysical and anthropological
models’ that read the past in terms of a truth that is held in the present.
Discipline and Punish provides a clear example of this practice. At the
outset of this text, Foucault explains why it is necessary to write a history
of the prison. He asks: is it ‘[s]imply because I am interested in the past?
No, if one means by that writing a history of the past in terms of the
present. Yes, if one means writing a history of the present’ (1977b:30–1).
In ‘Nietzsche, Genealogy, History’, a text published four years before
Discipline and Punish, Foucault addresses the basis of such genealogical
practice in detail. He declares that effective or genealogical history
‘will not permit itself to be transported by a voiceless obstinacy toward a
millennial ending’. Instead, ‘[i]t will uproot foundations and relentlessly
disrupt its pretended continuity. This is because knowledge is not made
for understanding; it is made for cutting’ (1977a:154). In this reading, the
purpose of historical work is not to establish singular origins or clear
lines of development or progress from which we can take comfort, but
rather to explore multiple lines of descent in the form of a counter-
memory that can be used to question and disturb the limits of our current
understandings of both past and present.
Foucault’s idea of genealogy is now well known, as are its con-
nections to, and points of deviation from, Weber’s historical socio-
logy (see Dean, 1994:58–95; Gane, 2002:113–30). But the other two
forms of history at stake in Nietzche’s essay have, by contrast, received
scant attention. Foucault says a little about either monumental or anti-
quarian history apart from a concluding line to ‘Niezsche, Genealogy,
Conclusion 135
History’ in which he argues that genealogy radicalises monumental

history by transforming ‘the veneration of monuments’ into parody,
and antiquarian history through the displacement of ‘ancient con-
tinuities’ through analysis of ‘systematic dissociation’ (1977a:164). This
latter notion of antiquarian history, which for Foucault rests on ‘respect
of ancient continuities’, is worth revisiting, albeit briefly. Nietzsche is
damning of historical work that clings to the past in order to instruct us
how to think in the present and future. He protests that such practice
belongs to
him who preserves and reveres – to him who looks back to whence
he came into being with love and loyalty; with this piety he as it
were gives thanks for his existence. By tending with care that which
has existed from old, he want to preserve for those who shall come
into existence after him the conditions under which he himself
came into existence (Nietzsche, 1983:72–3).
Against Nietzsche’s advice, this practice of preserving the past as a nor-

mative model for thinking and acting in the present can be detected, to
lesser or greater degree, within most strands of classical and contemporary
social theory. In Weber, while it is never translated into a normative state-
ment (against which his value-free sociology, at least in principle, takes
a stand), there is a sense in which his political sociology is animated
by charismatic forms of authority that have the potential to erupt and
destabilise the dry and soulless bureaucratic systems that have become
part of the fabric of contemporary life. Elsewhere, in the work of more
recent thinkers such as Jean Baudrillard, there is a comparable interest
in primordial forms of sociality and culture that operate outside of, and
other to, capitalist forms of value and exchange (see Gane, 2002:131–50),
and which may be reactivated as exemplary forms of otherness that can be
used to question the cultural logics and limits of the present. In such work
the division between critical and antiquarian history, or rather the bound-
aries between the political historicisation of the present and mere nostalgia
for an effervescent but perhaps idealised past, are not always clear.
In some cases, antiquarian thinking clearly takes on a more normative
tone. A prime example is the later work of Zygmunt Bauman, which
advances an analysis and critique of liquid modernity (addressed in
Chapter 7) that is framed by an ideal of political space drawn from Greek
antiquity. In In Search of Politics (1999) and then The Individualised Society
(2001), Bauman follows the lead of Cornelius Castoriadis in mapping out
three key spaces of political life: the oikos or private sphere or household;
the ecclesia or the arena of government or public power; and most impor-
tantly, he argues, the agora or the place where the public and private
meet. Bauman argues that in contemporary consumer society the balance
between these spheres has shifted for the worse, as the ecclesia has become
individualised or overrun by private and personal troubles, and the agora
transformed into little more than a marketplace as a site of consumption.
Bauman’s solution is to idealise the Greek agora – ‘the homeground of
democracy’ – as that arena through which the ‘work of translation between
oikos and ecclesia is performed’ (2001:201). For him, this social and political
space, accompanied by of such practices of translation, is central to the
revitalisation of politics:
The chance of changing this tradition hangs on the agora…[t]he space

where private problems meet in a meaningful way…to seek collec-
tively managed levers powerful enough to lift individuals from their
privately suffered misery; the space where such ideas may be born and
take shape as the “public good”, the “just society” or “shared values”’
(Bauman, 1999:3–4).
Underpinning Bauman’s theory of liquid modernity is an antiquarian

practice that reads the present in terms of a value-standard drawn from
the past. This is less a practice which uses the past to place the present
into question, as in genealogical history, but which looks to the past in
order to find a normative basis for life today. In these terms, the Greek
agora is not simply a model that exposes the deficiencies of our con-
sumerist present, it is rather the blueprint for how democratic politics
and active citizenship should proceed.
This is not the place to address the strengths and weaknesses of what
Nietzsche calls antiquarian thought, or to assess the values which under-
pin the normative positions of thinkers such as Bauman. This would require
extensive work to examine the ways in which past social and political
forms are idealised in order to guide action in the present: in Bauman, for
example, Athenian democracy is idealised by neglecting analysis of its
accompanying condition of slavery. Instead, the question to be addressed
here is whether there are other means alongside genealogy for thinking
about the present; ones that are not necessarily tied to grand narratives
or meta-concepts of modernity and the modern. This is a question that
largely exceeds the limits of this chapter, but two possible alternatives
come to mind. First, there are other ways of thinking that do not look
to the past in order to destabilise our understanding of the present
(genealogical practice) or to forge a normative position (antiquarian
Conclusion 137
history). For example, it might also be possible to question the present

from the future. And second, the value of the concept of the modern
can be placed into question on the ground that it is commonly consti-
tuted as a meta-concept that reduces the empirical complexities of his-
tory to a broad, overarching scheme of social and cultural development
(as in the idea of modernisation), or to the description of the emergence
and trajectory of general institutional forms such ‘society’ (as in Beck’s
‘risk’ society, see Chapter 7). The challenge this presents is of the poss-
ibility of thinking sociologically about capitalism without a notion of
the modern (the opposite angle of attack to Beck and Bauman), and
of the conceptual matrix that can be developed to best serve this
purpose.
As exemplified by the writings of Weber, history is the primary resource
for thinking sociologically about the present. But this does not mean that
historical sociology, or modernity thinking for that matter, is the only
way of proceeding. Indeed, as observed in Chapter 3, Nigel Thrift pro-
poses a different approach to the analysis of contemporary capitalism.
Thrift’s first ‘methodological principle’ is to employ a backward gaze
in order to identify and explore the social and cultural dynamics of
the present from the future. This approach stands in direct contrast to
modernity thinking. Thrift explains:
This means thinking rather as a historian from the future might, look-
ing back at our present time and seeing vast numbers of unresolved
issues, differences of interpretation and general confusions, exactly as
historians see the past now. This is in contrast to many social theorists
who too often let their historical imagination atrophy in order that
they can make large claims about ‘modernity’, which are meant to set
the seal on history, to wrap everything up (2005:2).
The other two contemporary thinkers considered alongside Thrift in

Chapter 3 share a comparable concern for the movement of thought
between present and future. Lyotard, on the one hand, addresses the
colonisation of time by technologies that work towards the ‘neutralising’
of events by subordinating ‘the present to what is (still) called a future’
(1991:65). On the other, he conceives of the future as constituting a limit
(most prominently in the form of the sun’s eventual death, see Lyotard,
1991:8–9) that, by necessity, must animate thought in the present. Lash,
by contrast, is interested less in the instrumental basis of capitalist culture
than in the broader metaphysics of capitalism, within which there is
never any clear correlation between current means and future ends. One
important development here is the emergence of forms of value that are,

in the case of derivatives, leveraged against the future (see 2007:19). The
question this poses is of how something, be it a commodity or an equity,
can be quantified in the form of an economic value when this value is
dependent on events that have yet to take place. This situation, Lash
argues, leads us away from a Weberian reading of capitalist culture in
terms of instrumental rationality, and towards one based on a theory of
value as ‘abstract inequivalence’.
One way of approaching such complexities is for the sociological analysis
of capitalism to consider, as Thrift suggests, not just the passage from
past to present, but also connections between present and future. This is
not an approach that is found in the work of Weber. The closest Weber
comes to questioning the fate of capitalist development is at the con-
clusion to the Protestant Ethic, where in a famous passage he observes that
no one can know whether in the future ‘new prophets will arise, or there
will be a great rebirth of old ideas and ideals, or, if neither, mechanized
petrifaction, embellished with a sort of convulsive self-importance’ (1992:
182). But he quickly recoils from exploring the possibility of such out-
comes by observing that any attempt to predict the future takes us into
‘the world of judgements of value and faith’ (1992:182). Weber’s socio-
logy is committed, unflinchingly, to work informed by history. But there
are other options. There are a range of theoretical resources, beyond Thrift,
Lyotard, and Lash, that can be deployed to think about the present through
the future, and which can only briefly be mentioned here.
One is Donna Haraway’s idea of ‘dreamwork (see 2004:323)’, which, in
the case of her ‘Cyborg Manifesto’ (1991:149–81), involves the construc-
tion of imaginary futures to show how things might be otherwise in the
present: a kind of genealogy in reverse. This idea of dreamwork is based
on the principle that ‘the fantasy of an elsewhere is not escapism but…a
powerful tool’ for understanding and critique (Haraway in Haraway and
Gane, 2006:152). This idea of expanding the sociological imagination by
working from the future to the present can also be found, in a more sober
sense, in Daniel Bell’s writings on social forecasting (for a broader overview
of sociological attempts at such forecasting, see Bailey, 1988:77–95). The
most remarkable of these writings is a little-known piece ‘The World and
the United States in 2013’ in which an arbitrary date in the future is taken
in order to read back to the present with the aim of identifying ‘basic struc-
tural frameworks that are emerging, that form the matrix of people’s lives’
(1987:1). Bell acknowledges the apparent futility of such an exercise, argu-
ing that it ‘is like holding a small candle in a hurricane to see if there
are any paths ahead and how to go forth’ (1987:31). But he nonetheless
Conclusion 139
emphasises the importance of trying to identify developmental trends

and logics that can be read out of and through the present from an
imagined future. Indeed, he declares: ‘if one cannot light and hold
even a small candle, then there is only darkness ahead’ (1987:31).
These strategies for thinking about the present through the future could
be used alongside more established genealogical approaches in order to
question the present from different directions and through different types
of work: historical and fictive. While an attractive prospect, this is not
something, however, that this book has attempted to do. Rather, the task
has been to identify concepts that can be assembled into a mobile and
flexible network in order to think sociologically about the empirical chal-
lenges of capitalism today. This might appear to be a genealogical exercise
based on the reactivation or reinvention of historical concepts contained
in the writings of Weber; concepts that can potentially enable us to think
in new ways about contemporary forms of sociality and culture. But
this book centres on concepts rather than history, and on how concepts
can be extracted through creative readings of seemingly time-worn texts
and given a new lease of life by reading them in connection to pressing
empirical concerns or problems.
This emphasis on concepts marks a break from Nietzsche’s notion of
critical history that is employed ‘in the service of life’ (1983:116). Against
Nietzsche’s vitalism, a neo-Kantian reading of Weber has been pursued
that places concepts and concept-formation at the heart of sociological
thinking. This also marks a break with Foucault’s writings on genealogy,
which are not concerned with concepts per se, and to some extent aligns
this project instead with the work of Deleuze (see Chapter 2). One of the
main concerns in this book has been to think critically about concepts
and their limits by reading between Weber and more contemporary theo-
rists, including Lyotard, Beck and Bauman, to name but a few. Some con-
cepts have fared better than other. Chapter 7 questioned the ongoing
value and use of concepts of modernity for thinking about the present,
and argued that at best such concepts should be reconnected to analysis
of contemporary capitalist culture, and at worst that they should be
dropped altogether on the grounds that such meta-conceptual forms now
have little analytic or interpretive purchase. On the face of it, it might be
argued that concepts of capitalism should also suffer this latter fate. But,
as suggested in Chapter 3, an appealing feature of Weber’s economic socio-
logy is that it does not talk of capitalism in a general societal sense, but
instead advances an array of ideal-typical concepts of capitalistic activity,
or what might be called ‘organized forms of profit-making’ (Swedberg,
1998:46). Weber’s tendency to work in this way is at times frustrating, for
alongside this emphasis on types and modes of profit-making a broader

analysis of the underlying cultural dynamics of market capitalism is
also needed; something that the work of Lyotard, Thrift and Lash help
us to address. But the danger in such work is that capitalism is con-
structed as a meta-conceptual form, one that is, for example, either
‘knowing’ or ‘metaphysical’. One answer is to take Deleuze’s advice and
forge a network of concepts that can be deployed in different configura-
tions depending on the task in hand. The network advanced in this book
starts with the concept of capitalism, which in the work of Weber is
already a multiple and networked conceptual form, before placing in
connection to three other main concepts (each of which has different
material instantiations): the market, neoliberalism and class.
One of the methodological ‘rules’ advanced in Chapter 2 is that con-
cepts should never be divorced completely from the empirical world,
and should be forged in connection to, and perhaps even out of, empirical
problems. This methodological commitment could perhaps have been
pushed further, but nevertheless in each chapter an empirical problem
has emerged that has exposed the possibilities and limits of Weber’s
concepts. But, nevertheless, in each chapter, an empirical problem has
emerged that has exposed the possibilities and limits of Weber’s con-
cepts. Chapter 3 addressed Weber’s ideal-types of capitalistic activity,
and argued that while they avoid the closure of thinking in bounded,
societal ways, they need to be complemented by a broader cultural
analysis that pays closer attention to the concept of value, as well as to
the embedding of values and rationalities within computational machines.
This is a concern which emerged again through Chapter 4, which
concluded by arguing that while there has been a move to understand
the technical basis of markets, Weber’s conceptual definition of what
markets are and how they work, in terms of exchange and competition,
continues to be useful but at the same time is not without problems. The
main one of these is that the dividing line between mass behaviour and
meaningful social action is often hard to discern in markets, and because
of this the sociality of imitative actions need further analysis (especially in
the light of the empirical problems posed by recent market events). This,
in turn, could underpin sociological work on the extent to which highly
technologised markets continue to be social in form, as well as cultural
analysis of the values that underpin the operation of contemporary
markets, in particular those that are concealed deep within their technical
instruments.
Chapter 5 used Weber’s conceptualisation of the market, alongside his
remarks on the possibility of market regulation, to question the relation
Conclusion 141
of the market to the state, and to consider the political economy of neo-
liberalism and the injection of market principles of competition into social
institutions and, more broadly, culture. This question was pursued in
Chapter 6, which asked whether competition in the form of a market-
situation leads to the emergence of new kinds of neoliberal sociality, or
whether sociality necessarily has a collective or communal basis. Not only
are such questions present-relevant and tied to deep-seated empirical
complexities and problems, they are also a starting point for the develop-
ment of new conceptual frameworks that can be developed from new and
classical sources. Through such an approach this book has attempted
to formulate a network of concepts for thinking sociologically about
contemporary capitalism, and perhaps also for working beyond both the
postmodern and second modern turns.
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Index
Adorno, T. 37, 93 rational 7, 26, 32–3, 43, 47, 48, 82

algorithmic trading 66–7, 69–70 soft 7, 40–2
Arnoldi, J. 62–5, 68 traditional 7, 26, 32–3, 48
Austrian economics 83–90, 93, 122 caste 105
Castells, M. 35, 67
Baudrillard, J. 2, 28, 44–5, 126, 135 Castoriadis, C. 135
Bauman, Z. 2–4, 6, 10, 11, 30, 79, charisma 106–7, 135
111, 114, 125–33, 135–6, 139 Chicago School economics 86, 116
Back, L. 24, 30 Clarke, S. 84
Beck, U. 3–6, 10, 28, 79, 108, class 1, 3–5, 9, 12, 31, 51, 71,
113–25, 129–33, 139 95–112, 114, 119, 120, 125, 140
Bell, D. 11, 34–5, 138 Coase, R. 68
Benjamin, W. 45, 48 competition 7, 9, 50–2, 54, 64, 65,
Bensmaïa, R. 29 67, 71, 77, 79–80, 82, 91, 93, 101,
Bentham, J. 8, 74–6, 79 109, 112, 129, 132, 141
Bergson, H. 22, 29 Comte, A. 43
biopolitics 8, 72, 76, 80, 91, 128 concepts 1, 4, 5–7, 11, 12–26, 28–9,
Borch, C. 59, 62–5, 68 31, 34, 38, 45, 49, 95, 139–40
Boundas, C. 15 consumerism 3, 127
Bourdieu, P. 4, 95 consumption 9, 38, 106, 111
Brennan, C. 96–7 crowd behaviour 50–1, 57–65, 68
Bretano, L. 84 culture 6–7, 10, 21, 30, 31, 35, 36–8,
Brewer, J. 59, 64 40–1, 43, 44–7, 50, 67, 72, 93,
Buchanan, J. 86, 116 113, 121, 123, 132, 135, 137,
bureaucracy 90, 110, 126, 129, 135 138–9, 141
Caldwell, B. 84 DeLanda, M. 25
Çalişkan, K. 69 Deleuze, G. 5, 6, 13, 14–29, 31, 32,
Callon, M. 67, 69 43, 46, 49, 87, 139–40
Calvinism 83, 87 derivatives 47, 56, 138
Cameron, D. 59 Descartes, R. 26
capital 37–8, 40, 81, 129 disenchantment 2, 39, 110
capitalism 1, 3–4, 6, 10–12, 26, 29, domination 2, 25, 26, 32, 65, 69–70,
30–50, 68, 72, 87, 93, 112, 114, 96, 103, 104, 121–2
124, 126–33, 137, 139–41 Durkheim, E. 30, 61
computerised 6–7, 31, 34–8, 41,
71 economics 9
intensive 6, 19, 31, 34, 42–6, 54, empiricism 13–15, 17, 21, 31
71 enchantment 39, 111
knowing 6, 7, 16, 31, 34, 39–42, estates 103–5
71 ethnicity 105
metaphysical 6, 7, 19, 43–4, 68 Eucken, W. 8, 76, 78, 81–2, 85, 90,
political 7, 26, 32–3, 48 94
150
Index 151
exchange 7, 9, 36, 45, 47, 50–3, 62, Kittler, F. 30

64, 67, 71, 77, 82, 93, 129, 132, Knies, K. 83
135 Knight, F. 86, 116–19, 123
Kuhn, T. 22
Feuerbach, L. 26
financial crisis 7, 30, 68, 124, 129 Lash, S. 6–7, 19, 31, 42–9, 68, 70,
Flash Crash 8, 50, 58, 65, 67–9, 71 71, 114, 137–8, 140
Foucault, M. 1, 2, 8, 28, 72, 73–83, Latour, B. 28
90–1, 93, 129, 133, 135 Lazarsfeld, P. 24
Frankfurt School 8, 37, 72, 80–1, 90, Le Bon, G. 59, 62
93 Leibniz, G. 43
Freiburg School economics 8, 72, Lenglet, M. 66–7
76, 80–1, 90 Lyotard, J.-F. 2, 6, 16, 22, 31, 35–42,
French, S. 41 46–9, 71, 79, 93, 137–40
Friedman, M. 76, 116
MacKenzie, D. 65, 67, 69
genealogy 11, 134–6, 138–9 markets 4, 7–8, 10, 12, 26, 31, 34–5,
geodemographics 42 37–8, 49, 50–71, 73, 76, 78–9,
Giddens, A. 3–4, 114–15 82, 93, 101–2, 105, 128–9, 132,
globalisation 43 140
governmentality 8, 72, 91, 93 market situation 51, 71, 101, 103,
Graham, S. 70 105, 109, 119–20, 141
Guattari, F. 5–6, 16–18, 20, 24–7, Marx, K. 8, 30, 43, 77, 106, 119
29, 31–2, 46, 49 Mauss, M. 44, 77
McLuhan, M. 30, 62
Hallward, P. 20, 25–6, 29 Menger, C. 19, 83–6, 89–90, 122
Harvey, D. 75 method 5, 9, 13–29, 38–9, 86, 90,
Hayek, F. von 73, 75–6, 82, 85–90 95, 108, 122–3, 133–4, 137, 140
Hayles, K. 30 Mill, J. 19
Haraway, D. 4, 11, 138 Mills, C.W. 4–5, 23, 24, 28
Hegel, G. 26 Mises, L. von 9–10, 73, 76, 82,
Holland, E. 27 86–90, 94, 110, 112, 122, 126
Horkheimer, M. 37, 93 modernisation 2, 114–24, 134
Hume, D. 14, 16, 29 modernity 1, 4, 10, 11, 28, 39,
113–33, 136, 139
ideal-types 5, 13, 21–2, 25, 31–2, 34, high 4
42, 45, 49, 50, 85, 89–90, 123, industrial 3
139 late 4
imitation 7, 8, 61–4, 68 liquid 3, 10, 30, 114, 125–31,
individualisation 3, 10, 79, 114, 135–6
119, 125, 127–8 reflexive 3, 10, 30, 113–24
information 6, 34–8, 41–2 second 3, 10, 114, 131–2
irrationality 59, 63–4, 81, 88, 93, Mont Pelerin Society 78, 86, 116
119, 121, 122–3
nation-state 5, 9
Johnson, B. 59 Negri, A. 45
neoliberalism 3–4, 8–10, 12, 23, 30,
Kant, I. 2, 43 31, 37, 40, 49–52, 71, 72–94,
Keynes, J.M. 118–19 109–10, 124, 127–30, 140
152 Index
neo-Kantianism 6, 12, 18, 19, 20, social action 25–6, 32, 50, 53, 57,
31, 45, 48, 87, 139 58, 60–1, 63, 68, 89–90, 94,
networks 67 98–102, 106–8, 110, 122, 126–7,
Nietzsche, F. 11, 43, 46, 133–6, 139 140
social relationships 25, 32, 55, 63,
objectivity 19, 22 69, 99–100, 102, 104–11, 125
ordoliberalism 9, 76–8, 81, 82, 90 Sombart, W. 83
Owen, D. 133 sovereignty 73
Spinoza, B. 29, 43, 45–6
Panopticon 74–6 state 3, 8, 10, 71, 73, 75–9, 91–3, 96,
paralogy 22 108–9, 114, 118, 125, 127–32
Parsons, T. 24, 86 status 5, 9, 51, 98, 102–6, 108–11
patriachalism 103 Strathern, M. 80
patrimonialism 103–4 stratification 10, 95–8, 101, 102,
performativity 37, 39 108–9, 119–20
Plato 27 Swedberg, R. 6–7, 32–3, 70, 83, 86
postmodern 2–4, 12, 113–14, 141
postmodernity 3, 113 Tarde, G. 8, 59, 61, 62–3, 68
post-postmodern 3 technology 35, 70
power 8, 25, 45–6, 51, 58, 65, Thrift, N. 6, 16, 31, 39, 45, 47–9,
69–71, 75, 97, 100–1, 106–7, 70–1, 137–8, 140
110–11, 113, 118, 121, 128–9 Turner, B. 98, 110
rationalisation 2, 36–8, 46–8, 110, utilitarianism 74

113–14, 118–21, 123, 126, 137
rationality 8, 25, 36, 47, 49, 59, 63, value 33–4, 37, 41, 44–5, 47, 67, 71,
65–6, 81, 88, 90, 93, 100, 106, 73, 84, 135
110, 114, 116, 120, 122, 123, value-freedom 19, 94
126, 131–2, 138 value-relevance 20–1
reflexivity 115 Villani, A. 17
Ringer, F. 13 vitalism 12, 134, 139
risk 4, 47, 56, 68, 113, 114–21,
123–4, 130, 131, 137 Wallerstein, I. 30
Ritzer, G. 111 Weber, M.
Röpke, W. 8, 81, 90 Class, Status, Party 52, 95–9,
Roscher, W. 83 106–11
Rose, G. 18 Commerce on the Stock and
Rose, N. 17 Commodity Exchanges 51, 53,
Roth, G. 96 56–7, 91
Rousseau, J.-J. 61, 73, 77 Economy and Society 5, 8, 25–6, 32,
33, 49–52, 60, 68, 86–8, 95, 96,
Schluchter, W. 133 98–101, 103, 112, 121–2
Schmoller, G. 83–5 Intermediate Reflection 2, 20
Schutz, A. 82, 87 Marginal Utility Theory and ‘The
Scott, J. 98 Fundamental Law of
Sica, A. 122 Psychophysics’ 84
Simmel, G. 19, 30, 59, 99 Politics as a Vocation 108, 121
singularity 15, 26, 38, 44–6 Science as a Vocation 27, 94, 120
Smith, A. 73, 85 Sociology of Religion 20, 31, 43
Index 153
Stock and Commodity Exchanges White, H. 63, 67

51, 53, 91 Williams, J. 17
The ‘Objectivity’ of Knowledge in Social Wollam, H. 59, 64
Science and Social Policy 21–2 Wynne, B. 114
The Protestant Ethic and the Spirit of
Capitalism 31, 48, 81, 120, Žižek, S. 34
131, 138

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Max Weber and Contemporary Capitalism

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MAX WEBER AND POSTMODERN THEORY

N. Gane, Max Weber and Contemporary Capitalism

This project is, in many ways, a continuation of a previous work

long faded, is the concrete task of forging inventive conceptual tools to

anticipated by Weber’s methodological writings. One question this

received and consumed. Thrift extends Lyotard’s position on the com-

the sense of instinctive and affective behaviour’ (Arnoldi and Borch,

the so-called ordoliberals of post-war Germany, many of whom were,

Today, through Weber it is possible to pose important questions about

argued that in each of these respects, Weber’s work continues to have

Finally, a further argument is advanced (one which extends the stance

This chapter focusses on one main aspect of Max Weber’s methodology:

N. Gane, Max Weber and Contemporary Capitalism

attempt to do three things. First, it will turn to Deleuze’s work in order to

Concepts and empiricism

what relations are or the liveliness of their components and contours.

It is, says Hume, the flux of the sensible, a collection of impressions

(1991:7). This position might be compared to Jean-François Lyotard’s

of the empirical world in order to open our theoretical imagination to

Deleuze and Weber

As soon as we attempt to reflect about the way in which life confronts

from pure experience, one arrives at polytheism’ (Weber, 1970:147).

is formed through a one-side accentuation of one or several perspectives,

largely in keeping with Deleuze’s empiricism, in which concepts are

Concepts and problems

might be forged. In this sense, there is perhaps a normative thread to

Deleuze and Guattari push things further by situating concepts on what

of strategic and flexible alliances with other concepts. This is perhaps

Conclusion: Sociology and concepts

This chapter has explored a number of parallels between the writings

conceptual imagination of this discipline is supplied largely by philo-

It is here that Deleuze and Guattari’s writings on concept formation

By detaching concepts from their original theoretical contexts, he is

It is indeed interesting that Deleuze so often turned back in order to

The analysis of capitalism – including its historical development, its core

N. Gane, Max Weber and Contemporary Capitalism

the task of the present chapter is to develop a conceptual framework

Capitalism: An initial conceptual framework

As argued in Chapter 2, Weber’s sociology is built upon a neo-Kantian

ation of means of payment’ and ‘the professional extension of credit’

formulation of the basic concepts of sociology ‘it has proved possible

Weber’s ideal-types and modes of capitalist profit-making provide a

that of other commodities, relates to the speed at which it can be exchanged,

new technologies…submit to exact calculation every inscription on

Lyotard’s argument is that the digitalisation of knowledge, rather than

of information, and to the selection of pre-programmed, and thus stan-

ability not simply to produce but to ‘invent, read, imagine’ (1997:3). In

Nigel Thrift’s Knowing Capitalism advances an analysis of capitalist society

adaptive and constantly mutating formation; it is a set of poised systems’

(Thrift, 2005:23), and also culture, as market values begin to infiltrate

Thrift’s ideas re-surface in Scott Lash’s work on capitalism and meta-

Let me give some idea of what I mean by metaphysics. Max Weber

moves into a transcendental sphere. It is now that metaphysics emerges

And at a later point he adds:

Max Weber’s oeuvre was obsessed with the metaphysical…Weber

value may both be extensive and intensive: it can be standardised to

turn, by Lyotard) and thinking instead about singularities in terms of

Types and modes of capitalism: Back to and beyond Weber

Marxist focus on commodification and exchange (something Weber

Weber, in moving from the formulation of types to modes of capital-

The previous chapter explored the uses and limitations of Weber’s