At the Origins of the Concept of Rationalisierung Max Webers Entwurf Part One 1

Introduction: State and Capitalist Bureaucracy as Trennung

In a modern state real rule, which becomes effective in everyday life neither through parliamentary speeches nor through the pronouncements of monarchs but through the day-to-day management of the administration, necessarily and inevitably lies in the hands of officialdom, both military and civilian. The modern high-ranking officer even conducts battles from his office. (Parliament and Government, p.145 in CWP) In statistical terms the numbers of office workers in private firms are growing faster than manual workers, and it is quite ridiculous for our litterateurs to imagine that there is the slightest difference between the mental work done in the office of a private firm and that performed in an office of the state. Fundamentally they are both exactly the same kind of thing. Looked at from a social-scientific point of view, the modern state is an organisation (Betrieb) in exactly the same way as a factory; indeed this is its specific historical characteristic. (p.146)

Webers approach to and theorization of the Rationalisierung experiences a marked and dramatic evolution between the year 1917 when he writes and publishes the articles on Parlament und Regierung and the year 1920 when he completes the Vorbemerkung to the Aufsatzes zur Religionssoziologie. This last contains a definition of the Rationalisierung encompassing its origins in both state administration and in industrial capitalism that reveals a marked deviation from its abstract ideal type sociology prior to 1917 traceable back to the Protestantische Ethik. The tide of events the worsening of the military position of the Reich and apprehension over its domestic political repercussions together with the revolutionary tumults in Russia and their significant echoes in Western Europe had forced Weber to turn his attention sharply to the re-structuring of Parliament and Government in a Newly-Ordered [neu-geordneten] Germany, and particularly to the nature of political parties (Parteienwesen) and of the existing bureaucracy (Beamtentum, officialdom) within the overall problematic of the Demokratisierung of the old European absolutist regimes that followed the rise of the industrial working class. The evolution of Webers thought over this period offers a unique vantage point from which to trace this entire Problematik of the relationship between capitalist social relations of production, their intrinsic social antagonism in the

dynamic context of economic growth and development, and the mode of political organization and representation of the antagonistic forces it pro-duces. To be sure, looked at from a social-scientific point of view, the modern state is an organisation [Betrieb] in exactly the same way as a factory which is why it is of fundamental importance to understand their symbiosis and con-currence in the fact that if indeed it is the specific historical characteristic of the modern state to be organized in exactly the same way as a factory, it was also the new asset of the European absolutist nation-state that made possible the concentration of political power that enabled the bourgeoisie to impose the rational organization of free labor under the regular discipline of the factory on the rest of society! The literati, the nostalgics and apologists for the aristocratic status quo, for the republique des notables, overlook the reality that there is [not] the slightest difference between the mental work done in the office of a private firm and that performed in an office of the state. Indeed, the number of office workers in private firms is growing faster than that of manual workers. There is a profound and urgent need to understand the transformation of capitalist industry and labor process because it is this that forms the foundation of the modern nation-state it is its model that must be examined closely so that the machinery of State may adapt to the needs of society, of its economy in such a way that the political will of the economically decisive parts of society may be expressed powerfully for there to be positive politics and not the present negative politics whereby Parliament is prevented or impeded from exercising the vital functions of leadership that the national economy the economy understood in terms of the Machtsstaat demands and requires. The capitalist entrepreneur here has been already side-lined. It is not that his function is unimportant: it is rather that the entrepreneurial function itself is incapable of mediating and realizing the trans-formation of the economy, of capitalist development in the broadest sense, even in the manner championed by Joseph Schumpeter! The genial Austrian economist had sought to identify and describe precisely the mechanism of transformation that is specific to the capitalist economy and that leads to its development. But this development is dependent on society not just in the sense that it occurs in a social context but also in the far more important sense that the trans-formations that capitalist industry generates have far-reaching political implications and consequences that need themselves to be mediated and mustered to maximize the Macht of the Nationaloekonomie, the power of the nation-state and of its leading class, and not only profits. The differentiation between the dynamic role of the entrepreneur and the static or passive one of the rentier or capitalist is duplicated at the political level by the pressing need to by-pass the passive and abulic inertia of the machinery of bureaucratic state administration with the active powerful leadership of a parliamentary elite that is not imposed on the country from above but that rises instead from its midst as the powerful expression of the political will of the nation, of its industrially relevant components - the representatives of the truly important powers in the economic world today(PuR, in Collected Political Writings, p.93).

This problematic had been completely missing in Webers earlier studies on the Protestant Ethic and the entrepreneurial spirit of capitalism. Armed with the insights of Schumpeters Theorie, however, Weber is now able to integrate the Austrians theory of economic development with a much more powerful Nietzschean account of parliamentary politics in a society that is destined to remain capitalistic for a long time to come! The essential and urgent task is how to co-ordinate the Demokratisierung of social forces within the institutional framework of the Parlamentarisierung. The problem is no longer so much to interpret the role of the entrepreneur as the herald of capitalist development within the organisation that is the capitalist factory. Instead, the essential and pressing task is that of preserving the rule of the bourgeoisie and of invigorating the nation-state by understanding whereupon and wherefrom capitalist industry derives its explosive dynamic power a power that drives the national economy and therefore its Macht a lot more efficiently and rationally than does the state administration. It is not the specific role of the entrepreneur within the congealed spirit represented by the capitalist machine that interests Weber, but rather the source of the energy, of the productive power that the entrepreneur musters and channels in the direction of development. And if, as Schumpeter argues, development is really the entrepreneurial channeling or use of crisis, then the state bureaucracy must learn in equal measure how to muster and channel its own crisis, how to relinquish the romantic utopian dreams of social equilibrium in order to utilize social conflict, to mediate and to govern it so as to preserve the power of the nation in the global arena. That the capitalist economy can occasion and provoke crises cannot be put in doubt. Weber had already experienced the economic convulsions of 1905 and their political complications reverberating from Russia to Germany prompting him even to engage in a rapid study of the Russian language! But now the Great War and the October revolution of 1917 in Russia bring prepotently to the fore this problematic of capitalism, of how to guide its development within a social body that is dramatically more interdependent and interconnected than ever before in which capitalist development can provoke crises that threaten and traverse the entire fabric of society by reason of its own socialization (Vergesellschaftung). The Bolshevik leap forward to the dictatorship of the proletariat in conditions that Lenin himself admits are premature (see The Development of Capitalism in Russia) shows that socialization need not mean evolution that it can portend revolution! - and that it poses problems not just for capitalism but also for socialism itself! Capitalist development poses the Problematik of rational Socialism. The central problem of Socialism is one posed by capitalist industry itself - the anarchy of production, the unequal distribution of wealth in society; and both are a direct result of the separation (the Marxian Trennung) of the worker from the means of production.
The relative independence of the craftsman or the home-worker, the freehold farmer, the Commendatar, the knight and the vassal, rested in (147) each case on the fact that they themselves owned the tools, provisions, finances or weapons which they used to perform their economic, political or military functions, and lived off them while they were

carrying out those functions. Conversely, the hierarchical dependency of the worker, clerk, technical employee, the assistant in an academic institution and also of the official and soldier of the state rests in every case on the fact that the tools, provisions and finances which are indispensable both for the performance of his work and for his economic existence are concentrated in the hands of an entrepreneur in the one case, and in those of a political master in the other. (146-7)

The former autonomy of the artisanal skilled worker, of the Gelernte, belonged to a stage of society in which communities were relatively self-reliant and controlled the totality of the labour process. But this is exactly what capitalist industrial development has changed what occasions its crises in the explosive socialization of the reproduction of society itself! The concentration of industry by capitalism with the Taylorisation of the labor process has determined the massification of society to such an extent that all pining for a lost paradise of artisanal control over the labour process, of totality, all resentment and ranting against the dis-enchantment (Ent-zauberung) engendered by the rise of capitalist industrialisation are sheer romantic fantasy.
Whether an organisation is a modern state apparatus engaging in power politics or cultural politics (Kulturpolitik) or pursuing military aims, or a private capitalist business, the same decisive economic basis is common to both, namely the separation of the worker from the material means of conducting the activity of the organisation - the means of production in the economy, the means of war in the army, or the means of research in a university institution or laboratory, and the financial means in all of them. (147)

The same decisive economic basis is common to both! Common to the modern state apparatus and to private capitalist business. Both are organizations; they are businesses or factories and what distinguishes them is precisely the separation of the worker from the material means of conducting the activity of the organization. This separation, this Marxian Trennung, then, may well seem peculiar to capitalist industry but in reality it extends to the rest of society and in especial mode to the modern state apparatus that we call bureaucracy, including the army and indeed even scientific research.
This apparatus is the common feature shared by all these formations, its existence and function being inseparably linked, both as cause and effect, with the 'concentration of the material means of operation'. Or rather this apparatus is the form taken by that very process of concentration. Today increasing 'socialisation inevitably means increasing bureaucratisation. Historically, too 'progress towards the bureaucratic state which adjudicates in accordance with rationally established law and administers according to rationally devised regulations stands in the closest relation to the development of modem capitalism.

Bureaucratisation is the inevitable outcome of socialization which, in turn, is engendered by the concentration of the material means of operation and of course also of the material means of production. Now, this apparatus is the form taken by that very process of concentration: it is this extensive and pervasive parcelisation of social labor, the very inter-connectedness of social functions that cater to the most basic needs of social life that make a nostalgic return to the artisanal ownership of the means of production on the part of the individual worker more than just a fantasy but a dangerous one as well! With one fell swoop, Weber exposes the sheer reactionary content of the utopian ramblings of the Sozialismus.
The modern state emerges when the prince takes this business into his own household, employs salaried officials and thereby brings about the 'separation' of the officials from the means of conducting their duties. Everywhere we find the same thing: the means of operation within the factories, the state administration, the army and university departments are concentrated by means of a bureaucratically structured human apparatus in the hands of the person who has command over (beherrscht) this human apparatus. This is due partly to purely technical considerations, to the nature of modern means of operation - machines, artillery and so on - bur partly simply to the greater efficiency of this kind of human cooperation: to the development of 'discipline" the discipline of the army, office, workshop and business. In any event it is a serious mistake to think that this separation of the worker from the means of operation is something peculiar to industry, and, moreover, to private industry. The basic state of affairs remains the same when a different person becomes lord and master of this apparatus, when, say, a state president or minister controls it instead of a private manufacturer. The separation' from the means of operation continues in any case. (Der Sozialismus, p.281, CPW)

To seek a remedy to the anarchy of private production in a socialism whereby the ownership of the means of production are socialized by the State is a pathetic and reactionary chimaera for the simple reason that as Weber blithely intuits here without perhaps realizing the full implications of what he is writing it was the State in the first
place that effected the separation of soldiers from their means of operation, and the State that enabled a class of capitalists to separate the workers from the means of production! Indeed, Weber may well have argued here that it was some of the workers themselves who rose from the ranks of artisanry to become accumulators of capital and thereby separating or expropriating their erstwhile fellow workers and huddling them into factories!

Weber does make this last point in the Vorbermerkungen, quoted later here [Maurice Dobb makes it a central plank of his Studies in the Development of Capitalism]. In Politik als Beruf, he is even more explicit about the first point:
Everywhere the development of the modern state is initiated through the action of the prince. He paves the way for the expropriation of the autonomous and 'private' bearers of executive power who stand beside him, of those who in their own right possess the means of administration, warfare, and financial organization, as well as politically usable goods of all sorts. The whole process is a complete parallel to the development

of the capitalist enterprise through gradual expropriation of the independent producers. In the end, the modern state controls the total means of political organization, which actually come together under a single head. No single official personally owns the money he pays out, or the buildings, stores, tools, and war machines he controls. In the contemporary 'state' and this is essential for the concept of state - the 'separation' of the administrative staff, of the administrative officials, and of the workers from the material means of administrative organization is completed. Here the most modern development begins, and we see with our own eyes the attempt to inaugurate the expropriation of this expropriator of the political means, and therewith of political power. (PaB, p.82).

Lukacs, who quotes and discusses some of these passages from Weber (at pp.95-6 of Geschichte und Klassenbewusstsein), can only lament further on [at p.103] that [t]he specialisation of skills leads to the destruction of every image of the whole. Totally lost to him are the far-reaching political implications of Webers observations about the role of the State administration in Western Europe after the Great Crisis of the early seventeenth century in the development of capitalist industry (a topic closely canvassed in M. Tronti et alii, Stato e Rivoluzione in Inghilterra). Nor can it be doubted that this deficiency has its roots in Marxs own insistence on the superstructural role of the State as against the determinant role of the social relations of production. Evidently, somewhere along the line, Marx lost sight of the fact that there is no such thing as a capitalist economy or an Economics with a market functioning according to an objectively definable Law of Value that can be abstracted from Politics and that indeed the State is part and parcel of those social relations of production, as we are seeking to demonstrate with this study (on Marxs theory of the State, cf. N. Bobbio, Marx e lo Stato in Bobbio et al. Dizionario di Politica). But yet again Weber assumes that the nature and substance of the labor that goes into production can be aggregated into a homogeneous mass and be divided into separate individual labors subject to the rational discipline of the factory for the maximization of industrial production and ultimately profit. Weber fails to theorize and to specify what the content, the historical substance, of this entity called labor is: he continues to skirt the edges of the question, describing the rise of the bureaucratic state as a progress toward rationally devised regulations [which] stands in the closest relation to the development of modern capitalism. We are still none the wiser as to the content of this rationality and, in causal regressus, of bureaucracy, of socialization, and then of concentration of both the means of production and operation.
The main inner foundation of the modern capitalist business is calculation. In order to exist, it requires a system of justice and administration which in 147 principle at any rate, function in a rationally calculable manner according to stable, general norms just as one calculates the predictable performance of a machine.

The fact of the matter is that calculation, however rational, is not and can never be more than a mathematical or logical form of behaviour. But it is as clear as daylight that behaviour itself can never be rationally calculable unless it first assumes a content, a substantive purpose that is capable of being calculated, that makes this

behaviour calculable! For it is simply impossible to calculate or to rationalize the incalculable or the irrational! Mathematics and logic all by themselves are mere form: they cannot be applied to human behaviour and functions unless these are first reduced to operations or tasks that can be meaningfully quantified! But such quantification cannot be in and of itself calculable and rational precisely because it is the pre-condition of the mathesis, of the Rationalisierung that Weber says is the inner foundation of modern capitalist business and of the modern state apparatus that make them both akin to (but not identical with!) the predictable performance of a machine. The entire sociological meaning of the Rationalisierung, then,
hinges on its being a certain practical conduct whose content is exquisitely political and can never be reduced to science whilst its form can be made rationally calculable within broad parameters of that practical conduct. (We have examined in our Nietzschebuch the far-

reaching consequences of these Nietzschean insights on the entire logico-mathematical foundations of Western values.) We need to go further, to dig deeper and find out what are the stable, general norms that allow such predictable performance.
Bureaucracy is certainly far from being the only modern form of organisation, just as the factory is far from being the only form in which manufacture can be conducted. But these are the two forms which have put their stamp on the present age and the foreseeable future. The future belongs to bureaucratization Compared with all these older forms, modern bureaucracy is distinguished by a characteristic which makes its inescapability much more absolute than theirs, namely rational, technical specialisation and training. (156)

Yet, specialization and training may well make the inescapability of bureaucracy much more absolute than previous forms of organization; they certainly cannot account for it in the first place.
But wherever the trained, specialised, modern official has once begun to rule, his power is absolutely unbreakable, because the entire organisation of providing even the most basic needs in life then depends on his performance of his duties.

In other words, what makes the power of the modern official and of bureaucracy absolutely unbreakable is the fact that the entire organization of providing even the most basic needs in life then depends on the performance of his duties. At last, we are now able to join the dots of Webers circuitous definitions to conclude that the socialization on which bureaucracy rests depends in turn on the concentration of the means of production and operation of society itself that are organized in such a manner that even the most basic needs in social life depend on the rational, technical specialization and training of modern bureaucracy and, a fortiori, of modern capitalism on which it is founded or at least stands in closest relation. 2 The Iron Cage as System of Needs and Wants

.In theory one could probably conceive of the progressive elimination of private capitalism - although this is certainly not the trivial matter some literati, who are unfamiliar with it, imagine it to be, and it will quite certainly not be a consequence of this war. But assuming this were to be achieved at some point, what would it mean in practice? Would it perhaps mean that the steel housing (stahlhartes Gehause) of modern industrial work would break open? No! It would mean rather that the management of businesses taken into state ownership or into some form of communal economy' would also become bureaucratised.

The juxtaposition indeed, the seamless transition that Weber effects from bureaucracy to private capitalism seems at first blush to be surprising given that he had earlier taken pains to distinguish the bureaucracy from the factory. Yet here Weber seems to conjoin the two without the slightest hesitation. And, in all fairness, this was to be expected given that Weber had earlier stressed the dependence of the entire organization of providing the most basic needs of social life, which also becomes the function of capital as it turns into social capital, on the performance of bureaucratic duties. It follows that for Weber bureaucracy, whether it be in the modern state apparatus or in modern private capitalism, has ultimately to do with that concentration and socialization of the means of production and operation that serve the essential aim of providing even the most basic needs of society. The quintessential question and problem of modern societies, therefore, is not so much whether they are capitalistic or socialistic, that is to say, under state ownership or some form of communal economy. No! The quintessential question of modern societies the problematic that is common to both capitalist bourgeois and socialist worker parties is that of the steel-hard housing [the iron cage] of modern industrial work! It is not then the nature of modern industrial work that determines the iron cage of bureaucratic, machine-like, rationally calculable rule: the genitive here is subjective! Instead, it is the iron cage that is the content, the social force or drive or impetus that conditions and effects the nature or the technically-given and rational and systematic form of modern industrial work. The iron cage does not in the least refer to the machinery of modern industrial work, of modern industry or to its labor process. Nor does it refer to, as is most commonly believed, the rational conduct of modern business [that] creates a rigid structure in which work is carried out in a mechanical fashion (as the editors of Webers Collected Political Writings wrongly define it in fn12 at p.90). It is not the mechanical fashion of work that concerns Weber, nor is it the rational conduct of modern business that induces modern industrial work. Weber himself expressly denies any such rigidity or mechanical fashion to modern industrial work. This homogenization or equalization of tasks in the modern industrial labor process is not only an essential pre-condition for the rational conduct of modern business, but also it represents for Weber the only way to understand human living activity, as we will see later in this piece. Weber resolutely and expressly dismisses and refutes the socialist fable of a capitalist labor process that, eo ipso, in and of itself (!), leads to the socialization of production and the inevitable expropriation of the capitalist expropriators! (Cf. his explicit remarks on this in Der Sozialismus discussed in this section.)

The iron cage refers instead to the economic demands or needs and wants of atomized individuals in capitalist mass society that modern industrial work is meant to provide for and satisfy a condition that the Protestant ethic with its Askesis (ascension, climbing) turning to acquisitive greed unleashed initially in the guise of the spirit of capitalism until that spirit escaped, leaving behind only a soul-less machine. It is this Ent-seelung (out-soul-ing, reification, mortification), this crystallization of social life caused by the care for external goods that is the iron cage certainly not the industrial machinery and the organization of free labor of modern capitalism! It is this system of needs and wants (Hegel and Marx seen through the Eristic filter of the negatives Denken and the Schematismus of Neo-Kantism) that leads inexorably and inescapably rationally to modern industrial capitalism and to the rise of bureaucracy: but the two are not identical! It is irrelevant for Weber whether the form of government in a modern nation-state is capitalist or socialist. Whether in bourgeois Europe or in communist Bolshevik Russia, the common Problematik will be that of the organization of labor, of modern industrial work as it is created and maintained by the steel-hard housing or iron cage. Weber takes this modern industrial work as a given, as a technical fact. And the inevitability of modern industrial work, its rationally calculable attributes in the sphere of production, is derived from the urgency and massive scale of the needs and wants that individuals have in capitalist society. Let us recall that Weber had already defined this iron cage explicitly in the closing paragraphs of his Protestantische Ethik published thirteen years earlier in 1904. But he had been unable or unwilling or not ready to define yet the precise nature of the process whereby the Protestant work ethic had led to a specifically bourgeois economic ethic, except to stress that it consisted entirely in the glorification of labor as an end in itself through the ascetic religious ideal an ideal that, in any case, had now been dissolved into utilitarianism (Nietzsche had described in quasi-Hegelian terms the selfdissolution [Selbst-Aufhebung] of the ascetic ideal in the Genealogie).
The Puritan wanted to work in a calling; we are condemned to do so. For when asceticism was carried out of monastic cells into everyday life, and began to dominate worldly morality, it did its part in building the tremendous cosmos of the modern economic order. This order is now bound to the technical and economic conditions of machine production which to-day determine the lives of all the individuals who are born into this mechanism, not only those directly concerned with economic acquisition, with irresistible force. Perhaps it will so determine them until the last ton of fossilized coal is burnt. In Baxter's view the care for external goods should only lie on the shoulders of the saint like a light cloak, which can be thrown aside at any moment. But fate decreed that the cloak should become an iron cage. Since asceticism undertook to remodel the world and to work out its ideals in the world, material goods have gained an increasing and finally an inexorable power over the lives of men as at no previous period in history. To-day the spirit of religious asceticismwhether finally, who knows?has escaped from the cage. But victorious capitalism, since it rests on mechanical [181] foundations, needs its support no longer.

The present system of needs and wants, that is to say the care for external goods is the iron cage that has replaced the light cloak it once was, now that the spirit of religious asceticism has escaped from the cage [the care for external goods], and has therefore become irrelevant to the now mechanical foundations of capitalism whose inspiring spirit or soul it had been earlier, at the very beginnings of this mode of production. It is this care for external goods diabolically transmuted into an iron cage that constitutes and effects (Weber might say creates and maintains, see below) modern industrial work and machinery as well as bureaucratic rule: - it is certainly not modern industrial work and machinery or indeed bureaucratic rule that constitute and effect the iron cage!

It is abundantly clear that in the Ethik Weber had understood the iron cage to mean the increasing and finally inexorable power over the lives of men on the part of material and external goods although as yet in 1904 there is no careful specification of what this inexorable power might be except the transmutation of the ascetic ideal that treated labor as an end in itself into a victorious capitalism that has dug by now mechanical foundations and that has jettisoned thereby the erstwhile religious asceticism whose support it needs no longer. Once we accept Webers proposition that the modern system of wants and needs has turned into an iron cage - how it has congealed or crystallized into mechanical foundations or a lifeless machine -, we can then see how and why Weber can argue without hesitation that there can be no difference between capitalism and socialism as political forms of the rational organization of modern industrial work except perhaps in the sense that the latter would be far more bureaucratic than the former, and therefore less free!
Is there any appreciable difference between the lives of the workers and clerks in the Prussian state-run mines and railways and those of people working in large private capitalist enterprises? They are less free, because there is no hope of winning any battle against the state bureaucracy and because no help can be summoned from any authority with an interest in opposing that bureaucracy and its power whereas this is possible in relation to private capitalism. That would be the entire difference. If private capitalism were eliminated, state bureaucracy would rule alone. Private and public bureaucracies would then be merged into a single hierarchy, whereas they now operate alongside and, at least potentially, against one another, thus keeping one 157 another in check. The situation would resemble that of ancient Egypt, but in an incomparably more rational and hence more inescapable form.

As further proof of Webers reasoning, and to put the matter of the meaning of the iron cage entirely beyond doubt, let us parse carefully an analogous passage on the Gehause in an essay (Suffrage and Democracy in Germany) that covers much of the ground of Parlament und Regierung but was published a little earlier in 1917. Having discussed the harm done to the German economy by government policies that would encourage rentier investments based on dividends as against entrepreneurial ones based on profits, Weber lashes the reactionary literati who cannot tell the difference

between the two. In referring to the casing (Gehause), Weber this time uses the attribute ehern or brazen (rather than stahlhartes) and this is an adjective that (as the editors here adroitly point out) is most often used in German with nouns such as Gesetz (Law), Schicksal (Fate) and Notwendigkeit (Necessity). Clear is the intention on the part of Weber to stress the harsh necessity, the iron law, the inexorable fate of the concept he is about to elucidate.
Much more significant is the fact that they [the literati] have not the faintest idea of the gulf of difference separating the kind of capitalism which lives from some momentary, purely political conjuncture - from government contracts, financing wars, black-market profiteering, from all the opportunities for profit and robbery, the gains and risks involved in adventurism all of which increased enormously during the war - and the calculation of profitability that is characteristic of the bourgeois rational conduct of business (Betrieb) in peacetime. As far as the litterateurs are concerned, what actually happens in the accounts office of this type of business is a book with seven seals. They do not know that the underlying principles' - or 'ethics if this term is preferred - of these two different types of capitalism are as mutually opposed as it is possible for two mental and moral forces to be. They have not the slightest inkling that one of them, the 'robber capitalism' tied completely to politics, is as ancient as all the military states known to us, while the other is a specific product of modern European man. Weber: Political Writings (90) If one wants to make ethical distinctions (and that is at least possible here) the peculiar situation is as follows: the brazen casing (ehern Gehause) which gives economic work its present stamp and fate was created and is maintained precisely by the - in terms of personal business ethics (Geschafsethik) highest rational - capitalist operational ethics (Betriebsethik) of this second type of capitalism' - the ethics of professional duty and professional honour, which, generally speaking, stand far above the average economic ethics which have really existed in any historical age (as opposed to those which have merely been preached by philosophers and litterateurs). Of course, the fate and character of economic life will be determined increasingly and irrevocably by this rigid casing if the opposition between state bureaucracy and the bureaucracy of private capitalism is replaced by a system of bringing firms under communal control' by a unitary bureaucracy to which the workers will be subordinated and which would no longer be counterbalanced by anything outside itself. Let us consider this opposition further. The bearer of the specifically modern form of capitalism as an inescapable system ruling the economy and thereby people's everyday fate was not profits made on the infamous principle that, you cant make millions without your sleeve brushing against the prison wall'; rather, it was precisely that type of profitability which is achieved by adopting the maxim, 'honesty is the best policy'. (89-90, CPW)

On the face of it, Weber is referring to the fact that it is this second type of capitalism, the one based on that type of profitability achieved through honesty, rather than the one based on opportunistic profit, that created and maintained the ehern Gehause. Yet

this does not mean that the ehern Gehause is identical with it. And of course this honest capitalism, unlike the first type, is based on the ethics of professional duty and honour. But the aspect that counts most here is definitely not professional duty and honour or rational conduct of business, but rather most certainly the aspect of calculation of profitability in other words, profitability based on sustainable and renewed business (Betrieb). It is this sustainability and renewability of business, this profitability that created and maintained the brazen casing. But neither of these properties of business would be possible if they did not respond to an autonomous market demand that sets the discipline for the efficient allocation of resources to the industrial production of consumer goods for which economic work with its present stamp and fate is required. It follows that what makes possible the calculation of profitability, its indispensable ingredient, is precisely this autonomous market demand based on individual consumer choice (the care for external goods) which, in turn, conditions the rational allocation (its present stamp and fate) of the available quantity of economic work for the production and supply of the various external goods that provide for and satisfy market demand - the care. That the autonomous nature of this demand for material goods (or the care for external goods of the Ethik) is the kernel of the concept of brazen casing is made evident once more by Webers insistence that
the fate and character of economic life will be determined increasingly and irrevocably by this rigid casing if the opposition between state bureaucracy and the bureaucracy of private capitalism is replaced by a system of bringing firms under communal control' [socialism] by a unitary bureaucracy to which the workers will be subordinated and which would no longer be counterbalanced by anything outside itself.

Now, if Weber had meant that the second type of capitalism and its ethics of honest and calculable profitability or the rational conduct of business was identical with the iron cage, he would never have said instead, as he did just before this long sentence, that it was these ethics that created and maintained the iron cage! And he would also reason here that the replacement of the private capitalist bureaucracy with the state bureaucracy would bring about the extinction of the iron cage as well as of those ethics and not, as he does here, the further increasing and irrevocable rigidification of this rigid casing! Weber puts the issue beyond doubt when he equates the fate and character of economic life with the subordination of the workers to the unitary bureaucracy that will no longer be counterbalanced by anything outside itself! It is the workers not the professional ethics of the private capitalists or the rational conduct of business or the capitalists who will be subordinated to this proto-totalitarian unitary bureaucracy. And in the very next sentence, Weber explains how it is most emphatically not the rationality of the profitability of this second capitalism that is the bearer of the specifically modern form of capitalism as an inescapable system ruling the economy and thereby people's everyday fate, but rather its profitability which, again, is based on

the autonomous market demand flowing from the formal freedom of the workers who are still not subordinated to a unitary bureaucracy! It follows that the brazen casing would be further rigidified if a unitary bureaucracy replaced private capitalist enterprise based on sustainable and renewable or honest and calculable profitability for the evident reason that then workers would be wholly subordinated to the rule of a unitary bureaucracy no longer counterbalanced by (in opposition to) private enterprise that would determine more than ever before the inescapable system of their needs and wants [the brazen casing] ruling the economy and thereby workers everyday fate or, what amounts to the same thing, their economic work which is the resultant of the necessarily political conflict over wants and provision. Perfectly aligned with this interpretation of the brazen casing or iron cage is the detailed discussion that Weber undertakes immediately and seamlessly after this paragraph on the quintessential role of autonomous, independent, voluntary and free determination of individual preferences and needs and wants in both the political and the economic spheres for the efficient functioning of government and economy, and therefore for the health and power of the nation-state, in strident opposition to the romantic fantasies (p.100) of the proponents of various forms of socio-economic corporatism.
It is, however, sheer naivete on the part of our scribbling ideologues to believe that this is the way 104 Suffrage and Democracy in Germany to weaken or eliminate the rule of the 'profit motive' and the interest in producing goods 'for gain' which they so despise, and to replace them with a 'natural, communal economic' interest in providing good and as far as possible cheap commodities to the people who desire and consume them! What abysmal nonsense! The interest of the capitalist producers and profit-makers represented by these cartels would itself then rule the state exclusively, unless that organisation of producers' interests is confronted by a power strong enough to control and steer them as the needs of the population require. But an individual's needs are not determined by his position in the machinery of goods-production. The worker has exactly the same needs for bread, housing and clothing, regardless of the type of factory he works in. Thus if that method of organising the economy is imminent, it is absolutely imperative before it begins to function - which means immediately - for us to have a parliament elected on the principle that the needs of the masses must be represented, and not one which represents the way an individual is employed in the production of goods - in other words a parliament of equal suffrage, wholly sovereign in its power, which can take an independent stand in relation to this type of economic organisation. Parliament must be much more sovereign in its powers than hitherto, for in the past its position of power has not sufficed to break the power of vested commercial interests nor the inevitable rule of fiscal interests in state-run industries. This is a negative reason for equal suffrage. (pp.104-5, CWP)

One could wish for no better definition from Weber of his identification of the iron cage with the system of needs and wants based on free labor! But note that both here and in the

quotation above in which Weber did not notice any appreciable difference between the lives of the workers and clerks in the Prussian state-run mines and railways and those of people working in large private capitalist enterprises, Weber vehemently emphasises the primacy of consumption needs on the part of workers rather than their demands over working conditions. For him,
an individual's needs are not determined by his position in the machinery of goods-production. The worker has exactly the same needs for bread, housing and clothing, regardless of the type of factory he works in. (Webers emphases.)

This skewed emphasis on the part of Weber on the consumption side of what we have called here autonomous market demand of workers, and the relative occultation of the conflict over modern industrial work is conclusive evidence of our thesis on the iron cage, but also an early portent of the insuperable problems that Webers formulation of the nature of capitalism will run into once he tries to give it a much more systematic and coherent definition in the Vorbermerkungen. More specifically, this inability to comprehend the historical specificity of capitalist social relations of production will rigidify Webers sociological analysis into a value-free positivistic formalism of the Rationalisierung akin to the experimental science of Mach, the Neo-Kantian Forms and Norms, the Sollen of Cohen, Simmel, and Kelsen, and their equivalent in economics, the marginalism of Neoclassical Theory and the Austrian School, all significantly removed from Nietzsches original and far more coherent critical exposition of this concept. Ultimately, this incomprehension will expose the intrinsic limitations of Webers plans for parliamentary democracy. We will return to these themes repeatedly in the remainder of this study.
(Now that we have cleared some initial theoretical hurdles, it may be

appropriate to emphasize the dramatic departure of this study from the almost universally standard manner in which Max Webers political sociology is approached in academic disciplines something that will become even clearer and more dramatic as the reader ventures further into our study when we deal with the Weberian concept of charisma. Almost invariably, these approaches begin with the erroneous interpretation of Webers stahlhartes Gehause as modern rationalism that turns Webers sociology precisely into that romantic fantasy that he himself denounced so vehemently! It is the mistaken equation of the iron cage with modern rationalism that leads to a much more catastrophic misinterpretation and hypostatization of Webers entire work by hiding the immanent materiality and historical concreteness of the Nietzschean-Weberian Rationalisierung, its foundation upon the system of needs and wants (the care for material and external goods) and the labor needed to provide for them that is the problem not just in Weber, but also in the greatest theoreticians of the bourgeois era from Hobbes through to Hegel and

Marx, and then Schopenhauer, Nietzsche and Schumpeter, not to speak of the liberal tradition from de Tocqueville to Croce! ************** The system of needs and wants can be satisfied best, most efficiently, as well as optimally through the rational and systematical application of industrial machinery, or means of production to the steel-hard casing, to the increasing and finally inexorable power over the lives of men on the part of material or external goods. The opposition between private capitalism and the proposed Socialist socialization of the means of production on the part of a state bureaucracy and its power consists precisely in this: - that the inexorable power of material goods over the lives of men or the iron cage would then become even more binding, their lives or labor even less free than it is under private capitalism! The rational organization of labor on the part of private capitalism allows a remnant of individual freedom of movement (Weber quoted below), of autonomy to the lives of men in terms of the individual choices that they make about the production of the material and external goods to which they are now almost ascetically devoted through the system of needs and wants. The inexorable power exercised by material goods over the lives of men induces the rational organization of their labor, of modern industrial work so as to maximize the provision for and satisfaction of these needs and wants - which leads in turn to concentration, to socialization and to bureaucratic rule in the provision of the most basic needs of social life. But the market mechanism allows at least a modicum of autonomy between the selection of material goods, between the rational organization of their production and the individual choices of workers as to the nature and kind and quantity of the material goods that are produced! Because the Socialists understand social relations of production as governed by a scientific Law of Value, the only point of disagreement with capitalists has to be ultimately not so much about the separation of the worker from the means of production, not about the ownership of the means of production, but rather about how this separation and ownership affect the production and distribution of this Value taken as a rationally calculable entity! That is why Weber can confidently dismiss the protestations of Socialists about the anarchy, the Planlosigkeit, of capitalist industry as the pathetic foibles of lazy literati and as romantic fantasies! Socialism in its current form, as the cult of labor value, its deification in the advent of the Socialist utopia of bureaucratically planned production is so infinitely inferior to the capitalist market system of consumer-driven production that its ideals can be dismissed with Nietzschean haughtiness and contempt! The Socialist Utopia is Wille zur Ohnmacht (will to powerlessness) right from the very start because any velleity toward its implementation would seek to deny the conflict inherent in production and promptly result in the erection of a socialist bureaucracy made up of technocratic experts that the workers themselves would be sure to oppose resolutely and violently precisely for their absurd denial of the existence or even the possibility of conflict in their socialist paradise! Weber would have relied here on the massive studies of the massification of

German industry carried out by two of his Archiv colleagues, Werner Sombart (Der Moderne Kapitalismus and Sozialismus und die soziale Bewegung) and Robert Michels, whose well-researched Die deutsche Sozialdemokratie (published in Archiv fr Sozialwissenschaft und Sozialpolitik XXIII (1906), S. 471-556) he would have appreciated much more than the ridiculous anecdotal generalities about the Iron Law of Oligarchy contained in his later theoretical compendium Political Parties, instantly translated in many languages! (The controversy is mentioned by G. Roth in his introduction to Economy and Society [at p.LXXI].) Note that Weber intends the inevitable conflict over the system of needs and wants to cover not merely the distribution of material goods but also their production in terms of both working conditions and the choice of material goods produced. Yet the overall rational conduct of capitalist business will be dictated by the fact that for any given level of conflict there is only a given rational conduct of business possible for capitalists, related to the degree of market competition with other capitalists. Private capitalism allows this conflict to take place on two levels: - at the industrial level in terms of wages and conditions to be offered in the labor market, and at the broader market level in terms of workers demand for consumer goods. Private capitalism allows therefore the settlement of the conflict inherent to the wage relation both at the industrialproductive level of supply and also at the market-distributive level of demand. It is the relative political autonomy of demand for labor that determines its political freedom and permits thereby its political organization and representation and it is this last that turns free labor into the real motor of development of capitalist industry and society overall.
If the worker goes to the entrepreneur today and says, We cannot live on these wages and you could pay us more', in nine out of ten cases - I mean in peacetime and in those branches of industry where there is really fierce competition - the employer is in a position to show the workers from his books that this is impossible: 'My competitor pays wages of such and such; if I pay each of you even only so much more, all the profit I could pay to the shareholders disappears from my books. I could not carry on the business, for I would get no credit from the bank.' Thereby he is very often just telling the naked truth. Finally, there is the additional point that under the pressure of competition profitability depends on the elimination of human labour as far as possible by new, labour-saving machines, and especially the highest-paid type of workers who cost the business most. Hence skilled workers must be replaced by unskilled workers or workers trained directly at the machine. This is inevitable and it happens all the time. (Socialism, p.284 in CPW).

Were the entirety of private capitalist industry to fall into the hands of a socialist state bureaucracy, even this remnant of individual freedom of movement would vanish, preventing the political organization and representation of conflict over wants and provision that private capitalism utilizes as the motor of its development! Were the consumer choice that the free market allows through its price mechanism regulating the allocation of labor to be abolished labor intended as modern industrial

work, as a rationally calculable entity -, then the rational organization of industrial production would necessarily be eliminated, and so would the competitive dynamic of inter-capitalist rivalry and industrial conflict over wages and conditions; were all this to be abolished through the socialization of the means of production and socialist planning, the disastrous consequence would be not only that workers, labor, would not achieve their socialist utopia because its implementation would be taken out of their hands by a socialist technocratic elite, but also that they would no longer be even free to choose which material and external goods are rationally produced by modern industrial work or to negotiate the conditions and remuneration of that work! In other words, labor - a technically calculable quantity applicable rationally to the production of material goods - would no longer be free because its rational application to the production of material goods would also be bureaucratically ruled by the removal of individual consumer choice and the market competition between capitalist employers over wages and conditions that private capitalism allows! The difference between wants and their provision would no longer exist, and yet the conflict between the two - were the safety-valve of the market to be removed - would swell to the point of explosion! The elimination of the anarchy of capitalist production would lead straight to the elimination of free labor that is, of the ability of labor to be free to choose and to negotiate the material and external goods (that make up the iron cage) and the working conditions for the satisfaction and provision of those wants and needs that jointly exercise their inexorable power over the lives of men.
It is entirely obvious here that whilst capitalist enterprise is able to rationalize the employment of labor power and the production process it adopts, it is unable to rationalize the needs and wants of workers! And this is why it is imperative that labor remain free if capitalist enterprise is to be run rationally for profit at all!

By removing the market pricing mechanism as a system of regulation, of social synthesis, as the ultimate rationality or discipline of private capitalism, Socialism would remove the last remnant of individual freedom of movement within the iron cage it would remove politics! -, and all this in the name of a society finally free from conflict!
The embarrassing thing would be that whereas the political and private-economic bureaucracies (of syndicates, banks, and giant concerns) exist alongside one another at present, as separate entities, so that economic power can still be curbed by political power, the two bureaucracies would then be a single body with identical interests and could no longer be supervised or controlled. In any event, profit would not be done away with as the lode-star of production. Yet the State as such would then [286] have to take its share of the workers' hatred, which is directed at the entrepreneurs at present. (ibid., Socialism, pp.285-6)

3 Schumpeter and Weber: Unternehmer-geist and leitender Geist between Freedom and Necessity

The Law of Value as reformulated in the new marginal utility theory of the Neoclassical Revolution represents the scientific specification by political economy of the market price mechanism as the optimal system for allocating existing scarce resources according to individual choices. The machinery of production, the technologies adopted in the process of production, is determined independently of the system of needs and wants that demands its rational and systematic utilization through bureaucratic rule so that its technically-determined output or supply can be maximized to satisfy the individual choices as fixed by the capitalist market price mechanism aimed at profit. The nature of the matter (das Wesen der Sache) for the Economics is that it needs to determine precisely from the standpoint of the individuals self-interest the individual contribution to the production of goods for final consumption (in Schumpeters words quoted below, the community has occasion to become conscious of the economic value of its members to itself), which is what interests the individual ultimately, and what determines the value and distribution or allocation of privately-owned social resources between individuals in society:
Another application of this theory [marginal utility] is the next step to a height from which a wide view into the innermost working of an economy is gained. Means of production are also complementary goods. But [171] their values are not directly determined: we value them only because they somehow or other lead to consumers' goods, and their value can thus, from the point of view of the subjective theory of value, be derived only from the value of these consumers' goods. But many factors of production are always involved in the production of a single consumers' good, and their productive contributions are seemingly indistinguishably intermixed. In fact, before Menger, one economist after another thought it impossible to speak of distin-guishable shares of the means of production in the value of the final product, with the result that further progress seemed impossible along this route, and the idea of subjective value appeared to be unusable. The theory of the value of complementary commodities solves this seemingly hopeless problem. It enables us to speak of a determinate 'productive contribution' (Wieser) of such means of production and to find for each of them a uniquely determined marginal utility, derived from its possibilities of productive application that marginal utility which has become the basic concept of the modern theory of distribution and the fundamental principle of our explanation of the nature and magnitude of the incomes of economic groups. (J. Schumpeter, Ten Great Economists, ch. on Bohm-Bawerk.)

As former professor of Political Economy, Weber was well aware of and versed in the new theories of the marginalist revolution propagated by the Austrian School against the Historismus of the old and new German Historical School. He had already published in 1904 a major critical review of the old School, when it was led by Roscher and Knies, criticizing heavily the logischen Probleme of its philo-Hegelian emanationism in which the economy was interpreted in the holistic and teleological perspective of the Volksgeist that denied the possibility of a scientific study of economic facts in isolation from other political and social phenomena. Weber would also have been perfectly aware that the central message of all bourgeois intellectual forces - most stridently advanced by

the emerging Neoclassical Theory - was incessantly to denounce the futility or the impossibility of Socialism at this critical time of global conflict and in the face of the Bolshevik challenge and the spread of revolutionary worker movements in Europe. Rational socialism cannot escape this beautifully closed chain of logic! Socialism can only amount to or end up in the identical system of production as capitalism, with only a lot more bureaucracy and a lot less free choice. At the very best, rational socialism could minimize the frictions of the market mechanism, its transaction costs and the negative effects of disturbances or exogenous shocks. At the worst, it would distort the free individual choices made by free labor by removing the ability of labor to determine freely the individual choices of workers, in such a way that bureaucracy would rule alone and would no longer be kept in check by private capitalism with its free market and free labour, through those conflictual and irreconcilable self-interests! Alternatively, were there to be no state bureaucracy, then free market capitalism would not be able to maintain the laws of free market competition that determine scientifically its optimal level of production for the satisfaction of individual needs and wants understood as self-interest.
(185) We now approach the last step of the stairway that takes us to the top of Bohm-Bawerk's edifice . He was the first to realize fully the significance of the length of the period of production in its two-fold aspect the aspect of productivity and that of the lapse of time. He gave both aspects their exact content and their places in the foundation of the system of marginal utility analysis. Our proof shows further that, because only an agio on present goods puts the relative demands of present and future into proper (183) balance with one another, the values of present and future goods cannot stand at par even in a socialist community, that the value phenomenon which is the basis of the rate of interest cannot be absent even there, and hence demands the attention of a central planning board. From this it follows that even in a socialist society workers cannot simply receive their product, since workers producing present goods produce less than those who are employed on the production of future goods. Thus, whatever the community decides to do with the quantity of goods corresponding to that value agio, it would never accrue to the workers as a wage (but only as a profit) even though it were divided equally among them. This could very well have practical consequences whenever, for example, the community had occasion to become conscious of the economic value of its members to itself; in such a case it could assess the value of a worker only at the discounted value of his productivity, and since all workers equally able to work must obviously be evaluated equally, a 'surplus value' must even here emerge which would appear as an income sui generis. (183) Two corrections of the idea of exploitation are now also in order: first, one can speak of 'exploitation' as a cause of profit only in the sense in which such exploitation would occur also in a socialist state; second, there is exploitation not only

of labor, but also of land. For moral and political judgment this is of course irrelevant, since the socialist state would use its 'exploitative gains' in a different way; but it is all the more important for our insight into the nature of the matter.(183)

Socialism may well be able to remove some of the anarchical features of capitalism which preserve in large part the individual choices of free labor. But it would do so at the cost of removing in large part that very free consumer choice and free labor that capitalism makes possible! In no way whatsoever could the Sozialismus prevent or abolish the separation, the Trennung, of the worker from the means of production the source of the Marxian alienation, of the ante litteram Lukacsian and Heideggerian loss of totality, reification and facticity , or still less remove profit, because these are technically necessary aspects of the efficient utilization of resources for the satisfaction of the system of conflicting and irreconcilable individual wants and needs! There is not and there cannot be a capitalist economy and a socialist economy: these are only formal differences in ownership of the means of production that must give rise in any case to the separation of all workers, individually and collectively, from control over their work in favour of a technocratic bureaucracy for the sake of the paramount technical and rational efficiency of production and the paramount satisfaction of the system of needs and wants, of the iron cage! There can only be one Economics, one economic science: the time for Political Economy is past because politics cannot determine the rationally calculable technical efficiency of industrial production and its utilization of resources.
Theoretically more important, however, is the result - to use a terminology that has become accepted in treatments of this topic that the rate of interest is a purely economic and not a historical or legal concept.(ibid., p.183)

This is the task and the supreme achievement of capitalism as a mode of production based on free labor: - that it organizes rationally the factors of production, chief among them labor, for the maximization of individual utilities. Its ultimate aim is the efficient production of consumption goods, not just for the present but also for the future, in accordance with the conflicting subjective valuations (needs and wants) of selfinterested individuals!
In applying this 'theory of imputation' (Wieser), which owes to Bohm-Bawerk one of its most perfect formulations, we arrive at the law of costs as a special case of the law of marginal utility. As a consequence of the theory of imputation, the phenomenon of cost becomes a reflex of subjective value, and the law of the equality of the cost and the value of a product is derived from the theory of value never in our science has there been a more beautifully closed chain of logic. But all this so far still refers only to the world of values. That all of its forms express themselves also in the mechanism of the exchange economy can be shown only by a corresponding theory of price. Bohm-Bawerk therefore turns to price theory, developing the

implications of the law of value for the behavior of buyers and sellers, and his investigation culminates in that celebrated proposi[172] tion (for the case of bilateral competition) which has since become 'historic'. All this is developed first for the situation with given quantities of exchangeable commodities with the conclusion that, since the forces operating on the supply side of the market are the same as those operating on the demand side, the old 'law of demand and supply' turns out to be simply a corollary of the law of marginal utility. This is then extended to the case of the formation of the prices of commodities whose available quantities can be varied by production.

In reviewing the theoretical masterpiece of his Viennese mentor, Die Positive Theorie des Kapitals, Schumpeter remarks first on the beautifully closed chain of logic of Bohm-Bawerks elaboration and extension of marginalist theory forgetting in the process that it was precisely the attempt by Karl Marx to close his system by transforming values into prices that had led Bohm-Bawerk to accuse the German theoretician of indulging in metaphysics in the appropriately named article The Close [Abschluss] of Karl Marxs System! Schumpeter is unable to see that the metaphysics of the socialist and Marxian labor theory of value have now become the metaphysics of neoclassical marginal utility! It is precisely Bohm-Bawerks attempt to identify and define a Law of Value that would allow him to close the subjective estimation of value with the objective manifestation of prices that lands him inexorably into the metaphysical trap that nullified Marxs own efforts in Volume Three of Das Kapital: for it is impossible, outside of meta-physics, to quantify mathematically what are inextricably social relations of production! The Law of Value whether in its socialist or Marxian or Neoclassical form seeks to reconcile the respective inputs of the factors of production with their respective shares of income to homologate values and prices. But what distinguishes economics from engineering is precisely the element of individual, subjective choice in the specification of needs and wants! It is therefore im-possible to certify the scientific status of the capitalist market economy and, at the same time, to preserve its freedom, its Freiheit precisely the con-fusion, the closing of the system that Nietzsche had so devastatingly demolished with his critique of German Idealism, and Bohm-Bawerk in his Machian critique of Marxs Ab-schluss echoed by Weber in his polemic against the emanationism of Roscher and Knies. Already in 1911, Schumpeter had celebrated at the very beginning of chapter two of the Theorie the advent of the Weberian Rationalisierung as the overcoming (Uberwindung) of metaphysics and the triumph of empirical science totally miscomprehending yet again the Nietzschean connotations of the word as applied by Weber. What Schumpeter overlooks in his Machian exultance is the evident and dramatic conflict that Bohm-Bawerks theory contains and exudes! For behind BohmBawerks scientistic and lucid exposition lies all the explosive conflict of capitalist society even at the level of market pricing according to consumer choice according to

marginal utilityor supply and demand! However much the different subjective valuations of goods on the market may be based on fair and equal exchange, the terrifying fact remains that the self-interests of the individual market agents are determined by the sheer violence of imposition of their subjective, egoistic choices and preferences!
The level of price is determined and limited by the level of the subjective valuations of the two marginal pairs' - i.e .on the one hand by the valuations of the 'last' buyer admitted to purchase [!] and of the seller who is the 'most capable of exchanging' among the ones already excluded from the exchange, and on the other hand by the valuations of the seller 'least capable of exchanging' [!] among those still admitted to the exchange and of the 'first' excluded buyer.

The full conflict and sheer violence of the market mechanism is made evident here in all its stark nakedness! It is futile to seek recourse to the beautifully closed logic of the Neoclassical theory reformulated by Bohm-Bawerk: the inescapable fact remains that even behind the most beautiful and elegant equations there is all the ineluctable conflict of what Weber will soon call with astonishing (Marxian!) insight the capitalist rational organisation of free labor under the regular discipline of the factory!
[F]or value to emerge, relative scarcity has to be added to utility. With the aid of a distinction between want categories (or want directions) and want intensities, and under careful consideration of the factor of substitutability, Bohm-Bawerk arrives(in Menger's sense, and in a way similar to Wieser's) at the law of decreasing marginal utility with increasing 'coverage' of wants within each category - i.e. with increasing quantities of the commodity in the possession [!] of an individual. (169)

As Schumpeter quite uncritically reveals and concedes with this summation, this scientific-rational economic mechanism is still self-consciously dependent on the conflicting self-interests of individuals and on their historical or legal acquisition of possessions which determine both the relative scarcity of commodities as well as the increasing or decreasing quantities of commodities in their possession! It follows inexorably, by definition, that this conflict can never result in equilibrium and that contrary to what Schumpeter claims above it can never be a purely economic and not a historical or legal concept! Quite to the contrary, this economic concept and process must be guided and governed politically instead!

(The horrifying spiral of bourgeois possessive individualism descending from Hobbes to the scientific administration of terror in the Third Reich is traced masterfully by Hannah Arendt in The Origins of Totalitarianism [1949]. With unequalled perspicacity, Arendt then goes on to trace the historical process whereby the parallel transformation of the capillary bureaucratic administration of the most basic needs of

social life (Webers phrase) arising out of the capitalist socialization turned into the Nazi and Stalinist nightmares of totalitarian control and terror in both the more advanced bourgeois civil society of Germany and the desolate peasant steppes of Russia. In her later study, On Revolution [1962], Arendt seeks to distinguish Hobbess commonwealth from Rousseaus volonte generale, for which the Frenchman was even tagged with the charge of plagiarizing from the Englishman, in the sense that the latter is an introspective concept the bellum civium becomes the bellum psychologicum in which the external threat is the common enemy of selfishness that stands in the way of compassion or le salut public and therefore more akin to totalitarian ideologies. We have canvassed these matters thoroughly in our Civil Society and shall return to them in Part Three, but it may suffice here to observe that Arendt over-psychologises the nature of totalitarian movements at least in the initial stages of their seizure of political power. After all, however much Robespierres Terror may have leaned on Rousseaus political philosophy, this was certainly not the case with the Nazi dictatorship which, if anything, found its geistesgeschitlich avatar in Carl Schmitts unquestionably Hobbesian early jurisprudence of the totalitarian state. This palpable change in her attitude to Anglophone political theory as against its continental counterparts [though she rescues Montesquieu and properly chastises, in chapter 6, the charlatanry of twentieth century French philosophes] rhymes with Arendts anointment of the Founding Fathers of the American Constitution. Equally, Arendt absurdly oversimplifies as compassion with the poor and downtrodden and a prelude to Stalinism, Marxs entire analytical effort to develop a complex theory of social development in antithesis to the capitalist wage relation, especially in the Grundrisse.)

*************** We intimated above that Weber will soon call this conflict the capitalist rational organisation of free labor, - but not yet! We have jumped too far ahead. This revealing re-formulation of the Problematik of rational Socialism indistinguishable from that of rational capitalism will not come out until Webers Vorbemerkungen to the Aufsatzen zur Religionssoziologie published in 1920, a Weberian terminus ad quem that we are tracing here. We need to retrace our steps and continue with our linear analysis of Webers political formulation of the Problematik of bureaucratic rule in 1917, when Parlament und Regierung is first published and then re-worked and extended in 1918 after the Bolshevik Revolution! For the moment, after the publication of Schumpeters Theorie, Weber has discovered the one element in it that will help him reformulate his entire theory of bureaucratic rule

most closely related to the rise of modern capitalism by seeking to integrate into it the Schumpeterian notions of the trans-formation mechanism (Ver-anderungsmechanismus) that characterises capitalist development (Entwicklung): development understood as crisis, - not simply as evolution but as meta-morphosis, not simply as growth but as trans-crescence, as growth-through-crisis, as Nietzschean creative destruction (the concept appeared in Nietzsches Zarathustra long before Schumpeter made it popular). In this re-working and extending of his previous formulations dating back to the Ethik in 1904, Weber gives proof yet again of having grasped much more thoroughly than Schumpeter the powerful and unprecedented Nietzschean critique of Western thought and society, of its Kultur and Zivilisation, of its Politics and a fortiori of its political economy (see our Nietzscebuch, end of Part One, on his ontogeny of economic relations and categories in Western societies). By the time Weber returns to the theorization of this transition, however, it is clear that it is no longer the inexorable powerof external goods that interests him, but rather the rational organization of modern industrial work under the pervasive aegis and control of machine-like bureaucratic rule, rational and systematic. What troubles Weber above all is the decisive leap forward of the Bolshevik Revolution and the possibility of its upsetting his seemingly inescapable fate of bureaucracy. The iron cage has now meta-morphosed from the simple secularization of the ascetic spirit of capitalism its glorification of labor to the dependence of the provision of the most basic needs of society on the rational organization of that labor. The Bolshevik Revolution of October 1917 has forced Weber to re-work and extend for publication in 1918 the original series of five articles that had appeared in the Frankfurter Zeitung between April and June 1917. If bureaucratization is the fate of human social development, if capitalism represents its closest relation and possibly its foundation, then the Bolshevik experiment needs to be understood and re-configured within Webers overall interpretative and methodological Entwurf (framework) so that its political impact can be anticipated and even neutralized. The Russian Revolution and its Leninist variant represent a quantum leap in the linear, scientific, rational and systematic Ordnung of bourgeois society. Specifically, precisely this vital element of conflict needs to be re-articulated and re-inserted organically within an overall theory of crisis and trans-formation of capitalist society and industry. Weber understands that conflict is the very nature of the matter of Economics and that he needs to theorize and devise an institutional framework capable of capturing this conflict, to encapsulate it and turn the energy of its antagonism into the motor of development, the source of real dynamism of bourgeois society and of the modern nation-state. Of course, the political realities that need to be considered are the incipient and
seemingly unstoppable democratization of governmental rule due to the irrepressible push on the part of the urban industrial proletariat for representation of their interests that are no longer mere individual interests but take on instead an organized form as class interests in the urgent instance with the formation of imponent and (sit venia verbo!) bureaucratic social democratic parties that reflect and even replicate the very rational organization of labor that characterizes the modern industrial work of the factory in modern capitalism.

Whereas the static equilibrium scientific analysis of Neoclassical Theory describes wishfully the equivalence of these conflicting self-interests in the marketplace as indicated by prices, it fails to com-prehend, to grasp practically the process whereby this conflict can be mustered and governed! There may well be no exploitation in the marginalist view of economics: certainly, there is no inter esse or teleological reconciliation of economic antagonism. But just as certainly there is conflict because there is self-interest; there are wants that cannot be satisfied due to lack of provision, due to scarcity a scarcity induced and provoked by the very conflict of want and provision of the quantity of possessions, as Schumpeter put it earlier. And it is simply unscientific and irrational to believe that these conflicts, these self-interests can be in equilibrium! That they can be balanced without evolution, without development without crisis.
The static and trans-historical analysis of the ascetic origins of capitalism carried out in the Ethik , the scientific, value-neutral framework of Wirtschaft und Gesellschaft are no longer applicable to the highly specific reality of capitalist industry and the trans-formation it has effected through the Sozialisierung of the most basic needs of social life. This antiquated analytical framework has been superseded and dissolved just as completely as the old Protestant work ethic. (As the editor of Economy and Society, Gunther Roth, put it, with

all its seemingly static typologies, the [p.XXXVI] work is a sociologist's world history, his way of reconstructing the paths of major civilizations. This is the principal reason why we are ignoring completely Webers sociological lexicon in this work.) To prove the point, if proof is needed, one need not do more than point to the profound upheavals of the Great War and the revolutionary workers movements spreading rapidly throughout Europe at this time! The question is: what ideal type of institutional structure can both reflect the conflictual and antagonistic reality of capitalist industry and its economy and muster the energy of this conflict to transform its existing static structures into the dynamic motor of capitalist and national development? In short, what institutional structures can capture and govern the class antagonism of modern capitalism and turn it into the dynamo of its development? The problem is one that invests not merely the reality, the experience of modern capitalism, but also the conceptual categories that can be used to com-prehend it: how can science, which involves a system of determinate concepts, com-prehend, under-stand (verstehen) dynamic, vital social processes that are by definition indeterminate and free? Can there be a dynamic science of capitalist development, or is this just an oxymoron, a contradictio in adjecto? The central problem here for Weber as for Schumpeter will be to analyze and theorize the interplay of a science of Economics in determining an optimal process of production that is managed rationally and systematically with the Political resolution of the conflict over wants and provision that the process of production the machine is meant to serve! If indeed there is conflict between want and provision, then the process of production cannot stand still! It will have to be driven by this conflict and by the crises to which it will unquestionably give rise. This antithesis between static science and dynamic transformation, between objective factors that can be weighed, quantified, and subjective forces impossible to rationalize and calculate, had already occupied Weber in his Roscher und Knies and again in the Ethik both written and

published between 1896 and 1904. It also became the central problematic for Schumpeter in a work first published seven years later in 1911 of which Weber must have been aware even because it cites him at the very beginning of chapter two! Having only recently succeeded Karl Knies in the Chair of Political Economy at Heidelberg, Weber was quick and keen to tackle the methodological diatribe that had seen the emerging Austrian School of Economics riding high on the early acceptance of its marginal utility theory in Central European industrial capitalist circles pitted against the more established German Historical School of Roscher, Knies and Hildebrand and now led by Gustav Schmoller, also close to German industrial circles. In his review of the by then notoriously heated Methodenstreit, Weber cuts to the quick and singles out the central bone of contention between the two Schools around the issue of whether it is possible to reconcile idiosyncratic [or ideographic] freedom and rational calculation, nomothetic necessity and irrational individuality in social science, whether it is possible to build such a social science methodically on the individual idiosyncratic inquiry in a manner that is consistent with sociological nomothetic measurement. Intriguingly, Weber openly sides with the methodological individualism of the Austrian School, denying that any sociological categories can legitimately or logically abstract from the role of the individual in society against the emanationism of the Historical School that starts from broad idealistic concepts such as people or nation. Yet, as we are about to see, Webers apparent championing of individual freedom very soon veers in the direction of social necessity in such a way that, whilst he recognizes the ultimately irrational forces that motivate human action, that make it peculiar and subjective, as he does in the Ethik, he ultimately asserts the logical rationality of Neoclassical Theory basing himself on the historically specific characteristics of modern capitalist society and therefore also on the full legitimacy, and indeed the theoretical necessity, of the kind of scientific-logical approach to the Economics propounded by Menger and the Austrian School that would seem to contradict the very methodological individualism that was ostensibly its theoretical point of departure! We shall see soon enough that despite Webers truly astounding and profound insight into the differentia specifica of capitalism, that is, its ability to transform apparently irrational social relations into apparently rationally calculable ones which is the formal significance of the rationalisation this trans-formation is indeed only apparent once the ultimate significance of the Rationalisierung, its effectuality, is fully com-prehended. But Weber lacked the theoretical tools and his theorization was historically too precocious to enable him to formulate it adequately. With the consequence that his own articulation of his theoretical Entwurf led him to oscillate and vacillate between the poles of decisionist voluntarism and Neo-Kantin formalism. *********** We open Schumpeters Theorie at the very start of chapter two:

The social process which rationalizes our life and thought has led us away from the metaphysical treatment of social development and taught us to see the possibility of an empirical treatment; but it has done its work so imperfectly that we must be careful in dealing with the phenomenon itself, still more with the concept with which we comprehend it, and most of all with the word by which we designate the concept and whose associations may lead us astray in all manner of directions. Closely connected with the metaphysical preconception. is every search for a meaning of history. The same is true of the postulate that a nation, a civilization, or even the whole of mankind must show some kind of uniform unilinear development, as even such a matter-of-fact mind as Roscher assumed (Schumpeter, Theorie, p.57)

The footnote at rationalizes was expanded for the English translation and reads as follows:
This is used in Max Webers sense. As the reader will see, rational and empirical here mean, if not identical, yet cognate, things. They are equally different from, and opposed to, metaphysical, which implies going beyond the reach of both reason and facts, beyond the realm, that is, of science. With some it has become a habit to use the word rational in much the same sense as we do metaphysical. Hence some warning against misunderstanding may not be out of place.

Evident here is the maladroit manner and dis-comfort (not aided, and perhaps exacerbated, by the disjoint prose) with which Schumpeter approaches the question of the meaning of history. The Rationalisierung, which Schumpeter adopts from Weber, has made possible a scientific empirical treatment of social development (Entwicklung), but has done so only imperfectly, not to such a degree that we are able to free ourselves entirely of metaphysical concepts which is why we must be careful in dealing with the phenomenon [of Entwicklung] itself. Nevertheless, Schumpeter believes that it is possible to leave metaphysics behind and to focus on both reason and facts, and therefore on the realm of science. In true Machian empiricist fashion, Schumpeter completely fails to see the point that Weber was making in adopting the ante litteram Nietzschean concept of Rationalisierung to which he gave the name. The social process which rationalizes is an exquisitely Weberian expression: far from indicating that there is a rational science founded on reason and facts that can be opposed epistemologically and uncritically to a non-scientifc idealistic and metaphysical rationalism, Weber is saying what Nietzsche intended by the ex-ertion of the Will to Power as an ontological dimension of life and the world that imposes the rationalization of social processes and development in such a manner that they can be subjected to mathesis, to scientific control! What Weber posits as a practice, one that has clear Nietzschean onto-logical (philosophical) and onto-genetic (biological) origins, Schumpeter mistakes for an empirical and objective process that is rational and factual at once forgetting thus the very basis of Nietzsches and Webers critique of Roscher and the Historismus - certainly not that they are founded on metaphysics (!), but rather that they fail to question critically the necessarily meta-physical foundations of their value-systems, of their historical truth or meaning, of their scientificity!

Far from positing a scientific-rational, ob-jective and empirical methodology from which Roscher and the German Historical School have diverged with their philo-Hegelian rationalist teleology, Nietzsche and Weber attack the foundations of any scientific study of the social process or social development that does not see it for what it is Rationalisierung, that is, rationalization of life and the world, the ex-pression and mani-festation of the Wille zur Macht! By contrast, Schumpeter believes that the mere abandonment of any linearity in the interpretation of history, of any progressus (as Nietzsche calls it), is sufficient to free his rational science from the pitfalls of metaphysics! But he would certainly have been enticed into this misapprehension by Webers own equivocal notion of ideal type (a Simmelian Form), which was intended to preserve the historicity of sociological inquiry by confining the reach of its categories to a specific situation (Simmels content) requiring the selection of specific means to achieve specific ends whence the distinction between Zweck-rationalitat and Wertrationalitat (purpose and goal, Sein and Sollen, soul and forms, content and form, form and norm) - whilst simultaneously insisting within this limited historical domain on the scientificity or rational basis of the sociological procedure and methodology utilized for such selection. Webers central failure was not that he mistook scientificity for science, for its corresponding practical conduct which mostly he did not! Webers failure was rather that his insistence on categorizing his scientific pursuit with the introduction of the ideal types distracted him from the fundamental question of how the Rationalisierung is possible! This failure led him to reify, to hypostatize the historical object of his studies into the scientific categories or forms that he presumed to adopt for that study ignoring thereby Nietzsches famous warning against systematizers! Essentially, Weber mis-interpreted (!) Nietzsches Umwertung (trans-valuation of all values) to mean that all values are interpretations of reality, and that therefore it is possible for the scientific observer of a given historical reality to select a hermeneutic code of interpretation (the ideal types) linking rationally the means available to its actors with the pro-jected ends that they may envisage. Yet, as Nietzsche would have promptly reminded Weber, this framework of analysis (Entwurf), this phenomenalism and relativism starts from the pre-supposition that such a rational code of interpretation is both possible and applicable which Nietzsche would vehemently deny on the ground that it is the very possibility and applicability of this rational code itself to a given historical reality its effectuality - that needs to be interpreted and explained as the mathesis universalis (Leibniz), as the rationalization of the world that is based on human needs, on the system of needs and wants! In Nietzsches own words, It is our needs that interpret the world; our instincts and their impulses for and against, (Aphorism 481, Wille zur Macht). Webers Neo-Kantian hypostatization not only of his sociology but above all of the scientific fields of knowledge to which he sought to apply it from economics, to law, to music is induced fatefully from this inability to com-prehend Nietzsches Umwertung, his thoroughgoing De-struktion (Heidegger) of Western metaphysics and science and the related critique of Western Kultur and Zivilisation. It should come as no surprise, then, that it remains suspended, as we noted earlier, between the Dezisionismus

of charisma derived from the individualist relativism and the Neo-Kantian formalism of the ideal types necessitated by Webers need to ground this hermeneutic relativism on logico-mathematical hence, rational and systematic, scientific - bases. What Weber fails to com-prehend above all else is precisely the historical character of the metaphysical foundations of logico-mathematical rationality whose political origins Nietzsche had made all but evident. A brilliant illustration of these points is provided by Norberto Bobbio who, in reviewing Kelsens attack on Webers theory of the State and sociology of law in Max Weber e Hans Kelsen (p.72), concedes that Webers Neo-Kantian or Simmelian formalism enticed him to his detriment into the Kelsenian Norms, but that at the same time Webers positivism was premised on the fact that capitalism represents a historically specific intensification of this positivization of the juridical norm, in line with its exasperation of the Rationalisierung (p.77) which would be theoretically a far more consistent and Nietzschean position for Weber to take. Commenting on Kelsens
requirement that co-action be added to the definition of legal norm (the famous Grundnorm) so as to equiparate the concepts of Right with Law and therefore also with that of State, Bobbio goes on to reason (at p.71) that Webers notion of apparatus (bureaucracy) must be added to Kelsens co-action for this equiparation of Right, Law and State to have any historical effectuality! Bobbio then comes uncannily close (at p.76) to the central thesis of this study on the meaning of Rationalisierung, which we have enucleated in our

Nietzschebuch and will illustrate more incisively in Parts Two and Three of this study on Weber. In a nutshell, Bobbio perceives without actually comprehending that the notion of Right or Law or the State requires the existence of appropriate "institutions" that "en-force" these abstract concepts and that indeed both enforcement and its requisite State apparatus are part and parcel of the conceptual content of the categories of Right, Law and State! The question that needs to be answered is how political enforcement can "crystallize" or "congeal" into abstract concepts and how abstract concepts "dis-solve" themselves into political institutions. This is what Nietzsche attempted by challenging the scientificity of Western science from the dawn of the bourgeois era, by exposing the immanent materiality of its scientific categories and laws whilst all others, including Marx, did not. Separately, by discussing Kelsens claim that his jurisprudence is intended to apply both to capitalist and to socialist States, Bobbio helps us highlight the link that we are about to trace in the following sections, dealing with the claim on the part of Neoclassical Theory to apply equally to both capitalist and socialist economies, between Neo-Kantism and Neoclassical Economics!
*************** Schumpeter is a contemporary of Weber, but he is also the heir of Mach. Through Weber he is linked to Nietzsche, but he is already too much under the spell of Machism fully to

comprehend the significance of Nietzsche's radical critique of bourgeois society through the tracing of the completion (Heideggers Vollendung) of Western metaphysics into science. Schumpeter looks at capitalism through the "scientific" prism of Machian empiricism. The task of the "scientist" is not to look "beyond" or "behind" mere phenomena, it is not to discover substances or values behind events (Geschehen), but rather to find the simplest mathematical "con-nection" between them; it is to describe reality, not to explain it: indeed, description that is mathematically regular is or amounts to explanation. The task of science is to describe phenomena in the simplest and most "predictable" manner: simplex sigillum veri (simplicity is the seal of truth). (A discussion of Nietzsches vehement critique of the ontological assumptions behind Machian and Newtonian science is in our Nietzschebuch.) Just as Mengers theory of marginal utility does not inquire about the value of utility, its substance, its quidditas, relegating these matters to the realm of metaphysics, but relies instead on the observable behavior of individuals to formalize mathematically an Aristotelian logic of human economic action, so Machs philosophy of science does not question the empirical validity of Newtonian physics, its ability to predict real events by con-necting them by means of mathematical equations: what it questions is instead the cosmology of the Newtonian system, its reliance on absolute frames of reference to explain the cosmos, the universe or reality (the res, the thing-iness of the Kantian thing-in-itself, the noumenon that pro-duces the empirical phenomena) that are dis-covered as the laws of nature. That is why Schumpeter never goes beyond the simple "observation" and "analysis" (literally, retrospective dissection) of the empirical behaviour of capitalist institutions and adopts uncritically the Machian presuppositions of his Viennese academic training:
According to this conception the purely economic plays only a passive role in development. Pure economic laws describe a particular behavior of economic agents, whose goal is to reach a static equilibrium and to re-establish such a state after each disturbance. Pure economic laws are similar to the laws of mechanics which tell us how bodies with mass behave under the influence of any external "forces", but which do not describe the nature of those "forces". It shows [471] how the economy responds to changes in those conditions coming from the outside. Therefore, in such a conception, pure economics almost by definition excludes the phenomenon of a "development of the economy from within". It is the conception that there is an independent element in technical and organizational progress, which carries its law of development in itself and mainly rests on the progress of our knowledge. (Schumpeter, ch.7, Theorie)

In the Theorie der wirtschaftlichen Entwicklung, Schumpeter seeks to enucleate scientifically the mechanism of transformation that can account for the phenomenon of a development of the economy from within, that can elevate the capitalist economy from one level or Gravitationszentrum (centre of gravity) to another from one

equi-librium to another. Granted that there is a system of forces that at any given time allow the economic system to operate and function, it may then be possible to define for that given moment in time an equilibrium state that does not explain why the economic system is in equilibrium but that may yet allow us to identify those forces that, when altered, caeteris paribus, determine a corresponding alteration in other forces affecting the system. An equi-librium is therefore a balance of forces whose nature we do not know but around which the economic system tends to gravitate. Equi-librium is literally a Gleich-gewicht, an equal weight, a balance of forces around which the economy gravitates: hence, for Schumpeter, economic equilibrium is not an eternally fixed mathematical identity, as it is for Walras, but rather a Gravitations-zentrum, a centre of gravity around which an economic system revolves but one from which this system may well move or diverge, in a direction that completely upsets and trans-forms the balance of forces and even the nature of the forces that determined the previous state of equilibrium, the previous centre of gravity!
Unlike the waves of the ocean, the waves of the economy do not return to the same level. They always tend to swing like a pendulum around a certain level, but the level itself is not always the same. It is not just the observable facts that change. The explanatory pattern, i.e. the ideal type, changes as well. Let us grant that the first problem of economics was: how, based on its entire circumstances of life, does a population reach a particular level of the economy? Then [466] the second problem is the following: how does an economy make the transition from one level-which itself was viewed as the final point and point of equilibrium-to another level? This question takes us to the very essence of economic development [wirtschaftliche Entwicklung]. (Schumpeter, TwE, ch.7, pp465-6)

But by insisting on the existence of a scientifically ascertainable centre of gravity for the capitalist economy and of its equally scientific mechanism of transformation, Schumpeter ends up oscillating between two untenable antinomic positions: - on one hand, the scientific hypothesis of the tendency of the economic system toward equilibrium (hence the notion of centre of gravity) or circular flow (Kreislauf); and on the other hand the historical experience of the proneness of the economy to grow and develop, to change from one ideal type to another an experience that is both empirical as well as necessary for the simple reason that an economy is and must be subject to historical transformation, but a transformation that is nevertheless impossible to formalize as a mechanism! Equilibrium is either static or it is not an equi-librium at all! For the system to change, it must be subject to forces that are not the mathematical or mechanical ones of equilibrium. In short, dynamic equilibrium is a contradiction in terms! Schumpeter himself rightfully contends as much:
It follows from the entire outline of our line of reasoning that there is no such thing as a dynamic equilibrium. Development, in its deepest character, constitutes a disturbance of the existing static equilibrium and shows no tendency at all to strive again for that or any other state of equilibrium. Development has a tendency to move out of equilibrium. This is quite different from what we could call organic development; it leads to quite different pathways that lead somewhere else. If the economy does reach a new

state of equilibrium then this is achieved not by the motive forces of development, but rather by a reaction against it. Other forces bring development to an end, and by so doing create the first precondition for regaining a new equilibrium. Actually, what happens first is that when a new development begins, there is again a new disturbance in the equilibrium of the economy. Thus, development and equilibrium in the sense that we have given these terms are therefore opposites, the one excludes the other. Neither is the static economy being characterized by a static equilibrium, nor is the dynamic economy characterized by a dynamic equilibrium; an equilibrium can only exist at all in the one sense mentioned before. The equilibrium of the economy is essentially a static one.`19

And not only is the equilibrium of the economy essentially a static one, but it is also above all a stagnant one! Yet we know that one of the vital features of capitalist industry is precisely its ability to grow, to develop. It follows therefore that there must be some internal feature of capitalism that forces it to trans-cresce and that therefore constitutes its differentia specifica. Orthodox economic theory, both Classical and Neoclassical, treats the forces of development as essentially exogenous to the capitalist system of production:
It is the conception that there is an independent element in technical and organizational progress, which carries its law of development in itself and mainly rests on the progress of our knowledge, (Schumpeter, ibid.)

Here Schumpeter seizes on the realization that in point of fact there can be no such independent element in technical and organizational progress and that both of these must be treated as part and parcel of the social relations of production, and not be attributed to an independent element, a purely mechanical and adventitious factor independent of what Weber styles capitalist economic action. It comes as no surprise, then, that because Schumpeter takes the economy and economics as objects or phenomena of scientific analysis that are separate and distinct from the rest of social reality, including those technical and organizational forces (!), he must then necessarily isolate them from the trans-formation mechanism of the capitalist economy! When Schumpeter looks for a "trans-formation mechanism" (Veranderungsmechanismus) to explain the "meta-morphosis" of capitalist industry - its "development, evolution and growth" (Entwicklung) he can find it only in a subjective, voluntary factor, something that closely resembles Webers own thesis of the spirit of capitalism (der Geist des Kapitalismus) expounded in the Ethik published in 1904, that is, only seven years before the publication of Schumpeters path-breaking Theorie! Following Webers lead, Schumpeter finds the carrier (Trager) of the transformation mechanism, the driver of capitalist Entwicklung, (the expressions have a curious Hegelian-Marxist ring) in the "entrepreneurial spirit" (Unternehmer-geist) without noticing the contra-diction between "mechanism" and "spirit"! His search immediately contra-dicts itself because the factors of development, the forces that trans-form the economy, that buffet it from crisis to crisis and therefore elevate or lower it from level to level can quite evidently not themselves constitute a trans-formation mechanism! A mechanism will always be static because whatever factors cause it to develop must be endogenous and therefore, by definition, re-conducible to the

existing definition of the system! An endogenous or internal mechanism of transformation would always be re-definable in terms of those equi-librium conditions that Schumpeters theory was supposed to confute and discard! There can be no freedom in a system of economic analysis or science. There can be no trans-formation in a mechanism- no internally-generated scientifically measurable development or growth from one equilibrium to another. And that is the exact reason why Schumpeter is unable to com-prehend in his theory the real subsumption of the technical and organizational processes, which he erroneously relegates to the Statik or exogenous components of the mechanism, within the social relations of capitalism itself, within the Dynamik of the system of needs and wants (Webers iron cage) that drives or pro-pels the modern industrial work or the lifeless machine of capitalist industry (the Simmelian Form) which in turn is guided by the capitalistic rational conduct of business the living machine (Simmels Soul). One can almost feel the agony of Schumpeters theoretical contortions as he grapples and fumbles with these complex conceptual matters:
[490] Economic development is not an organic entity that forms a whole; it rather consists of relatively separate partial developments that follow one upon the other. Here we build on what has been said in the chapter on crises. Accordingly, development of the economy occurs in a wavelike fashion. Each of these waves has a life of its own. With this we really get closer to reality. In particular, we win a clearer insight into that peculiar jumble of conditioning and freedom, which economic life shows us. The static circular flow and the static phenomena of adaptation are dominated by a logic of things, while it is completely irrelevant for the general problem of freedom of will, nevertheless in practice - with fixed given social relationships - it leaves as good as no maneuvering room for individual freedom of will. This can be demonstrated and yet it was always a point of criticism, since the creative work of the individual was so obviously visible. We know now that the latter observation is correct. Yet, this observation does not contradict the theorems of statics. We can precisely describe the place and function of this work. Of course, in development the logic of things is not missing; and just as one cannot demonstrate with the static conception the case for philosophical determinism, one cannot maintain the case against it with the dynamic conception. But despite this we have shown that an element is present in the economy, which cannot be explained by objective conditions and we have put it in a precise relationship to those objective conditions.23 (Theorie, ch.7)

By identifying a subjective factor as the historical carrier (Trager) of the metamorphosis of the capitalist economic system, of the trans-crescence of capitalist industry the entrepreneurial spirit and the process of innovation (Innovationsprozess) that it unleashes subjectively (!) on the scientifically and mathematically definable static equilibrium of the capitalist economy to move it from one centre of gravity to another, to transport it like a wave from one ocean level to

another -, Schumpeter is also validating and sharpening Webers original thesis in the Ethik of the religious ascetic origins of capitalism in the entrepreneurial spirit. But the reason for Schumpeters agonising ambi-valence and ambiguity over the dualism of freedom and necessity and his acquiescence in his own theoretical answer to it can be found once again in Ernst Mach's philosophy of science. The "empirical observation" of entrepreneurs in capitalist industry and their empirical connection to the provision of "finance" by "capitalists" is all that counts: both factors can be reconciled as parts of one mechanism" for the trans-formation of capitalist industry through "innovation" and "creative destruction". Just as in marginalist theory the axiomatic assumption of utility (a metaphysical notion at best, by Mengers own admission, an inscrutable Aristotelian entelechy) does not and cannot explain the determination of market prices, and yet the mere proof of a simple mathematical connection between individual prices and the axiomatically assumed marginal utilities of individuals is sufficient to prove the mathematical existence of an economic equilibrium and to found the new science of Neoclassical Economics, so now Schumpeter concludes that the empirical derivation by the "entrepreneur" of a "profit" from his "innovative leadership", from his "enterprise", combined with the existence of a pool of financial capital made available by capitalists is sufficient to establish the existence of a Mechanismus that trans-forms the capitalist economy. Indeed, the Unternehmer-Gewinn (the entrepreneurial profit) is the only "profit" that is worthy of the name for him. All other "profits", as the subtitle to the Theorie loudly suggests, are simply "interest" or rents charged by "capitalists" for advancing their "working capital" to the entrepreneur. In other words, Schumpeter never even attempts to locate the source of "profits" beyond the mere "innovation process" of the entrepreneur, beyond the "reward" for his "enterprise". Schumpeter does not look at the "motive" behind the activity of the entrepreneur except to allude to a vague Nietzschean "will to conquer", to the simple "pleasure of success". Again, this failure is largely due to the fact that, unlike Weber, Schumpeter does not see the Rationalisierung as a political process but simply as a "scientific development", as the supersession of the Enlightenment notion of "progress", understood in a teleological or moral sense, and its replacement with the strictly empirical scientific principles of the Economics applicable to human organisation and industry. Put differently, Schumpeter interprets "profits" as a function of and reward for the "entrepreneurial spirit". Yet he does not even suspect that it may be "profitability" that makes the "entrepreneurial spirit" a matter of life or death for every "capitalist", whether an entrepreneur or not! ********* The timeless mathematical scientific description of the capitalist economy clashes irremediably here with the living experience of its existence! This is a leitmotiv of the period that will preoccupy Wilhelmine culture from Nietzsche to Husserl, Lukacs and Heidegger that is to say, the Neo-Kantian dualism of knowledge and experience, of

living spirit and objective process or machine, between Soul and Forms, and between Forms and content. Weber himself will mock the evident contra-diction between the scientific proof of capitalist collapse proffered in The Communist Manifesto with its prophecy of the inevitable advent of human socialist freedom applying thus the Nietzschean demolition of Western metaphysical transcendentalism and subjectivity, of the Freiheit that Webers initial formulation of the Rationalisierung in the Ethik and in Roscher und Knies had failed fully to comprehend but that what is one of our central theses in this piece he will begin to tackle seriously with the articulation of the interaction between the Political and the Economics in the triptych of 1917 to 1919 formed by Parlament und Regierung and the two Munich lectures, in the lecture on Der Sozialismus delivered in June 1918, and then finally with the Vorbermerkungen written in 1920. The profound, almost absurd in-comprehension of this vital reality the overwhelming, conditioning necessity of the system of wants and needs and the social antagonism of the capitalist wage relation - on the part of Schumpeter, he himself exhibits in this blunt statement in the Theorie:
The leader personality never happens as a response to present or revealed needs. The issue is always to obtrude the new, which until recently had been mocked or rejected or had just remained unnoticed. Its acceptance is always a case of compulsion being exercised on a reluctant mass, which is not really interested in the new, and often does not even know [545] what it is all about. What we want to show now becomes obvious. The development of wants, which we observe in reality, is a consequential creation of the economic development that has already been present. It is not its motor. The fact that the human economy has remained constant over centuries heavily weighs in favor of our argument. . The amplification of needs is a consequence and symptom of development. Insofar as truly new needs and desires exist they will not have a practical effect on the economy, new needs and desires as such mean nothing. But even then, if there were an original cause in the development of needs and desires, this would still require creativity and energetic activity in order to create anything new of importance

It is at this fateful juncture that Weber takes his distance from Schumpeter, even as he obviously stands on the shoulders of the Austrians evolutionary problematic. For whilst he accepts that the economy can never be in equilibrium, Weber correctly rejects the proposition that in any case science could ever explain rationally the trans-crescence of the economic system, its Entwicklung. Weber rejects dismissively Schumpeters thesis that it is the entrepreneur with his creativity and energetic activity who is solely or even chiefly responsible for the meta-morphosis of the system and that new needs and desires as such mean nothing! To the Nietzschean Weber, this proposition would smack unacceptably of the jejune subjectivism and emanationism of the German Historical Schools Historismus of the Hegelian Providence (Weis-heit) and of the idolatry of Freiheit, the freedom of the will whose dialectical reconciliation in German Idealism leads to the freedom from the will of the Demokratisierung and its Socialist utopia, that triumph of the Individualitat

against which Nietzsche had devoted much of his critical genius with devastating effect! It is this Individualitat, the personality of the entrepreneur that Weber could never entertain approvingly. (The concept of freedom in German Idealism is canvassed with supreme mastery from the viewpoint of the negatives Denken by Heidegger in his Schellings Essay on the Essence of Human Freedom. It is interesting to advert here to the incomprehension of Webers entire theoretical orientation on the part of those critics of all persuasions who wave his concept of charisma as conclusive evidence of a voluntaristic streak or subjectivism in Webers methodology, and the even greater incomprehension of those epigones who make charisma the central concept in Webers entire sociology! However much these quite erroneous views may be justified on the basis of the static typology contained in the Ethik and in Webers later classificatory efforts, it is very wide of the mark when it comes to his incisive reformulation of the Problematik of capitalism in his later writings. There is no charismatic voluntarism in this methodological stance, no Caesarism! There is only a coherent application of Nietzschean immanentist ontology of thought to the phenomenology of the social world. Nor is there any irrationalism in the post-Nietzschean De-struktion [Heideggers term] of the philosophia perennis and scientism of the Aufklarung and its German Idealist apotheosis.)
Not only does Weber realize with unmatchable acuity that the creative entrepreneur is not responsible for the phenomenon of capitalist development and the concomitant crises that it ineluctably inflicts on the economic system; but also and above all else he sees that the entrepreneur is responsible instead in a Nietzschean sense diametrically opposed to the one suggested by Schumpeter! For the entrepreneur can be merely the carrier of a trans-

formation of the economy that must originate endogenously from its very foundations, from its ground that is to say, from its Wants and Provisions, from its system of needs and wants. But not as a mechanism of transformation such as Schumpeter had sought on the mistaken assumption that wants are static! On the contrary, it is the
conflict inherent and intrinsic to the very notion of want and of self-interest that creates the objective con-ditions and circum-stances that allow the emergence of the entrepreneurial spirit, of his Will to Power at the very crest of this surging wave of conflict that transports with itself the entrepreneur and the rest of the capitalist economy and society!

(An interpretation of Webers political sociology of the leitender Geist in this sense will be advanced in Part Three. Wirtschaft und Gesellschaft is the title of Webers greatest collection of works, published late in his life. The juxtaposition of Will and Wave here is an allusion to Schumpeters use of the metaphor and to the section with homonymous title [Wille und Welle] in Nietzsches Zarathustra.)

The nature of the matter, the essence of capitalism and of the Economics, must consist then in the historically novel and specific manner in which capitalism organizes this conflict! This signifies the end of Political Economy not only as the market-based mirage entertained by Neoclassical Theory of a rigorous science of Economics devoid of political conflict, but also as the utopia embraced by liberalism and socialism of a free public sphere of Politics devoid of economic antagonism. The personality that truly counts, the Individualitat that drives the system, the machine the motor of the mechanism of transformation that Schumpeter was so desperately seeking - is emphatically not the entrepreneur with his creative individuality causing the inertia of the system of needs and wants - the rentier capitalist, finance capital, trustified capitalism, the passive consumer - to change through the Innovationsprozess facilitated by the mechanism of capitalist financial institutions. A million times No! The real motor, the true spirit of capitalism (however
soul-less it may have become now) is exactly and precisely that conflict inherent to the system of needs and wants, to the iron cage, that capitalism has freed, has unleashed, has vented and released by institutionalizing bureaucratically the rational organization of free labor! The most effective way to organize a society is to utilize its labor, intended

as labor force or labor power, in a manner that responds rationally to the politically free specification of their conflicting needs and wants by the workers through the market mechanism (filter, osmosis, synthesis) so that these may be provided for most efficiently. In regard to this point, Weber can detect now another major fallacy or oversight in Schumpeters limited and flawed analysis in the fact that the entrepreneur may well be the material functional carrier of trans-formations to the structure and orientation of enterprise, but that these trans-formations occasion profound shocks and crises that cannot be limited or confined to the economy alone, and that therefore require a form of mediation and governance of political responsibility! - that is absolutely inaccessible to the entrepreneur or indeed even to the bureaucracy! In fact, it is not merely the entrepreneurial function that loses its autonomy, its individuality under the iron law of socialization, but it is also that scientific research that becomes increasingly subsumed to the political needs and wants of the system rather than be dictated by the narrow needs of industry or the exogeneity of pure research. In other words, there may well be no scientifically ascertainable mechanism of development for the simple reason that scientific activity itself (!) has lost its autonomy from that rational organization of free labor that is capitalist enterprise. This is the more so, the freer that free labor becomes precisely by reason of its Demokratisierung and the constitution of the proletariat as a class (!) with its own socialist democratic political parties that defies and prongs the state bureaucracy out of its inertia, out of its myopic search for scientific equilibrium! It is no accident that the sub-title to Parlament und Regierung refers specifically to the binary interplay, the antithetical dualism between Parteienwesen (the nature of parties or party system) and Beamtentum (bureaucracy)! To be sure, Schumpeter himself had foreshadowed this problem during his discussion of his problematic in the quotations we selected above:

In other words, there is no true economic development, no development emanating from the economy itself, but only development that conforms to one pattern of imagination or does not conform to it. Yet, in any event economic development brings about extraeconomic effects in the social realm that have further repercussions within the economy. This kind of development expresses itself everywhere in national life. (Schumpeter, ibidem)

But in pointing to the personality and leadership of the entrepreneur, even within the confines of the Innovations-prozess, as the differentia specifica of capitalism, Schumpeter neglected these essential extraeconomic effects of modern capitalist industry and society that Weber is already theorizing from the standpoint of political sociology and that Keynes will start to dress up in economic garb after the Paris Conference of 1919: (a) the ineluctable presence of conflict in the relationship between market effective demand (or wants) and its provision through development and growth; (b) the problematic of bureaucratic-technical and scientific-technological capitalist organization of this irreducible and irrepressible conflict; and then (c) the articulation of the forms of political organization able to mediate the inevitable dis-equilibria and crises that development inevitably engenders so as to govern these effectively. This is the gigantic task that Weber would now tackle with his overall program or Entwurf of Parlamentarisierung for the effective Regierung of a re-constructed Germany (neugeordneten Deutschland). ********** 4 Webers Political Conclusions
Assuming that precisely this possibility were to be an inescapable fate who could help smiling at the anxiety of our litterateurs lest future social and political developments might bestow on us too much 'individualism' or democracy' or the like or that 'true freedom would not emerge until the present anarchy' in our economic production and the party machinations' in our parliaments had been eliminated in favour of social order and an organic structure - which means in favor of the pacifism of social impotence under the wing of the one quite definitely inescapable power, that of the bureaucracy in the state and the economy?(169)

The laughable incomprehension of the nature of the matter by the literati, the decadent liberal intelligentsia (an orientation that persists to the present day!), is to believe that the capitalist economy is anarchical and that parliamentary politics is Machiavellian that the problem that besets society is too much individualism or democracy, and that only social order will restore true freedom. Yet it is precisely this yearning for a lost paradise of true freedom the Schumpeterian Individualitat of the entrepreneurial spirit (Freedom) reconciled with the scientific rationality of

Economics (Truth) -, this unwillingness to grapple with the anarchy of capitalism and the machinations of politics that constitutes the pacifism of social impotence (the Nietzschean Ohn-Macht); it is the unwillingness to tackle the inescapable fate of conflict that will condemn us to one definitely inescapable power, that of the bureaucracy in the state and the economy! Weber gives ample proof in this passage of how well he has understood Nietzsches pitiless de-struktion of the Vollendung, the com-pletion of Western values in science, philosophy and morality. Schumpeters vain attempt to reconcile the Individualitat of the Unternehmergeist with the scientificity of the Economics is definitely overcome. Not only is it not possible to retain any scientific analysis of the Economy that can quantify its conflict and reduce it to the rational individual choice of the market; not only can there be no development of the capitalist economy due to the subjectivity of the entrepreneur because development originates from a system of needs and wants that curtails and conditions any subjectivity; but it is also the very conflict over the provision for needs and wants liberated by capitalism with the formation of free labor organized as a class that now finally subsumes scientific activity itself to that conflict by means of the rational organization of free labor.
In other words, far from being the outcome of the unstoppable expansion of the sphere of empirical science to the realm of social life and of the Economics in particular, the Rationalisierung theorized by Nietzsche (philosophically) and Weber (sociologically) engenders the subsumption of the scientific process to the explosive, uncontainable conflict and antagonism between the system of needs and wants aimed at the care for external goods (the iron cage) and the ability of the capitalist mode of production to guide and govern it through a program of development and growth that preserves and reproduces the existing capitalist social relations of production. Any rational evaluation of capitalism in the sense of empirical science as understood by Schumpeter in the Theorie and by the Economics is therefore quite impossible! Scientific rationality itself is now subsumed to the conflict that capitalism generates as a motor of its own development.

It is this triptych of the relationship between social conflict from the democratization of labor, its rational and scientific organization in the direction of capitalist development, and the political governance needed to mediate the effects of growththrough-crisis that concerns Weber in the all-important period between 1917 and 1919 and that covers the lectures on Politik als Beruf and Wissenschaft als Beruf and then the series of papers on Parlament und Regierung.
A lifeless machine is congealed [crystallized]spirit [geronnener Geist]. It is only this fact that gives the machine the power to force men to serve it and thus to rule and determine their daily working lives, as in fact happens in factories. This same congealed spirit is, however, also embodied in that living machine which is represented by bureaucratic organisation with its specialisation of trained, technical work, its delimitation of areas of responsibility, its regulations and its graduated hierarchy of relations of obedience. Combined with the dead machine, it is in the process of manufacturing the housing of that future serfdom to which, perhaps, men may have to submit powerlessly, just like the slaves in the ancient state of Egypt, if they consider that the ultimate and only value

by which the conduct of their affairs is to be decided is good administration and provision for their needs by officials (that is good in the pure' technical sense of rational administration). Bureaucracy achieves this, after all, incomparably better than any other structure of rule. (158)

It is the very freedom of labor that allows workers to organize as a class and that permits therefore the organization of conflict in a rational manner by the living machine of private capitalist and state bureaucracy, that is to say, under the regular discipline of the factory, - of the factory as lifeless machine with its congealed spirit of the system of wants and needs! The lifeless machine of capitalist production possesses a congealed spirit, and the machinery of bureaucracy is a living machine that stands in the closest relation to both capitalist enterprise and state administration. No rationality is possible without the free expression of social antagonism over the wage relation. The reality of Western economy and society against Schumpeters misunderstanding of Webers Rationalisierung as empirical science replacing the teleological rationality of metaphysics, against Werner Sombarts interpretation of modern capitalism as economic rationality, soon to be repudiated by Weber in the Vorbermerkungen of 1920 is that capitalism is the rational organization of free labor! Indeed, it would not even be possible to speak of true freedom, of Individualitat, of individualism and democracy and the Rights of Man without the imponent push of the conflict that capitalism has organized under the regular discipline of the factory. It is a piece of cruel self-deception to think that even the most conservative amongst us, even those of us most opposed to freedom and democracy, could carry on living at all today without these achievements from the age of the Rights of Man, that is, the American and French Revolutions and the Enlightenment, which have led through the liberation of labor, through free labor and its autonomous market demand, to the kind of rational organization of free labor, of social conflict and antagonism embodied by the all-powerful trend toward bureaucratization that is to say, the provision of the most basic needs and wants of social life, to the socialization that is the necessary pre-condition of bureaucracy. It is vital to discern how Weber traces a strict link between freedom and democracy, and therefore the Demokratisierung, through to the liberation of labor, its constitution as a class that can press its autonomous market demands in terms of the care for external goods, of its needs and wants all the way to the Vergesellschaftung, the socialization of these conflicting needs and wants as a result of the need for capital rationally to organize this free labor in the pursuit of rationally calculable profit (in opposition to the romantic Gemeinschaft theorized by Tonnies as an echo to Kants ungesellige Geselligkeit) that is, of its own private form of bureaucratization in opposition to, and therefore separate from, the State bureaucracy to which it is yet most closely related. As we will soon see in section 6, here Weber, because of his reified notion of labor, falls back into and retraces the conceptual Schematismus of the NeoKantian sociological Forms theorized by Simmel, distinct from their content not in terms of historical-materialist experience but only in terms of durability (the Forms

being Kantian concepts or categories that have epistemological and scientific validity whilst their content is purely variable and historically contingent or aleatory). The same distinction applies to the Rationalisierung and to bureaucratization. Not until the Vorbermerkungen will Weber seek to deal explicitly and coherently with these matters.
In view of the fundamental fact that the advance of bureaucratisation is unstoppable, there is only one possible set of questions to be asked about future forms of political organisation: (1) how is it at all possible to salvage any remnants of 'individual' freedom of movement in any sense given this all-powerful trend towards bureaucratisation? It is, after all, a piece of cruel self-deception to think that even the most conservative amongst us could carry on living at all today without these achievements from the age of the 'Rights of Man'. However, let us put this question to one side for now, for there is another which is directly relevant to our present concerns: (2) In view of the growing indispensability and hence increasing power of state officialdom, which is our concern here, how can there be any guarantee that forces exist which can impose limits on the enormous, crushing power of this constantly growing stratum of society and control it effectively? How is democracy even in this restricted sense to be at all possible? (169)

Therefore, in view of the growing indispensability and hence increasing power of state officialdom [bureaucracy] that has been brought about by this growing socialization, the second question is what limits can be imposed on this enormous, crushing power so as to be able and this is the first question - to salvage any remnants of individual freedom of movement in any sense at all! These two questions have to do crucially with the future forms of political organization. The attempt to control growth in such a manner that the explosive push of the system of needs and wants and its ineluctable conflict can be mustered and then channeled into the preservation and reproduction of existing capitalist social relations of production the profit motive engenders an increasing power of State bureaucracy, a growth of control, that becomes inexorably more indispensable in terms of gauging and monitoring the rationally calculable functioning of the system both the needs and wants and the profit motive -, but at the same time grows ever less capable to decide legitimately the direction of the system! The control of growth required for the preservation of existing relations of production the rational conduct of capitalist business - engenders a growth of control designed to maintain these relations of production that tends to stifle and smother the very conflict that the system of needs and wants rationally organized as free labor with an autonomous market demand inevitably and irrepressibly generates. The result is exactly the same as Weber had apprehended for rational Socialism. The living machine cannot exorcise the congealed spirit of the lifeless machine: - only the leading Spirit can guide and govern it.
Yet this too is not the only question of concern to us here, for there is (3) a third question, the most important of all, which

arises from any consideration of what is not performed by bureaucracy as such. It is clear that its effectiveness has strict internal limits, both in the management of public, political affairs and in the private economic sphere. The leading spirit, the entrepreneur in the one case, the politician in the other, is something different from an official. Not necessarily in form, but certainly in substance. The entrepreneur, too, sits in an 'office'. An army commander does the same.(170) In the sphere of the state the same applies to the leading politician. The leading minister is formally an official with a pensionable salary.

This is the Organisationsfrage for Weber, the point at which the Problematik of rational Socialism coincides with that of capitalism: how can the present conflict-ridden system of needs and wants the congealed spirit of the lifeless machine which under capitalism takes institutional shape as the rational organization of free labor as a class that is represented by the social democratic workers parties of the whole of Europe be reconciled with that rationality? If indeed the system is founded on an irrational iron cage of care for external goods, how can its irrational conflict, its needs and wants, its freedom, be reconciled with the rational conduct of capitalist business for profitability, its science? Indeed, how is it at all possible to conduct business for profitability rationally when the system of needs and wants expressed through the autonomous market demand of free labor is not itself rational? This is the point at which the content of the presumed rationality of the overall system of capitalist production must be enucleated, discovered and explained. And the content itself cannot be rational merely in the sense of calculable. Either we find a substantive rationality or else Webers Rationalisierung is sheer mechanical violence whose increasing power, its growing control stands in the way of, obtrudes and represses, those most basic needs of social life, those needs and wants that make it indispensable! This is where the effectiveness [of bureaucracy, state and capitalist] has strict internal limits,
both in the management of public, political affairs and in the private economic sphere in that there are things that are not performed by bureaucracy! The bureaucracy can only measure

and monitor and perhaps even repair the existing system. But it cannot determine either the modalities of its own growth nor those of the system whose operation it is supposed to measure and monitor: its growing power grows the more oppressive and repressive the more it requires the responsibility of the leitender Geist. The leitender Geist can only become the ultimate safety-valve of the system by assuming the responsibility for the decisions that must be made to guide and govern and direct the system. The leader is the expression of a particular, specific, historical institutional expression of the conflict and antagonism of the capitalist rational organization of free labor under the regular discipline of the factory. The leader is the culmination of social antagonism and its ultimate legitimation. This shows yet again how deficient was Schumpeters attempt to explain the phenomenon of capitalist development purely in terms of the subjective Individualitat of the entrepreneur able to trans-form the wants and provisions of capitalist society,

rather than in terms of the conflict intrinsic to these wants and provisions and its rational organization! The leader is not different or separate from the bureaucratic machine: the leader represents merely the moment of decision, the function of responsibility for the entire system. But the concentration of legitimacy in the figure of the leader serves merely to display disastrously, catastrophically the inability of the living machine of bureaucracy to live up to its indispensability. As the legitimacy of the leitender Geist declines so does the effectuality of the State administration and so does the systemic risk of the entire system grow. The Parlamentarisierung is supposed to facilitate and allow the control of the controllers (Ciceros paradox quis custodiet ipsos custodes?) so as to preserve the autonomy of market demand and the remnants of individual freedom of expression in any sense at all. But this presupposes that (a) the conflict inherent to the iron cage is itself inescapable a fate; (b) that the growth of control is occasioned blindly and irrationally by the system of needs and wants that there are no other reasons outside of the iron cage for the socialization of production and the increasing power of bureaucracy; and (c) that the very possibility of governance under capitalism through the Parlamentarisierung does not itself allow for an alternative form of governance that, apart from the leitender Geist and its responsibility for decisions, cannot resolve the conflict between wants and provision a conflict that, far from being an inescapable fate, Weber himself had traced back to its historical origins! The question of the alternative must then be posed. In other words, is there not an inter esse that is finally expressed, however distortedly, by the growth of control engendered by the need to control growth? Is the growth of control not itself the pro-duct of that need to control growth within the bounds set by the capitalist rationality of profitability? And does this rationality, this profitability not rest on the rational organization of free labor under the regular discipline of the factory and not on autonomous market demand? Clearly the problem here is that Webers iron cage itself needs to be reviewed, its inescapability questioned, its creation and maintenance by the spirit of capitalism traced to its historical origins. The very possibility of conducting capitalist business for rational and systematic profitability, through the rational organization of free labor under the regular discipline of the factory needs to be examined. Only then will we be able to assess realistically Webers plans for Parlamentarisierung und Demokratisierung, that is to say, for the successful and lasting integration of free labor organized as a class within the machine of State and private capitalist bureaucracy under the legitimate and legal parliamentary oversight of the leitender Geist as the ultimate expression of the political will of the Herrenvolk.

The bellum civium from Marx to Weber or, the Ghost of Needs in the Machine of Labor But the question still remains of what modern industrial work means and of how it leads necessarily inescapably to concentration, to socialization and thence to what this last inevitably means, namely, bureaucratization. This is an all-important chain of historical and theoretical transitions or passages that must be traced carefully. Even as late as Parlament und Regierung, however, Weber fails to do this, preferring instead to leave the whole chain of historical connections entirely open. The ultimate foundation of social life is the system of needs and wants. The ultimate aim and purpose of society is to satisfy these needs and wants that are ineluctably individual. Not only is the individual and self-interest the foundation of human society, not only is the satisfaction of needs and wants their provision the essential aim of social life. But also the efficient satisfaction of these needs and wants depends on the rational and systematic organization of free labor. And this free labor is understood as operari, as mere, sheer labor power or force a homogeneous and measurable quantity that does not itself create anything, pro-duce any goods, but rather consumes and utilizes the external world so as to satisfy and provide for its wants wants that are deemed to be as insatiable as the Schopenhauerian Will. In Schopenhauer, the Ding an sich is still present in the entity of the Will whose objectification is the body. Therefore the external world exists as well, though only as representation that can be com-prehended scientifically by the Understanding (Verstand) in accordance with the Principle of Sufficient Reason. In the Schopenhauerian version of the negatives Denken the world is still a Wirk-lichkeit, a work-likeness, an actu-ality in which the human operari is conditioned by scientific logicomathematical laws just as it was in Kant, whose greatest merit for Schopenhauer consisted precisely in this separation of thing-in-itself from phenomena. Except that Schopenhauer effects a re-versal (Um-kehrung) of Kants metaphysics: the external world therefore is not an inscrutable Ob-ject, an unknowable reality of noumena op-posed (Gegen-stand, ob-ject) to the Will, of which we can only register phenomena. But because it is now the subjective side, the Will, that is the thing-initself from which the phenomena, the objectifications originate, the scientificity of experimental observations, of phenomena, is guaranteed by the unity of their representation (Vorstellung) as subject-object in the Will a unity that overcomes the infamous Kantian antinomies of thought due to inscrutability of the ob-jective (gegen-standliche) thing-in-itself. In this Welt-anschauung, esse est percipi to be is to be perceived, the representations (Vorstellungen) are reality (Wirklichkeit) itself and no longer mere phenomena (blosse Erscheinungen). In this sense, Lukacss critique of Kants formalism, of the antinomies of bourgeois thought, and his theorization of the proletariat as the individual subject-object of history is fully comprehensible only through the screen of Schopenhauers reversal of Kant. The separation of noumenon and phenomenon also disappears in Machism; but this time it is the thing-in-itself that is entirely eliminated in favour of the simple

mathematical con-nection between phenomena or sensations (Empfindungen) in an experimental relationship that is predictable and regular. Like Neo-Kantism, Machs phenomenology, the Empfindungen or sensations, effectively instrumentalise science reducing it to the state of a mere tool, to its success or, in the phrase of one of the founders of the marginalist revolution, Stanley Jevons, to a set of predictions and regularities. (Cf. for this, the opening chapters of Erkenntnis und Irrtum.)There is here a virulent and total rejection of any reality or substance that may lie behind phenomena, of any metaphysics. Science is sheer certainty achieved in the simplest relations capable of being described and calculated with mathematical precision.
In connection with the discussion about the admissibility or possibility of introducing psychological factors into economics there stood the question of a standard of value. This question became essential as soon as the theorists saw the excellent objective measure of labour vanish. Even before Smith people had discussed the question of a standard of exchange value and it had been recognized that there could be no standard that was unchangeable in itself. All the classical writers taught this, while the old supporters of the theory of value in use, as e.g. Say, insisted on equating the exchange value of a commodity simply with the quantity of goods which it was possible to obtain for it in the market. It was, however, simply considered impossible to measure the value in use, although in practice everybody definitely compares values of commodities with each other. The psychological theory of value now seemed to demand such a standard of value in use also in economic theory. Against this doubts were raised whether it was substantially possible to measure 'quantities of intensity' and in particular whether valuations of different people could actually be compared. Yet 1 Cf. Bhm,Bawerk,'Exkurs' IX in the third edition of the Positive Theory HISTORICAL SCHOOL AND MARGINAL UTILITY 193 there is really no need for such a comparison and in measuring the valuations of one person it is quite possible to proceed merely from facts that can be observed if we start from the following formulation: The value of a quantity of a commodity for somebody is measured by that quantity of another commodity which makes the choice between both a matter of indifference to the economic individual. (Fisher, Mathematical Investigations into the Theory of Prices, 1892.) This method of basing the measurement of values on acts of choice of the individuals gained more and more adherents (Pareto, Boninsegni and others). Yet it is possible to overcome the difficulties of the problem also in a different way.1 The primary fact with which the theory of marginal utility is concerned and in which its fundamental achievement consists and on which everything else is based, is the proof that in spite of appearances to the contrary the factor of wants and as a result from this the utility character of commodities determine all individual occurrences in the economy. At first it was necessary to deal with the old antinomy of values, the opposition between utility and value. This had already been done. The distinctions between categories of want and the incitement of want, between the total value of a store and the value of partial quantities of which the store held

by the economic individual is composed, help to overcome this opposition. In this lies the importance of the conception of 'marginal utility'.2 Thus all facts relating to the determination of prices could be explained with the help of the basic principle. It is true, however, that there never had been any doubt that those facts on which the 'demand side' of the problem of price is based could be explained with its help and this had usually been considered as self-evident. But it was only the theory of marginal utility which based the 'supply side' of the problem on it and conceived costs as phenomena of value. In this respect the decisive achievement mostly overlooked by the criticslay in the proof that the esti194 ECONOMIC DOCTRINE AND METHOD mation of commodities according to their costs, which is so predominant in economic life, is merely an expedient abbreviation of the real correlation, that this correlation is explained with the help of the element of value in use, that the calculations of the entrepreneur are merely the reflection of valuations on the part of the consumers, and that in cases in which somebody estimates a commodity according to the value in use of commodities which he can obtain for it in the marketsubjective exchange valuethe 'exchangeability' and with it the subjective exchange value is based on alternative estimates of the value in use. This led to a uniform explanation of all occurrences in the exchange economy with the help of one single principle and in particular also to a classification of the relation between costs and prices.1

(Schumpeter, Economic Doctrines and Methodology) For Weber as for Nietzsche, there cannot be any separation (Trennung) in the Marxian sense between labor and the means of production because there was never any union between them! The human operari is entirely instrumental to its goal the provision for want. There is and there can be no Gattungswesen, no species-conscious being, no original union of workers with tools because, if anything and quite to the contrary, the nature of human wants and the scarcity of their provision ensure that there is conflict between and among workers, let alone between workers and capitalists! Human beings are irreducibly and ontologically things-in-themselves; they are Wills or, as Nietzsche describes them, instincts of freedom that can co-operate or col-laborate to the extent that their needs, their iron necessities and their wants are provided for and satisfied. This is the Hobbesian status naturae, the bellum omnium contra omnes, the state of nature in which homo homini lupus obtains and that Schopenhauer postulates in Book Four of Die Welt als Wille und Vorstellung, after his pitiless critique of Kantian ethics in the Grundprobleme der Ethik, of the moral theology of the Categorical Imperative. In the negatives Denken initiated by Schopenhauer in response to the Hegelian dialectic, the instrumental operari, the Arbeit, the labor itself does not have utility because it is the objectification of the Will to Life with its unfathomable Wants, with its evanescent World. Only the World is wealth; only consumption goods have utility for the Will. They and they alone ultimately measure or value or price the marginal utility of the means of production not in an objective or substantive sense, but merely from the

viewpoint (Gesichtspunkt), from the per-spective of the individual choice. Utility is an entirely subjective and inscrutable entity that can be measured as Value, that can be given social significance or a social Form that can be reified only through the social osmosis of the market pricing mechanism where individual Wills clash or com-pete for the same scarce consumer goods. The Askesis, Webers ascetic renunciation of the world or Entsagung, is emphatically not attained through the pursuit of labor as an end in itself, but rather through the deferral of consumption and the application of the Arbeit to the construction of tools (means of production, or capital) that are more roundabout and therefore increase the productivity of labor by saving it. And the higher Value derived from producing with more roundabout methods of production can be calculated not just in an instantaneous or timeless analytical dimension but even in a temporal one, in terms of time preference, even as a projection toward the future! In this view (Anschauung), in this perspective (Welt-anschauung), labor can have no utility because it has no intrinsic value. Instead, labor is effort (Kampf), it is the objectification of the Will, it is the operari, it is Pain (Leid) without Pleasure (Lust): labor is dis-utility! And the marginal utility of the consumption goods produced to provide for the workers wants the wage - must be equivalent to the marginal dis-utility of labor if the production of consumption goods is to be optimal! Neoclassical theory from Gossen onwards begins with the notion that human living activity is toil, it is effort, it is pain and want (Bedarf) in search of provision (Deckung), as Bohm-Bawerk styles them in the Positive Theorie. It follows from this perspective that human living activity is conceptually separated from its object, from its environment which supplies it (human operari) with the means of production. And consequently human living labour is seen from the outset as pure and utter destitution, as poverty, as want. Accordingly, all means of production cannot serve as means for the expression or objectification of human living labour but rather as labour-saving devices! We should note the difference between Jeremy Benthams Utilitarian or hedonistic calculus of pleasure and pain and the strict nexus established by Schopenhauer between operari as Arbeit (labor) and A-skesis as release from Pain, as renunciation of the World and therefore the identification of labor with want and pain. This nexus is entirely missing in Bentham just as it is in JS Mill who espoused the Labor Theory of Value as the last great representative of Classical Political Economy. But it is this Schopenhauerian nexus that is vital to the early development of the theory of margina utility. What this means is that human living labour itself is already considered, for one, as a tool, as an instrument whose productivity can be measured in terms of units of output per unit of time. And for another, it is seen as an activity or a labour power that, just like Schopenhauers Will to Life and its objectification, the Body, is purely abstract, mere potentiality, utter possibility, sheer pro-ject not bound to a particular, specific mode of expression or activity. In practice, it is the latter view of living labor the assumption that living labor is only mere potentiality - that serves as the premise that leads inexorably to the former conclusion that is, that living labor is only a tool, a homogeneous force, Marxs abstract labor! Weber's entire

understanding of "free labour", discussed here earlier, is the sociological equivalent of this decadence and nihilism of European thought not, pace Lukacs or Marcuse, a destruction of Reason, because , as Nietzsche showed quite conclusively, Reason itself is the summum bonum of Western metaphysics that culminates in nihilism. In this perspective, this abstract labour is sheer, naked, destitute poverty, barren misery potential that can only become actual if, and only to the extent and manner that, it is allowed by the laws of supply and demand to come into contact as a tool with the means of production that are the endowment and possession of the capitalist. For the Neoclassics, then, labour and workers are by definition the factor of production that is in want or need, that suffers toil and pain and dis-utility and that needs capital (the means of production as labour-saving tools) in order to satisfy its wants that are made immediate, urgent in contrast with the capitalist owner who can defer consumption by the very fact that it does not now have provisions for its subsistence and reproduction and survival! The culmination of this blatant nihilism implicit in the Weltanschauung of the negatives Denken can be found in the principal theoretical works of the most prestigious member of the early Austrian School, none other than the bourgeois Marx himself Eugen BohmBawerk. Here is how his greatest pupil, Joseph Schumpeter, summarises his work in a manner that needs little commentary from us to be placed in the context of our discussion and that in connection with interest, that is the most fundamental aspect of profit as the most unabashedly natural claim by the bourgeoisie over social wealth (in the form of what Marx called fructiferous capital):
In 1884 there appeared Bhm-Bawerk's critical work which established not only the untenable but also the superficial character of the existing explanations of interest and opened a new era for the theory of interest. This book and the one entitled Positive Theorie, which followed four years later, trained numerous theorists of interest and hardly a single one remained unaffected by them. Of all the works on the theory of marginal utility these two volumes had the deepest and widest effect. We find the traces of their influence in the way in which almost all theorists of interest phrased their questions and proceeded to answer them. There are signs of this influence even in those writers who rejected the concrete solution of the problem of interest as offered by BhmBawerk. This solution is based on the fundamental idea that the phenomenon of interest can be explained by a discrepancy between the values of present and future consumer goods. This discrepancy rests on three facts: first, on the difference between the present and the future level of supplies available for the members of the economy, secondly, on the fact that a future satisfaction of wants stands much less vividly before people's eyes than an equal but present satisfaction. In consequence, economic activity reacts less strongly to the prospect of future satisfaction than to that of present enjoyment and the individual members of the economy are in certain circumstances willing to buy present enjoyment with one that is greater in itself but lies in the future. The discrepancy between present and future values is, thirdly, based on the fact that the possession of goods

ready to be enjoyed makes it unnecessary for the economic individuals to provide for their subsistence by HISTORICAL SCHOOL AND MARGINAL UTILITY 199 producing for the moment, e.g. by a primitive search for food. The possession of such goods enables them to choose some methods of production which are more profitable but are more time-consuming: the possession of goods ready to be enjoyed in the present guarantees, as it were, the possession of more such goods in the future. In this 'third reason' for the phenomenon of interest there are contained two elements: First, the establishment of a technical fact which so far had been unknown to the theorists, namely that the prolongation of the period of production, the adoption of 'detours' of production, makes it possible to obtain a greater return which is more than proportionate to the time employed. Secondly, the thesis that this technical fact is also an independent cause of an increase in value of consumption goods which are in existence at any given time. Interest as form of income then originates in the price struggle between the capitalists on the one side, who must be considered as merchants who offer goods which are ready for consumption, and landlords and workers on the other. Because the latter value present goods more highly and because the possible use of present stocks of consumer goods for a more profitable extension of the period of production is practically unlimited, the price struggle is always decided in favour of the capitalists. In consequence, landlords and workers receive their future product only with a deduction, as it were, with a discount for the present. The achievement which this formulation contains was epoch-making and a great deal of the theoretical work of the last twenty years has been devoted to a discussion of it and to its criticism.

(Schumpeter, Economic Doctrines and Methodology.) The blunt brutality of Schumpeters illations conclusions drawn from utterly ludicrous premises need not detain us long here. But we should draw attention to two features that will be relevant to our discussion of Webers theory of the origins of capitalism in Part Two. The first is that Bohm-Bawerks theory of the greater productivity of more roundabout methods of production (a feat of metaphysical fantasy unequalled in the sorry history of the Economics a bedtime story to make children laugh) is yet another version of the Schopenhauerian renunciation (Entsagung), the refusal of the pain (Leid) of the Will to Life in its abulic, incessant and insatiable search for pleasure (Lust) that can never be satis-fied, least of all at the moment of its ful-filment (Schopenhauer)! Bohm-Bawerk is clearly intimating under the pretence of economic theory that the capitalist is rewarded with higher productivity of the tools (capital) he possesses by virtue of his ascetic renunciation or deferral of immediate consumption in order to devote his labor and existing capital to the construction of more roundabout methods of production that will yield higher productivity and therefore profit when they are utilized. As we will see in Part Two, Weber argues in the Ethik that it is the Protestant calling (Beruf) of labor as an end in itself that makes up the spirit of capitalism and constitutes a specifically bourgeois economic ethic. We can

see already from the quotation above that in fact it is Neoclassical Theory that provides such a specifically bourgeois economic ethic because it lays emphasis of the source of Value on the renunciation of immediate consumption by the capitalist through the preference of more roundabout means of production (capital) rather than Webers dedication to or calling for labor as an end in itself which, of course, is much closer to the Labor Theory of Value of Classical Political Economy. The second point follows practically from the first, and that is that once again, as we argued earlier and as Weber realized, the entire concept of interest or profit is evidently founded in Neoclassical Theory on the idea of a price struggle between capitalists and workers that, given the premises of this theory, is always decided in favour of the capitalists. ************ Webers inexorable separation (inexorable because for him there is no existential basis whatsoever for conceiving of a union of the worker with the means of production except on the basis of individual ownership of the latter) - the inescapability of bureaucratic rule over modern industrial work anticipates fatidically the philosophical synthesis operated by Heidegger only eight years later in 1927 with the publication of his epoch-making Sein und Zeit. Heideggers ontology of human Da-sein, of human being as possibility, is a philosophical reflection of the politically-enforced separation (Trennung) that Weber deems inescapable and that Heidegger will misconstrue philosophisch for phenomenological inauthenticity (Un-eigentlichkeit) or averageness (Alltaglichkeit) and existential estrangement (Verfall). Pathetic (like Schopenhauers sym-pathy derided by Nietzsche as the perspective of the herd, like Romain Rollands oceanic feeling refuted by Freud in Die Unbehagen der Kultur) will be Lukacss plaintive longing for the enchantment of totality, his late-romantic vision of the proletariat as the individual subject-object of history and quasi-religious invocation of class consciousness just as equally pathetic will remain Heideggers appeals to authenticity in the face of the Vorhandenheit (instrumentality) of Technik. (The proximity of the two thinkers is reviewed by L. Goldmann in Lukacs et Heidegger. It may be enlightening to quote fully here Webers avuncular chiding of Lukacs for his exuberant Marxist concepts of totality and class consciousness, not less than that of individual subject-object of history. Weber decries [ Economy and Society, at p.930]
that kind of pseudo-scientific operation with the concepts of class and class interests which is so frequent these days and which has found its most classic expression in the assertion (Behauptung) of a talented author that the individual may be in error about his interests, but that the class is infallible.)

For the Nietzschean Weber, these literati with their romantic fantasies fail to grasp the irreducible and overriding irreconcilability of human individual needs and wants, the total absence of any social syn-thesis, the complete lack of any inter esse in human Da-sein. Life is conflict; it is struggle; it is Will to Power. This much Weber has learned from Schopenhauer and Nietzsche combined. But this ineluctable, physio-logical human conflict can and does allow for human co-operation in a purely instrumental sense, to achieve practical purposes that satisfy individual needs and wants. Social institutions, both symbolic and political, can lead to the socialization of the instincts through compromises that channel human instincts of freedom toward the construction of an ontogeny of thought that stretches from the notions of consciousness and egoity (Ich-heit), to those of logic and mathematics, and then to science, individuality, society and the State. This ontogeny of thought is what allows Weber to reconcile Nietzsches true perspectivism and phenomenalism with Neo-Kantian epistemology and Machian philosophy of science. Kants transcendental idealism remained fundamentally subjective. The ontological universality of Pure Reason is implicitly questioned in the Critique of Judgement (as Arendt argues in Lectures on Kants Political Philosophy, though not, pace Heidegger, in the First Critique even if the limitations of Pure Reason are already apparent there) and made to retreat to the Leibnizian sphere of intuition and aesthetics, as Heidegger would argue later in the Kantbuch. (A useful discussion of this point is in H-G Gadamers Les Chemins de Heidegger, p.64, essay on Kant et le tournant hermeneutique.) Neo-Kantism is the unwilling avowal of this retreat of Reason, of the definitive abandonment of the summum bonum of German Idealism of unifying metaphysics with epistemology a surrender presaged already by Kant in the Opus Postumum and the subject of the dramatic clash at Davos between Heidegger and Cassirer. In the Neo-Kantian Lebensphilosophie, the Form rescues the content of knowledge, Practical Reason saves experience, and the Norm justifies the conduct. The Natur-wissenschaften and the Geistes-wissenschaften will never be united again: the irretrievable separation of the Subject from the Object is finally conceded. The social sciences must turn to the Unicum of the Soul which can ex-press and externalize its spirit through the Schematismus, through the symbolic and social forms. This is the essence of socialization that mani-fests itself in all areas of human life even to the extent that these Forms acquire a life of their own, until they become a crystallized Spirit (geronnener Geist the phrase is Simmels, in Philosophische Kultur, before Weber adopted it) that dominates the lives of individual souls. The intellectual path of Lukacs from Die Seele und die Formen (adopting Simmels schema of Soul and Forms from the Philosophische Kultur) to the elaboration of the concept of reification out of the Marxian fetishism of commodities in Geschichte und Klassenbewusstsein describes faithfully and fatefully this flirtation of Marxism with the Vollendung of German Idealism:
At the time, then, it was Marx the sociologist that attracted me and I saw him through spectacles tinged by Simmel and Max Weber. I resumed my studies of Marx during World War I, but this time I was led to do so by my general philosophical interests and under the influence of Hegel rather than any contemporary thinkers. (from 1967 Preface, p.ix)

Indeed, Marx himself acknowledged this flirtation with Hegel (in the Preface to Kapital) and then coined the phrase crystallized labor-time [blosse Gerinnung von Arbeitszeit, Vol.1, Kapital] to indicate the socially necessary labor time that is embodied in the means of production used by living labor to valorize commodities in the process of production. Marx sought thereby to circumvent the obvious inconsistency that it is impossible for market prices, which are subjectively allocated according to demand, to determine what is socially necessary labor-time. It is something with which the most discerning Marxists have struggled since the publication of Volume Three of Das Kapital. The finest among them have sought to reconcile the inconsistency by appealing precisely to this crystallization of labor-time through the reification of human living labor that the fetishism of commodities engenders through the market mechanism. (See especially Lukacss chapter on Reification in Geschichte and the final chapter on Marxism: Scienza o Rivoluzione? in L. Collettis Ideologia e Societa.) The insuperable objection to this version of Marxs critique is that if value is sheer mystification and fetishism, then it is absolutely impossible for it to determine the quantitative allocation of social resources for production! Nor is it possible for us to discern a way to evade this fetishism! Lukacs himself confesses to the overriding subjectivism of this framework (p.xviii) and indeed to its affinity with Webers own brand of Neo-Kantian rationalization (as we will see later) and Heideggers phenomenological account of inauthenticity and totality in Sein und Zeit (p.xxii). It is not an accident then if Karl Lowith focused on the convergence of the concepts of rationalization in Weber and of alienation in Marx in his appositely titled early work on Max Weber and Karl Marx. This complex web of sociological forms characterizes also Webers entire methodology from the ideal type (Simmels Form) as a sociological form to the hermeneutic Verstehen of social phenomena (clearly drawn from Dilthey) that allows the liberation of social science from its normative content (wert-frei, value-free science). Indeed, we will argue that Webers entire sociology and Wissenschaftslehre is founded on these Simmelian sociological Forms that allow him as they do Schumpeter in the Theorie and the Austrian School generally, especially von Mises who had links with Weber to conceive of the Rationalisierung in terms of its instrumental purpose (Zweck-rationalitat what we may call mathesis) and therefore scientificity that can be distinguished from its Norm or Value (Wert-rationalitat). (The distinction between causa efficiens and causa finalis actually belongs to the great German jurist Rudolf von Jhering and pertains to political theory and the sociology of law [see his Der Zweck im Recht, trans. as Law as a Means to an End]. Weber seems to have adopted it without apparent acknowledgement. Similarly, Webers theory of the State as a monopoly on the use of violence is derived from Jherings jurisprudence. We will discuss these themes in Part Three.) Once more, we are back full circle to Simmels Neo-Kantian dualism of Soul (value, norm) and Forms (instrumental purpose). But in pursuing this schema, Weber moves very far from Nietzsches much more consistent and sophisticated philosophical Entwurf and original version of the Rationalisierung. Weber is more ecumenical than Nietzsche in highlighting the irrational elements of Kultur in which Ratio and iron cage are crystallizations or Forms of the Spirit or Soul. Such a neat, formalistic Kantian

Schematismus would have seemed absurd to Nietzsche part of that moral theology of German Idealism and of the German Historical School of Law, of the Historismus that he vehemently denounced, and indeed part of the emanationism that Weber himself had rebuffed when reviewing the older German Historical School in his Roscher und Knies, but one into which he was forced by his espousal of the methodological individualism of the Austrian School and the judicial positivism of Kelsen and the Marburg School. In this specific and important regard, insufficient attention has been paid to the actual practical convergence of the Austrian School and the German Historical School that seemed so bitterly divided over the Methodenstreit in the final decades of the twentieth century with the famous diatribe between Karl Menger and Gustav Schmoller. In reality, notwithstanding the apparent unbridgeable divide between the quest for scientific laws expressible even in mathematical form of the Austrian School and the resolute opposition to such generalities from the Historical School, the fact remains that both Schools had a common aim: - and that is the practical effectuality of scientific research! If one takes a closer look at the Welt-anschauung of the Schools, one will notice immediately that the Machism of the Austrian School was aimed at establishing the simplest mathematical relationships between events even at microeconomic level (regarding the price behavior of firms and individuals, for instance) that could serve as guidance for overall government policy and, not least, as essential strategic ideological tools in the fight against the spreading socialist ideologies. Despite Machs insistence on the disinterestedness of scientific research in Erkenntnis und Irrtum, the fact remains that Machism looks at phenomena as sensations that is to say, as the be all and end all of cosmic reality thereby abolishing this reality, this meta-physics, in such a way that the regular and predictable relationships (Jevons) that can be found between sense-impressions (Empfindungen) are taken to exhaust the entire uni-verse of science. It follows from this that Machism would regard the present social relations of production (capitalist ones) as the only truly scientific ones! Any deviation of social behavior from the scientific laws based on the present social relations imposed by capital would be seen as aberrant and erroneous (hence the title to Machs main work Knowledge and Error)! (The best epistemological account of the methodology of the Austrian School remains Friedrich Hayeks The Counter-Revolution of Science.) Seen from the standpoint of the German Historical School, the practical outcome of its theoretical and methodological position would be absolutely identical, in the sense that its exclusive focus on historical research (Dilthey), on the close concentration on individual events (Geschehen) in Thucydidean fashion (Marx satirises ThukydidesRoscher in chapter 9 of Kapital, Volume 1) would be concerned with identifying current practices that could be put to practical effective use on the part of German industry! The practical industrial activities and membership of the leaders of the School chief among them, Gustav Schmoller himself with his influential Verein fur Sozialpolitik testify to this supporting role of the German Historical School in the sociological service of German industry. Here it is the interestedness of the Historismus of the German School that converges with the apparent Machian dis-interestedness of the

Austrian School which, in effect, amounts to the affirmation of the status quo and indeed to its elevation to epistemological and ontological status! It is most important to note at this juncture that the Austrian and German Schools, however heated their controversy over the methodology of the social sciences in the Methodenstreit, constituted powerful forces in the concerted effort by capitalist bourgeois interests across Europe to counter the emergence of socialist parties and their ideologies in the name of an overall methodological subjectivism that displaced the entire focus of Political Economy from Labour to individual Utility and therefore from the dramatic transformation and concentration of the labour process (Taylorism and Fordism), of the composition of the working class (from the skilled [Gelernte] to the mass worker), and that of capital (the rise of large cartels and corporations vertically and horizontally integrated) in what has been generally described as the Second Industrial Revolution (see Alfred Chandler Jnrs The Visible Hand), to a vision of the liberal free and competitive market that championed the Planlosigkeit (spontaneous plan-lessness, anarchical freedom) of bourgeois civil society (Fergusons and Hegels burgerliche Gesellschaft) against the regimentation of the planned, organized economy advanced by the Sozialismus. It is the abandonment of all metaphysical illusions the better to conceal the greater illusion of marginal utility - that will allow the conceptual fusion by the German ruling elites in the period to World War Two and beyond of the German Historical Schools focus on individual, specific interventionist projects of German industrial domination in Europe, on one hand, and of the Austrian Schools elevation of individual consumer choices in the liberalist free market mechanism on the other. (Not for nothing the Austrians were dubbed in Germany Manchester mercantilists! [cf. Schumpeters last chapter in Economic Doctrines]) In this context, Nietzsches own philosophical Entwurf, together with the spread of Machism in science that subtended both the Austrian (Menger, Bohm-Bawerk, Mises and Schumpeter, then Hayek) and the Lausanne (Walras and Pareto) Schools, must be seen as one co-ordinated and massive intellectual counter-attack by capital against the emergent working class whose political expression will culminate with the overarching intellectual vision of Max Weber. (For an initial outline of these arguments, see M. Cacciaris Sul Problema dellOrganizzazione in Pensiero Negativo e Razionalizzazione.) It is a fact beyond doubt that Webers own overriding concern with the political effectuality of the Parlamentarisierung was never dictated by a genuine concern for the corresponding Demokratisierung of German politics, but rather by the need to smoothe and invigorate the political and economic Staatsmacht of the German capitalist Nationaloekonomie. Webers scornful jibes at the literati and their romantic fantasies can be retorted with some justice against his own petty-bourgeois nostalgic lamentations about the steel-hard casing of the care for external goods, at his ethereal conceptions of a crystallised Spirit of modern industrial work (to be examined below), and the Ent-seelung (out-souling, desecration) of political life through the massification of political parties (in Politik als Beruf), and the Ent-zauberung (disenchantment) of human experience through its instrumental rationalization. Above all, as we will see, it is that central notion of free labor that contains in its denotation of autonomous market demand guiding and determining the profitability that is the

benchmark of the rational conduct of capitalist business it is this notion of free labor that hides Webers ultimate allegiance to the Spontaneitat of human needs and wants intended as the autonomous consumerist market demand that we discussed earlier and the optimistic liberal understanding of market competition that is the centerpiece of bourgeois liberalism. Here Weber jettisons the initial Nietzschean Resolve (the notion of Gewissen or conscience or responsibility expounded and championed against its opposite schlechte Gewissen [bad conscience or bad faith, later to mimetise into Heideggers Uneigentlichkeit and Sartres mauvaise foi] - by Nietzsche at length in the Genealogie) that he had espoused and proclaimed in his Inaugural Lecture at Heidelberg in the attempt to bridge the divide between the revolutionary and technocratic appeal of Austrian Machian empiricism, which sanctions the validity of scientific methods in the study of social life, and the staid conservatism of German Historical School historicism that seeks to preserve the aura of subjectivity, of Hegelian Ver-geist-igung (embodiment of spirit, or divine emanation), for human existence. (The most explicit elaboration of this methodological individualism is in Friedrich Hayeks The Counter-revolution of Science and in Schumpeters Economic Doctrine and Method.) It is the machinery of the congealed spirit, whether lifeless (the care for external goods, the wants and needs embodied in the labor process), or living (rational bureaucratic rule) that Weber seeks to balance (the opposition he vehemently emphasizes) with the Dezisionismus, the responsibility (Gewiss, Verantwortung categories expounded by Nietzsche in his mature works), of the leitender Geist. Even as late as 1918, Weber can still believe in the value-neutrality of his parliamentary framework. But as we shall see, already in 1919 political developments inside Germany had shaken the self-assuredness of his social-scientific analysis and proposals. Two short years after his death, in 1922, Carl Schmitt will publish his Politische Theologie in a direct challenge to Webers philosophical and scientific assumptions surrounding the Verfassungsfrage of the Weimar Republic, and in 1927, Heideggers Sein und Zeit will serve as the epitaph to Wilhelmine Zivilisation and to the Kultur of Weimar. The Nazi Catastrophe was just around the corner, presaging the imminent obscuring of the world. (The phrase obscurcissement du monde is taken from the French translation of Heideggers lectures delivered in Paris in 1935, published originally as Einfuhrung in die Metaphysik.) ******************** What in fact happens in factories is that the daily working lives of men are determined by the congealed spirit of the lifeless machine. The means of production are the lifeless machine: as such, they cannot have a will of their own. Nevertheless, their function, shape and form - their technological attributes are determined by the material needs and wants of the men who in their operari, in the objectification of their needs and wants must utilize the lifeless machine that

therefore only appears to have the power to force them to serve it, but in reality possesses this power only (!) because it is the resultant objectification operated by the living machine of rational and systematic bureaucratic rule of private capitalists or state administration - of their conflicting , opposed and irreconcilable self-interests as these are filtered scientifically and optimized, for the present and for the foreseeable future, by the market mechanism! Only in this sense can a lifeless machine become a congealed spirit or a crystallised spirit [geronnener Geist] (also translated as objectified mind by Gerth and Mills in From Max Weber). Weber borrows this expression from Marx [Kapital] and Simmel [Philosophische Kultur], but infuses it with Nietzschean meaning. Marx had intended (in The German Ideology and in the Grundrisse, for instance) that machines embody the social relations of production of a particular society; but in Weber machines objectify the neednecessity of human instincts in conflict with one another. Whereas in Marx technology re-produces (reflects and preserves) the existing power relations between producers in a process that can be resolved or be super-seded dialectically through the growing socialization (again, Simmels notion, understood philosophisch here by Weber) of human needs and the spreading inter-dependence of social labour, for Weber instead this socialisation reflects only the rationally calculable and efficient provision for the antagonistic needs of workers and capitalists both within and across the class divide. In Marx the means of production embody the political command of the capitalist who seeks to divide the ineluctable interdependent interaction the inter esse of social labor into the false homogeneity of individual labors remunerated in accordance with an extrinsic quantitative metre (dead objectified labor) in the form of the wage. The capitalist exploits politically the ineluctable sociality of the labor process in the attempt to reproduce its artificial separation both from the means of production and from labor interaction. The mystique of capitalism is the legitimation of this act of violence the reduction of living labor to mere abstraction both collectively from the means of production and individually from the sociality of human labor. For Marx therefore the congealment, the crystallization of labor-time consists precisely in the political continuity of this capitalist design, this project of domination over living labor through dead labor or crystallized labor. For Marx, in other words, the crystallization of labor-time, the reification of human experience has little to do with mysticism or fetishism but purely with sheer and abject political violence! Marxs crystallized labor corresponds to this congealment of living labour into labor power or labor time (Marx refers specifically to Arbeits-zeit) or dead objectified labor imposed coercively and enforced in the factory by the authoritarian command of the capitalist over workers in the labor process. The antagonism of the wage relation over the distribution of surplus value the ratio between the necessary portion of the working day and its surplus portion that constitutes the exploitation of workers is mediated by the means of production that embody or crystallize the socially necessary labor time or value that went into their original production. The means of production therefore are not mere lifeless machines but embody or crystallize

value that is extracted by the capitalist in the process of production and that is to be realized later by means of the sale of goods on the market. And yet Marxs analysis will converge with Webers once Marx (and the Weberian Lukacs) try to find a scientific proof of exploitation in the very possibility of socially quantifying this crystallized labor-time in the concept of surplus value or theft of labor-time, which is a contradiction in terms as far as Marxs critique of political economy and of capitalism goes for the simple reason that reification is a political practice that can in no way shape or form or manner be transmuted into the measurable value content of produced commodities Marxs socially necessary labor time! Differently put, if, as Marx himself avows, it is the market that decides ultimately what labor-time is socially necessary and what is not, then clearly it is not the production process (Marxs process of valorization) that determines value, but rather the process of realization of value through the sale of goods, which is entirely dependent on the subjective valuations of autonomous or spontaneous market demand in blatant contradiction of Marxs thesis! And if, conversely, market demand is itself determined by the amount of value (of crystallized labor-time) in possession of market agents or purchasers in the form of monetary media, then these monetary media and the amount of value they represent must themselves have been determined by the amount of value already produced in the production process! And here we have the perfect circulus vitiosus exposed by Bohm-Bawerk! The thought process by which Marx passes erroneously from the reification of the experience of the labor process by individual workers to its reification as labor time that is quantifiable in terms of output per unit of time (productivity) is usefully illustrated by Lukacs in his exposition of Reification in the Geschichte:
If we follow the path taken by labour in its development from the handicrafts via cooperation and manufacture to machine industry we can see a continuous trend towards greater rationalisation, the progressive elimination of the qualitative, human and individual attributes of the worker. On the one hand, the process of labour is progressively broken down into abstract, rational, specialised operations so that the worker loses contact with the finished product and his work is reduced to the mechanical repetition of a specialised set of actions. On the other hand, the period of time necessary for work to be accomplished (which forms the basis of rational calculation) is converted, as mechanisation and rationalisation are intensified, from a merely empirical average figure to an objectively calculable work-stint that confronts the worker as a fixed and established reality. With the modern 'psychological' analysis of the work-process (in Taylorism) this rational mechanisation extends right into the worker's soul Thus time sheds its qualitative, variable, flowing nature; it freezes into an exactly delimited, quantifiable continuum filled with quantifiable 'things' (the reified, mechanically objectified 'performance' of the worker, wholly separated from his total human personality: in short, it becomes space. (GuK, pp.89-90)

It is entirely evident here what atrocious non sequitur Lukacs has committed! Simply because time [Lukacs should say the workers experience of time] sheds its qualitativenature under the capitalist command of the regular discipline of the factory for workers, this does not even remotely mean that therefore timefreezes into

an exactly delimited, quantifiable continuum filled with quantifiable things[whereby] it becomes space! It does not and cannot do so! Time remains time! And the material products of living labor do not thereby become quantifiable things in terms of value! No matter how much a capitalist may oppress a worker, time does not freeze, it does not congeal or crystallize! Nor does it become space! Yet this is precisely the mistake that Marx himself makes in his conceptualisation of value as socially necessary labor-time, as crystallized labor-time. Lukacs quotes directly from Marxs Kapital:
Through the subordination of man to the machine the situation arises in which men are effaced by their labour; in which the pendulum of the clock has becomes as accurate a measure of the relative activity of two workers as it is of the speed of two locomotives. Therefore, we should not say that one man's hour is worth another man's hour, but rather that one man during an hour is worth just as much as another man during an hour. Time is everything, man is nothing; he is at the most the incarnation of time. Quality no longer matters. Quantity alone decides everything: hour for hour, day for day ....

Marx needed this notion of crystallized labor-time to serve a dual purpose: - first, to enable him to claim that he had successfully quantified value and therefore to establish his labor theory of value on a scientific footing; but, second, he needed it also to be able to retain the political and social foundations of capitalist social relations of production as historical phenomena that were not immutable (sub specie aeternitatis) but subject to human action. The seeming oxymoron of historical materialism encapsulates this constant search by Marx for a way to reconcile science and politics or history. Given that this is equivalent to squaring a circle, it is not surprising that Marx failed in the attempt. Marx was certainly sufficiently intelligent and competent in economic theory to realize that the quantity of things produced in the capitalist process of production has nothing to do with the value of that production which is determined instead by the extent to which that production is done by employing socially necessary labor-time. (Contrast this with how Lukacs instead is clearly all at sea when dealing with matters that are not immediately philosophical as is evinced by the remarkable difference between the clearly incompetent discussions in Reification of economic matters [especially Marginal Utility Theory] as against the sure mastery of his philosophical critique in the section on The Antinomies of Bourgeois Thought.) Nor can it be doubted seriously that Marx was aware of the impossibility of reducing objectively, physically, heterogeneous labor to a homogeneous substance: indeed, he counted this, the discovery of the Doppelcharakter of the commodity labor power (its being at once living labor that valorizes capital and labor power that is exchanged on the market), as perhaps his greatest achievement. It is just as certain, as Colletti has noted, that for Marx value was a social hieroglyph that, like God or the soul, has no material existence and yet is objective in that it conditions and guides human action. But, and here is the crux, this theory of value is inconsistent with the notion of market competition. One of two things: - either market competition is regarded by Marx as an autonomous and spontaneous sphere of activity not enforced politically by one class against another, in which case it is an aporetic

concept because competition invariably ends up destroying competition (!); or else market competition is a sphere of activity that is politically enforced, in which case, eo ipso, there can be no competition as a reality a se stante (that can stand on its own) and that allows value to be determined independently of politically-enforced rules! Yet Marx worked precisely on the grim assumption of the Law of Value, that capitalist society reproduces itself through the operation of the self-regulating market, especially its pessimistic feature competition (the dira necessitas). Consequently, he had to persevere with his inconsistent theoretical framework because to have done otherwise, to have accepted that value is an entirely political category and that the capitalist economy is operated by concrete and identifiable social institutions would have meant for him to be lowered once again into the kingdom of shadows, into the shadowy world of the Political, into the interpretation of capitalism as a set of specific historical institutions, something he despised and spurned because he identified it mistakenly with the ideological, superstructural public sphere of liberalism founded on the optimistic features of the market (commutative and distributive justice). But the fact that Marx retained the pessimistic features of market competition so as to prove scientifically his determination of value as socially necessary labor time meant that essentially he replicated the fallacious notion of a homogeneous substance called Value that forms the subject-matter of the Economics both in its Classical and Neoclassical versions! From Smith to Weber, and including Marx, the Economics refuses to see the capitalist economy as a network of political institutions but sees it instead as an unplanned, anarchic mechanism that can reproduce itself, that can be in equilibrium only if its participants can discipline or police one another in the act of exchanging goods by virtue of their very egoism, of their self-interest. Competition is construed therefore as a jumble of conflicting and opposing forces, as a system of conflicting needs and wants, tugging in different directions, that annul or balance one another and, by so doing, yield an equi-librium of prices consistent with the real value of the goods sold on the market. The pessimistic matrix of this conception of competition, common to both Marx and Weber, is quite obviously to be found in Hobbess political theory and its scientific progeny, Newtonian mechanics. It is nothing other than the Hobbesian scientific hypothesis of the state of nature with its war of all against all reproposed in bourgeois garb as the political convention of the contractual laws of competition that could legitimize the newly-founded science of Economics and, above all, its Political homologation in the philosophy of Liberalism of the State of Law or Rechtsstaat! (The classic exposition of this ignis fatuus of economic doctrine and ideology is in Karl Polanyis The Great Transformation. Of course, Marx falls into this scientistic trap in Das Kapital, but generally not in the Grundrisse which are therefore much to be preferred as the exposition of Marxs overall theory of capitalism. Incredibly, in Natural Law and Revolution, now in Theory and Practice, Habermas argues that it was Marxs finding of the theft of labor time in the pure exchange categories of bourgeois law that discredit[ed] so enduringly for Marxism both the idea of legality and the intention of Natural Law as such that ever since the link between Natural Law and revolution has

been dissolved! Habermas, who is almost entirely innocent of economic theoretical training, cannot see that indeed it is that side of Marxs theory and of Socialism that believes in the fable of the theft of labor time that then must necessarily believe, vi rerum [by force of things!], in the legitimacy of legal categories that draw Habermass analysis back into the orbit of Arendts liberalist and jusnaturalist rendition of the historical reality of revolutions! Habermas manages therewith to undo the valid critique of Arendts On Revolution that he had expounded in his essay Die Geschichte von den zwei Revolutionen. See also Part Three discussion of these themes.) Given the necessary failure of this critique of capitalism to prove in quantitative terms in terms of value as a quantity, of surplus value as theft of labor time the existence of exploitation, it is evident that Marx and Lukacs must then turn to the political analysis of capitalist social relations of production: but here, ironically, because they are forced to move on the same conceptual grounds as bourgeois political economy, they can offer no greater objection to capitalism than the fact that it extends Weberian rationalization to every aspect of social life even if this is only founded on an illusion!
But this implies that the principle of rational mechanisation and calculability must embrace every aspect of life. Consumer articles no longer appear as the products of an organic process within a community (as for example in a village community).They now appear, on the one hand, as abstract members of a species identical by definition with its other members and, on the other hand, as isolated objects the possession or non-possession of which depends on rational calculations. Only when the whole life of society is thus fragmented into the isolated acts of commodity exchange can the 'free' worker come into being; at the same time his fate becomes the typical fate of the whole society. Of course, this isolation and fragmentation is only apparent However, if this atomisation is only an illusion it is a necessary one. (Lukacs, Geschichte, pp.91-2)

Neither Marx nor Lukacs understand the powerlessness (Ohnmacht) of a critique that describes capitalism as a necessary illusion! If an illusion is necessary, then it cannot be dispelled except by changing the conditions that make it necessary. But Marx and Lukacs are clearly arguing here that it is the illusion of commodity fetishism, and not the violence of capitalist command over living labor, that constitutes the necessity the freezing, congealment, or crystallization of labor-time into value of capitalist production! This explains why Lukacs in the Geschichte comes so close to sharing Webers analysis of capitalism almost word for word! (See pp.95ff where Lukacs quotes Weber at length from Parlament und Regierung, without hint of criticism!) Lukacss incomprehension of the utterly reactionary pathos of his artisanal nostalgia the village community! - against specialization is quite breath-taking. In this regard, Webers contemptuous dismissal of the socialist charge of separation against capitalist rationalization and mechanization is entirely understandable and condivisible. Amidst the mystique surrounding this late-romantic Lukacsian notion of reification

(which has spawned lamentably an entire industry of useless philosophes), Lukacs himself does have time to perceive the necessity of crisis in capitalism. Yet he interprets it uncritically as merely a moment in which the anarchy of capitalist production leads to the collapse of the system: it is an echo of the infamous Zusammenbruchstheorie the theory of final collapse that will preoccupy and distract the political strategy of the Linkskommunismus at the turn of the last century. Lukacs therefore completely misunderstands the strategic importance of Webers own analysis of the Rationalisierung in the precise context of drawing up a specific political project of trans-formation of bourgeois political institutions around the Verfassungsfrage, the new Constitution of the Weimar Republic. (And so does Hannah Arendt, whose On Revolution is a paean to the revolutionary Spontaneitat of the Linkskommunismus promulgated by the heroine of her youth, Rosa Luxemburg.) Despite his fallacious belief in a homogeneous entity called labor, Weber understood, having learned from Schumpeter, what Lukacs totally ignored: the inevitability of crisis as a decisive moment of the utilization of class conflict in the Entwicklung creative destruction, trans-crescence, growth-through-crisis of capitalist industry and society. (The etymological nexus between crisis and critique and decision is drawn in fn. 155 of R. Kosellecks Kritik und Krisis.) ********** We saw in the Nietzschebuch how Nietzsche unleashes in the Goetzes-Dammerung a pitiless tirade against the dialecticians Socrates and Plato who are guilty in his eyes of seeking to suppress the self-interested speculation of the Sophists against their championing of the purity of the philosophers quest for the dis-interested and dispassionate Truth. In the earliest clear statement of his own novel quest for a thoroughgoing critique (Nietzsche saw himself as a fearless critic) of the Will to Truth, Nietzsche describes in Uber den Wahrheit und Luge how human beings abandon the Hobbesian bellum omnium of the state of nature to form the status civilis and by so doing are prompted by con-venience by the social con-ventum or social contract to enter into, precisely, con-ventions that by their very symbolic conventionality in fact exclude the physio-logical reality of individual needs by equalizing the unequal, by comparing the incomparable. The Will to Truth consists just in this crystallization of human reality into symbols such as language, logic and mathematics that consequently come to replace and mask the intuitive reality of the individuals representation (Vorstellung, also dissimulation) of his own self-interest in the original state of nature. The merit of the Sophists for Nietzsche is that their rhetorical pursuit of selfinterest is a more genuine expression of human reality than the pretended dis-interested dialectical philosophical efforts of Socrates and his disciples. The Sophists know that the Truth is a mere perspective and that what matters are the interests of human beings of the body. Socrates and Plato instead absurdly believe in the real world and thereby render it into a fable, into another world so per-fect as to be unreal and unattainable the empyrean of Platonic Ideas. It is the crystallization of human reality through the ontogeny of thought or the perspective of the herd, the

dictatorship of self-consciousness that Nietzsche combats vigorously. Between poiesis and techne, Nietzsche prefers the sensuousness, the immanence of the latter. Ernst Mach begins his magnum opus, Erkenntnis und Irrtum, by emphasizing exactly this distinction between the dis-interested pursuit of truth by the scientist and the more mercenary efforts of the artisan interested only in short-term and opportunistic material gains. This distinction or dichotomy between the true pursuit or the pursuit of truth on the part of the philosopher for the being of beings or ontology the Aristotelian prima philosophia - as against the interested efforts of the Sophists for the utility of beings, for applied philosophy, for mere practical science, is what Heidegger condemns in the very opening pages of his imposing Metaphysical Foundations of Logic:
The philosopher has [13] taken upon himself the seriousness of the concept, of fundamental questioning. Everything routine, everyday, average (fallenness) is the opposite of this endeavor. The sophist, on the contrary, as rationalizer and know-it-all, appoints himself to work on human beings, persuades them they must worry about one another's spiritual needs. (pp.12-3)

.
In the direction of this basic problem, the decisive determination of human Dasein lies in the insight that that which we call the understanding-of-being belongs to Dasein's ontological constitution. Human Dasein is a being with a kind of being to which it belongs essentially to understand something like being. We call this the transcendence of Dasein, primal transcendence (see the second major part of the lecture course). It is on the basis of transcendence that Dasein comports itself to beings, is always already thrown onto beings as a whole. (p.16) . This fundamental philosophical question about man remains prior to every psychology, anthropology, and characterology, but also prior to all ethics and sociology. The fact that the aforementioned appear wherever this question is more or less explicitly alive, and are even taken for essential in its stead, only demonstrates one thing: that this question, and with it the basic problem of philosophy, is not and never does become easily accessible. For this reason also it is constantly threatened by sophistry. What is easier than, in a comfortable and interesting way, to interest a human being in human beings, to enumerate for him his complexes, potentials, standpoints, one-sidedness, and failings, and to say this is philosophy? It is crucial that the human being, in this sophistical sense, become completely irrelevant in the rightly understood fundamental philosophical question about man. Philosophy never "busies" itself with man in this hustling sense in which man can never take himself to be important enough. (p.17) . Thus also the result of a philosophical effort has a character fundamentally different from the acquisition of particular sciences. To be sure, philosophizing-and it especially-must always proceed

through a rigorous conceptual knowledge and must remain in the medium of that knowledge, but this knowledge is grasped in its genuine content only when in such knowledge the whole of existence is seized by the root after which philosophy searches-in and by freedom. (p.18)

If we combine these seemingly opposing perspectives on the relationship between knowledge and human interest, we will see that in all cases, from Hobbes to Nietzsche and through to Mach and Heidegger, the essential feature of the negatives Denken (negative thought) is the utter denial of any inter esse in human being. From Nietzsches immanentist opposition to crystallized or congealed [the term he uses is StarrWerden, becoming fixed, translated as crystallized] human con-ventions that dissimulate the antagonism of the Hobbesian feral state of nature (cf. his 1873 piece, Uber Wahrheit und Luge), to the Machian dis-interest in the applications of scientific experimentation, to the Heideggerian transcendental destitution of the concrete ontic existence of man in all these cases we encounter the unbridgeable separation (Trennung) of human beings from their being human, from the concrete historical and material circum-stances and con-ditions of their species-conscious or phylogenetic being (Marxs Gattungs-wesen). (Hannah Arendt, in On Revolution and in The Human Condition, brilliantly captures this Roman notion of homo, the bare human being of the status naturae, as opposed to the juridical status of the persona [a theme developed later by Giorgio Agamben in Homo Sacer]. But Arendt completely misses this entire complex Hobbesian socio-theoretical framework of status naturae as the necessary scientific hypothesis [indeed, Euclidean! cf. Hobbess own Elements of Philosophy] from which the free political con-vention of the status civilis can be ana-lysed. In the process, she neglects Marxs own entire fundamental discussion of the Gattungswesen, already in Kapital [and unbeknownst to her, the critical discussions on technological development in the Fragment on Machinery of the Grundrisse] which is light years more advanced than Socratess literally archaic disquisitions on the soul to which she gives great priority! These matters we will discuss at length when we examine specifically Webers political sociology in Part Three.) Even Webers distinction between the Kalkulation of sober bourgeois capitalism and the opportunistic nature of its historical predecessors is based on this notion of the purity, of the spontaneity of modern capitalism in its unflinching application of the Rationalisierung to the organization of free labor under the regular discipline of the factory. For Weber, the Trennung, the separation of human beings from the production or objectification of their own existence is both the sine qua non of modern industrial work in the sense that it constitutes the crystallized spirit of the care for external goods now embodied by the lifeless machine and the nec plus ultra of capitalist industry in the sense that only because of this separation and the conflict

that it engenders between all economic agents is the full rationalization of production on the part of the living machine of capitalist bureaucratic rule made possible. Essentially, and quite instructively for us, Weber duplicates for his own theory of capitalism the conditions of the state of nature, the war of all against all, that Hobbes had hypothesized so as to be able to establish scientifically the need for a convention by human beings to erect a State-machine that would represent rationally (!) their otherwise ir-reconcilable self-interests! It is the feral conflict of the war of all against all the Weberian care for external goods, the hypothesized conflict of the iron cage that allows the crystallization the convention! of the spirit that is represented jointly by the lifeless machine (the technology adopted to maximize rationally the provision for the care for external goods) and the living machine, that is, the actual living Spirit (Heideggers expression in his doctoral thesis on Duns Scotus) needed to guide and govern the lifeless machine and the free labor that operates it. Together, the lifeless machine and the living machine merely utilize rationally the antagonism of self-interests: - this is not a re-conciliation but a decision in extremis, ob metum mortis a decision at once free and unfree, an ultima ratio, a reason made rational by its being ultimate. And here, as in Hobbes and in Schumpeter, the problem poses itself of how the State-machine can effectually re-present and then govern the self-interests of free labor involved in the rational operation of the machine. What legitimacy can such a Regierung have, and how can its legality take institutional, parliamentary form? The next stage of the critical debate will involve the illiberal Hobbesian Carl Schmitt and the liberal Kelsenian Weber. ************ Weber does the exact opposite of Marx and ends up therefore with the same vicious circle! For Weber the machine is what allows the conflicting wants and needs of workers in their free status to converge in the purely instrumental aim (the Zweckrationalitat) to maximize the provision for and satisfaction of these needs and wants! Far from dividing workers through capitalist command, machinery actually concentrates free labor under the rational bureaucratic rule and the regular discipline of the machine, of the factory! It is this machine or factory that allows the congealed spirit of irremediably, irreconcilably selfish interests to be amalgamated or associated (the Kantian ungeselle Geselligkeit, unsociable sociability) for the sake of maximizing the autonomous or spontaneous market demand of (free) labor! For Weber therefore this labor is naturaliter un-sociable, naturally un-defined and pure potentiality sheer force (Kraft) or power (Macht) that can be applied rationally as a physical quantity in the process of production. Because this labor is naturally separate and its wants and needs conflictual, it is simply impossible for there to be any separation of something that was never united! The only union, the only osmosis, the only homologation of conflicting self-interests and individual choices, of subjective marginal utilities the only social synthesis is through the market and its competitive measurement of the Value of all consumer goods and

of labor itself through the marginal utilities, the inscrutable (metaphysical!) individual choices of each separate in-dividual! We should note here how the German Historical School and other early opponents of Neoclassical Theory objected to it on the ground that utility is a homogeneous entity whereas in fact the motivations behind economic action are quite evidently heterogeneous. The error that the Economics commits (we call it "the Economics" rather than "economics" to emphasize that the essence of "economics" is to serve as a strategy of political power) is to presume that its "subject-matter" (its sub-iectum), its "quidditas" is actually a Sub-stance, a homogeneous qualitas occulta - and it presumes as much because it starts from the phenomenology of capitalist social relations of production which are "co-ordinated and measured" by money. Every economist from Smith to Marx to Jevons started from the fact that every "thing" that is exchanged in the market has a "price" and that therefore all "things" on the market must have a homogeneous "Value" - and that this "Value" must be the "subject-matter" of a "science of Economics"! The fact that Neoclassical Theory never even bothered to question this fundamental assumption on the ground that science is not concerned with ultimate values or metaphysical substances illustrates wonderfully how instrumental was Machs empiricist understanding of what constitutes science in the development of marginal utility (see Schumpeters dismissive one-sided account of these apories in the last chapter of his Economic Doctrines). One of the constant objections to capitalist enterprise is precisely this that it reduces all aspects of human social interaction to the homogeneous pursuit of profit. Clearly, however, what these critics fail to do is to confront the central question that we are addressing here that is, how such a reduction of the heterogeneity of human activity to homogeneous and rationally calculable enterprise or profit is at all possible! (We are performing perhaps a task similar to Kants critique inquiring about how synthetic a priori judgements are possible, or indeed, to adapt Nietzsches sardonic twist when he asked why are a priori judgements necessary?, we should also ask: why are these categories necessary for a capitalist strategy of command?!) Here again Weber makes the colossal Neo-Kantian mistake of assuming that there is a specific form of human knowledge or action that is singularly economic just as he conceded to Kelsen that there is a specific dimension of human enquiry and social activity that is legal! Weber simply mistakes what are mere and highly contingent institutions of human groupings the economy and value, the law, the State and power for hypostatic and ineluctable forms of human knowledge that a social scientist or observer can analyze in their epistemological specificity and autonomy from other disciplines and then apply scientifically to specific historical realities! The fact that a great mind such as Webers never even posed itself the question as to how and why utility could be adduced as the ectoplasm, the metaphysical quidditas that could constitute the subject-matter of the Economics bears witness to the ability of the social production of exchange value and its politically-enforced transmutation into money, then money capital, and then profit, to mystify human social relations as Marx took pains to emphasize, though even he succumbed to the temptation of hypostatizing value.

The evident contra-diction for Weber is that it is impossible for any form of human cooperation to be founded on the assumption of irreconcilable self-interest, of inscrutable marginal utilities. Weber takes the standpoint of the Neoclassical theory of Value. The means of production are mere technological devices, mere labor-saving tools that serve purely to maximize the production of goods with labor and land as the other technical factors of production. The dead machine does not re-present or embody for Weber, as it does for Marx, the attempt by the capitalist to divide or parcelise social labor, the human phylogenetic common being, coercively into homogeneous individual labors in competition with one another so as to extract surplus value from living labor. Not at all! For there is no inter esse in living labor, no sociality, no inter-action! For Weber, the dead or lifeless machine is congealed spirit only because it allows individuals to maximize the satisfaction of their needs and wants which remain at all times in conflict with one another and cannot be reconciled by the labor process which, for him, remains purely instrumental! The machine with its crystallized spirit (indeed, because of it!) does not and cannot reconcile the conflicting self-interests of workers and capitalists within and across the class divide: for it remains a machine whose only spirit is the crystallization or congealment of the conflict inherent to the care for external goods! The machine serves only to maximize rationally the productivity of free labor in all its free conflictuality and antagonism, in all its strife. The process of production is not in the least antagonistic! The capitalist replaces machinery to save labor not to command living labor. Production is purely technical, which is why it is organized rationally by a living machine, a bureaucracy (state or private capitalist). It is only in the market that the conflict between self-interests can be and is manifested openly in the settling of the value of goods through the law of supply and demand. The conflict is not between workers and capitalists and not really in the process of production whose rationality can be established scientifically through the Kalkulation of profitability, but between the self-interests of all economic agents, between their limitless wants and the scarce provisions.
What characterises our current situation is firstly the fact that the private sector of the economy, in conjunction with private bureaucratic organisation and hence with the separation of the worker from the means of operation (Betriebsmitteln), dominates an area that has never exhibited these two characteristics together on such a scale at any time in history, namely the area of industrial production. Secondly there is the fact that this process coincides with the introduction of mechanical production within the factory, and thus with a local concentration of labour on one and the same premises, with the fact that the worker is tied to the machine, and with common working discipline throughout the machine-shop or pit. Above all else, it is this discipline which gives our present-day way of 'separating' the worker from the means of work (Arbeitsmittel) its special quality. It was life lived under these conditions, this factory discipline, that gave birth to modern socialism. Socialism of the most diverse kinds has existed everywhere) at every period and in every country in the world. The unique character of modern socialism could grow only on this soil.

This subjection to working discipline is felt so acutely by the production worker because, in contrast to, say, a slave plantation or enforced labour on a manorial farm (Fronhof), a modern production plant functions on the basis of an extraordinarily severe process of selection (Auslese). A modern manufacturer does not employ just any worker, just because he might work for a low wage. Rather he installs the man at the machine on piece-wages and says: 'All right, now work! I shall see how much you earn.' If the man does not prove himself capable of earning a certain minimum wage he is told: 'we are sorry, but you are nor suited to this occupation, we cannot use you. He is expelled because the machine is not working to capacity unless the man operating it knows how to utilise it fully. It is the same, or similar, everywhere. In contrast to the use of slave labour in antiquity, where the lord was tied to whatever slaves he had (if one of them died, it was a capital loss for him), every modem industrial firm rests on the principle of selection. On the other hand this selection is driven to an extreme of intensity by competition between entrepreneurs, which ties the individual entrepreneur to certain maximum wages; the inevitability (Zwangslaufigkeit) of the workers earnings corresponds to the inevitability of discipline. (Socialism, in CWP, p.283.)

We can see how ultimately both Marx and Weber reason in identical terms! In terms, that is, of the rational organization of free labor under the regular discipline of the factory! It follows therefore that the crystallization of labor-time (Marx) or of Spirit (the care for external goods or iron cage for Weber) really and truly boil down to one and the same thing: - the regular discipline of the factory. But this crystallization, which necessarily involves conflict and antagonism between workers and capitalists for Marx and between all economic agents for Weber, requires for both theoreticians the filter of the market mechanism to decide on the distribution of the goods produced in the factory and on the selection of the workers and on the technologies to be used for production! And this distribution or selection or market allocation of resources responds for both Marx and Weber to the rational and systematic Kalkulation or Rationalisierung made possible by the command over free labor on the part of capitalists in the factory for the pursuit of profit!
The decisive impetus toward capitalism could come only from one source, namely a mass market demand, which again could arise only in a small proportion of the luxury industries through the democratization of the demand, especially along the lines of production of substitutes for the luxury goods of the upper classes, (General Economic History, p.310).

This is the ultimate meaning and significance of the Demokratisierung! The rationalization operated by capitalist industry has engendered also as part of the same process the emergence of rational Socialism! In other words, as we will see in Part Two, for Weber the central problem of capitalism is the Problematik of rational Socialism that is to say, Socialism not just as a problem external and opposed to capitalism, but rather Socialism as a specific set of problems intrinsic to capitalist industry and society! Indeed, for both Marx (disapprovingly) and Weber (approvingly) we have a democratic

market society and an authoritarian factory! How or whether to reconcile the two will be the greatest social problem of the century leading up to our present. Marxs living labor becomes violently alienated by capitalists through its separation from its interaction, its Gattungswesen, and from the means of production (Trennung) and ends up in the fetishism of commodities or reification of living labor as crystallized labor time, as a homogeneous quantity that can be divided and remunerated through the payment of wages to individual workers commensurate with or equivalent to the labor-time that is socially necessary for their reproduction. Of course, Marx famously added to his definition of what is socially necessary for the reproduction of workers a social and cultural component. But this is simply pathetic: because it does not address the issue of what makes labor-time socially necessary in the first place, apart from capitalist coercion. It is this crystallization of labor time that, according to Marx, allows the rationally calculable allocation of social resources in market capitalism. As we have shown, however, this rational allocation or Rationalisierung according to the Law of Value or of the Equalisation of Profit is simply not possible because living labor is inconsistent with its quantification or the crystallization of labor time: it is an impossible trans-substantiation of realities that are toto genere heterogeneous and utterly incommensurable. Yet Marxs critique converges with Webers notion of the Rationalisierung, of the organization of free labor under the regular discipline of the factory that is dictated by the search for profitability on the part of capitalists who are themselves constrained by the autonomous or spontaneous market demand motivated by human needs or speciesconscious being (Marx) or the iron cage or stahl-hartes Gehause of self-interested individuals (Weber). Both Marx and Weber think in terms of the regular discipline of formally free workers in the factory in combination with the determination of Value through the social osmosis or social synthesis of the market mechanism through the Law of Value and the Equalisation of Profit. But whereas Marx insists on the determination of value in the process of production through exploitation or the theft of labor time by capitalists, Weber adheres to Neoclassical Theory in seeing the process of production as part and parcel of the rational organization of free labor for the sake of profits that arise from autonomous market demand based on the ubiquitous conflict between individual wants (the iron cage) over scarce provisions. We will discuss in Part Two whether it is possible to unify these approaches that we may describe as theories of the mode of production in Marx, and of the mode of consumption in Weber. Both approaches are circuitous (circuli vitiosi) and metaphysical because they seek to quantify through the Law of Value and the Equalisation of Profit what are unquantifiable aspects of being human: - living labor for Marx and individual utility for Weber. What Marx sees as the violent exploitation of workers, the alienation of their living labor on the part of capitalists in the process of production and the consequent fetishism and reification of social reality, Weber sees as the Ent-zauberung of human experience occasioned by the Rationalisierung of social life due to the universal conflict between individuals over their care for external goods. There can be no co-operation, no Marxian Gattungswesen (species-conscious being) or

Lukacsian and Heideggerian totality, no Durkheimian solidarity, either mechanical or organic, - there can be nothing that workers can be alienated from (!) in Webers Nietzschean interpretation of the process of production. Nor, therefore, can there be
antagonism or conflict intended as exploitation first because conflict cannot be resolved with such teleological notions, and second because conflict is the very essence of the imbalance between want and provision: conflict is absolutely inevitable and ineluctable! It is life!

Here is Nietzsche:
[L]ife itself is essentially appropriation, injury, conquest of the strange and weak, suppression, severity, obtrusion of peculiar forms, incorporation, and at the least, putting it mildest, exploitation [Ausbeutung]; -- but why should one for ever use precisely these words on which for ages a disparaging purpose has been stamped? Even the organisation within which, as was previously supposed, the individuals treat each other as equal--it takes place in every healthy aristocracy -- must itself, if it be a living and not a dying organisation, do all that towards other bodies, which the individuals within it refrain from doing to each other: it will have to be the incarnated Will to Power, it will endeavour to grow, to gain ground, attract to itself and acquire ascendancy - not owing to any morality or immorality, but because it lives, and because life is precisely Will to Power. (Beyond Good and Evil, Aphorism 259.)

*******

Part Two
6 Webers Theory of the Origins of Capitalism
Truly what is here preached is not simply a means of making one*s way in the world, but a peculiar ethic. The infraction of its rules is treated not as foolishness but as forgetfulness of duty. That is the essence of the matter. It is not mere business astuteness, that sort of thing is common enough, it is an ethos. This is the quality which interests us. (Vorbermerkungen, p.51) Labour must, on the contrary be performed as if it were an absolute end in itself, a calling. But such an attitude is by no means a product of nature. It cannot be evoked by low wages or high ones alone, but can only be the product of a long and arduous process of education. (p62) The ability of mental concentration, as well as the absolutely essential feeling of obligation to one's job, are here most often combined with a strict economy which calculates the possibility of high earnings, and a cool self-control and frugality which enormously increase performance. This provides the most favourable foundation for the conception of labour as an end in itself, as a calling which is necessary to capitalism: the chances of overcoming traditionalism are greatest on account of the religious upbringing.

This observation of present-day capitalism in itself suggests that it is worth while to ask how this connection of adaptability to capitalism with religious factors may have come about in the days of the early development of capitalism. (ibid., p.63) A specifically bourgeois economic ethic had grown up. With the consciousness of standing in the fullness 176 of God's grace and being visibly blessed by Him, the bourgeois business man, as long as he remained within the bounds of formal correctness, as long as his moral conduct was spotless and the use to which he put his wealth was not objectionable, could follow his pecuniary interests as he would and feel that he was fulfilling a duty in doing so. The power of religious asceticism provided him in addition with sober, conscientious, and unusually industrious workmen, who clung to their work as to a life purpose willed by God. (Protestant Ethic, p.176.)

Webers attempt to locate the spirit of capitalism and therefore great part of the historical origins of capitalism in the protestant work ethic at the beginning of the bourgeois era as a specifically bourgeois economic ethic must fail, and for reasons that are both instructive and politically useful to us us the party against labor. Not only is there a problem with historical periodisation: - the timing of the protestant ethic does not accord with the rise of agrarian and then industrial capitalism in England and Northern Europe in the early 1600s. Not only is it a horrendous reality that, far from being sober, conscientious, and unusually industrious workmen, who clung to their work as to a life purpose willed by God, the industrial proletariat that was herded into vast urban centres in England from London to Manchester and beyond resembled an army returning from a horrific war. Just read any Charles Dickens novel and you will understand perfectly well how far from reality Weber is here. Webers judgement is not just wrong but deprecable in the extreme. His sociological and theoretical work is motivated by the interests of his own class, the bourgeoisie: and this is precisely why it is not sufficient to say how wrong he was: it is very important to get inside the mind of one of the sharpest and perspicacious and encyclopaedic political theoreticians the bourgeoisie has ever produced. It is symptomatic of his espousal of the point of view of his class that Weber should put the cart before the horse both analytically (as we are about to see) and historically by seeking to camouflage as a religious belief a calling the vile and horrific practices of a class that to this day seeks to glorify and rationalize its brutality in the name of scientific objectivity and ascetic enterprise. Right from the beginning of his monograph, Webers quote from Benjamin Franklin to the effect that time is money brilliantly illustrates his misapprehension and obfuscation: it was not because people believed through their religious faith that time is money that a protestant work ethic developed. Instead, it was precisely because time had already become money that the bourgeoisie developed a religious apology for the enforcement of their as yet counter-productive bourgeois economic ethic (Classical Political Economy) on the rest of society. (Cf. on this, the superb study by EP Thompson

on Time and Work Discipline in the Industrial Revolution. An early retort against Webers thesis was by Henryk Grossman who made the same point as Thompson but without the all-important historical documentation.) What Weber was attempting to do with the central thesis of the Ethik was nothing less than to rewrite the truculent history of the rise of his class in Europe and to cover it in sanctimonious ascetic self-righteousness: - the spirit of piety and mortification of the body that tragically degenerates into the pursuit of mundane riches. Weber refers to an economic ethic which already casts the net wider than he had intended by specifying the bourgeois ethic as a work ethic. And the fact that work does not make up the entirety of the economic is absolutely vital, crucial and essential to bourgeois ideology. Were the bourgeoisie to concede that work was the real source of all profits and indeed of value, then it would have a very difficult time arguing that capital is the most important factor of production and that indeed it is capital that makes production at all possible! Weber almost tacitly concedes this point by referring to an economic ethic and also by conceding that To-day the spirit of religious asceticismwhether finally, who knows?has
escaped from the cage, but victorious capitalism, since it rests on mechanical [181] foundations, needs its support no longer.

This demonstrates that, at most, the Protestant work ethic was only a support for the bourgeoisie certainly not a necessity and indeed it did not even serve to originate capitalist industry because, as we argued earlier, it is not the belief that time is money that creates capitalist industry but rather the fact (!) that time is money that makes possible and encourages the belief, the ethic! But the notion that time is money does not mean in the least that work is money! As we saw in the quotations given above, Weber already concedes that business astuteness is both independent of and originates much earlier than the protestant work ethic. Weber himself argues against his own thesis when he makes the following proposition:
The ability of mental concentration, as well as the absolutely essential feeling of obligation to one's job, are here most often combined with a strict economy which calculates the possibility of high earnings, and a cool self-control and frugality which enormously increase performance. This provides the most favourable foundation for the conception of labour as an end in itself, as a calling which is necessary to capitalism.

The contradiction, the non sequitur, in Webers reasoning is blindingly obvious: it is not the conception of labour as an end in itself that makes it a calling necessary to capitalism! It is rather a strict economy which calculates the possibility of high earnings, and a cool self-control and frugality which enormously increase performance that provide the most favourable foundation for the conception of labour as an end in itself! In other words, labour as an end in itself does not and cannot provide a

specifically bourgeois economic ethic but rather it can provide a specifically socialist economic ethic! The centrality of the Arbeit is not and cannot be the basis of the specifically bourgeois economic ethic that Weber is so desperately searching! The idea that labouris necessary to capitalism, that labour is the only source of value and of wealth that kind of miserable faith in laborand philosophy of labor belongs to all the dogooders of the rational socialism and of Keynesianism! This belief, which was central to the Classical Political Economy and to the ideology of Keynesianism is something that the bourgeoisie could never accept for its economic science and that it could embrace solely as the ideology of socialism, as the new opium of the masses! Even Hannah Arendt, no great authority in the matter, perceived this point directly, citing the Labor Theory of Value as a forthright ideology behind Western revolutions:
Theoretically speaking, the stage was set when first Locke - probably under the influence of the prosperous conditions of the colonies in the NewWorld - and then Adam Smith held that labour and toil, farfrom being the appanage of poverty, the activity to which poverty condemned those who were without property, were, on the contrary, the source of all wealth. Under these conditions, the rebellion of the poor, of 'the slavish part of mankind', could indeed aim at more than liberation of themselves and enslavement of the other part of mankind. (On Revolution, ch1, p.23).

But the very notion of labor as an exactly calculable, rational measure of profit is precisely dependent and indeed it is the creature! of capital itself!! There could simply be no labor (labor-power) without the regular discipline of the factory, without the political command of the capitalist that transforms living labour into the equivalent of dead objectified labour, that transmutes by means of sheer violence and coercion the living activity of workers into a quantity exactly and rationally and systematically calculable not physically or scientifically, but politically! - in terms of the wage, in terms of its own pro-duct, in terms of wagebasket goods! For this trans-mutation or meta-morphosis to occur this trans-substantiation! the living labour of workers must be subjected first to the capitalist organization of labor, which is the rational organization of free labour, which becomes the regular discipline of the factory imposed on free labour, which turns finally into rational Socialism, into the Problematik of modern Socialism and, at last, the economic science of Keynes in the General Theory, to which we will return. Weber draws the wrong conclusions from much more insightful and revealing premises:
The ability of mental concentration, as well as the absolutely essential feeling of obligation to one's job, are here most often combined with a strict economy which calculates the possibility of high earnings, and a cool self-control and frugality which enormously increase performance.

But in Webers own admission, it is not labor that leads to profits: it is rather strict economy and frugality that lead to the possibility of high earnings and of enormously increased performance. Weber commits the extraordinary non sequitur and mistake of arguing that strict economy and frugality have anything whatsoever to do with labor! If labor were the true source of earnings and profits, then the socialist Utopia would finally be realized and the capitalist class could be wiped out forever! How can labor as an end in itself, then, even in our wildest dreams form the basis for a specifically bourgeois economic ethic? But how can the ability of mental concentration and strict economy and frugality which are all negative and passive qualities, more saving rather than investment how can these passive habits lead to positive wealth, to Value, to the active generation of profits? How can frugality lead to higher earnings and increased performance or productivity and value? In truth, Weber ought to have known what the specifically bourgeois economic theory behind this argument was. - Because he was quite aware of the Neoclassical Revolution or the neoclassical theory of Marginal Utility developed by Gossen and Jevons and Menger, and in part even by Marshall and in particular he ought to have been aware of the significant addition to this Revolution in economic science operated by the Viennese professor Eugen Bohm-Bawerk, the bourgeois Marx and perhaps the most significant and influential member of the Austrian School at least according to his great and most scholarly pupil, Joseph Schumpeter. Webers Protestant Ethic still indirectly glorifies labour as at least one motor of wealth-creation in tracing the spirit of capitalism to the Christian notions of human expiation of the original sin ora et labora (work and pray). Yet although puritanical parsimony is one means (saving) of accumulating wealth, it is by no means a method of creating or producing wealth. This is the side that Weber neglects but that is present in Schopenhauer and is insightfully theorized by Bohm-Bawerk. For Webers Calvinists and Puritans, wealth is a sign of Beruf, of blessedness and active divine calling. But the Beruf, even in the religious specification of Entsagung, of renunciation and Askesis, does not yet sever decisively the theoretical link between labour and accumulation of wealth which is absolutely vital to the development of a specifically capitalist ethic freed from the moral theology of an obsolete Judaeo-Christian eschatology. Labour is still consumption of the world in that it pro-duces greater wealth; it is not deliverance from the world and from wealth; it is not resignation. Labour is still intimately connected with wealth-creation (see Weber, PE, beginning of section on Asceticism). Only by severing or reversing (um-kehren) the nexus between labour and utility or wealth-creation will an economic theory emerge that will relegate labour and the working class to their proper place in the market economy. Above all, only by severing the social-teleological osmotic link between labour and wealth will it be possible to replace the Judaeo-Christian Beruf, so burdened with religious tenets and moral theology (this was Schopenhauers critique of Kant and Hegel), with the amoral,

effective Entsagung that leads to the Unternehmergeist! This is the specifically bourgeois economic ethic that Weber was seeking at the end of Die Protestantische Ethik but understood incorrectly. The new link that needs to be theorized is that between saving as renunciation of consumption and thence as deliverance from the world (Schopenhauer), on one side, and utility and interest on the other. In reality, with the protestant ethic Weber is still unwittingly reprising Smiths theory: division of labour, specialization, as wealth-creation. Wealth is created through growing labour productivity enabled by exchange and therefore specialization, that is, through the pro-duction of more goods for exchange and the use of fewer goods for consumption. This growth of productivity through exchange is the source of wealth. In this perspective, wealth is the squeezing out of greater output from existing means of production or resources. By consuming less himself the worker can exchange more and by exchanging more he can specialize more so as to produce even more! The worker can be more productive by specializing, producing more and consuming less in the exchange. Smith assumes constant, fixed and exogenous technology. Smiths theory does not allow for innovation or the role of wealth as delayed consumption. Thus, consuming less oneself becomes producing wealth through exchange by producing more for exchange. Weber points this out as an aspect of Asceticism in (PE, p161). It can be seen how this protestant work ethic rationale preserved entirely the link between labour and wealth that could no longer serve the bourgeoisie after the initial phase of accumulation. What for Smith and the Puritans and for Weber - was wealth-creating division of labour, Hegel perceived in Smiths pin production as the antithesis of productivity that does not enrich the worker! The problem, of course, as Marx will correctly explain, is that the use value of the higher productivity of living labor (its wealth) is obviously greater with specialization, but the value-in-exchange of the labor-power of the worker is lower as a result! With good reason, Mandeville could chastise Smith with the harsh reality that the Publick that benefitted from Private Vices was not the working class whilst taking delight both in the ferity of humans as well as in exposing the hypocrisy of enrichment and immiseration for a divine purpose. Mandeville could still share the condemnation of laziness and of the charity halls, not for Deistic reasons related to the Protestant work ethic (for discouraging labor as an avenue to wealth), but for the cynical realization that they invited work-shirking! Let us take a closer look at the reasoning of the Neoclassics, starting with Bohm-Bawerk.
The reason why economists failed in this simple task [of defining Capital] was that they did not allow the facts to speak for themselves. Instead of simply describing them as they were, explanations were read into them and added to them; one feature was pushed into the foreground, another kept in the background, a third was quite overlooked, while perhaps a fourth was entirely absent, but was read into them. When every man had thus imported his own particular views bodily into the facts, it was, of course, no wonder that everybody got something different out of them. (The Positive Theory of Capital. II.1.4)

The facts speak for themselves. Eugen Bohm-Bawerk, the bourgeois Marx, had already demolished the labor theory of value by uncovering its metaphysical premises. The Value of goods sold on the market their prices is the immediate fact, the empirical phenomenon that needs to be described and not explained. The task of economic science, as with the physical sciences, is not to explain phenomena but to link them together in a manner that makes them visible and predictable so as to let the facts, the phenomena, speak for themselves, without the aid of an explanation that must be superfluous and redundant. The market price is not a phenomenon that can be explained with a sub-stance, an es-sence, a hypo-stasis a whatness or reality that stands behind or under or inside the phenomenon. Such essentialism or substantivism as is proffered by the labour theory of value that seeks to go behind and beyond the empirical facts of market prices can be nothing more than pure metaphysics, sheer confabulation, pure fantasy. Esse est percipi: what you see is what you get. Economic science must be a theory that allows us to place the phenomena in a regular and predictable relation with one another so that they can be described mathematically. And this is exactly what the new theory of marginal utility developed by Heinrich Gossen first, then by Stanley Jevons and Karl Menger in Vienna where Bohm-Bawerk taught, and so did Ernst Mach, the scientist behind this empiricist Berkeleyan philosophy of science allows us to do. The price of a good cannot tell us anything about its objective amount of value or utility because the law of supply and demand tells us only what the actual, real, visible valuation of goods is by market participants. Therefore, the price of a good can indicate only the relative and subjective utility of that good to its sellers and purchasers: a utility obviously not measurable in quantities but in terms of the subjective utility of the last marginal quantity offered in exchange for another good. The total utility of a good can be measured not cardinally but ordinally in relative terms calculated at the margin of exchange. Prices thus indicate the marginal utility of a good to its seller and purchaser relative to all other goods exchanged on the market. There is no objective quantity such as labor to explain prices no substance behind value. Value is quite simply the actual phenomenon indicated by market prices: no Freudian oceanic feeling, no Schopenhauerian sympathy only the physiological sign of the subjective marginal utility, its visible manifestation, the body as the objectification of Will. Therefore, no inter esse: labor is the aimless consumption of the world by the Will and the Will is the thing in itself. There is no common being, no inter esse, only strict phenomenalism, only sensations (Machian Empfindungen). To be is the same as to be perceived. Sichtbar machen: to render visible is the task of science, and to con-nect facts or public sensations in the simplest possible relation mathematically so that they can speak for themselves. In short, Simplex sigillum veri simplicity is the seal of truth. Truth is certainty. That is the aim and scope of science.

But marginal utility market prices are not a substance that can provide a social synthesis, an inter esse as did labor in the socialist metaphysics. Market prices represent only the subjective valuations of market participants. They unite only in their dividing human experience into incommunicable individual sensations that can be connected, syn-thesised socially only in their empirical manifestations. Individuals co-ordinate choices only in their self-interest, only in their atomicity. Unlike the totalitarian nightmare of collective socialist planning, the market mechanism allows the free competition of self-interest the unplanned spontaneity of individual choice. Such is the great merit of economic science: to have shown that an equilibrium is possible, can exist at least mathematically without the Smithian invisible hand. It is not Labor that is the substance behind the Value that is distorted by market prices, as Classical Political Economy had it. Labor does not create pro-ducts or goods. Labor rather consumes what is already there, in Nature (!). (See for what follows the first chapters of Bohm-Bawerks Positive Theory of Capital.) Physical science tells us that nothing can be created; everything is conserved; everything is transformed. Labor simply trans-forms the natural resources available to it so as to be able to reproduce itself, to survive and provide for its wants and needs. Labor has no utility therefore: it has only dis-utility in that it needs the existing wealth of Nature to preserve itself. The only
way in which labor can make possible the pro-duction of Value, then, is by utilizing laborsaving devices. And that is the precise definition of Capital. It is Capital, not Labor, that

allows human labor to be productive; it is tools that allow workers to produce more: not in any positive sense, but only in the negative sense of saving labor, reducing the pain (Leid) of the operari, its strife (Kampf) in a world in which pleasure (Lust) is only the Provision for Want, the satis-faction of unlimited wants, their partial extinction their ful-filment and com-pletion only in a negative sense of the appeasement of a want or desire, never in the positive sense of its full gratification, for that is impossible! And it is only by saving labor, by curbing the Will, by deferring consumption that the tools of productive capital can be produced precisely, by substituting present consumption with labor-saving tools. Here then is the inversion of Max Webers proposition in the Ethik that saw the ascetic adoption of labor as an end in itself as the specifically bourgeois economic ethic. No! It is not labor as an end in itself: it is the saving of labor devoted to consumption that allows its diversion to the construction of tools or productive capital that will permit labor to be more productive! In the words of Bohm-Bawerk, Classical Political Economy has been stood on its head!
Adam Smith's celebrated proposition therefore"Parsimony and not industry is the immediate cause of the increase of capital"is, strictly speaking, to be turned just the other way about. The immediate cause of the origin of capital is production; the mediate cause is a previous saving. (PTC, II.4, fn.30)

It is industry and not parsimony that is the immediate cause of the increase of capital. But industry here does not mean Labor! It means the use of labor-saving devices, the

saving of labor as the operari of the Will through the use of productive capital! Labor is not and cannot be the source of Value because Value is the saving of Labor as Want! So here finally! we have what Max Weber was looking for but could not find with his definitions and approach in the Ethik: - A specifically bourgeois economic ethic! Indeed, an economic science. The Neoclassical Counter-revolution against the Socialist ideology of the

industrial proletariat had finally arrived. This is the conundrum of historical economic analysis that Joseph Schumpeter and JM Keynes set out to explain. Bohm-Bawerk himself allows of Uncertainty as a source of variations in expectations as to the marginal utility of future goods. But again this is something that can be arbitraged (agio) away by the market mechanism at any one time. As he rightly notes, neither abstention nor Uncertainty can determine marginal utilities or prices for the very simple reason that they are negative or passive emotions that cannot increase the productivity of labor through labor-saving devices or means of production or capital. Abstention in and of itself cannot be the source of Value. It has to be the switched preference between consumption and production goods abstinence in this specific economic context involving laborsaving devices that is economically relevant. It is not frugality or mere industry that leads to the diversion of the existing powers of nature, but the diversion of time preferences to labor-saving tools, the substitution not the mere abstinence or frugality or saving of consumption goods with labor-saving goods that leads to a different distribution or exchange of marginal utilities. Exchange is always relative but its content (marginal utility) can be of a higher or lower order for the individuals involved because of their endowments whose stock is raised by the preference for labor-saving devices. These are not strictly time-saving devices; they are labor-saving devices because the object is always to save labor to provide for given wants, which will rise in kind as more capital is employed in production through roundabout methods. Wants expand to absorb the available labor productivity with scarce resources. Capital is therefore stored-up labor at a given time of exchange: not labor understood absolutely or positively as utility, but rather negatively as dis-utility at a given time, given that labor too is subject to time preference. Thus, Franklins time is money must be read as saving of labor-time for provision of immediate consumption goods and diversion of it to production of labor-saving goods for the future production of goods for consumption.
Webers Askesis ascetic ideal is not relevant to the spirit of capitalism because it understands labor as an end in itself! And it is also not relevant because it calls for abstinence, parsimony and frugality as a substitute for consumption! On the contrary, for the Neoclassics what occasions Value (does not create it, only makes it possible through the diversion of the powers of nature) is not labor as an end in itself at all! Nor is it frugality as the substitute for consumption. Quite to the contrary, what occasions Value is the deferral of consumption and its diversion to, or substitution with, tools for production, that is, means of production as labor-saving devices! It is not labor that is an end in itself as Weber had it. Instead, it is provision for want that is the end that the deferral of consumption makes possible by substituting labor-saving devices or capital for consumption goods that can then be pro-duced with less labor and therefore be relatively more valuable! Thus, time is money means labor-time-saving devices or capital not labor! - is money or generic social wealth or claim on social resources remembering that labor is labor-power or productivity in terms of output per unit of time - that is, not a quantity but a rate.

[Marx was entirely right, reprising Hegel, in the Paris Manuscripts to highlight this antithesis between labor-as-poverty or need already evident (long before it became dis-utility for the Neoclassics) in Classical Political Economy, and money-as-wealth in the inverted world of commodity production (or fetishism). Hannah Arendt, again in On Revolution (ch.2, The Social Question, p.63), makes the fundamental mistake of misrepresenting Marx (!) as the avenging peoples tribune of this distorted notion of labor-as-poverty turning into the blind rage of revolution forgivable perhaps if one considers the crude statements in the Communist Manifesto, but entirely philistine and vulgar when the rest of Marxs work is canvassed. Her poverty of philosophy is to mistake Marx for Proudhon, the utopian author of Philosophie de la Misere. That poverty and freedom are two different concepts is blatantly evident. But that Marx ever made the mistake of confusing deliverance from poverty with freedom when in fact he was stating merely that freedom offers very little solace to those who are poor, is an accusation unworthy of Arendts otherwise admirable intellect. Again, we will look at this important question when we discuss Webers political sociology in Part Three. We should note further how the German Historical School and other early opponents of Neoclassical Theory objected to it on the ground that utility is a homogeneous entity whereas in fact the motivations behind economic action are quite evidently heterogeneous (see Schumpeters account of this in the last chapter of his Economic Doctrines).One of the constant objections to capitalist enterprise is precisely this that it reduces all aspects of human social interaction to the homogeneous pursuit of profit. Clearly, what these critics fail to do is to confront the central question that we are addressing here that is, how such a reduction of the heterogeneity of human activity to homogeneous and rationally calculable enterprise or profit is at all possible! Here again Weber makes the colossal Neo-Kantian mistake of assuming that there is a specific form of human knowledge or action that is singularly economic just as he conceded to Kelsen that there is a specific dimension of human social activity that is legal! Weber simply mistakes what are mere and highly contingent institutions of human groupings the economy and value, the law, the State and power for hypostatic and ineluctable forms of human knowledge that a social scientist or observer can analyse in their epistemological specificity and autonomy from other disciplines! The fact that a great mind such as Webers never even posed itself the question as to how and why utility could be adduced as the ectoplasm, the metaphysical quidditas that could constitute the subject-matter of the Economics bears witness to the ability of the

social production of exchange value and its politically-enforced transmutation into money, then money capital, and then profit, to mystify human social relations as Marx took pains to emphasise.] Only once we have comprehended this reversal (Um-kehrung) of the specifically bourgeois economic ethic that is operated by Neoclassical Theory is it possible for us to solve Webers riddle his inability, even in the final paragraphs of the Vorbemerkungen, to account for the spirit of capitalism as the devotion to labour [as a]
calling which is, as we have seen, so irrational from the standpoint of purely eudaemonistic selfinterest (p.78). Indeed it is! If we interpret the spirit of capitalism as Weber does as

the devotion to labor as an end in itself!

Rationalism is a historical concept which covers a whole world of different things. It will be our task to find out whose intellectual child the particular concrete form of rational thought was, from which the idea of a calling and the devotion to labour in the calling has grown, which is, as we have seen, so irrational from the standpoint of purely eudaemonistic self-interest, but which has been and still is one of the most characteristic elements of our capitalistic culture. We are here particularly interested in the origin of precisely the irrational element which lies in this, as in every conception of a calling. (PE, pp.75-8).

In the negatives Denken, wealth stands against and is the ob-jective of (Gegen-stand standing op-posite) work, not its pro-duct, just as the Body and the World are the objectification of the Will, its variance or resistance or polarity or source of strife. Wealth (capital) employs labour; labour consumes wealth to earn its keep, to produce more wealth. But the active part is wealth, which is stored consumption or utility, whereas labour is the passive (passio, suffering) part, the part that consumes wealth and in consuming affirms the world. Wealth is consumed after it has been saved. Wealth is delayed consumption hence the time preference theorized by Bohm-Bawerk. Piercing the veil of Maya, seeing through the illusion of striving and labouring, the mortification of the body, the abnegation of the Will is the renunciation of consumption and the preservation of wealth. As we noted above, these features are lacking in Weber. Above all, the mundanity of wealth, its evanescence, is left unexplained and is yet another inconsistency in the Protestant ethic as a rationale for accumulation as an end in itself in the spirit of capitalism. Why labor at all, when the pro-duct of labor, this presumed mortification of the body, is in fact wealth? By contrast, this evanescence of wealth and its pursuit is the very centerpiece of Schopenhauers system, the Unwirklichkeit der Erscheinungswelt (unreality of the evanescent world) and of the Will to Life (Simmel, Schopenhauer und Nietzsche, pp.29-30). In that case, Schopenhauers original version of Nirvana as renunciation (Entsagung) of the World and of the Will would be a far more rational goal for Webers innerweltliche Askese. But the spirit of capitalism becomes far more rational if we interpret it as Lionel Robbins does after the Neoclassical Revolution that is, from the viewpoint of a

truly specifically bourgeois economic ethic: according to Robbins in his Essay, contrary to Schopenhauer, Nirvana is the satisfaction of all wants! This is the rational conclusion if one sees capitalism as the accumulation of Value and capital intended as labor-saving tools! Devastatingly put, the spirit of capitalism then becomes will to power over living labor projected into the future!

7 Rationalisierung and the Money-Wage The Weberian interpretation of capitalism focuses on its operari, its mechanical functioning which is rational and systematic not in a normative or purposive or still less a teleological sense, but only because its economic action can be measured according to mathematical relations that serve to maximize the profit expressed in monetary terms of the capitalist activity. The ultimate rationality, the basis upon which the rational-mathematic and systematic-scientific measurement of capitalist economic action is at all possible is the Kalkulation of profit, which Weber defines as the difference, monetarily expressed, between expenses and receipts. All other impulses must be subordinated to this overriding calculating rationality.
Let us now define our terms somewhat more carefully than is generally done. We will define a capitalistic economic action as one which rests on the expectation of profit by the utilization of opportunities for exchange, that is on (formally) peaceful chances of profit. 17 Where capitalistic acquisition is rationally pursued, the corresponding action is adjusted to calculations in terms of capital. This means that the action is adapted to a systematic utilization of goods or personal services as means of acquisition in such a way that, at the close of a business period, the balance of the enterprise in money assets (or, in the case of a continuous enterprise, the periodically estimated money value of assets) exceeds the capital, i.e. the estimated value of the material means of production used for acquisition in exchange. (pp17-8)

From the outset, the Vorbermerkungen published in 1920 and meant as a general introduction to the Aufsatze zur Religionssoziologie are intended as a recapitulation of Webers reflections on and theory of the origins and nature of capitalism. This is the culmination of a reflection that was already well advanced with the triptych of 1918-9 and the intensification of the political debate around the Verfassungsfrage in 1919 in which Weber seems finally to veer toward authoritarianism. Here therefore we have the fruit of Webers mature reflections on his exegesis and critique of the capitalist economy and its social institutions. In the process, Weber seeks to reconcile the irrational calling (Beruf) or ascetic Ideal, as the esse, the Will or Spirit at the origins of the spirit of capitalism with the rationally calculable operari of capitalistic economic action itself.

Capitalism is only one form of economic action that relies on opportunities for exchange which, by definition, have a degree of legitimacy and are therefore peaceful and that, where they are rationally pursued involve the periodic excess of the balance of the enterprise in money assets over the preceding period. Already, therefore, capitalistic economic action involves a system that ensures its legitimate reproduction on an expanded scale. It involves the systematic utilization of goods or personal services as means of acquisition for profit, that is, the difference between the cost of utilizing goods and personal services as a means of acquisition and the estimated value of the material means of production used for acquisition in exchange or capital. Webers awkwardness in describing capitalist economic action is on full display here, despite his resolve to define our terms somewhat more carefully than is generally done, and it reflects clearly his unwillingness to separate the institutional aspects of capitalist enterprise from its narrower systemic elements. We notice next that Weber does not distinguish between goods and personal services utilized systematically in capitalism from the means of production. This indicates that Weber sees no distinction, where capitalist economic action is concerned, between means of production and labor (personal services). In other words, he treats labor as a simple homogeneous quantity that is utilized just like other goods in the production of means of acquisition. Weber is not saying that the aim of capitalist enterprise is to acquire more means of acquisition, (as Don Patinkin put it, in capitalism goods do not buy goods), but it is an awkward way of saying that the money assets of a capitalist enterprise at the end of a given period have to be systematically higher than at the start. Thus, what really matters for capitalist profit is the value of money assets and not means of acquisition. Yet this does not mean that if the measurement of profit and the economic actions taken in its pursuit can be calculated mathematically so as to maximize that profit then the pursuit of profit itself is rational in any substantive sense in terms of what Weber himself called Wert-rationalitat. The rationality of capitalist economic action is limited to and defined by the sheer calculability of the steps taken in the pursuit of profit maximization: it is a Zweck-rationalitat, a rationality limited to and circumscribed by its purpose. But the pursuit itself cannot be rational in the sense that the ultimate motive forces of human action cannot be subjected to the formal rationality of mathematical calculation and maximization.
Unlimited greed for gain is not in the least identical with capitalism and is still less its spirit. Capitalism may even be identical with the restraint or at least a rational tempering of this irrational impulse. But capitalism is identical with the pursuit of profit, and forever renewed profit, by means of continuous, rational, capitalistic enterprise. For it must be so: in a wholly capitalistic order of society, an individual capitalistic enterprise which did not take advantage of its opportunities for profit-making would be doomed to extinction. (p.17)

Thus, capitalistic enterprise consists of exchange for profit defined as the monetary excess of receipts over expenses. Nowhere does Weber attempt to define profit except

in monetary terms. And the profit is the simple result of exchange of goods so long as the monetary value of these goods at periodic intervals is greater than the goods and personal services utilized to acquire them. Weber here isolates three elements, namely, rational action, exchange and profits. The problem remains, however, that Weber does not define or explain profit and therefore we do not know yet how the simple act of exchange can give rise rationally and systematically to the realization of profits unless this is done through extortion or trickstery, which Weber has already excluded. But capitalist enterprise is hemmed in between two pincers: - from below, capitalists are forced by competition to take advantage of profit opportunities that are, therefore, necessarily limited or scarce. From above, instead, capitalist investment cannot be so foolhardy that it is not checked by reasonable opportunities for profit that ensure its renewed character. This upper limit can be constituted by risk and by social limits (values, religion, institutions, social cohesion, the environment externalities). Already therefore we have a definition of capitalist economic action that requires two fundamental limitations: on the low side, capitalist enterprise requires the regulation of competition so that regular opportunities for profit actually exist on a renewed basis and are not defeated by monopoly or else by other practices that endanger the entry of new competitors into the market. And the preservation of the possibility of renewal of this action is what sets the upper limit to capitalist industry. It is evident from Webers broad definition that there is no independent de-finition of capitalistic economic action, but that instead capitalism depends on a number of institutional presuppositions or conditions that allow it to operate rationally and systematically. But when Weber confronts the meaning of this rationality he makes clear - unlike Schumpeter who (as we saw in our piece on Nietzschebuch) completely confused Webers use for a kind of empirical scientific truth that there is neither a teleological nor a scientific meaning to this and that indeed it cannot even be defined in terms of systematic empirical methods (as Langlois does stupidly in his peevish attempt to saddle Marx with the teleological aspect of rationality as if, as we are about to see, Weber had not thought that Lenins greatness consisted precisely in the attempt to achieve the rational organization of labour in Russia!). The Rationalisierung is not for Weber a process of substantive rationality intended teleologically, nor is it a process of systematization, which in itself would amount to an empty formalistic definition. No. Let us see more closely what he means.
It is hence our first concern to work out and to explain genetically the special peculiarity of Occidental rationalism, and within this field that of the modern Occidental form. Every such attempt at explanation must, recognizing the fundamental importance of the economic factor, above all take account of the economic conditions. But at the same time the opposite correlation must not be left out of consideration. For though the development of economic rationalism is partly dependent on rational technique and law, it is at the same time determined by the ability and disposition of men to adopt certain types of practical rational conduct. When these types have been obstructed by spiritual obstacles, the 26 development of rational economic conduct has also met serious inner resistance. The magical and religious forces, and the ethical ideas of duty based upon them, have in the

past always been among the most important formative influences on conduct. In the studies collected here we shall be concerned with these forces.

No finality, then. No telos. Rationality of the Western kind is a practical rational conduct that is conditioned and determined by non-rational, even magical and religious forces, and the ethical ideas of duty based upon them. These are forces that Nietzsche had already explored in works that culminate with Genealogie der Moral and Gaya Scienza. Weber is simply continuing from where Nietzsche left off, but in his own exquisitely genial manner. Remember that Weber was a member of the German Parliament and that his ideas embodied also the interests and the will of the German bourgeoisie whose very existence was now threatened by the catastrophe of the Great War and the collapse of Wilhelmine Germany together with its Zivilisation.
Hence in a universal history of culture the central problem for us is not, in the last analysis, even from a purely economic view-point, the development of capitalistic activity as such, differing in different cultures only 23 in form: the adventurer type, or capitalism in trade, war, politics, or administration as sources of gain. It is rather the origin of this sober bourgeois capitalism with its rational organization of free labour. Or in terms of cultural history, the problem is that of the origin of the Western bourgeois class and of its peculiarities, a problem which is certainly closely connected with that of the origin of the capitalistic organization of labour, but is not quite the same thing. For the bourgeois as a class existed prior to the development of the peculiar modern form of capitalism, though, it is true, only in the Western hemisphere.

Thus, although the peculiar modern form of capitalism is closely connected with that of the origin of the capitalistic organization of labor or rather the rational organization of free labor, still this peculiar modern or sober bourgeois capitalism is not quite the same thing as the broader kind of capitalism because the bourgeois class existed prior to the development of [this] peculiar modern form of capitalism. There are two types of capitalism, then: - a broader type and a peculiar modern, sober bourgeois form of capitalism. This second type is sober because it involves the rational organization of free labor. This broader definition seems inconsistent with Webers own position that the rational organization of free labour and therefore of production and productivity (see below) is crucial to the definition of sober capitalism indicating thereby that in this second type of capitalism profit is to be found in the sphere of production and not in the sphere of exchange. Or at the very least the two spheres need to be connected through that qualification of labor that Weber makes by calling it free. What is the nature of this freedom? Indeed, having considered a number of peculiarities of capitalist economic action, Weber then comes to this startling statement:
However, all these peculiarities of Western capitalism have derived their significance in the last analysis only from their association with the capitalistic organization of labour. Even what is generally called commercialization, the development of negotiable securities and the rationalization of speculation, the

exchanges, etc., is connected with it. For without the rational capitalistic organization of labour, all this, so far as it was possible at all, would have nothing like the same significance, above all for the social structure and all the specific problems of the modem Occident connected with it. Exact calculationthe basis of everything elseis only possible on a basis of free labour. (p22)

The shift from opportunistic exchange, which would define a capitalism that is far from systematic or indeed rational or scientific, to one that is founded on the rational capitalistic organization of labour is as obvious as it is dramatic. Weber has touched however unwittingly on the all-important difference between the early forms of mercantilist capitalism which do rely on gains derived from the greater value of goods exchanged for goods of less value, to a form of organized capitalism that rationally and systematically ensures the production of goods with higher value than the means of production utilized on the basis of the rational organization of labour! Not only that! But Weber also makes a statement of truly earth-shattering significance:
Exact calculationthe basis of everything elseis only possible on a basis of free labour. In other words, capitalism is a social system founded on the exchange for profit (in monetary terms) between goods of less value for goods of more value on the basis the basis of everything else! of exact [rational] calculation made only possible on a basis of [the rational organization] of free labour!
Eine exakte Kalkulation: die Grundlage alles andern, ist eben nur auf dem Boden freier Arbeit mglich. Und wie und weil keine rationale Arbeitsorganisation, so und deshalb hat die Welt auerhalb des modernen Okzidents auch keinen rationalen Sozialismus gekannt.

Note how exact calculation that is, rational calculation here means regular profitability! Weber is certainly getting very close to the mark. Unfortunately, however, he fails to give any indication at all as to why and how exact calculation is only possible on a basis of free labour! Clearly, free labour is at the very centre of capitalism with the added attribute or characteristic that capitalism is responsible for its rational organization. But how does this lead us to profit? Weber has failed to explain how the quantification of the content of profit as a social relation of production can be operated by capital and therefore enable the rationalization of production and distribution of commodities for the realization and maximization of profits from their sale on the market. Weber seems to have extensive insights into the workings of industrial relations and of the labour process for the production of goods for exchange as well as of the antagonism of free labour and capital with regard to the wage relation, that is, with regard to the antagonism of living labour to being alienated by being placed under the command of the capitalist:
A man does not "by nature" wish to earn more and more money but simply to live as he is accustomed to live and to earn as much as is necessary for that purpose. Wherever modern capitalism has begun its work of increasing the productivity

of human labour by increasing its intensity, it has encountered the immensely stubborn resistance of this leading trait of pre-capitalistic labour. And to-day it encounters it the more, the more backward (from a capitalistic point of view) the labouring forces are with which it has to deal. Another obvious possibility, to return to our example, since the appeal to the acquisitive instinct through higher wage-rates failed, would have been to try the opposite policy, to force the worker by reduction of his wage-rates to work harder to earn the same amount than he did before. Low wages and high profits seem even to-day to a superficial observer to stand in correlation; everything which is paid out in wages seems to involve a corresponding reduction of profits. That road capitalism has taken again and again since its beginning. (p60) But the effectiveness of this apparently so efficient method has its limits. Of course the presence of a surplus population which it can hire cheaply in the labour market is a necessity for the development of capitalism. But though too large a reserve army may in certain cases favour its quantitative expansion, it checks its qualitative development, especially the transition, to types of enterprise which make more intensive use of labour. Low wages are by no means identical with cheap labour. (p61)

Weber starts from the most blindingly obvious fact visible to the most superficial observer with even the slightest knowledge of capitalist industry:
Low wages and high profits seem even to-day to a superficial observer to stand in correlation; everything which is paid out in wages seems to involve a corresponding reduction of profits.

It is this obvious fact that leads one immediately to suspect that capitalist profitability has to do with the rational organization of labor. Minimising wages tends to maximize profits. But the relationship is far more complicated than that, because it is often possible for individual capitalists to offer higher wages to their workers so as to get them to work harder or longer. Yet this runs up against the undeniable reality that
[a] man does not "by nature" wish to earn more and more money but simply to live as he is accustomed to live and to earn as much as is necessary for that purpose. Wherever modern capitalism has begun its work of increasing the productivity of human labour by increasing its intensity, it has encountered the immensely stubborn resistance of this leading trait of pre-capitalistic labour. And to-day it encounters it the more, the more backward (from a capitalistic point of view) the labouring forces are with which it has to deal.

Weber is absurdly wrong here because this immensely stubborn resistance is not merely a leading trait of pre-capitalistic labor but it is indeed a trait especially of workers in the most advanced industrial capitalist sectors or nations! Workers are keen to accept higher wages, but only on the condition that their working conditions, which include wages and labor process, are not extended or intensified significantly. It is because of this immensely stubborn resistance that the capitalist either increases wages significantly or else replaces existing means of production (machinery and labor process) to types of enterprise which make more intensive use of labour so as to increase the

productivity of the workers. There is an obvious quid pro quo involved here between the technology of the means of production and the wage and working conditions of workers. It does not seem possible therefore for Weber to hold to the notion that the workers stubborn resistance to the increase in the productivity of human labor by increasing its intensity is a leading trait of pre-capitalistic labor because in fact and in reality this exchange between high productivity and high wages and conditions is unquestionably the most evident aspect of advanced capitalism! Weber himself admits as much when he writes,
Another obvious possibility, to return to our example, since the appeal to the acquisitive instinct through higher wage-rates failed, would have been to try the opposite policy, to force the worker by reduction of his wage-rates to work harder to earn the same amount than he did before.That [is a] road capitalism has taken again and again since its beginning.

And this opposite policy of forcing the worker to work harder, consists not so much, as Weber says, of reducing his wage-rates to earn the same amount as before, which only happened in the putting-out system of piece-work wages, but rather in deploying a reserve army of labor prepared to work for lower wages which is an indispensable ingredient of capitalism, not just a road capitalism has taken repeatedly! Weber finally gets down to this violent reality:
But the effectiveness of this apparently so efficient method has its limits. Of course the presence of a surplus population which it can hire cheaply in the labour market is a necessity for the development of capitalism. But though too large a reserve army may in certain cases favour its quantitative expansion, it checks its qualitative development, especially the transition, to types of enterprise which make more intensive use of labour. Low wages are by no means identical with cheap labour.

Once again, Weber displays the awkwardness of someone who, by his own admission according to his wife, attended his first lessons on political economy when he began giving them! But he is making a terrifically valid and extremely insightful point here that deserves close attention: Capital may expand quantitatively by employing a greater number of workers at low wages. But these low wages may not mean that the labor employed is cheap if the productivity of that labor is so low that its output becomes uncompetitive because it is relatively expensive. So, rather than expanding that is, seeking to maximize revenue by what we may call absolute exploitation of workers, capital may develop qualitatively by making more intensive use of labor through the employment of new technologies and labor processes - what Weber calls here types of enterprise [Betrieb]. We may call this relative exploitation. But we should note above all the difference in Webers terminology between expansion and development, and then the emphasis on the type of enterprise. These are analytical features first outlined by Marx, especially in the Grundrisse, and adopted and adapted by Schumpeter in his Theorie der wirtschaftlichen Entwicklung. Four major elements emerge already from the thrust of Webers analysis of capitalism thus far:

The first is the distinction between opportunistic or mercantilist capitalism and the more serious bourgeois modern capitalism that Weber subdivides further into the entrepreneurial capitalism of innovators and risk-takers who create new opportunities for profit, and the capitalistic or rentier or financial capitalism constituted by passive investors happy to collect dividends, interest and rent from their mere ownership of capital. This distinction Weber would have taken straight out of Schumpeters pioneering theory of economic development glorifying the Unternehmer-Geist (entrepreneurial Spirit) and the corresponding Unternehmer-Gewinn (profit). The second is that labor is seen as a homogeneous force (labor-power or ArbeitsKraft) that is interested only or predominantly in wages and wage-rates in its purchasing power rather than in working conditions, technologies and labor process. The third point is that this labor is free in the sense that the ultimate spirit of capitalism consists precisely of the care for external goods that has now rigidified or crystallized into a steel-hard casing and that determines ultimately the rational allocation of the means of production on the part of capitalists for the provision and satisfaction of the iron cage. The freedom of labor is the fundamental condition that will ensure both the competition required from below and the checks and balances required as a limitation to capitalistic profit-seeking. The fourth element is that because workers care only for their wages (their needs and wants), the conflict between workers as a class and capitalists boils down ultimately to their being employed for satisfactory wages and does not extend to other more utopian demands. These socialist demands are utopian firstly because capitalist production is so rational that it ensures the efficient production and distribution of social resources (in accordance with Marginal Utility Theory) so that essentially rational Socialism coincides with rational capitalism; and secondly, as a corollary, socialist demands are utopian because they are inflated by the political representatives of workers in the new social democratic and communist mass parties in effect, they are a by-product of the very Demokratisierung engendered by sober bourgeois capitalism.
What abysmal nonsense! The interest of the capitalist producers and profit-makers represented by these cartels would itself then rule the state exclusively, unless that organisation of producers' interests is confronted by a power strong enough to control and steer them as the needs of the population require. But an individual's needs are not determined by his position in the machinery of goods-production. The worker has exactly the same needs for bread, housing and clothing, regardless of the type of factory he works in. Thus if that method of organising the economy is imminent, it is absolutely imperative before it begins to function - which means immediately - for us to have a parliament elected on the principle that the needs of the masses must be represented, and not one which represents the way an individual is employed in the production of goods - in other words a parliament of equal suffrage, wholly sovereign

in its power, which can take an independent stand in relation to this type of economic organisation.

Weber sees free labor as a homogeneous malleable mass or force that can be organized rationally by sober bourgeois capitalists in order to maximize the profits and the productivity of the lifeless machine of production which is seen to embody the crystallized Spirit of the iron cage of labor as calling at first, and then as the care for external goods expressed freely by workers as their aggregate market demand for goods. Although he is aware of the historical difference between quantitative expansion and qualitative development as specific capitalist types of enterprise, Weber does not see the antagonism in production that this difference so evidently demonstrates! For him, conflict exists only in consumption and the combination of free labor and rational organization for profit make capitalist enterprise capable of rational calculation and resolution of this pervasive conflict in the congealed Spirit of the lifeless machine guided by the living machine of State and private capitalist bureaucracy. When Weber took time to examine der Sozialismus more closely (specifically in the homonymous lecture delivered in Vienna in mid-1918), he was more concerned with reaffirming his critique of its Marxist version, replicating Schumpeters own arguments that we hinted at earlier. First, socialism would be subject to exactly the same economic laws as capitalism, except that it would remove the autonomous market demand that capitalism allows to free labor. Socialism would become rational not by allowing free labor to decide on the mode of consumption but by transforming all aspects of social life into production, into industry! Thus, Socialism would replace the Planlosigkeit of capitalism with a total bureaucracy that would remove even the last remnants of individual freedom still available under capitalism through the countervailing power of private production against an oligarchy of bureaucrats the officialdom (Beamtentum). Indeed, even the political parties representing workers (!) displayed all the symptoms of bureaucratic sclerosis and hierarchical organization for which they accused the capitalist Monopolies and Finanzkapital! On this, Weber could turn to no greater authorities than his own collaborators at the Archiv fur Sozialwissenschaften und Sozialpolitik: the now famous and prolific authors Werner Sombart and Robert Michels whose studies on German Socialism are unrivalled to this day! And Schumpeter himself who had taken up government positions in Germany to assist in the Sozialisierung of German industry! Sandwiched in between the two last quotations from the Vorbemerkungen is this passage of apocalyptic importance that ought to be read one hundred times:
And just as, or rather because, the world has known no rational organization of labour outside the modern Occident, it has known no rational socialism [precisely what Lenin is attempting in Russia!]. Of course, there has been civic economy, a civic food-supply policy, mercantilism and welfare policies of princes, rationing, regulation of economic life, protectionism, and laissez-faire theories (as in China). The world has also known socialistic and communistic experiments of various sort: family, religious, or military communism, State

socialism (in Egypt), monopolistic cartels, and consumers' organizations. But although there have everywhere been civic market privileges, companies, guilds, and all sorts of legal differences between town and country, the concept of the Burger [as opposed to "citizen"] has not existed outside the Occident, and that of the bourgeoisie outside the modern Occident. Similarly, the proletariat as a class could not exist, because there was no rational organization of free labour under regular discipline [die rationale Organisation freier Arbeit als Betrieb]. Class struggles between creditor and debtor classes; landowners and the landless, serfs, or tenants; trading interests and consumers or landlords, have existed everywhere in various combinations. But even the Western mediaeval struggles between putters-out and their workers exist elsewhere only in beginnings. The modern conflict of the large-scale industrial entrepreneur and free wage labourers was entirely lacking. And thus there could be no such Problematik as that known [experienced] by modern socialism [Parsons: no such problems as those of socialism].
Eine exakte Kalkulation: die Grundlage alles andern, ist eben nur auf dem Boden freier Arbeit mglich. Und wie und weil keine rationale Arbeitsorganisation, so und deshalb hat die Welt auerhalb des modernen Okzidents auch keinen rationalen Sozialismus gekannt. Aber ebenso wie trotzdem es doch berall einmal stdtische Marktprivilegien, Znfte, Gilden und allerhand rechtliche Scheidungen zwischen Stadt und Land in der verschiedensten Form gab, doch der Begriff des Brgers berall auer im Okzident und der Begriff der Bourgeoisie berall auer im modernen Okzident fehlte, so fehlte auch das Proletariat als Klasse und mute fehlen, weil eben die rationale Organisation freier Arbeit als Betrieb fehlte. Klassenkmpfe zwischen Glubiger- und Schuldnerschichten, Grundbesitzern und Besitzlosen oder Fronknechten oder Pchtern, Handelsinteressenten und Konsumenten oder Grundbesitzern, hat es in verschiedener Konstellation berall lngst gegeben. Aber schon die okzidental-mittelalterlichen Kmpfe zwischen Verlegern und Verlegten finden sich anderwrts nur in Anstzen. Vollends fehlt der moderne Gegensatz: groindustrieller Unternehmer und freier Lohnarbeiter. Und daher konnte es auch eine Problematik von der Art, wie sie der moderne Sozialismus kennt, nicht geben.

It is not socialism that is so much the problem, because even this Sozialismus, this political organization of free labor as a class will not be able to escape the iron law of oligarchy that contrarily to Michelss abstract use is a specific characteristic of capitalistic rational conduct of business to provide for the care for external goods, even if Socialism were to take over the national government! So rational is Socialism that Weber can already envisage and indeed advocate its full integration in the German Parliament and Government (Regierung) through the existence and breathtakingly rational political organization of the German proletariat by the Social Democratic Party of Germany! The problem is not socialism, but rather the problems that the Sozialismus knows or experiences (kennt) in organizing rationally the integration of the proletariat as free labour within the system of political command by the sober Western bourgeois class! And this was precisely, exactly, specifically the very problem, but formulated in a philosophical framework, that Nietzsche devoted his entire super-human philosophical effort (Kampf, struggle, he called it) to addressing the problem of those crazy for the State [Twilight of the Idols]! as well as the problem of the greatest thinkers of the age from Hegel to Kierkegaard to Donoso Cortes to Proudhon and Sorel down to Schumpeter and Schmitt!

The problems of Socialism have to do precisely with this: with the ability of the political parties of the working class the Social Democratic or Labour (!) parties to represent and channel and integrate the antagonistic push of the working class what Weber calls rational organization of free labour under regular discipline - against the wage relation within the political institutions and organs such as the Parliament and the State (!) that represent instead the interests of the bourgeoisie which centre on profitability! Note that here Weber uses the phrase rational Socialism in a very different way from that adopted by Werner Sombart in his great book on the soziale Bewegung. In chapter two of that book, Sombart referred to Rational Socialism as a child of the Enlightenment, as a moral and prophetic belief in a Utopian society of workers to replace the current aberration of human nature represented by capitalism. The chapter was later translated in French and English as Le Socialisme Utopique and Utopian Socialism to avoid confusion. Nevertheless, in a later work called Der Bourgeois, Sombart insisted on viewing capitalism and its spirit as the product of the diffusion of scientific rationalism through the application of scientific methods to economic action or enterprise a view expressly repudiated by Weber who correctly upbraided Sombart for this emanationism in the Vorbermerkungen:
Now this process of rationalization in the field of technique and economic organization undoubtedly determines an important part of the ideals of life of modern bourgeois society. Labour in the service of a [75] rational organization for the provision of humanity with material goods has without doubt always appeared to representatives of the capitalistic spirit as one of the most important purposes of their life-work. It might thus seem that the development of the spirit of capitalism is best understood as part of the development of rationalism as a whole, and could be deduced from the fundamental position of rationalism on the basic problems of life. But any serious attempt to carry this thesis through makes it evident that such a [76] simple way of putting the question will not work, simply because of the fact that the history of rationalism shows a development which by no means follows parallel lines in the various departments of life. In fact, one maythis simple proposition, which is often forgotten, should be placed [77] at the beginning of every study which essays to deal with rationalismrationalize life from fundamentally different basic points of view and in very different directions. Rationalism is a historical concept which covers a whole world of different things. It will be our task to find out whose intellectual child the particular concrete form of rational thought was, from which the idea of a calling and the devotion to labour in the calling has grown, which is, as we have seen, so irrational from the standpoint of purely eudaemonistic self-interest, but which has been and still is one of the most characteristic elements of our capitalistic culture. We are here particularly interested in the origin of precisely

the irrational element which lies in this, as in every conception of a calling. (pp.75-8).

The inability of Sombart to understand that there is no technical or scientific notion of rationality, but that instead one may. rationalize life from fundamentally different basic points of view and in very different directions, is evinced by his contorted polemic against Weber in Der Bourgeois to establish that capitalism was the cause and not the effect of the spirit of capitalism. Because Sombart, unlike Weber, understands rationalism as a technical-scientific reality, he has difficulty reconciling the ghost (the spirit) of capitalism with its machine, as is evinced in this final summation of his argument in Der Bourgeois:
Ce que le rentier garde encore de l'esprit capitaliste est supprim par la bureaucratie. Car dans une industrie gigantesque fonde sur l'organisation bureaucratique, dans la quelle non seulement le rationalisme conomique, mais aussi l'esprit d'entreprise a t mcanis, il ne reste que peu de place pour l'esprit capitaliste. (Final page of Der Bourgeois, W.Sombart.) Was der Rentner noch ubrig lasst, nimmt der Bureaukrat weg. Denn in einem regelrechten bureaukratischen Riesenbetriebe, in dem nicht nur der oekonomische Rationalismus, sondern auch der Unternehmungsgeist mechanisiert ist, bleibt fur der kapitalistischen Geist kein Raum mehr. (p.463)

The very idea that the entrepreneurial spirit can be mechanized is an obvious absurdity that reveals how little Sombart has understood the historical reality of capitalist social relations of production. This is something that Weber deftly avoids with his much more sophisticated approach to the problem of the interplay and interdependence of rational capitalism (profits) and rational socialism (wages) and in particular the distinction between types of enterprise which include quantitative expansion (the adoption of existing methods of production or formal subsumption, Weber calls it traditional enterprise) and qualitative development (which implies real subsumption or modern enterprise) which already subjects rational technology to a critical examination as metamorphosis of the wage relation, as qualitative development of capitalist enterprise and its trans-formation of the rational organization of free labor. So let us now return to Weber and that absolutely remarkable passage from the Foreword to his intended series of studies on The Sociology of Religions which Talcott Parsons (despite the appalling translation in places) wisely chose to preface to the English edition of Die Protestantische Ethik. Hidden in these few lapidary notes are some of the most remarkable political and sociological insights in the history of capitalist praxis. We should study them very carefully because they contain the keynote (Italians would call it la chiave di lettura), the key to the interpretation of capitalist society and State in the Keynesian era. The world has never known the rational organization of labour, says Weber outside of capitalism, of the bourgeois era, that is. But the rational organization of labour means quintessentially for Weber that the organization of labour must occur in accordance with a measurable, calculable, hence quantifiable method of organization. And for him the only basis or ground for this rational organization of

labour to be exactly calculable is that this labour force is free. But here the freedom of labour needs to be defined, and the definition of free will also qualify the definition of labour. Because the freedom of labour contains a number of characteristics. The first is that the labour is free from any social bonds that prevent or interfere with its being subjected to regular discipline of the factory. In other words, Weber intends freedom for labour only in a negative sense: it is freedom from social bonds or rights that may prevent labour from being subjected to the regular discipline of the factory: and this means that this labour must be entirely destitute, divested of all social bonds or claims to anything that may serve for its own reproduction outside of the factory! Labour must be free from the means of production so that it may alienate itself to the bourgeois who will subject it to the regular discipline of the factory. Already, therefore, Webers main contention in the Ethik that the calling of labour under the principle of time is money was responsible for the spirit of capitalism is completely confuted. It is not religious faith, but rather the coercion of human living labour into factory work as regular discipline that turns the time of human beings into money! (We have examined already Bohm-Bawerks introduction of time preference in marginalist theory.) Weber does not explain what it is that is calculated when exact calculation or rationality is enforced on organized labour in the factory: he does not explain profit, which is quite obviously the monetary difference between the cost of factory production and the revenue derived from the sale of the goods produced in that factory. So already at least we have a definition of profit that goes well beyond Webers earlier simplistic notion of opportunistic exchange and that comes closer to the rational and systematic pursuit of profit that he intended.
But this leads us to the second meaning of free: this labour must be free also in the sense that the living activity of each human being as worker is easily comparable to that of every other worker: in other words, not the work itself, the labour process, has to be easily comparable and measurable as in the ergonomic principles of Taylorism and then of Fordism (for that is in fact impossible!), but rather the social expression of the workers autonomous demand for consumption goods which will have to confine, de-fine, and determine this free demand in terms of effective demand for the overall output and employment (Keynes!) of the entire system of capitalist production! Thus, the organization of labour can be rational only if it is exactly calculable. And this exact calculation is possible only on the basis of free labour under regular discipline which discipline consists in the physical homologation (so far as is possible) of human living activity in terms of tasks and time in accordance with a fundamental unit of measurement of its demand for output in terms of a nominal money wage! In other words, it is regular discipline of formally free labour that makes possible and it alone (!) can make possible the exact calculation or rationality (profitability) of the organization of labour based on the difference between aggregate output and aggregate demand calculated monetarily through the specification of the money-wage as a basket of consumption goods! This, in a nutshell, is the essence of Keynesianism and of the Rationalisierung in the Economics!

And all this put together is more than just capitalism: but it is also and above all rational socialism! Only rational socialism ensures the existence of the proletariat as a class (!) that is in opposition or contrast (Gegensatz not necessarily conflict or struggle [Kampf] again, poor Parsons translation) with the large-scale entrepreneur. By this, Weber surely means that the organization of labour can be rational only if it is exactly calculable by means of profit (or the monetary expression of surplus value) and for this the labour must be subjected to the regular discipline of the factory so that it is free in the following senses: free from ownership of the means of production for its own reproduction; free in the sense of performing homogeneous tasks that make it comparable to other living labour in such a way that all living labour becomes one aggregate mass of divisible labour (including individual labour) not through the labor process, but through the aggregation of workers demand for aggregate output; free in the sense that once labour is divisible in terms of the money-wage its productive power as social labour becomes the property of capital because it is capital in the shape of the means of production that brings individual labours together as social labour within the factory under the regular discipline of the capitalist; and finally, this labour must be free to form an opposition or contrast as a class to the employer or entrepreneur (the Arbeit-geber, the giver of labour) in such a way that the labour becomes truly rational or exactly calculable in terms of its organization as autonomous market aggregate demand.

But this final task of the political organization of labour as free labour upon which the exact calculability and therefore the profitability (!) of the rational organization of labour is dependent this final task of organizing free labour as a class is the task of rational Socialism! So this is the Problematik of rational Socialism! How to ensure that the living labour of workers which is always and always will be antagonistic to the capitalist rational organization of free labour under the regular discipline of the factory - which will always be antagonistic to the wage relation and the reduction of living labour to alienated free labour the Problematik of rational Socialism is how to ensure that this worker antagonism to the false exchange of living labour with dead labour (the goods the capitalist produces) is organized in a manner that makes possible the exact calculation on which the capitalistic extraction of value and profits is based!! Weber confuses the Marxian Trennung (the separation of the living labour from the means of production, of its objectification) with the inescapable socialisation of free labour which means in effect its coercive division into separate homogeneous labours: he takes for inescapable what is the result of class domination and regards its opposite as being the Lukacsian romantic search for the totality of artisanal work, of the Gelernte. Curiously, in ridiculing the literati, Weber is revealing his own disenchantment: evident in this regard are his residual Neo-Kantism and insistence on remnants of individual freedom, the repeated refuge in Geist the Simmelian

Seele opposed to die Formen, reprised by Lukacs; and all this is done consistently with the Machism of the Austrian School. (The inevitability of profit is assumed by Weber in Sozialismus. Schumpeter sees it as entrepreneurial profit a la Cantillon; Bohm-Bawerk sees it as interest in a static analysis.)
Excursus on the Division of Social Labor

[The English translation of Emile Durkheims, the great French sociologist, work La Division du Travail Social is almost universally rendered as The Social Division of Labor. The obvious mis-translation illustrates brilliantly and perfectly the gross misconception that gives rise to it: Durkheim was speaking of the division of social labour certainly not of the social division of labour! For there can clearly be no labour as an entity that is abstracted from the ineluctable sociality of human beings. Our living activity, our very being from eating to dreaming to speaking and therefore also working, is simply unimaginable independently of our belonging to our species. Just as Leibniz could enjoin that a being must be a being that, in other words, it is impossible to conceive of being except as a unity so we may say that human beings (individual physical human bodies) are really and truly aspects of being human. In other words, it is utterly impossible to conceive human beings as separate atomic individuals whose lives and activities can be described independently of their humanity, of their being human. And this applies a fortiori to our living activity as living labour. To speak of labour abstractly is to believe that there is a quantity, a material and spatial and homogeneous entity that can be measured according to, say, time or productivity or definite tasks. But what we know for certain about human activity is that its act of objectification, however much it may be conditioned by our natural environment, is categorically different from its pro-duct! It is absolutely impossible therefore to describe human living activity in terms of individual labour there is simply no such thing! Living labour is an activity that cannot be measured and that therefore cannot be divided: there can be no such thing as the division of labour! What is possible, however, is for human beings as being human to divide the totality of their social labour into different but interdependent tasks. Social labour then is a totality that belongs to the human species (leaving out for a moment its impact on the environment) and that is by that very fact only divisible in a political sense never scientifically or mathematically or rationally or systematically! Only politically! And the question then becomes

what kind of political decision-making is in place so as to organize social labour again, not labour (!), but social labour. Similarly, Adam Smith, in chapter two of The Wealth of Nations, argues that it is the human natural tendency to truck, barter and trade to exchange that engenders specialization or the division of labour. But as we can infer from our analysis, Smith has inverted the historical sequence! It is the necessity for being human to divide social labor the only kind of labor possible to us that makes exchange between human beings at all possible. And it is the generalization of exchange as a specific form of political-social relations that can lead to the fiction of measurable individual labors remunerable with individual money-wages. As a result of this violentlyimposed fiction, the imprescindible unity of social labor, as against its aggregation in individual labors, comes to appear not as the property of living labor, but rather as the property of the machine (!), of capital, of the means of production as the congealed spirit of Webers lifeless machine! Durkheim, incidentally, distinguished between the mechanical solidarity of early social groups and the organic solidarity of advanced human societies. But when Max Weber considers modern capitalism (the phrase is Werner Sombarts, though Weber borrows it), he speaks invariably of its mechanical foundations indicating metaphorically the complex machinery of what he calls the capitalist organization of labour. Given his spiritualist bent, Weber considers that capitalist society is less organic than earlier human groupings. Yet here again we must side with Durkheim: what makes advanced industrial capitalist societies organic is the fact that despite the imposing and ubiquitous machinery, the interdependence of human beings has now reached such a stage that it has become truly organic, rather than mechanical. Even in a metaphorical sense, heavy industry is becoming a smaller component of capitalist industry, leaving greater space for services and, above all, information. The viruses that we attribute to computer systems are becoming ever more organically real with each passing day!] **************** Let us take up the analysis from where we left it.
To be sure the capitalistic form of an enterprise and the spirit in which it is run generally stand in some sort of adequate relationship to each other, but not in one of necessary interdependence. Nevertheless, we provisionally use the

expression spirit of (modern) capitalism to describe that attitude which seeks profit rationally and systematically in the manner which we have illustrated by the example of Benjamin Franklin. This, however, is justified by the historical fact that that attitude of 64 mind has on the one hand found its most suitable expression in capitalistic enterprise, while on the other the enterprise has derived its most suitable motive force from the spirit of capitalism. But the two may very well occur separately. (Max Weber, Vorbemerkungen, pp.64-5)

In the Vorbemerkungen, Weber distinguishes three elements, three factors that may be isolated in the analysis of capitalism as a mode of production. The first is the search for or pursuit of profit. The second is its rational and systematic character or manner, which, combined with the pursuit of profit he calls the spirit of capitalism. And this spirit of capitalism he takes as distinct from, third, the enterprise which, whilst
on the one hand [has provided the]. most suitable expression.[for the spirit of capitalism], on the other. has derived its most suitable motive force from the spirit of capitalism. But the two may very well occur separately.

There is first an attitude that seeks profit, although Weber does not define profit. Then there is the manner in which profit is sought, which is rational and systematic and this means that the rationality and systematicity of the pursuit of profit is separate from the motive force or attitude that drives or causes the pursuit of profit. And this self-same motive force or attitude or pursuit is what most suitably drives enterprise. Enterprise is therefore the most suitable expression of the spirit of capitalism because it derives its most suitable motive force from that spirit. Enterprise and the profit motive are most suited to each other. And to find out why and how, we must look deeper into both the meaning of enterprise, the meaning of pursuit or spirit, and then the meaning of profit and rationalization so that we may arrive at capitalism. It is evident that by rationalization Weber does not mean the organization of the pursuit of profit according to a teleological rationality. The rationality does not consist in the goals of the pursuit but purely in the fact that the goal is a quantifiable one. If the spirit of capitalism is the pursuit of profit and profit is a numerical, mathematical quantity or magnitude something that, like profit, is measurable numerically because it is a monetary entity then and only then the spirit of capitalism can assume a rational and systematic form as a pursuit that need not have any substantive rationality or meaning. It follows that it is the quantification of whatever it is that constitutes the substance or meaning of profit as a social institution it is this quantification or formalization of the social content of profit that allows its rational and systematic pursuit. But the pursuit as a motive force is distinct from the rationalization. The pursuit of a goal or end that could not be quantified could not be rationalized for the precise reason that the goal is not achievable by formally rational means.

Capitalism is therefore a mode of social organization that allows the pursuit of profit to be conducted in a scientific, mathematically calculable manner because its goal can be quantified in the monetary entity of profit. We have then a motive force or drive or ethos that aims at the rational and systematic goal of the quantifiable entity called profit. And this means that the only rational and systematic aim or goal of the pursuit of profit is its maximization over a period of time. Weber distinguishes the motive force, the motivation or drive of capitalism, its spirit, from the actual formal-rational goal, on one side the maximization of profit; and from its purposive goal which is the satisfaction of the motive force. Profit as a formal and numerical quantity cannot be its own goal, because then it would be meaningless and purposeless as a numerical quantity. The purpose behind the pursuit of profit, the meaning of profit, must be something other than its numerical expression, and can be its monetary expression only so far as money means something other than a mere quantity! To understand profit we must understand the motive force behind the pursuit of profit what makes profit a pursuit -; and we must understand how profit can be quantified, that is, we need to know what allows the content of profit to enable it to be quantified not (!) because the content of profit is an actual quantity but because it is subject to quantification. In other words, how is it possible for the content of profit (profit outside its numerical form) to be quantified? If profit were a mere quantity, then there would be no need for enterprise because its maximization would depend entirely on some engineering numerical formula. The enterprise is needed because profit needs entrepreneurial conduct in order to be derived. Differently put, if profit depended merely on the entirely individual conduct of the entrepreneur without involving other people, then it could never (!) be described as enterprise or entrepreneurship but merely as skill or craft or strength in the performance of a task. Enterprise involves the organization of human beings around some activity. But this activity need not be for profit and that is why enterprise is indispensable for capitalism but capitalism is not indispensable for enterprise! When Weber argues that the two may very well occur separately, he means that the entrepreneurial spirit and the spirit of capitalism are two separate concepts or human motivations because for him the spirit of capitalism contains a rational and systematic component in the pursuit of profit that the entrepreneurial spirit need not necessarily contain. As a result, it is possible to exhibit the spirit of capitalism even in traditional enterprises that do not innovate entrepreneurially. But here Weber is as wrong as can be because the two concepts are separable one from the other only because entrepreneurship does not necessarily contain the spirit of capitalismto the extent that the former is not aimed at profit! Whereas, by contrast, the spirit of capitalism, which is aimed necessarily at profit, necessarily also implies the entrepreneurial spirit! The mistake that Weber has made is to confuse enterprise

with innovation. He imagines that the spirit of capitalism involves only the capitalist pursuit of profit, and that whilst it may have an irrational ethos as its motive force, it does not necessarily involve enterprise but involves necessarily rational and systematic methods for the maximization of profit.
But the two may very well occur separately. Benjamin Franklin was filled with the spirit of capitalism at a time when his printing business did not' differ in form from any handicraft enterprise.(p.65)

Weber goes to great lengths to differentiate the less rational and more innovative personal qualities of the ideal type of the entrepreneur as distinct from the capitalist and invokes Sombart (Der moderne Kapitalismus), whose confusion of the spirit of capitalism (the rational pursuit of profit) with rationalization tout court Weber had just denounced, to distinguish by improving it his definition of traditionalist (for needs) and entrepreneurial (for acquisition) businesses (pp.63-65 ff) and between profit maximization over time and sheer opportunistic rapacity (p.56). Yet neither of these distinctions detracts from the fact that capitalist investment requires necessarily the realization of profit and therefore also the command of living labour mediated by both the labor process dictated by the means of production and the wage goods that affect the free individual choice of the worker in the sphere of production. This is the essential feature of capitalism regardless of whether profits are then distributed as interest or rent to passive investors or whether giant industry mechanizes the entrepreneurial spirit to the point that it smothers the spirit of capitalism! Sombart and Weber are confusing the initial formal subsumption by capital of existing means of production with the historico-political reality that the antagonism of the wage relation must lead to the trans-formation of the means of production and therefore to the real subsumption of the production process by capital. To draw such a fictitious and untenable distinction is the same as arguing that capitalist industry is possible as a totally purposive rational activity, as a static equilibrium, as a Schumpeterian circular flow which, as we have seen, is equivalent to confusing it with engineering. This means that contrary to what Schumpeter theorized the real capitalist cannot be the financier who simply sits in a bank and lends money for interest: the real capitalist is precisely the entrepreneur who must go to hell and back to realize a profit for the capital invested and to do so must also trans-form the method of production and the products as well! It is not the entrepreneurial spirit that defines capitalism, but it is the intrinsic antagonism of the wage relation that compels the capitalist to be entrepreneurial! Weber ends up here making the same confusion for which he had properly criticised Sombart who wrongly identified development with rationalization and the same oversight that Schumpeter made by isolating the entrepreneurial spirit from the spirit of capitalism or the profit motive and therefore from development and innovation from profitability! All three thus fail to see that there can be no capitalism without enterprise and no spirit of capitalism without the pursuit of profit, which means

antagonism, which means development-through-crisis. Webers complete con-fusion of rationalization with competition and profitability, and between saving and earning is painfully palpable in this passage:
There was repeated what everywhere and always is the result of such a process of rationalization: those who would not follow suit had to go out of business. The idyllic state collapsed under the pressure of a bitter competitive struggle, respectable fortunes were made,- and not lent out at interest, but always reinvested in the business. The old leisurely and comfortable attitude toward life gave way to a hard frugality in which some participated and came to the top, because they did not wish to consume but to earn, while others who wished to keep on with the old ways were forced to curtail their consumption . And, what is most important in this connection, it was not generally in such cases a stream of new money invested in the industry which brought about this revolution. but the new spirit, the spirit of modem capitalism, had set to work.(p.68)

Once again Weber confuses frugality and curtailed consumption with labor as a calling and, through a non sequitur, with capitalist profit-making enterprise. That is why Weber never took adequate notice of Schumpeters Unternehmergeist (entrepreneurial spirit) and chose to concentrate instead on the leitender Geist (leadership spirit) of the charismatic political leader and on the calling of the rationalizing scientist. Schumpeter himself, as we have seen, incorrectly borrows the same false dichotomy of capitalist/financier (dull and calculating) and entrepreneur (enterprising and innovative as well as a captain of industry). The mistake Weber and Schumpeter (as well as Sombart) make is to believe that it is possible to have an irrational motive force, the spirit of modern capitalism, driving a rational machine (lifeless and living) which is an obvious paradox without the historical antagonism between capitalists and workers that drives the Innovationsprozess and the capitalist Entwicklung! Without this historical Dynamik of antagonism between living and dead labor, Weber and Schumpeter are destined to fall either into the voluntarism of the Spirit or into the scientism of rationalization: in both cases the whole point of the Rationalisierung is lost. Nor is this a historical and analytical mistake that is confined to the greatest bourgeois theoreticians of the turn of the century. The entire romantic fantasy of a monolithic corporatist capitalism able to co-ordinate and manipulate the economy through the consolidation of powerful monopolies is one that was embraced even more credulously by the entire official workers movement of the time. From Hilferdings apocalyptic denunciation of the machinations of Finance Capital and the extension of this jejune analysis by Lenin to the theme of Imperialism, down to the sociological work of Berle and Means on The Modern Corporation and Schumpeters hypothesis of trustified capitalism, and Michal Kaleckis economic theory of monopoly pricing all these socialistic theories will serve to hide much more than they pretended to reveal. Even Lukacs reformulation of Marxs thesis of commodity fetishism as reification will amount to little more than the hypostatization of Webers notion of rationalization and of the bureaucratic iron cage.

Yet it is precisely the irrational element in capitalism that ought to have prompted Weber to inspect more closely the political viability of his own theoretical and constitutional project. Webers paradoxical error consisted in perceiving the irrational
element at the heart of the wage relation, but then instantly confusing it with the scientific hypothesis of a rationally calculable calling (Beruf) for labor that could be shared by both capitalists and workers and thereby turn the antagonism of the wage relation into a manageable political convention that could then be represented directly in the liberal institutions of parliamentary democracy. Indeed, as we have shown, Weber even misunderstood the very

fundamental fact that his notion of labor as a calling (Beruf) did not and could not constitute a specifically bourgeois economic ethic, even in its aspect as innerweltliche Askese, until the essential meaning and interpretation of this Askesis had been literally reversed by the ideologues of the Neoclassical Revolution. It is this paradoxical error that leads Weber into the lucus a non lucendo, the blind alley of his plans for the Parlamentarisierung. - In the same manner as Hobbes resolved the bellum omnium contra omnes by hypothesizing the convention ob metum mortis of the Leviathan, of the State-machine as a mechanical ab-solution of all human conflict, and therefore cleverly but inconsistently resolving the antithesis of scientific hypothesis (the necessity of the decision to form a con-vention) with the political convention (that therefore preserves the freedom of the individual decisions) -, now it is Weber who envisages the possibility of resolving the conflict of the Demokratisierung in the Kalkulation of compromise within the ultima ratio of the parliamentary oversight of the bureaucracy, the selection of the responsible leitender Geist. But, like Hobbes, he then faces the problem of the trans-formation of the system, of the capitalist machine and of its governing State-machine - of their Entwicklung, of their Dynamik, which he can understand only in terms of political representation and compromise of the Parlamentarisierung. This is the Aufklarung the spirit of Enlightenment, the belief in rational or value-neutral legality and legitimacy of Parliament that Carl Schmitt will definitively demolish in his response to Richard Thoma in Parlamentarismus and echoed by Schumpeter (in an important but neglected article published in 1921 in Webers own Archiv, called Sozialistische mglichkeiten von heute). Inaccurate and superficial therefore is the thesis of W E Scheuerman in his The End of Law of an irrational common matrix in Schumpeter and Schmitt against the Parlamentarisierung espoused by the rational Weber. Scheuerman entirely misses the point that Webers Nietzschean notion of Rationalisierung, when correctly framed, has overcome the old opposition of rational science and irrational beliefs. And equally facile and off-target is also Marcuses equiparation of Webers rationality with capitalist domination in his Industrialism and Capitalism in the Work of Max Weber, now in Negations. Like Lukacs and Heidegger, whose natural philosophical successor he was, Marcuse simply lacked the sociological, historical, political and economic background to tackle the complexity of Webers problematic. By denouncing Webers presumed equiparation of technique and science with reason and by equating them instead with ideology, Marcuse entirely misses the point of the Nietzschean-Weberian Rationalisierung that is our central topic here and in our

Nietzschebuch: science and technology are neither ideology nor truth; they are effective tools that take on the value of those who utilize them (the way, for instance, that gases expand to occupy the shape available in the space that contains them). Webers and Schumpeters occasional apparent relapse into this jejune belief in the value-neutrality of formal rationality or empirical science can easily be averted in effect by simply re-stating the Nietzschean-Weberian tactical perspectivism which retains the effectuality of empirical scientificity whilst dis-pelling the Ratio of science. Even a socio-theoretical master like Habermas fails to see this essential point in his review of Marcuse [Wissenschaft und Technik als Ideologie] and in his review of Nietzsche [The Nihilist Critique of Knowledge] again, in large part because of his inability to perceive the relevance of this central concept of Rationalisierung in social theory and especially in the sphere of the Economics. In point of fact, Weber will abandon his original schema of political reform as formulated in Parlament und Regierung with the publication in 1919 of Deutschlands kunftige Staatsform where his plebiscitarian or elitarian position becomes almost indistinguishable from Schumpeters. Yet it is Weber, not Schumpeter, who sees more keenly the Problematik of the complex relationship between the capitalist pursuit of profit through the rational organization of free labor and the difficulty of accommodating and integrating this freedom of labor (the Demokratisierung) within an overall scheme of governance (the Parlamentarisierung) of the crises that the antagonism between profits and wages throws up in the form of conflict over development. Weber understands what Schumpeter does not: - the ineffectuality of the entrepreneur, the powerlessness of the entrepreneurial role in an antagonistic mode of production in which the technological and scientific process has been irretrievably subsumed by class relationships that require appropriate political institutions - a State Plan to ensure the survival of the last remnants of individual freedom in any sense at all! Schumpeter ignored this Problematik almost completely; but Weber was unequal to the task of confronting it precisely because he misunderstood the nature of the antagonism inherent to his notion of the Arbeit. Webers Parliament alone did not have the instruments it needed in the event of a collapse in the rational profitability of market capitalism provoked by the inability of market institutions and liberalism to provide the social osmosis that the antagonism of the Arbeit place in constant peril. Demand may well come from free labor: but it does not automatically guarantee profitability. There is no natural link between the conflict intrinsic to demand, the Arbeit as want, and its free antagonistic ex-pression through the mechanism of the market to ensure its translation into the rational organization of (free) labor that can provide for those needs and wants! There is no mechanism, whether lifeless or living, that secures the inter-pretation of conflicting wants and needs articulated by the freedom of labor into their rational and calculable organisation through the filter of the market and that ensures the social osmosis, the social synthesis, whether automatically (the self-regulating market mechanism of Classical and Neoclassical Political Economy), or through the entrepreneurial spirit (Schumpeter), or else through the political representation and mediation of democratic needs and wants, of the Arbeit, in the Parlamentarisierung auspicated by Weber! Neither the market

mechanism nor the Parlamentarisierung can ensure the reconciliation of the freedom of needs and wants, the Demokratisierung, with the labor, the Arbeit, through the rationalization of capitalistic economic action. As Keynes was about to discover and theorize, it is aggregate demand that requires specific policies and instruments that the German State lacked and that no parliamentary compromise could deliver. It was this lack, this institutional deficiency of market capitalism, that could fire the charge Schmitt will move in his Parlamentarismus against the liberal illusion of a Rechtsstaat capable of mediating through the public sphere [Offentlichkeit] the social conflict that capitalism generates and that requires instead a total state. Even Weber ignores that without this ability of the State to manage aggregate demand, the rational profitability of capital may collapse. And if it does, the temptation on the part of capital will be to resort to that quantitative expansion or absolute exploitation that is the opposite of qualitative development or relative exploitation. And what this means ultimately is that sober bourgeois capitalism, far from acting in opposition to the State bureaucracy, will then unite with it in an all-out attempt to suppress (!) that freedom of labor on which Webers entire Parlamentarisierung was absolutely dependent and precisely the denouement that Weber himself feared! (This final compromise between German bourgeoisie and State bureaucracy is ably identified by Alfred Sohn-Rethel, in his Oekonomie und Klassenstruktur des deutschen Faschismus, as the social force that catapulted Hitler to power sealing the fate of the Weimar Republic.) This was the Problematik that only a trained economist blessed with uncommon political insight like Keynes could tackle: but not before the Kafkaesque meta-morphosis of the Weimarer Verfassung into the Nazi dictatorship had found an emphatic riposte in the Rooseveltian New Deal! Most certainly, Weber lacked the armor needed for the kind of politico-economic analysis that Keynes adopted in devising his genial macroeconomic theory. But Keynes had the benefit of the tremendous and unprecedented revolution in the asset of capitalist state institutions that the New Deal put in place following the Great Crash of 1929 and that he theorized later in the General Theory: - the absorption of the antagonistic
push of the working class against the wage relation in the form of aggregate and effective demand in the form of growth - as a means of controlling this push through the rational organization of free labour rational because measured through the institutional means of the money-wage as the fundamental unit of capitalist antagonism so as to turn free labour into organized labour under regular discipline. Weber had no such assistance: the

totalitarian turn that the German polity was about to take would have been unimaginable to him except perhaps the pre-capitalist form it took in Russia. In propounding and dissecting the Parlamentarisierung, Weber did not imagine that even the more repressive Socialist alternative would resemble anything like the horrors of Stalinism or indeed its National Socialist totalitarian counterpart in Germany.