Lecture 12

Lecture 12 - Weber, General Economic History, part IV...

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Weber, General Economic History, part IV Origins of Capitalism
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Characteristics and pre-requisites of capitalist enterprise 1. Appropriation of the physical means of production by the entrepreneur 2. Freedom of the market 3. Rational technology 4. Rational law 5. Free labor 6. Commercialization of economic life p. 268
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Capitalism as a “whole epoch” A whole epoch is designated as capitalistic only as the provision for wants in capitalistically organized to such a predominant degree that if we imagine this form of organization taken away the whole economic system must collapse. P. 276
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FREE LABOR Persons must be present who are not only legally in the position, but are also economically compelled to sell their labor on the market without restriction. It is in contradiction to the essence of capitalism, and the development of capitalism is impossible, if such property less stratum is absent, a class compelled to sell its labor services to live; and it is likewise impossible if only unfree labor is at hand. Rationalistic capitalist calculation is possible only on the basis of free labor; only where in consequence of the existence of workers who in the formal sense voluntarily, but actually under the compulsion of the whip of hunger, offer themselves, the costs of products may be unambiguously determined by agreement in advance.
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Joint Stock Company Weber states that they are descended from the State Corporations such as Dutch East India Company and so forth. This is probably true, but there is a great discontinuity in the history of the corporate form of organization, see what Adam Smith says
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Adam Smith on Joint Stock Companies The directors of such companies, being the managers rather of other people’s money than of their own, it cannot be well expected, that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own. Like the stewards of a rich man, they are apt to consider attention to small matters as not for their master’s honor, and very easily give themselves a dispensation from having it. Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company. It is upon this account that joint stock companies for foreign trade have seldom been able to maintain the competition against the private adventurers. They have, accordingly, very seldom succeeded without an exclusive privilege; and frequently have not succeeded with one. Without an exclusive privilege they have commonly mismanaged the trade. With an exclusive
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Lecture 12 - Weber, General Economic History, part IV...

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