Abstract
In Marx’s characterization of the first stage of manufacture, economic production is constituted by the formal subsumption of labor under capital and thus the retention of precapitalist processes of production. In consequence, increases in production occur with constant returns to scale, competitive constraints are incompletely developed (per unit costs are not reduced), cooperation is simple, and this economic structure is consistent with various traditional as well as with rationalizing values. The objective, coercive, competitive constraints found in machine capitalism (the “iron cage”) are absent, and if capital accumulation occurs within this first stage of manufacture, it must be motivated subjectively. While Weber provides an explanation of the nature of this subjective motivation, an explanation of the capacity of the Protestant ethic and the spirit of capitalism to motivate capital accumulation systematically presumes a characterization of the logic of economic production that is developed incompletely in Weber’s analysis. The Protestant ethic becomes the spirit of capitalism, and methodically motivates capital accumulation, only when it interpenetrates the first stage of manufacture. Thus, neither Marx nor Weber alone provides an adequate explanation for the emergence of machine capitalism. Marx slights the necessity for the autonomous, subjective motivation of capital accumulation within the first stage of manufacture, while Weber provides an inadequate analysis of the nature of manufacture, the structure of economic production that is rationalized subjectively by the spirit of capitalism. However, their arguments are complementary and, if integrated, provide the foundation for a satisfactory explanation of this developmental process. Through my characterization of their analyses of capital accumulation in the first stage of manufacture, I construct an argument about Marx and Weber’s understanding of the role of value-commitments in the analysis of economic/social structures and about the common logic of historical explanation found in their theories.
Keywords
In this essay, I outline a simple framework within which it is possible to compare Marx and Weber’s viewpoints on the role of value-commitments in history. I examine their respective attempts to explain the genesis of machine capitalism in England and then attempt to determine what, if his theory was to be logically coherent, each had to assume about the independent effects of value-commitments in the emergence of machine capitalism. This discussion enables me to show how they converged on the same logic of historical explanation.
In Marx’s characterization of first stage of manufacture, a stage of capitalist development in both agriculture and industry, economic production is constituted by the formal subsumption of labor under capital and thus the retention of precapitalist processes of production. Here, increases in production are not essential; if increases in production do occur, they do not occur because of increases in productivity. In the first stage of manufacture, increases in production occur with constant returns to scale, where simple cooperation prevails, and competitive constraints are incompletely developed because increases in production are not associated with reduced per unit costs. There are no objective constraints within this structure that necessitate capital accumulation; in consequence, this economic structure is consistent with various traditional as well as with rationalizing values. The objective, coercive, competitive constraints found in machine capitalism (the “iron cage”), due to the emergence of the real subsumption of labor under capital, the development of a specifically capitalist mode of production, and consequent increases in productivity and decreases in per unit costs during the process of industrialization, are absent. If capital accumulation occurs within the first stage of manufacture, it must be motivated subjectively. If, in the first stage of manufacture, the society and economy are regulated by traditional values, capital accumulation will only be sporadic and it will not be sustained systematically. There will be no tendential development toward machine capitalism.
Weber provides an explanation of the nature of the subjective motivation for capital accumulation during the first stage of manufacture in his characterization of the Protestant ethic and the spirit of capitalism. The Protestant ethic is the set of religious commitments associated with ascetic Protestantism; when these values interpenetrate an economy characterized by the first stage of manufacture, the spirit of capitalism, a set of economic value-commitments, emerges to motivate capital accumulation systematically. This analysis presumes what we do not find developed adequately in Weber, a characterization of the logic of economic production in the first stage of manufacture.
This analysis results in the conclusion that neither Marx nor Weber provides an adequate explanation for the emergence of machine capitalism, where labor is not formally, but really, subsumed under capital and where the specifically capitalist mode of production emerges through industrialization. Here, the use of machines results in increases in productivity, the reduction of per unit costs, and thus the emergence of objective, competitive constraints. Capitalists who adhere to traditional values in machine capitalism, legitimating traditional processes of production, are driven out of business. In machine capitalism, capitalists are constrained objectively to transform their processes of production to increase productivity; the only values consistent with this process are characterized by instrumental rationality.
Marx slights the necessity for the autonomous motivation of capital accumulation within the first stage of manufacture, while Weber provides an inadequate analysis of the nature of manufacture as a structure of economic production. I focus on the first stage of manufacture because it is here, where the economic order does not limit the nature of actors’ economic orientations to ones that are instrumentally rational, that we can see the importance of integrating a characterization of the process of production with the values that motivate how actors act within it. 1 Within this discussion, we will also discover that Marx and Weber’s arguments are complementary and compatible, and, when integrated, provide the foundation for a satisfactory explanation of the process leading from the first stage of manufacture to machine capitalism. 2 I begin by characterizing a framework within which we might compare the logic of historical explanation in their arguments.
The logic of historical explanation
In the Theory of Collective Behavior, Neil Smelser explicates the logic of value-added models. These articulate universal class propositions that specify the necessary and sufficient conditions for the occurrence of some outcome. Unlike most such arguments, the order of the independent variables enunciated by the propositions is important in determining the nature of the expected outcome. The activation of these variables, in turn, narrows the range of possible outcomes. Drawing on an analogy from economics, Smelser (1962) comments that
Every stage in the value-added process … is a necessary condition for the appropriate and effective addition of value in the next stage. The sufficient condition for final production, moreover, is the combination of every necessary condition, according to a definite pattern. (p. 14)
As each variable is introduced, “the explanation of the outcome becomes increasingly determinate or specific” (p. 14). Crucial in this model is the recognition that the earlier variables must combine in a specific order before the next variable becomes relevant in the explanation of a particular outcome. Thus, the variables are viewed as ordered within any particular explanation.
The ordering of the independent variables is not necessarily temporal:
In a value-added process … we must distinguish between the occurrence or existence of an event or situation, and the activation of this event or situation as a determinant. The value-added logic implies a temporal sequence of activation of determinants, but any or all of these determinants may have existed for an indefinite period before activation. (p. 19)
The variables are not necessarily ordered in time. The second independent variable may be present prior to the first, but the second will only “add value,” become relevant to the predicted outcome, when the first is also present. Thus, in this model, we are dealing with a series of independent, yet interdependent, variables (Parsons, 1949 [1937]: 25, fn. 2), ordered in terms of their effect upon the final predicted outcome, but not necessarily ordered in linear time.
It is necessary to make one addition to Smelser’s discussion. Value-added models are organized within a cybernetic hierarchy. A cybernetic system is made up of at least two parts, one said to be high in information, the other high in energy. In this system, the first controls the second, while the second conditions the first. “Conditions” limit the range of variation defining the state of relations within the system, while “controls” regulate the state of the system within that range (cf. Wright, 1979 [1978]: ch. 1).
In a theory encompassing economic, political, and ideational variables, these may be ordered within the cybernetic hierarchy Parsons has articulated – working towards the cybernetically controlling system, the organization is as follows: the economy (A), the polity (G), the societal community (I), and the fiduciary subsystem (L). The economy is said to condition the polity, or less elliptically, organizations in the economy provide adaptive resources to organizations in the polity, resources that limit the possibilities of effective political action. While political decisions may contradict economic limitations, they will not be capable of successful implementation if they fall outside of those structurally defined limits (Gould, 1976, 1987: ch. 4; Marx and Engels, 1975: 60, vol. 5).
In a value-added model, “material conditions” precede (although not necessarily in time) “ideational controls.” The presence of the former is required if the latter are to “add value.” Thus, the presence of the theoretically relevant conditions is necessary before the controls are activated, although the latter may appear on the scene prior to the former.
Every variable in a value-added theory is a necessary condition for the occurrence of the explicandum, but only together do they encompass the necessary and sufficient conditions for the outcome. Thus, value-added theories are universal class propositions of a multivariate nature: if xyz, then a. 3
Marx, Weber, and the value-added model
I can best illustrate the relevance of the value-added model to an analysis of Marx and Weber if the discussion is restricted to two variables, defined by their relative position within the cybernetic hierarchy. Marx and Engels (1975) pointed out in The German Ideology that unless the “material conditions” for a revolution are present, it is immaterial whether the “ideas” of revolution have been expressed a hundred times (vol. 5, p. 54; cf. 59–60). The implication of this statement is that both specifiable “material conditions” and “ideational controls” are necessary for the occurrence of a revolution, that the “material conditions” must be present for the “ideational controls” to be relevant to the genesis of revolution (to “add value”), but that the “ideational controls” are independent of (even if interdependent with) the “material conditions” in that they may emerge first in linear, historical time. Their presence may be generated by circumstances other than the relevant “material conditions.” 4
The logic of the value-added model appears to differ from the logic of Marx’s theoretical arguments on one important point. For Marx, at least as read by many, the presence of the “material conditions” for the occurrence of some event necessarily gives rise to those ideas also necessary as preconditions for its occurrence. This is the famous determination in the last instance (Engels, in Marx and Engels, 1965 [1955]: 417–425). Thus, while Marx orders his variables in a cybernetic hierarchy and is aware of the necessity of multivariable explanations, including “ideational” factors, his independent variables are not truly independent, as in time, all are dependent upon, emerge from, the primary “material conditions.”
Weber’s model, on the other hand, is a pure value-added construct. While “material” factors were seen as the conditions for social transformation, “ideational” factors were seen as autonomous from those conditions, although interrelated with them. 5 Weber’s order for the variables follows the same cybernetic hierarchy Marx articulates, but, as in the value-added model, he maintained the independence of the variables; there is no determination in the last instance, only a series of prior conditions required for the next variable up the hierarchy to be relevant in the genesis of the explicandum. The presence of the “material conditions” for the occurrence of the explicandum is neither a necessary nor a sufficient condition for the occurrence of the “ideational controls” (see Weber, 1958 [1904–1905]: 26–27, 190, fn. 16, 277, fn. 84).
Both Marx and Weber formulate value-added models in which “material conditions” (almost always economic conditions) limit the range of possible outcomes. For both, the genesis of major social transformations requires the concomitant presence of “ideational controls” and for both “ideational controls” may be present prior to their material counterparts. Thus, “ideational controls” may be generated independently of their “material” counterparts. Nonetheless, these “ideational controls” add value only when the “material conditions” are present. The difference is that for Marx, when the “material conditions” are present, they will in time generate their “ideational” counterparts. This is the “last instance.” If, as Althusser (1970 [1967]) tells us, “the lonely hour of the ‘last instance’ never comes” (p. 113), the logic of Weber’s and Marx’s historical explanations is identical.
From manufacture to machine capitalism
Rather than attempting to document this interpretation of Marx’s and Weber’s work, I am now going to outline their respective theories explaining the emergence of machine capitalism. I hope to demonstrate that a satisfactory reconstruction of Marx’s argument requires the inclusion of value-commitments as an integral component in his explanation. We will find, in other words, that whatever Marx’s stated views (in one passage or another) with regard to the “determination” of events by “material,” economic conditions, his own theoretical argument concerning the emergence of machine capitalism requires that he accept the viewpoint that “material,” economic circumstances limit possible outcomes, but only in conjunction with “ideational” controls do they determine outcomes. As the reader might suspect, it will not be necessary to worry about the “last instance.”
In addition, I show that Weber’s explanation requires the inclusion of specifiable economic conditions to explain satisfactorily the emergence of machine capitalism. While Weber was always aware of this, nowhere does he specify these conditions with any cogency. Thus, to approach logical closure, Weber’s explanation requires the inclusion of Marx’s insights about the nature of economic production in the first stage of manufacture in addition to his own analysis of the value-commitments that rationalize economic production. Contrary to being an anti-Marxist, we will see that Weber’s theory requires that he adopt a Marxist perspective.
A reconstruction of Marx’s position 6
In the first stage of the development of capitalism, the first stage of manufacture, the labor process is subsumed formally under capital. The labor process thus becomes a means in the extraction of surplus value, a vehicle in the capitalist valorization process. The capitalist is severed from direct production, assumes managerial responsibilities, and exploits the worker, but manufacture is not characterized by a labor process of a specifically capitalist type, by the “specifically capitalist mode of production.” For Marx, capitalism is, in its most general form, typified by the capitalist valorization process, but not necessarily by a distinct process of production.
Manufacture, at least in its first stage, does not imply any alteration in the actual process of production:
On the contrary, the fact is that capital subsumes the labour process as it finds it, that is to say, it takes over an existing labour process, developed by different and more archaic modes of production. And since that is the case it is evident that capital took over an available, established labour process, for example handicraft or the form of agriculture corresponding to a small, independent peasant economy. (Marx, 1976 [1867]: 1021. I have altered what I assume is a typographical error in the text; cf. Marx, 1971: 194.)
7
In manufacture, a monetary relationship exists between the buyer and seller of labor power. Workers are formally free and are dependent on capitalists because the latter control the conditions of their labor. Technologically and organizationally, workers may conduct their labor process exactly as they did prior to this subordination, but now it is their labor that is consumed in the labor process and the capitalist has control over the commodity that is produced. A master’s position in artisanal production is defined in terms of the trade he has mastered: his “capital” is tied to specific use-values, and the methods of production are defined traditionally. In manufacturing, the use-value of the capital is theoretically irrelevant to the capitalist, whose only concern is the surplus value produced. 8 In such circumstances, the capitalist will be removed from the actual process of production and will assume the functions of capital, the appropriation and control of the labor of others, and the selling of the products of that labor (Marx, 1967 [1867, 1885, 1894]: 308–309, vol. 1).
Manufacturing, when based on the formal subsumption of labor under capital, yields absolute surplus value. Machine capitalism revolutionizes the labor process and yields, in addition, relative surplus value. The specifically capitalist mode of production, sui generis, is based on the extraction of relative surplus value; 9 here, there is congruence between the method of production and the valorization process; it is here that the capitalist mode of production is dominant, while manufacturing only predominates. 10 In machine capitalism, there is a “real subsumption of labour under capital” (Marx, 1976 [1867]: 1024ff, 1034ff).
Even in its first period, manufacture is based on cooperation as a productive power of capital. At its most primitive level, this cooperation induces no change in the actual productive process other than concentrating on larger numbers of workers under one roof or coordinating the work of workers who ply their trades in their own dwellings. Later it may give rise to a situation in which the workers perform different but connected tasks in the production of commodities:
[I]n the handicraft-like beginnings of manufacture, and in that kind of agriculture on a large scale, which corresponds to the epoch of manufacture … [s]imple cooperation is always the prevailing form, in those branches of production in which capital operates on a large scale, and division of labour and machinery play but a subordinate part. (Marx, 1967 [1867, 1885, 1894]: 335, vol. 1)
The latter type of cooperation, in which different workers perform different tasks, melds into manufacturing processes based on a more complex division of labor. In heterogeneous manufacture, articles made separately are later fitted together; here, where the production of each part is separated from the rest, the labor process may, and in its early stages usually was, farmed out to private homes, saving the capital outlay on a shop. In serial manufacture, commodities are produced in connected processes. These remain isolated from each other, but in most cases, Smith’s example of the manufacture of the pin being the most famous, this process is best carried out under one roof. Serial manufacture clearly transforms the labor process itself; it is a form of the real subsumption of labor under capital. It covers the gap between the earliest capitalist production, based solely on the formal subsumption of labor under capital, and machine capitalism through the process of industrialization. In manufacture based on complex cooperation and characterized by the division of labor, the value embedded in individual commodities may decrease, and thus relative as well as absolute surplus value may be extracted (see Marx, 1967 [1867, 1885, 1894]: 342–368, vol. 1). 11
Two distinctions are crucial here: (1) between (a) usurer’s and merchant’s capital situated within the interstices of precapitalist modes of production and (b) manufacture and (2) between (the first stage of) manufacture and the specifically capitalist mode of production. The first distinction concerns production formally subsumed under capital versus production
in which capital is to be found in certain specific, subordinate functions, but where it has not emerged as the direct purchaser of labour and as the immediate owner of the process of production, and where in consequence it has not yet succeeded in becoming the [pre – M.G.] dominant force, capable of determining the form of society as a whole. (Marx, 1967 [1867, 1885, 1894]: 1023)
The two subordinate forms Marx (1967 [1867, 1885, 1894]) has in mind are usurer’s and merchant’s capital:
In such forms capital has not yet acquired the direct control of the labour-process. By the side of independent producers who carry on their handicrafts and agriculture in the traditional old-fashioned way, there stands the usurer or the merchant, with his usurer’s capital or merchant’s capital, feeding on them like a parasite. The predominance, in a society, of this form of exploitation excludes the capitalist mode of production; to which mode, however, this form may serve as a transition, as it did towards the close of the middle ages. (Vol. 1, p. 510; my italics – M.G.)
These subordinate forms of capital are not based on the formal subsumption of labor under capital. “The immediate producer still performs the functions of selling his wares and making use of his own labour” (Marx, 1976 [1867]: 1023). In dealing with merchant capital, outside the formal subsumption of labor under capital, artisans sell their commodities to a customer; they do not sell their labor power to a capitalist. While the line is often a fine one, it is important to draw it.
The second crucial distinction is between (1) manufacture based on the formal subsumption of labor under capital, characterized by precapitalist labor processes and thus an incongruence between the valorization and labor processes, by simple cooperation and constant returns to scale, by the extraction of absolute surplus value, and thus by no or very limited increases in productivity and no objective competitive constraints, and (2) the specifically capitalist mode of production based on the real subsumption of labor under capital, characterized by a congruence between the labor and valorization processes, by increases in productivity, by decreases in per unit costs, by the extraction of relative surplus value, and by the emergence of competitive constraints. The specifically capitalist mode of production emerges in the second stage of manufacture, in the context of complex cooperation, but before the introduction of machines. Historically, this second stage of manufacture is very important, but here, in a discussion of Marx and Weber, I focus on the first stage of manufacture and on machine capitalism. When I use the term manufacture, unless otherwise noted, I will be referring to the first stage of manufacture.
Capital accumulation may occur within the context of a manufacturing system based on the formal subsumption of labor. Here, where absolute surplus value is extracted, accumulation grows either with the lengthening of the work day, the intensification of work, or more clearly via an extension of production, where an increase in the volume of capital implies a proportional increase in the number of persons employed and thus an increase in the amount of surplus value extracted and available for reinvestment – accumulation via replication of producing units at constant returns to scale. It is still absolute surplus value that is extracted, and aside from a comparatively slight increase in relative surplus value that might occur indirectly via an intensification of the labor process, the lengthening of the work day, or via simple cooperation, only absolute surplus value. 12 In this situation, an increase in surplus value is paralleled by a proportional increase in total capital invested; the rate of surplus value and the rate of profit remain constant. Where the amount of surplus value is increased by an increase in the scale of production, where no or almost no increase in relative surplus value occurs, and where the rate of surplus value remains constant, I refer to the surplus value gleaned in accumulation as iterative surplus value. In such a system of extended reproduction, competitive constraints are not articulated.
In machine capitalism, where there is the real subsumption of labor under capital, competition acts as a coercive mechanism; capitalists will attempt to increase labor productivity to garner surplus profits by selling commodities below their (social) value. Here, the individual value of commodities is below their social value and the capitalist is able to undercut the prices of his competition while still making above-average profits. As production increases, prices fall, and pressure is put on those capitalists who have not innovated to increase productivity. Either they follow suit or eventually they will go out of business. Marx argues, but does not demonstrate, that in the long run, as the competitors catch up, this process will lower the average rate of profit for all capitalists. In increasing the productivity of labor in those industries whose commodities constitute the goods incorporated in the value of labor power, this process will also increase the relative surplus value extracted (which buoys the rate of profit). 13
Increases in productivity in machine capitalism come primarily through increased investment in fixed (a form of constant) capital. Marx argues that in this situation, “motivated” by competition, productivity will increase, relative surplus value will increase, the absolute level of surplus value will increase, but owing to an even greater increase in the organic composition of capital, the ratio of constant to variable capital, the rate of profit will tendentially decrease. 14
The important question to pose in this context concerns the nature of the mechanisms that lead to an increase in the number of productive units formally subsumed under capital, that is, that lead to capital accumulation where iterative surplus value predominated. It is clear that the formal subsumption of labor under capital may occur in many conjunctures and that it did occur without becoming the predominant mode of production within a society:
This enlargement of scale constitutes the real foundation on which the specifically capitalist mode of production [the real subsumption of labor under capital] can arise if the historical circumstances are otherwise favourable, as they were for instance in the sixteenth century. Of course, it may also occur sporadically, as something which does not dominate society, at isolated points within earlier social formations. (Marx, 1976 [1867]: 1022; see also Marx, 1973 [1939]: 505–506)
I am concerned with the conditions of the predominance of manufacture, where its development is systematic and where it controls the tendential movement into the next stage of economic organization. 15
Marx informs us that the production of surplus value is the absolute law of the capitalist mode of production. Use-values are produced solely as a means to the valorization of capital (e.g. Marx, 1967 [1867, 1885, 1894]: 618, vol. 1). Thus, the aim of capitalism is production; consumption is essential only because the value of produced commodities must be realized. Marx (1976 [1867]) also informs us that production for production’s sake, production as an end in itself, appears with the formal subsumption of labor under capital, where the exchange value of the product is the deciding factor in its production:
But this inherent tendency of capitalist production does not become adequately realized – it does not become indispensable, and that also means technologically indispensable – until the specific mode of capitalist production and hence the real subsumption of labour under capital has become a reality. (p. 1037)
Only in the latter case is production severed from “needs laid down in advance.” Here, the law of value is fully developed, and accumulation is manifest in the form of concentration and centralization and thus, Marx suggests, through industrialization in an increase in the organic composition of capital. Capital accumulation becomes a necessity if an individual capitalist is to remain competitive and survive.
Marx (1976 [1867]) further distinguishes between the use-values that enter into the productive process:
On the one hand, we find the material means of production, the objective conditions of production, and on the other hand, the active capacities for labour, labour-power expressing itself purposively: the subjective conditions of labour. (pp. 980 and ff.)
The capacity of each of these two sets of conditions to determine the nature of the productive process changes in the movement from manufacture to machine capitalism:
In Manufacture, the organization of the social labor-process is purely subjective; it is a combination of detail labourers; in its machinery system, Modern Industry has a productive organism that is purely objective, in which the labourer becomes a mere appendage to an already existing material condition of production. (Marx, 1967 [1867, 1885, 1894]: 386, vol. 1 – my italics)
It is important to add that in machine capitalism, capitalists are also constrained by the objective conditions of production. They function only as personified capital, just as workers are labor personified; “the capitalist is just as enslaved by the relationships of capitalism as his opposite pole, the worker, albeit in a quite different manner” (Marx, 1976 [1867]: 990).
In machine capitalism, increases in productivity allow for the lowering of per unit costs and prices. This process creates the coercive constraints of competition. “Free competition brings out the inherent laws of capitalist production, in the shape of external coercive laws having power over every individual capitalist” (Marx, 1967 [1867, 1885, 1894]: 270, vol. 1; cf. 316). It is this competition that objectively coerces capitalists into lowering the per unit cost and price of their products via the introduction of new productive techniques, and it is competition that forces the generalization of these techniques. It is competition that forces production for production’s sake and, incidentally, creates the material conditions for the development of a new social order while actualizing the law of capital accumulation (Marx, 1967 [1867, 1885, 1894]: 319, 592, vol. 1).
This distinction between subjective motivation and objective constraint is crucial, but it must not be misunderstood. Marx does not argue that in machine capitalism the individual capitalist will necessarily follow the law of capital accumulation; rather, he contends that determinate consequences will befall the capitalist who fails to obey it. Competitive pressures enforce these consequences. If the system is to function reasonably efficiently, a rationalizing ideology will emerge within it motivating actions congruent to those required for survival. Thus, capital accumulation will appear as voluntary and capitalists will be committed to it, perhaps even in situations where it is not required by competitive pressures. To say that the constraints within the system are “objective” does not imply that value-commitments legitimating action within the system are unimportant, rather it means that these commitments must be of a particular, narrowly defined, sort. 16
Where labor is formally subsumed under capital, competitive constraints are, at most, incompletely developed. In a strict sense, as manufacture approaches a system with constant returns to scale, they are not present at all. This means that capital accumulation is not mandated by “objective constraints” inherent in the mode of production. In consequence, various types of value-commitments may prove to be consistent with manufacture, even commitments that do not motivate capital accumulation.
In manufacture, as we have seen, accumulation occurs within the context of iterative surplus value; accumulation implies the extension of production, the replication of production units (cf. Marx, 1967 [1867, 1885, 1894]: 612ff, vol. 1). Accumulation in manufacture is not coerced by the inadequately realized tendency of capitalist accumulation. While there may be motivations to expand production to increase profits or even to try to lower costs to gain a competitive advantage, they are not inherent in the laws of capitalism within the context of the extraction of iterative surplus value, in the first stage of manufacture, where competitive constraints are not in place. At this stage, activities are subjectively motivated, rather than “objectively constrained,” for both capitalists and workers.
Marx explicitly recognizes this for the worker. Much of his discussion of primitive accumulation involves a specification of the conditions under which persons might be forced to work as wage-labor. This argument is codified in his equation, at one point, of the subjective conditions of labor with the means of subsistence. The greater control over the necessities maintained by the capitalist, the more firmly established the formal subsumption of labor under capital (Marx, 1976 [1867]: 1026). He also emphasizes this point in his discussion of discipline problems under manufacturing. While it is clear that certain aspects of manufacture were structured with a view to giving control over the labor process to the capitalist (cf. Brighton Labour Process Group, 1977; Marglin, 1974, 1984, and for a critique, Williamson, 1985: ch. 9), only with the development of machine capitalism was this control, and the consequent discipline, conclusively established (Marx, 1967 [1867, 1885, 1894]: 367–368, vol. 1; cf. Braverman, 1974; Burawoy, 1985; Stone, 1974).
When it comes to providing an understanding of the subjective controls over the capitalist, Marx’s arguments are less cogent. He indicates that the development of manufacture grounded in the real subsumption of labor under capital is a spontaneous formation, leaving us with the image of a chance mutation and the competitive advantage of natural selection (Marx, 1967 [1867, 1885, 1894]: 363, vol. 1). Usually, when Marx uses the word “spontaneous,” he is referring to a natural process within a constituted tendency. The problem in this case is his failure to establish the structures that constitute the tendency leading to the “spontaneous” formation of manufacture based on division of labor, the real subsumption of labor under capital, from manufacture grounded in the formal subsumption of labor under capital.
However, he also discusses the ascetic values of the capitalist, the bourgeois virtue of reinvesting surplus value as capital instead of squandering it as revenue:
It will never do, therefore, to represent capitalist production as something which it is not, namely as production whose immediate purpose is enjoyment or the manufacture of the means of enjoyment for the capitalist. This would be overlooking its specific character, which is revealed in all its inner essence. (Marx, 1967 [1867, 1885, 1894]: 244, vol. 3; cf., vol. 1, p. 586)
17
Forgetting the philosophical flourish, this statement is intelligible only within the context of the real domination of labor by capital, the congruence between the valorization and labor processes, and thus the extraction of relative surplus value in competitive conditions. Within this context, Marx’s analysis of commodity fetishism makes perfect sense for all who are “supports” (Träger) of the system. It is a mystification if applied to the first stage of manufacture, for it assumes a commitment to a form of rationality that had to be created. 18
Fortunately, Marx provides hints to the answer to this problem, and Weber comes very close to its solution. There are in Marx’s writings scattered references to the importance of Protestantism, or more specifically Puritanism, in establishing the hegemony of capitalism. He tells us that Protestantism is the most fitting form of religion
for a society based upon the production of commodities, in which the producers in general enter into social relations with one another by treating their products as commodities and values, whereby they reduce their individual private labour to the standard of homogeneous human labour … (Marx, 1967 [1867, 1885, 1894]: 79, vol. 1)
He explicitly notes the importance of Protestantism in eliminating traditional holidays and thereby in regulating the work schedule within economic production (Marx, 1967 [1867, 1885, 1894]: 276, vol. 1, fn. 2; cf. Thomas, 1964; Thompson, 1967). Most important, he recognized the relationship between English Puritanism (“and also Dutch Protestantism”) and asceticism, self-denial, self-sacrifice, frugality, and contempt for mundane and fleeting pleasures (Marx, 1973 [1939]: 232). Unfortunately, he does not tie this religious ethic, which is itself never effectively discussed, to the process of accumulation within the first stage of manufacture. For this linkage, we must turn to Weber.
A reconstruction of Weber’s position
The logic of Weber’s studies in comparative religion is as follows: a series of necessary and sufficient conditions for the genesis of modern Occidental capitalism may be established; these conditions, with the exception of one, motivating and legitimating value-commitments (moral obligations), enforced with psychological and social sanctions, were found in a number of situations. The requisite value-commitments were understood to be independent of (yet interdependent with) the “material,” and most especially the economic, conditions that lead to the development of machine capitalism. The necessary and sufficient conditions were cybernetically ordered; the cybernetic controls (including the legitimating values) were understood to have consequences for the development of capitalism only when the “material conditions” were present. In only one situation, northwest Europe from the sixteenth century, were all of the necessary and sufficient conditions present, including the required “ideational control,” and here we find the origins of modern capitalism, the constitution of a structure whose tendencies resulted in the creation of machine capitalism. Unfortunately, Weber does not provide adequate theoretical specification of the non-ideological conditions for the development of the modern capitalism, nor does he explicitly identify and discuss them in his comparative work. One of these conditions was the presence of a manufacturing economy. 19
Weber is sometimes accused of providing a circular definition of modern capitalism. He recognized that capitalism has often existed in the absence of “the spirit of capitalism” and that this set of rationalizing value-commitments was at the time only found in modern Western European and American capitalism (Weber, 1958 [1904–1905]: 52). He might be accused of explaining modern capitalism (the pursuit of profit on the basis of a rational organization of formally free labor when coupled with rationalizing values) in terms of one of its definitional attributes, the spirit of capitalism (the rationalizing values). His position is clarified if one recognizes that the Protestant ethic had positive consequences for the development of capitalism only when it legitimated actions within a specific mode of production, manufacture, and that the predominance of manufacture is understood to lead to the dominance of machine capitalism (where machine capitalism, not “modern capitalism,” is the explicandum). Machine capitalism may be defined without reference to either the Protestant ethic or the spirit of capitalism. 20
If we substitute “machine capitalism” for “modern capitalism,” it is clear that our discussion is not tautologous. Weber’s argument is that the presence of ascetic Protestantism within a situation of a rudimentary manufacturing economy gave rise to capital accumulation and to the predominance of that economy. 21 The presence of ascetic Protestantism in situations not characterized by a rudimentary manufacturing economy did not give rise to the predominance of manufacturing within the economy and, thus, it did not lead to the development of machine capitalism. 22
Weber’s main conclusion is that a modern capitalism seeking profit in terms of the rational organization of formally free labor (i.e. machine capitalism), while dependent on a given economic foundation and on many other variables, originally emerged in the context of the rational ethical prophecy embedded in Calvinism. He wants to demonstrate the effect of a certain set of religious commitments on the ethos of a manufacturing economy. He is neither concerned with the theology of Protestantism nor with its direct teachings concerning economic activities. Rather, he is concerned with the consequences of its teachings in the genesis of value-commitments controlling these economic activities. He is at pains to argue the unintended consequences of Calvinism and continually emphasizes the sanctions that reinforced the social obligations derivative from those commitments (see, for example, Weber, 1958 [1904–1905]: 97–98, 197, fn. 12; 217, fn. 3).
Weber emphasizes that rational action is relative to a particular point of view and embedded in a particular series of social relations. Rationalization entails the systematic organization of ideals and the efficient selection of means to attain the goals embedded within those ideals. Rational action within the feudal mode of production or according to Catholic ethics differs from rational action in a manufacturing structure or according to Puritan ethics. It is not self-interest that concerns Weber, but rather formally rational action, which was characterized in a situation of manufacture by the calculation of profit. The rationalization of an embryonic capitalism led to its self-sustaining growth; an ethic demanding an inner-worldly asceticism, operative in another set of circumstances, would have another set of consequences.
The interpenetration of the Protestant ethic within an economy at the first stage of manufacture gave rise to the spirit of capitalism; through this interpenetration, a religious set of values transformed into a set of economic values. In a situation of rudimentary manufacture, the inner-worldly asceticism embedded in the notion of a calling, demanding as a moral duty the fulfillment of religious obligations in worldly affairs and emphasizing what later came to be called Methodism in their pursuit, gave rise to the spirit of capitalism, which entailed the rational acquisition of profit. This pursuit was sanctioned by the necessity of manifesting one’s salvation; within a theological system defined by predestination, this resulted in the rational ordering of one’s entire worldly life. The weighing of good deeds against bad deeds was unacceptable where works were irrelevant to salvation; the certainty of salvation in faith and the manifestation of this certainty in good deeds were relevant only as an indication of God’s favor. This certainty came in a totalistic judgment of one’s self and thus in the disciplined ordering of one’s life. A theology based on predestination was not the sole foundation of moral sanction – Weber especially notes the importance of church discipline – but it clearly was an important one in the genesis of the pattern of commitments Weber discusses as the Protestant ethic. 23 Within a situation of nascent manufacture, these religious commitments, as the spirit of capitalism, resulted in systematic capital accumulation. 24
Weber differentiates between what I would label a manufacturing system legitimated by traditional values and one legitimated by rationalizing values. In the first instance, the form of organization was capitalistic (labor was formally subsumed under capital):
But it was traditionalistic business, if one considers the spirit which animated the entrepreneur: the traditional manner of life, the traditional rate of profit, the traditional amount of work, the traditional manner of regulating relationships with labour, and the essentially traditional circle of customers and the manner of attracting new ones. (Weber, 1958 [1904–1905]: 67)
When the same organizational form is found in conjunction with the spirit of modern capitalism, that is, where the values that regulate its operation are specifications from the values of ascetic Protestantism, a process of rationalization occurs. This process resulted in systematic capital accumulation via iterative surplus value, in extended reproduction. This occurred, Weber emphasizes, without necessarily modifying the form of organization or the nature of the labor process. But it changed the circumstances within which those touched by these businesses did business.
The development of this system, where labor was formally subsumed under capital and where the subjective control over the process was constituted by the spirit of capitalism, was autonomous in that while it drew on extant capital and labor (from the process of primitive accumulation) and extant markets, it also created the capital, labor, and markets it needed both domestically and, once it conquered the state, internationally. Thus, a manufacturing system legitimated by the values of the Protestant ethic was a self-sustaining system, operating in terms of the law of capital accumulation. This system was predominant in early seventeenth-century England (Gould, 1987: ch. 4); the narrowly economic foundation for it had existed elsewhere, but the manufacturing system predominated only when that foundation was interpenetrated with a formally rational, inner-worldly, ethos.
It is essential to recognize that the Protestant ethic did not define a substantive orientation towards economic activities; ascetic Protestants in non-capitalist societies did not suddenly act to maximize profits in the exploitation of formally free labor. Rather, in conjunction with a rudimentary manufacturing structure, it rationalized activities already extant. The logic of economic activities, and thus the nature of economic rationality, was defined by the manufacturing structure within which these values were assimilated. In rationalizing these activities, the Protestant ethic initiated a process leading to the predominance of manufacture within the English economy.
Weber (1958 [1904–1905]) agreed with Marx that the capitalist system in its developed form was self-sustaining:
The capitalist economy of the present day is an immense cosmos into which the individual is born, and which presents itself to him, at least as an individual, as an unalterable order of things in which he must live. It forces the individual, in so far as he is involved in the system of market relationships, to conform to capitalistic rules of action. The manufacturer who in the long run acts counter to these norms, will as inevitably be eliminated from the economic scene as the worker who cannot or will not adapt himself to them will be thrown into the streets without a job. (pp. 54–55; see 72; 181–182; 282, fn. 108)
This is Marx’s machine capitalism, the dominant mode of production within a society where the real subsumption of labor under capital has occurred and where objective competitive constraints are operative. In Weber’s (1958 [1904–1905]) terms, “these are phenomena of a time in which modern capitalism has become dominant and has become emancipated from its old supports” (p. 72).
We must avoid the error of explaining capital accumulation within a manufacturing system through the presumption that all actors at all times (excepting for error and ignorance) are instrumentally rational. The process of rationalization and the sanctions that constrain it must be explained. In manufacture, if extended reproduction was to be routinized, the controls definitive of the spirit of capitalism were necessary to motivate persons within the economic system and to assure systematic capital accumulation and the predominance of manufacture within the economy. Unlike in machine capitalism, where adherence to traditional values will result in a capitalist’s uncompetitiveness and elimination, such values were compatible with the first stage of manufacture. In this economic order, capitalists who produced traditionally were not driven out of business, but where traditional values interpenetrated the first stage of manufacture, they did not lead to systematic capital accumulation.
If we return to the cybernetic analogy, I can clarify this argument in another way. In machine capitalism, the objective conditions of production generate competitive constraints that necessitate efficient production if an individual capitalist is to survive. The state of the system, controlled by the motivational value-commitments, is narrowly delimited by its economic structure. In manufacture, however, the allowable variation in the direction of action is much broader. Production in terms of constant returns to scale and thus the absence of competitive constraints means that a wide variety of value-orientations are consistent with economic survival and a wide variety of economic outcomes are possible. The conditions delimited by manufacture as an organizational form are very broad.
In machine capitalism, it may appear as if the economy determines value-orientations. In consequence, it is possible for neoclassical economists to assume that actors are always instrumentally rational (excepting only error and ignorance [Parsons, 1949 [1937]: ch. 2]). In machine capitalism, actors are constrained to act rationally within the economic system. In the first stage of manufacture, however, it should now be clear that sustained and methodical capital accumulation is the outcome of the conjunction between the formal subsumption of labor under capital and the instrumentally rational values of the spirit of capitalism. In manufacture, the controls mandating rational action are both interdependent with the logic of economic organization and independent from that logic (Parsons, 1949 [1937]: 25, fn. 2); they emerged through the interpenetration of ascetic Protestantism and manufacture.
Three possible objections
There are at least three objections that a reader might want to make to my arguments. The first concerns Weber’s focus on exchange relations in defining capitalism, as against Marx’s emphasis on the structure of production. The second concerns whether there might not be some alternative motive force, besides the value-commitments generated within, or functionally equivalent to, the Protestant ethic, leading to the rationalization of manufacture and thus to the first development of machine capitalism. 25 The third concerns Kenneth Smith’s discussion of Marx’s analysis of the transition from simple to extended reproduction and whether it provides an alternative characterization of the transition between manufacture and machine capitalism.
With regard to Weber’s emphasis on exchange as against production, the following points might be made. He succeeds in avoiding the pitfall of what Brenner has labeled “Neo-Smithian Marxism”; he does not assume the operation of capitalist rationality; rather, he seeks to explain its emergence. 26 Weber (1958 [1904–1905]) also avoids another Neo-Smithian pitfall when he recognizes that modern capitalism is grounded in formally free labor (p. 22). What he fails to realize is that the distinction that he wants to draw between the forms of economic system Marx labels manufacture (in its first stage) and machine capitalism can only be articulated in terms of an analysis of the logic of production, in an analysis of the labor process and the mode of surplus extraction. The distinction between a capitalism grounded in objective constraints (Weber, 1958 [1904–1905]: 54–55, 62, 70) and one grounded in subjective controls (pp. 65–69) is meaningless if one simply focuses on exchange relationships. The distinction, to use the neoclassical terms, between an economic order grounded in constant and one grounded in increasing returns to scale is intelligible only if one focuses on the structure of production.
To express both of these points, the necessity of explaining capitalist rationality and the differentiation between a capitalism that allows for variations in motivation from one that constrains rational activity, requires a Marxian analysis grounded in the distinction between the formal and the real subsumption of labor under capital and between absolute-iterative and relative surplus value. Thus on these and other grounds, Weber’s analysis of the structure of capitalism is inferior to that provided by Marx. Nonetheless, owing to his avoidance of the pitfalls of most analyses focusing on exchange, the assumption of rationality, and the failure to focus on wage-labor, 27 his analysis is compatible with Marx’s, in that it might be corrected via Marx’s insights while incorporating the central points Weber makes into our modified theory.
The second possible objection concerns alternative forces of motivation for the rationalization of economic activity. Insofar as we are concerned with the first emergence of machine capitalism, we can rule out competitive constraints from outside the system under analysis. May we also rule out political forces from within the system? At times Marx appears to imply that political pressures mandated capital accumulation.
In point of fact, we can rule out political pressures as a first source of systematic rationalization. To assume their presence is to put the cart before the horse. The congruence of political actions with capitalist development requires explanation; the emergence of a state compatible with the rationalization of English manufacture required a series of revolutions. 28
If the state served to regularize the process of capital accumulation in a manufacturing system dominated by the formal subsumption of labor under capital, then no possible explanation can be offered for the necessity of “bourgeois revolutions.” If we argue that the patrimonial state in early seventeenth-century England was a bourgeois state, regularly serving the interests of manufacturing capitalists, no explanation for the transformation of the state to facilitate capitalist development is possible, unless one argues what is clearly false, that this transformation occurred to facilitate the emergence of machine capitalism, in contradistinction to manufacture.
The prerevolutionary English social formation must be conceptualized, to adopt Piaget’s (1962 [1932]) term, as a “stage of action,” as a transitional stage (see Gould, 1987: ch. 8). This type of social formation is characterized by a set of practices looking forward to the next stage of social development; it is the nature of such a stage that these actions are legitimated in terms of beliefs drawn from the previous stage.
The transitional stage extant in early seventeenth-century England was constituted economically as a manufacturing structure, in both town and country, which Marx treats as a form of capitalism, and by patrimonial political legitimation, which Weber treats as a form of traditionalism. The English revolutions of the seventeenth century were an outgrowth of the internal, immanent, movement of this manufacturing mode of economic production, when controlled, as it was in England, by a set of rationalizing values, in contradistinction to a political system legitimated by traditional values. The revolutions mark the point where the continued transformation of the social formation became self-sustaining, powered by a manufacturing structure governed by accelerated capital accumulation. Prior to the revolutions, the state impeded this process. 29
Third, one of the anonymous reviewers kindly suggested the possible relevance of one of Kenneth Smith’s central arguments, in his Guide to Marx’s Capital, to my explanation of the transition from the formal to the real subsumption of labor under capital, from manufacture to machine capitalism (Smith, 2012). Unfortunately, I do not believe that the Smith argument is pertinent to my discussion. Smith is concerned with the transition from simple to extended reproduction, as discussed primarily in Volume 2 of Capital. He suggests that Marx cannot explain this transition. Smith’s discussion focuses on the capital accumulated due to the depreciation of fixed capital (although I admit to being a bit unclear as to the point of his argument). I am interested in the conditions motivating capitalists to accumulate capital during the first phase of manufacture, when fixed capital is relatively insignificant, when there are no increases in productivity, and when there are no “objective” constraints on capitalists requiring capital accumulation.
Smith’s argument may seem relevant to my own because he suggests that Marx lacks a material means of explaining the expansion of the capitalist mode of production from simple to extended reproduction. His line of reasoning seems contrary to mine because he denies the validity of an argument evoking the will or spirit of the capitalist, or at least he denies that such an argument would be acceptable to Marx (p. 78). 30 His discussion overlooks the distinction between the two forms of manufacture, the first stage characterized by simple cooperation and the formal subsumption of labor under capital and the second stage characterized by complex cooperation and the emergence of the real subsumption of labor under capital. Competitive constraints emerge in manufacture with complex cooperation (where, originally, fixed capital is relatively unimportant, but where increases in productivity are manifest and thus traditional, precapitalist production processes are increasingly no longer viable), but not in the first stage of manufacture, which is characterized by constant returns to scale.
Simply, Smith’s questions are different from the ones I pose. If they appear to be the same, it is because he misunderstands the place where Marx believes objective constraints become significant. Smith tells us that “competition between capitalists can only explain accumulation once the process of reproduction on an extended scale is already underway …” (p. 84). However, as I have explained, competition emerged with the real subsumption of labor under capital in the second phase of manufacture, after the movement from simple to complex cooperation. It is correct that Marx cannot explain this movement from subjective to objective constraints, but I have elucidated it using Weber as a complement to Marx, emphasizing that the moral obligations constituted by the Protestant ethic interpenetrate into a manufacturing economy, generating the spirit of capitalism and, in consequence, systematic capital accumulation.
Marx provides a simple argument explaining the transition from the second stage of manufacture (complex cooperation, the real subsumption of labor under capital) to machine capitalism. In complex cooperation, the production process is reduced to its component parts, which may then be transferred to machines. Second, as production increases (as it must in the second stage of manufacture), the demand for labor increases along with its cost (this is true although productivity also increases). Thus, it becomes advantageous to substitute machines for workers, especially since doing so further increases productivity (and thus for a time, surplus profits for innovators) in addition to controlling the value of labor power. Here, in Marx’s argument, we have the tendency that constitutes machine capitalism out of manufacture, one that he sees as leading to a decline in the rate of profit.
If I understand Smith’s argument correctly (in Section II of his book), he presumes that there is only one unit of fixed capital used during the process of production. He asks why capitalists accumulate a fund to replace this unit of fixed capital during its period of depreciation. It is, however, likely that there are many units of fixed capital that are used up at different times. As Smith recognizes, the capital fund is money; it thus need not be used only to purchase the unit of capital whose depreciation it represents; it can be used to purchase other aspects of constant or variable capital more or less continuously (and in all likelihood, the capital fund includes capital representing the depreciation of several forms of capital). Furthermore, even if there were only one unit of fixed capital, a capitalist in a competitive economy would be forced to invest the capital fund; she would not be able to hoard it because doing so would result in less profit that others were garnering. Presumably, any investment would be undertaken in anticipation of the need to monetize her capital at the time she will be required to purchase the fixed (and other) capital required to continue production. All of this is the case because Marx’s discussion of fixed capital and extended reproduction presumes what I have called machine capitalism, where there are competitive constraints, objective constraints that impinge on all capitalists. Here, capitalists are forced to use capital productively, to expand or transform the nature of production when required to do so to produce profitably. 31 In machine capitalism, where the organic composition of capital is assumed to increase, extended reproduction is the norm. Smith’s concern about inadequate (productive) consumption seems to me to be relevant only when capitalists hoard money, a situation better analyzed by Keynes than Marx (where such hoarding is not possible if it reduces a firm’s profits).
Conclusion
We have seen that Marx paid insufficient attention to a distinction implicit in his own theory, between economic structures that permitted significant variations in correlative “ideational controls” (the first phase of manufacture) and those that severely limited such variation (machine capitalism). This lapse led him into an error insofar as he assumed a natural process of rationalization within manufacture leading into machine capitalism. We have also seen that Weber failed to provide an adequate analysis of the economic structure rationalized by the Protestant ethic; thus, he failed to explain adequately the emergence of the spirit of capitalism, which is a consequence of the interpenetration of the Protestant ethic and the first stage of manufacture. Together, however, they do provide a satisfactory analysis of conditions for systematic capital accumulation within a manufacturing economy.
This theoretical conjuncture is, in itself, insufficient to explain the emergence of machine capitalism. The next step is to explain how the growth of manufacture helped to generate a bourgeois revolution constituting a state that acted in ways consistent with the law of capital accumulation. If the prerevolutionary state is conceptualized within Weber’s framework of patrimonialism, it can be shown that its conjunction with a manufacturing economy interpenetrated with rationalizing values generated crucial variables necessary for a revolution. One consequence of this revolution was the establishment of political controls that facilitated the emergence of machine capitalism (Gould, 1987).
We may draw several important lessons from our analysis:
Both Weber and Marx articulated arguments consistent with the value-added model. The logic of historical explanation each specified requires the analysis of both “material” and “ideational” variables. While these variables are not necessarily ordered in time, they are ordered in terms of their effects on potential outcomes. A set of rationalizing values may appear independently of a particular type of economic structure, but they will not be relevant to the genesis of machine capitalism until the first stage of manufacture is present.
It can be hard to see the importance of explaining the emergence of rationalizing values when examining machine capitalism, where objective constraints require instrumentally rational action. In a discussion of machine capitalism, the presumption that all actors are at all times rational maximizers, that they always maximize against constraints, may seem acceptable. The necessity of explaining the presence and nature of rationalizing values is obvious, however, when examining the first stage of manufacture, which is consistent with both traditional and rationalizing values. Thus, the necessity for Weber’s discussion of the Protestant ethic (and the spirit of capitalism) is demonstrated in a Marxian analysis of the first stage of capitalism.
While Marx and Weber each left much unsaid, and while each might be said to have misspoken on occasion, when taken together, their arguments approach a satisfactory explanation for the emergence of machine capitalism in England. We may integrate their arguments successfully because the logics of historical explanation within which each is made are congruent.
Footnotes
Acknowledgements
This essay emerged from work undertaken originally many years ago and published in 
; much of the analysis of manufacture and ascetic Protestantism is taken from that text. I want to thank my former colleague, Besnik Pula, for urging me to return to these materials and to publish the current essay, which focuses on the nature of Marx and Weber’s theoretical arguments in light of that earlier work. I revised this essay while a Visiting Fellow in the Human Rights Program at the Harvard Law School. It is hard to imagine a location more conducive to hard and, I hope, effective work.