Max Weber: precursor of economic sociology and heterodox economics?

American Journal of Economics and Sociology, The, Nov, 2004 by Helge Peukert

We could find only one practical application of Weber's concepts in economics. Vanagunas (1989) argues (in our view not really convincingly) that Weber's authority model makes Leibenstein's X-efficiency concept more intelligible. Suchanek (1996) compares Weber and the Buchanan-type analysis of economic political theory and stresses the differences: Weber focused on the ambivalence and meaning of the rationalization of rules, whereas the economic tradition focuses on the functional aspect of rules for modern economies. Shionoya (1996 [1992]) parallels Weber with Schumpeter and tries to show that Weber also followed the method of instrumentalism.

In the context of Weber's intellectual history, Rossi's book (1987) deserves mentioning. He explains Weber's transition from historicism to a historical social science. Rossi shows how Weber struggled against psychological interpretations (Brentano), voluntarism, and irrationality as essentials of the human condition (Knies), the historical school (Roscher), Dilthey's intuitivism, organical social concepts, all-embracing historical secular trend approaches, the romantic notion of individuality, Hegel's philosophy of history, positivism, the dichotomy of understanding and explaining, a unique body of universal values, and Menger's rationalism. In Rossi's view, Weber picks up from Menger the difference between historical and theoretical knowledge, and the characterization of economics on the basis of marginal theory. On the other hand, for Weber economics belongs to the historical, while for Menger it belongs to the theoretical sciences (Rossi 1987, pp. 33-34).

Let us mention only one methodological contribution. Ringer (1997) reconstructs Weber's thinking on method. First, he puts Weber's endeavor to combine understanding and explanation in the context of the specific German intellectual background with the neo-Kantian Rickert as a main starting point. Further, he tries to show that the judicial concept of Kries's objective possibilities helped Weber to overcome a positivist and idealist position in favor of a causalist position. In addition, he argues that and discusses how far Menger influenced Weber's ideal type concept. In Chapter 4 (1997, pp. 92-121), he retraces Weber's approach to the rational reconstruction of action by the social scientist, which will be in the center of our following critique. The Protestant Ethic is Ringer's prime example of Weber as a historical sociologist of long-term structural change. It demonstrates to what extent "Weber could appreciate the neoclassical models of the Austrian school, even while extending German historical economics to a whole new set of topics" (1997, p. 169).

The two most intriguing contributions on Weber and economics are by Nau (1997) and Swedberg (1998), their works masterpieces by real connoisseurs of the subject matter. Both are interested in bridging economic, sociological, and historical research and both try to make Weber's economics as strong as reasonably possible. Nau first describes Weber's intellectual history as an economist in the 1890s, and then sketches the background and intentions of Weber's methodological writings: to transcend the historicism of the historical, the objectivism of the Marxist, and the psychologism of the (mainly Austrian) marginalist school. He recapitulates Weber's critique of Roscher and Knies, (9) and the critique of Schmoller and Menger. For Weber, Schmoller and Menger committed the naturalistic fallacy. Nau mentions personal unpublished notes and a letter to Brentano in which Weber states that although Menger erroneously thought that theories are representations of reality, in the debate on method with Schmoller, Menger was correct in the essential points (1997, p. 233, fn. 84, and p. 234). He goes on to discuss the concept of ideal types, stress the influence of Rickert, and explain the development of the concept of social economics. Finally he delineates Weber's view of a national science and the principle of value neutrality. Nau's book is a valuable source on Weber's approach and the secondary literature, but sometimes the reader wishes for some distance from Weber and his language and a more critical discussion.