Max Weber: precursor of economic sociology and heterodox economics?

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

Next, Weber states that economic theory models an economic agent in contrast to the empirical real behavior of man. In the most-often-quoted passage of his deliberations on economics, he enumerates the well-known idealizations: all noneconomic motives are excluded; full knowledge of the situation, maximization (the use of the best means available), and full use of all energies (he seems to mean no Leibenstein inefficiency) are assumed. This is an unrealistic image, analogous to a mathematical ideal figure (1990, p. 30). For Weber, the neoclassical model of man is in the center of theoretical analysis. His remark on the unrealistic character makes no difference, because no serious neoclassical economist doubts that we are dealing with an idealization. Weber himself states just previously that the action of this idealized economic man formulates the transhistorical logic of systematic or rational economic behavior and that, at least for the time being, the occident converges to this model. So Weber is in a certain sense more dogmatic or "naturalist" then present-day heuristic neoclassical economists such as Arrow" or Debreu.

Further, he leaves out an essential element, which does not make his delineation more clear: What about sell-interest (seeking with guile)? This behavioral assumption is absolutely essential to state the noninterdependence of consumption, otherwise we cannot argue for the two welfare postulates and the apology of the superiority of the market. All these problems were present in the economic discourse of his time (for instance, Edgeworth's mathematical psychics were published in 1881), at least alter Pareto's publication of the Manuali in 1906. But in later works, until his death in 1920, we find no allusion or reference at all to these theoretical debates in economics.

Weber, professor in economics who is considered a fountainhead of economic sociology, simply had to deal with these questions! (10) It is interesting to note that when he started teaching again at the University of Vienna, in 1918, he lectured "his own version of social economics ... [it] was mostly about the economy, religion and the state" (Swedberg 1998:198). In 1919 he went to Munich and "did not want to teach the standard courses that professors of economics were supposed to teach" (1998, p. 199). Swedberg cites on the same page Weber's wife, who remarked that Weber "had outgrown" (a word with an interesting double sense) political economy. The main topic of the lectures was therefore economic history (see Weber 1927), which he apparently had not outgrown. We can conclude that Weber had no real interest in and that he did not develop basic questions of economic theory.

Another point is worth mentioning. We have seen that Weber was strongly influenced by Austrian marginalism. It is thus surprising that in the statements above Weber is more neoclassical than Menger. (11) As Streissler (1973) has shown in clarifying exaggeration (see Peukert 1997), there exist strong heterodox, subjectivist, and uncertainty elements in Menger that Weber ignores. They could have been building blocks for an alternative theory of economic sociology.