sails", were by no means the representatives of that attitude of mind from which the specifically modern capitalistic spirit as a mass phenomenon is derived, and that is what matters. At all periods of history, wherever it was possible, there has been ruthless acquisition, bound to no ethical norms whatever] Like war and piracy, trade has often been unrestrained in its relations with foreigners J^and those outside the group. The double ethic has permit- ^ted here what was forbidden in dealings among brothers. I 57 The Protestant Ethic and the Spirit of Capitalism Capitalistic acquisition as an adventure has been at home in all types of economic society which have known trade with the use of money and which have offered it opportunities, through commenda^ farming of taxes, State loans, financing of wars, ducal courts and office- holders. Likewise the inner attitude of the adventurer, which laughs at all ethical limitations, has been'^uni- versal. Absolute and conscious ruthlessness in acqui- sition has often stood in the closest connection with the strictest conformity to tradition. Moreover, with the breakdown of tradition and the more or less complete extension of free economic enterprise, even to within the social group, the new thing has not generally been ethically justified and encouraged, but only tolerated as a fact. And this fact has been treated either as ethically indiflferent or as reprehensible, but unfortu- nately unavoidable. This has not only been the normal attitude of all ethical teachings, but, what is more important, also that expressed m the practical action of the average man of pre-capitalistic times, pre-capi tal- is tic in the sense that the rational utilization of capital in a permanent enterprise and the rational capitalistic organization of labour had not yet become dominant forces in the determination of economic activity. Now just this attitude was one of the strongest inner obstacles which the adaptation of men to the conditions of an ordered bourgeois- capitalistic economy has encoun- tered. everywhere.
CThe most important opponent with which the spirit of capitalism, in the sense of a definite standard of life claiming ethical sanction, has had to struggle, was that type of attitude and reaction to new situations which S8 Vi The Spirit of Capitalism we may designate as traditionalism.^ In this case also every attempt at a final definition must be held in abeyance. On the other hand, we must try to make the provisional meaning clear by citing a few cases. We will begin from below, with the labourers.
One of the technical means which the modern employer uses in order to secure the greatest possible amount of work from his men is the device of piece- rates Jin agriculture, for instance, the gathering of the harvest is a case where the greatest possible intensity of labour is called for, since, the weather being un- certain, the difference between high profit and heavy loss may depend on the speed with which the harvesting can be done. Hence a system of piece-rates is almost universal in this case. And since the interest of the employer in a speeding- up of harvesting increases with the increase of the results and the intensity of the work, the attempt has again and again been made, by in- creasing the piece-rates of the workmen, thereby giving them an opportunity to earn what is for them a very high wage, to interest them in increasing their own efficiency. But a peculiar difficulty has been met with surprising frequency: raising the piece-rates has often had the result that not more but less has been accom- plished in the same time, because the worker reacted to the increase not by increasing but by decreasing the amount of his work. A man, for instance, who at the rate of i mark per acre mowed 2\ acres per day and earned 2 J marks, when the rate was raised to 1*25 marks per acre mowed, not 3 acres, as he might easily have done, thus earning 3*75 marks, but only 2 acres, so that he could still earn the 2\ marks to 59 The Protestant Ethic and the Spirit of Capitalisn^fwhich he was accustomed. The opportunity of earninvä^ more was less attractive than that of working less. He did not ask: how much can I earn in a day if I do as much work as possible? but: how much must I work in order to earn the wage, 2\ marks, which. I earned before and which takes care of my traditional needs? This is an example of what is here meant bytradition- jlisin. A man does not "by nature" wish to earn more and more rnoney^ut_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 ^ork 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 tp stand in corre- lation; 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. For centuries it was an article of faith, that low wages were productive, i.e. that they increased the material results of labour so that, as Pieter de la Cour, on this point, as we shall see, quite in the spirit of the old 60 The Spirit of Capitalism Calvinism, said long ago, the people only work because and so long as they are poor.
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 developrhent, especially the transition, to types of enterprise which make more intensive use of labour. Low wages are by no means identical with cheap labour. ^^ From a purely quantita-; tive point of view the efficiency of labour decreases! with a wage which is physiologically insufficient, whichj may in the long run even mean a survival of the unfit. The present-day average Silesian mows, when he exerts himself to the full, little more than two-thirds as much land as the better paid and nourished Pomeranian or Mecklenburger, and the Pole, the further East he comes from, accomplishes progressively less than the German. Low wages fail even from a purely business point of view wherever it is a question of producing goods which require any sort o'f skilled labouf, or the use of expensive machinery which is easily damaged, or in general wherever any great amount of sharp attention or of initiative is required. Here low wages do not pay, and their effect is the opposite of what was intended.(For not only is a developed sense of responsi- bility absolutely indispensable, but in general also an attitude which, at least during working hours, is freed from continual calculations of how the customary wage may be earned with a maximum of comfort and a "^The Protestant Ethic and the Spirit of Capitalism minimum of exertion. Labour must, on the contrary^ be performed as if it were an absolute end in itselL_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. To-day, capitalism, once in the.saddle, can recruit its labouring force in all A I industrial countries with comparative ease. In the past this was in every case an extremely difficult^roblem.^' d even to-day it could probably not get along~with- out the support of a powerful ally along the way, which, as we shall see below, was at hand at the time of its development.
What is meant can again best be explained by means of an example. The type of backward traditional form of labour is to-day very often exemplified by women workers, especially unmarried ones. An almost universal complaint of employers of girls, for instance German girls, is that they are almost entirely unable and un- willing to give up methods of work inherited or once learned in favour of more efficient ones, to adapt themselves to new methods, to learn and to concentrate their intelligence, or even to use it at all. Explanations of the possibility of making work easier, above all more profitable to themselves, generally encounter a com- plete lack of understanding. Increases of piece-rates are without avail against the stone wall of habit. In general it is otherwise, and that is a point of no little importance from our view-point, only with girls having a specifically religious, especially a Pietistic, background. One often hears, and statistical investigation confirms it,^® that by far the best chances of economic education are found 62 The Spirit of Capitalism among this group. The ability of mental concentration, as well as the absolutely essentiajjFeeling of obligation tojone'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 lalwmrasjLnjendjn itself, as a calling which is necessary to capitalism: the chances of overcoming traditionalism are greatest oiT account of the religious upbringing. This observation of present-day capitalism ^^ in itself suggests that it is worth while to ask how this connec- tion of adaptability to capitalism with religious factors may have come about in the days of the early develop- ment of capitalism. For that they were even then present in much the same form can be inferred from numerous facts. For instance, the dislike and the per- secution which Methodist workmen in the eighteenth century met at the hands of their comrades were not solely nor even principally the result of their religious eccentricities, England had seen many of those and more striking ones. It rested rather, as the destruction of their tools, repeatedly mentioned in the reports, suggests, upon their specific willingness to work as we should say to-day.
However, let us again return to the present, and this time to the entrepreneur, in order to clarify the meaning of traditionalism in his case.
Sombart, in his discussions of the genesis of capital- ism,20 has distinguished between the satisfaction of needs and acquisition as the two great leading prin- ciples in economic history. In the former case the 63 The Protestant Ethic and the Spirit of Capitalism attainment of the goods necessary to meet personal needs, in the latter a struggle for profit free from the limits set by needs, have been the ends controlling the form and direction of economic activity. What he calls the economy of needs seems at first glance to be identical with what is here described as economic traditionalism. That may be the case if the concept of needs is limited to traditional needs. But if that is not done, a number of economic types which must be considered capitalistic according to the definition of capital which Sombart gives in another part of his work, 2^ would be excluded from the category of acquisitive economy and put into that of needs economy. Enterprises, namely, which are carried on by private entrepreneurs by utilizing capital (money or goods with a money value) to make a profit, purchasing the means of production and selling the product, i.e. undoubted capitalistic enterprises, may at the same time have a traditionalistic character. This has, in the course even of modem economic history, not been merely an occasional case, but rather the rule, with continual interruptions from repeated and increasingly powerful conquests of the capitalistic spirit. 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 The Spirit of Capitalism mind has on the one hand found its most suitable expression in capitahstic 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. 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. And we shall see that at the beginning of modern times it was by no means the capitalistic entrepreneurs of the commercial aristocracy, who were either the sole or the predominant bearers of the attitude we have here called the spirit of capital- ism.2^ It was much more the rising strata of the lower industrial middle classes. Even in the nineteenth century its classical representatives were not the elegant gentlemen of Liverpool and Hamburg, with their commercial fortunes handed down for genera- tions, but the self-made parvenus of Manchester and Westphalia, who often rose from very modest circum- stances. As early as the sixteenth century the situation was similar; the industries which arose at that time were mostly created by parvenus.^^ The management, for instance, of a bank, a wholesale export business, a large retail establishment, or of a large putting-out enterprise dealing with goods pro- duced in homes, is certainly only possible in the form of a capitalistic enterprise. Nevertheless, they may all be carried on in a traditionalistic spirit. In fact, the business of a large bank of issue cannot be carried on in any other way. The foreign trade of whole epochs has rested on the basis of monopolies and legal privileges of strictly traditional character. In retail trade — and we 6s The Protestant Ethic and the Spirit of Capitalism are not here talking of the small men without capital who are continually crying out for Government aid — the revolution which is making an end of the old traditionalism is still in full swing. It is the same development which broke up the old putting-out system, to which modern domestic labour is related only in form. How this revolution takes place and what is its significance may, in spite of the fact these things are so familiar, be again brought out by a concrete example.
Until about the middle of the past century the life of a putter-out was, at least in many of the branches of the Continental textile industry,2^ what we should to-day consider very comfortable. We may imagine its routine somewhat as follows: The peasants came with their cloth, often (in the case of linen) principally or entirely made from raw material which the peasant himself had produced, to the town in which the putter-out lived, and after a careful, often official, appraisal of the quality, received the customary price for it. The putter-out's customers, for markets any appreciable distance away, were middlemen, who also came to him, generally not yet following samples, but seeking traditional qualities, and bought from his warehouse, or, long before delivery, placed orders which were probably in turn passed on to the peasants. Personal canvassing of customers took place, if at all, only at long intervals. Otherwise correspondence sufficed, though the sending of samples slowly gained ground. The number of business hours was very moderate, perhaps five to six a day, sometimes con- siderably less; in the rush season, where there was one, 66 The Spirit of Capitalism more. Earnings were moderate; enough to lead a respectable life and in good times to put away a little. On the whole, relations among competitors were rela- tively good, with a large degree of agreement on the fundamentals of business. A long daily visit to the tavern, with often plenty to drink, and a congenial circle of friends, made life comfortable and leisurely.
The form of organization was in every respect capitalistic; the entrepreneur's activity was of a purely business character; the use of capital, turned over in the business, was indispensable; and finally, the objec- tive aspect of the economic process, the book-keeping, was rational. 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 the relationships with labour, and the^ssentially traditional circle of customers and the manner of attracting new ones. All these dominated the conduct of the business, were at the basis, one may say, of the ethosoi this group of business men.
Now at some time this leisureliness was suddenly destroyed, and often entirely without any essential change in the form of organization, such as the transi- tion to a unified factory, to mechanical weaving, etc. What happened was, on the contrary, often no more than this: some young man from one of the putting-out families went out into the country, carefully chose weavers for his employ, greatly increased the rigour of his supervision of their work, and thus turned them from peasants into labourers. On the other hand, he would begin to change his marketing methods by so 67 The Protestant Ethic and the Spirit of Capitalism far as possible going directly to the final consumer, would take the details into his own hands, would personally solicit customers, visiting them every year, and above all would adapt the quality of the product directly to their needs and wishes. At the same time he began to introduce the principle of low prices and large turnover. There was repeated what everywhere and always is the result of such a process of rationali- zation: 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 — in several cases known to me the whole revolutionary process was set in motion with a few thousands of capital borrowed from relations — but the ,new spirit, the spirit of modem capitalism, had set to work. The question of the motive forces in the expan- sion of modem capitalism is not in the first instance a question of the origin of the capital sums which were available for capitalistic uses, but, above all, of the development of the spirit of capitalism. Where it appears and is able to work itself out, it produces its own capital and monetary supplies as the means to its 68 The Spirit of Capitalism ends, but the reverse is not true.^'^ Its entry on the scene was not generally peaceful. A flood of mistrust, sometimes of hatred, above all of moral indignation, regularly opposed itself to the first innovator. Often — I know of several cases of the sort — regular legends of mysterious shady spots in his previous life have been produced. jit is very easy not to recognize that only an unusually strong character could save an entrepreneur of this new type from the loss of his temperate self- control and from both moral and economic shipwreckj^ Furthermore, along with clarity of vision and ability to act, it is only by virtue of very definite and highly developed ethical qualities that it has been possible for him to command the absolutely indispensable confi- dence of his customers and workmen. Nothing else could have given him the strength to overcome the innumerable obstacles, above all the infinitely more intensive work which is demanded of the modern entrepreneur. But these are ethical qualities of quite a diff^erent sort from those adapted to the traditionalism of the past.
And, as a rule, it has been neither dare-devil and unscrupulous speculators, economic adventurers such as we meet at all periods of economic history, nor simply great financiers who have carried through this change, outwardly so inconspicuous, but nevertheless so de- cisive for the penetration of economic life with the new spirit. ^n the contrary, they were men who had grown up in the hard school of life, calculating and daring at the same time, above all temperate and reliable, shrewd and completely devoted to their business, with strictly bourgeois opinions and principlesJ 69 The Protestant Ethic and the Spirit of Capitalism One is tempted to think that these personal moral qualities have not the slightest relation to any ethical maxims, to say nothing of religious ideas, but that the essential relation between them is negative. The ability to free oneself from the common tradition, a sort of liberal enlightenment, seems likely to be the most suitable basis for such a business man's success. And to-day that is generally precisely the case. Any relation- ship between religious beliefs and conduct is generally absent, and where any exists, at least in Germany, it tends to be of the negative sort. The people filled with the spirit of capitali&m to-day tend to be indifferent, if not hostile, to the Church. The thought of the pious boredom of paradise has little attraction for their active natures; religion appears to them as a means of drawing people away from labour in this world. If you ask them what is the meaning of their restless activity, why they are never satisfied with what they have, thus appearing so senseless to any purely worldly view of life, they would perhaps give the answer, if they know any at ail: "to provide for my children and grand- children". But more often and, since that motive is not peculiar to them, but was just as effective for the traditionalist, more correctly, simply: that business with its continuous work has become a necessary part of their lives. That is in fact the only possible motivä^ tion, but it at the same time expresses what is, seen from the view-point of personal happiness, so irrational about this sort of life, where a man exists for the sake of his business, instead of the reverse."^ "" Of course, the desire for the power and recognition which the mere fact of wealth brings plays its part. 70 The Spirit of Capitalistn