Weber

I had dinner with some colleagues last night and we had a great conversation over beer/wine and bar-b-que over whether Weber’s Iron Cage critique of modernity ignores the various ways in which belief is practiced in modern society (actually it was something about IPods and authenticity, but I digress).

Paul Krugman’s latest column in the Times nicely complements this critique of Weber’s Iron Cage. Krugman argues that the banking industry has gone through distinct phases of “exciting” banking where regulation was lax and great profits and profligate risk taking were rewarded and “boring” banking where the sector was heavily regulated and profits/risk taking were minimized. He concludes by taking the Obama economic team to task for their reticence in returning us to a “boring” banking era (You’d think Krugman taught at Harvard instead of Princeton they way he goes after Larry Summers)!

To me, the scaffolding underlying “exciting” baking is a very un-rational, un-iron cage-like “enchantment” with capital accumulation and profit making. Matt Yglesias makes the point in reference to the Krugman article that our era of “exciting banking” reflects a larger inability in our culture to assert that greed is a vice and not a virtue. Yglesias characterizes reckless investment bakers as:

people primarily motivated in life by greed. Not just by a desire to make some scratch, mind you. These aren’t immigrants who walked through the desert from Mexico in order to earn more money by washing dishes in a San Diego hotel. They’re not 24 year-olds looking for a hefty salary in order to pay off student loans. They’re multi-millionaires who want to earn millions more.

This may be part of  Weber’s larger critique of modernity — means/end rationality replaces other more intrinsic and spiritual forms of rationality.  But the Krugman piece and Ygelsias’ response seems to blur the line between the rational and the emotional. It is possible to be enchanted by money, not for what it can provide, but as an icon in and of itself.   I think Ken gets at some of this in his post on what’s being taught in business schools.

It think it would benefit us to study the banking system as if it were a religious devotion. What are it’s creation myths? It’s rituals? It’s core texts? It’s iconography?  Are there any good anthropoligical works on the banking industry?

I’ve been thinking about José’s blog on Luther’s Freedom (2/19), which reminded of Max Weber’s The Protestant Ethic and the Spirit of Capitalism (PESC).

I find many of these ideas to be interesting.  The idea of Luther’s Reformation as a catalyst for change in terms of social relations in markets is pretty heady stuff.  I see the Reformation as the obvious move away from the [ideas/ideals] of the Catholic church (and its take on absolution and salvation, which was often criticized from within), which also marked a shift (in my opinion) a new era of spirituality, going from a more commutarian approach to an individualistic one, particularly under Calvinism.

After the Reformation, salvation was divorced (no pun intended) from leading a Christian life.  Pascal’s wager was irrelevant, as man could not influence God.  Nevertheless, through work could man serve God.  One’s profession was one’s calling.  It was later developments in Protestantism, i.e., John Calvin, where one couldn’t know for sure if they were saved, BUT success might be an indicator of it.  Hence, the Protestant work ethic was born.  It gave people meaning, as opposed to wallowing in nihilism due to not knowing one’s eternal fate.  Actions became centralized around the individual.  Community wasn’t dead, but status and legitimacy were now focused more than ever towards personal success.

Slouching towards late capitalism (or postmodernity), spiritual life was usurped by the profane.  The final fall of mediaeval asceticism?  The ascendance of a bourgeois ideology?  Materialism filled in the gaps of meaning.  (S)he who dies with the most toys, wins?  Brands become the symbols/totems that hold meanings.  Nike = transcendence.  Coca-Cola = global community.  Apple = cool rebellion.

While I find Weber’s PESC to be interesting, I think that the main idea is that the cultural context matters when it comes to determining the roots of the various flavors of capitalism, which is being fleshed out with recent research.  One could write a paper on the Shintoist ethic and the divine spirit of capitalism to explain the rise and fall of Japan, layering how feudal structures were thrust into capitalism under Meiji and how, decades later, overembedded networks of people and organizations were both a boon (70s-80s) and an albatross (90s-00s) to economic growth.  Cultural context.

• Is the trajectory of Protestantism responsible, at least in part, for our current era of materialism?
• Was the trajectory inevitable?
• If so, what does this say about Luther’s freedom?

image:  “Difference between the Protestant and Catholic church service” Cranach the Younger