Werner Sombart and the 'Spirit' of Modern Capitalism: Rediscovering a Classic 3031544234, 9783031544231

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PALGRAVE STUDIES IN CLASSICAL LIBERALISM SERIES EDITORS: DAVID F. HARDWICK · LESLIE MARSH

Werner Sombart and the ‘Spirit’ of Modern Capitalism Rediscovering a Classic Christopher Adair-Toteff

Palgrave Studies in Classical Liberalism

Series Editors David F. Hardwick, Department of Pathology and Laboratory Medicine, The University of British Columbia, Vancouver, BC, Canada Leslie Marsh, Department of Economics, Philosophy and Political Science, The University of British Columbia, Okanagan, BC, Canada

This series offers a forum to writers concerned that the central presuppositions of the liberal tradition have been severely corroded, neglected, or misappropriated by overly rationalistic and constructivist approaches. The hardest-won achievement of the liberal tradition has been the wrestling of epistemic independence from overwhelming concentrations of power, monopolies and capricious zealotries. The very precondition of knowledge is the exploitation of the epistemic virtues accorded by society’s situated and distributed manifold of spontaneous orders, the DNA of the modern civil condition. With the confluence of interest in situated and distributed liberalism emanating from the Scottish tradition, Austrian and behavioral economics, non-Cartesian philosophy and moral psychology, the editors are soliciting proposals that speak to this multidisciplinary constituency. Sole or joint authorship submissions are welcome as are edited collections, broadly theoretical or topical in nature.

Christopher Adair-Toteff

Werner Sombart and the ’Spirit’ of Modern Capitalism Rediscovering a Classic

Christopher Adair-Toteff Center for Social and Political Thought University of South Florida Tampa, FL, USA

ISSN 2662-6470 ISSN 2662-6489 (electronic) Palgrave Studies in Classical Liberalism ISBN 978-3-031-54422-4 ISBN 978-3-031-54423-1 (eBook) https://doi.org/10.1007/978-3-031-54423-1 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover illustration: Pattadis Walarput/Alamy Stock Photo This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Paper in this product is recyclable.

Preface

As I was writing Sociological Beginnings (2005) I began to realize how important Werner Sombart’s writings were. Sociological Beginnings involved working on the five main lectures given in 1910 at the inaugural conference of the Deutsche Gesellschaft für Soziologie. That book entailed providing analyses of papers presented by Ferdinand Tönnies, Georg Simmel, and Ernst Troeltsch. It also involved examining Weber’s contribution and especially Sombart’s paper on technology. It was then that I realized that instead of being less important than the famous Max Weber, Werner Sombart was just as penetrating a thinker on social-economics as his co-editor of the Archiv für Sozialwissenschaft und Sozialpolitik. When writing “Parsons as Economist: His Early Writings on Modern Capitalism” (2021) I realized how famous Sombart was during the first three decades of the twentieth century. In the late 1920s Talcott Parsons was in Heidelberg and was searching for a dissertation topic. Parsons had intended to concentrate on Sombart but Edgar Salin, his director, suggested he should include Max Weber. Sombart had long established himself as one of the leading German political economists and had a growing international reputation. In contrast, Max Weber was gaining a

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reputation primarily through the efforts of his widow. Marianne Weber had published a number of collections of his work and had just written Max Weber. Ein Leben, a glowing biography of her late husband. Parsons’ early writings revealed that Sombart was equal to Weber in terms of social-economic thinking and was even more devoted to examining the origins of modern capitalism. I had begun to regard Sombart’s writings as being worthy of investigations almost twenty years ago and my belief in the importance of his writings on modern capitalism has only increased in the past several years. It is my hope that this book might lead others to a similar reevaluation regarding Sombart’s contributions to the “spirit” of modern capitalism. I want to thank many of the people who offered advice and encouragement for my work on Sombart’s “spirit” of modern capitalism. These include Roberta Iannone, Klaus Lichtblau, Neil Jordan, Leslie Marsh, Keith Tribe, and Bruce Wearne. I also want to thank Richard Swedberg for his encouraging me to explore economic sociology—because of that, many doors have been opened—not just for my work on Sombart and Weber, but also on Menger, von Wieser, and Böhm-Bawerk. As always, I want to thank “the other Professor” Adair-Toteff (Stephanie) for her criticisms, her corrections, and her encouragement. Tampa, USA

Christopher Adair-Toteff

Contents

1

“Why Read Sombart?” Sombart: A Sketch of a Life Chapter Overviews References

2 Werner Sombart and the “Spirit” of Modern Capitalism 1900–1910 Introduction Moderne Kapitalismus Proletariat Concluding Comments References 3

Sombart and Capitalism 1911–1915 Introduction The Reception of Der moderne Kapitalismus Die Juden Luxury, War, and Capitalism Der Bourgeoise

1 4 8 12 15 15 16 47 54 54 55 55 56 63 75 85

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Traders and Heroes Concluding Comments References

92 94 95

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Der moderne Kapitalismus Revisions 1917–1928 Introduction The Second Edition of Der moderne Kapitalismus Sombart’s Hochkapitalismus The Second Half Volume “Schluß” Concluding Comments References

97 97 98 115 123 129 130 130

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Sombart on Capitalism 1925–1932 Sombart’s Later Capitalism Book Sombart’s Essays in the Handwörterbuch Sombart’s Late Essays on Capitalism Concluding Comments References

133 134 140 156 160 161

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Conclusion: Read Sombart References

163 165

Index

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1 “Why Read Sombart?”

In 1926 the young Talcott Parsons was in Heidelberg discussing a possible dissertation topic with his advisor, Edgar Salin. Parsons had sought out Salin as advisor because he seemed the most agreeable to oversee a dissertation on modern capitalism with a possible emphasis on the work of Werner Sombart.1 Salin evidently agreed to that but suggested that Parsons include a major section on Max Weber. Parsons had heard the name Max Weber during his early time in Heidelberg, but did not know much about him. This was not so remarkable because the name Max Weber was not so famous. In contrast, Werner Sombart

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The claim that Parsons wanted to concentrate on Weber and had to be persuaded by Edgar Salin to include Sombart seems more than doubtful (Stummvoll and Wearne 2018: 37). Sombart had published several editions of Der moderne Kapitalismus by 1925 and had authored a number of books on capitalism. Consider what Stummvoll and Wearne quote from Parsons: I “concentrated on Werner Sombart (author of the huge work on capitalism) and Max Weber.” quoted in Stummvoll and Wearne (2018: 40). See also Klaus Lichtblau’s important comments on Sombart’s role in the exploration of capitalism as well as his notes about Sombart’s influence on Parsons (Lichtblau 2019: 2–4).

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 C. Adair-Toteff, Werner Sombart and the ‘Spirit’ of Modern Capitalism, Palgrave Studies in Classical Liberalism, https://doi.org/10.1007/978-3-031-54423-1_1

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was regarded as the leading German authority on modern capitalism.2 These differences in reputation would change radically because of several things. In Germany, Weber’s widow Marianne was publishing editions of his writings and had just finished writing a very positive biography of her late husband. In England and especially in the United States, several scholars were working to draw attention to Weber’s writings: Frank Knight had published a translation of Weber’s major work on economic history and Parsons was pursuing his plan to translate the Protestantische Ethik into English. By the mid-nineteen thirties, Weber’s fame was increasing spurred on by Marianne’s efforts as well as by others in Germany, in England, and especially by Parsons in the United States. In contrast, Sombart’s once impressive world reputation was fading. The present book is not intended to explore how Weber became famous while Sombart has fallen into oblivion. Nor is it to be regarded as an intellectual biography of Sombart. It does not cover his early years where his inclinations were mostly socialist, nor does it cover his later years in which he focused on sociology and held right-wing ideas. Instead, it is focused on the years between 1902 and 1932: the year that he published his first book on the origins and nature of modern capitalism and the year that he published an article about capitalism’s future. In short, this book is intended to provide a much-warranted examination of Werner Sombart’s investigation into the “spirit” of modern capitalism.3

2 Michael Appel claimed with much justification that in the 1920s Sombart was the dominate theoretician and historian of capitalism (Appel 1992: 16). Friedrich Lenger observed that not only was Sombart world famous but that he had been honored with doctorates from three different universities (Lenger 1994: 276). 3 Many scholars have looked to Talcott Parsons as the one who made America aware of Max Weber. Some have suggested that Parsons was the one who alerted Americans to Weber with his translation of Weber’s Protestant Ethic book. Whether this is indeed the case is not the issue here. What is, is that Weber continues to eclipse Sombart. The German sociologist and Parsons’ biographer Uta Gerhardt has done some remarkable work on Sombart, yet she plays favorites with Weber over Sombart. Her edition of Parsons’ dissertation omits Sombart’s name from her title and in her biography of Parsons, Sombart is mentioned only twice (Parsons 2019; Gerhardt 2002: 33, 233). Bruce Wearne notes that Parsons had not yet been granted his doctorate from Heidelberg when he was “commending Max Weber’s work to prominent academic publishers” (Stummvoll and Wearne 2018: 22, 26, 29, See also Wearne 1989, Grundmann and Stehr 2001, and Adair-Toteff 2021).

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Most scholars associate the notion of “spirit” with Max Weber’s “Protestant Ethic and the Spirit of Capitalism”, not realizing that Sombart had used that term two years previously in Der moderne Kapitalismus. Most scholars associate the exploration into the genesis of modern capitalism again with Weber’s work; however, he never provided a full account of the genesis and nature of modern capitalism. However, Sombart certainly did. In fact, most of Sombart’s scholarly writings are devoted to the origin, nature, and impacts of modern capitalism. Although scholars will admit that Der moderne Kapitalismus is a rather impressive book because of its scope and its size, those who have looked at it have criticized it was being less that convincing and too critical of modern capitalism. Critics have also charged that Sombart provided misleading facts and offered unworkable theories. In addition, Sombart’s books from the nineteen-teens are often dismissed out of hand for (perceived) anti-Semitism and anti-British sentiments. There is much that supports the latter charge; the former is a misreading of Sombart’s Die Juden. Critics did not necessarily need to invent reasons to dismiss Sombart’s writings—because sometimes he provided a few himself. There are several legitimate, and some not so legitimate, reasons not to read Sombart. Like Weber, Sombart often preached the importance of value neutrality in scholarly writings, but he failed to adhere to this dictum even more than Weber. That lends much of Sombart’s work a rather polemical tone and detracts from the value of his scholarship. In addition, Sombart sometimes repeats himself and more often he over burdens his readers with facts and figures. These may be legitimate reasons why one may not want to read Sombart’s writings on modern capitalism. What is not legitimate is to claim that Sombart was somebody who he was not. There is little doubt that in the final decade of his life Sombart’s opinion of National Socialism was positive. But one cannot accuse the author of Die Juden as being anti-Semitic. As I make clear in the exploration of that book, Sombart was detailing the impressive advancement that the Jews made in developing modern capitalism. While Sombart’s style and his later political leanings offer some reasons for Sombart’s fall from grace, there are those reasons sketched above that should provide ample justifications for reading his work on modern development. The single purpose of the present work is to

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explore most of the relevant works in Sombart’s writings in order to provide an impetus to read Sombart’s own writings on modern capitalism. Despite his shortcomings, Werner Sombart was one of the most dedicated explorers of the development and the essence of modern capitalism and truly deserves a positive answer to the question “Why read Sombart?”

Sombart: A Sketch of a Life4 Werner Sombart was born prior to Germany’s unification and he died during the second year of World War II. As such, he saw not only the rise and impending fall of Germany; he also saw the rise and the continual rise of modern capitalism. Sombart was born on January 19, 1863, in Ermsleben and died on May 18, 1941, in Berlin. Like Max Weber’s father, Sombart’s father also served as a member of Germany’s parliament; unlike Max Weber Senior, Anton Ludwig Sombart was in the Prussian parliament from 1861 to 1863, again from 1877 to 1882, and finally from 1889 to 1893 (vom Brocke 1987: 14). When Anton Sombart died in 1898, he left almost a million Goldmarks to his four children. Prior to his death, Anton practiced “iron frugality” (“eiserner Sparsamkeit”) much as Weber would later describe that type in his “Protestant Capitalism and the Spirit of Protestantism” (vom Brocke 1987: 15; Lenger 1994: 29). His first three children were born closely apart: Paul was born in 1842, Georg in 1843, and Helene in 1850. As the considerably younger son, Werner had difficulties with his family and especially his father. Nonetheless, like the older siblings, Sombart inherited a rather substantial sum of money (vom Brocke 1987: 33). Unfortunately, he was not very good about saving it. Sombart was also not very good as a young student in Berlin. His father recognized this and sent him to a new school in Schleusingen which was a town almost four hundred kilometers south of Berlin.

4 Much of this account is drawn from Lenger’s Sombart biography, from the “Einleitung” to Sombart’s letters, and from Brocke’s vom Brocke’s “Werner Sombart 1863–1941” (Lenger 1994; Kroll et al. 2019; vom Brocke 1987).

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There he improved considerably, and his grades improved and he passed more exams. However, he was at odds with many of the people in the area because he was not religious and had cosmopolitan leanings. That interest in other countries was later reinforced by lengthy stays in Rome and Pisa and it was his interest in Italy that prompted Sombart to write his dissertation on “Die römanische Compagna” (vom Brocke 1972: 131–132; Appel 1992: 11). His suffering from lung infections increased his sense of isolation and it was at a health resort in Pisa that Sombart met his future wife Felicitas. At the age of twenty-four he married her and that was the year that he began working in Bremen. It is likely that his “Doktorvater” Gustav Schmoller and his biological father were at least partially responsible for the “Verein für Sozialpolitik” to publish Sombart’s dissertation, and it is also likely that both were at least partially responsible for his call to Breslau as an “extra ordinary” professor (vom Brocke 1987: 16). Sombart had socialist leanings but he had not made them manifest; his writings for Heinrich Braun’s Archiv für soziale Gesetszgebung in Statistik began to change that. In particular, Sombart’s Sozialismus und kapitalistische Gesellschaftsordnung was published in 1892 and sold at least 10,000 copies (Kroll et al. 2019: 12–13). The appearance a decade later of Der moderne Kapitalismus did not draw the same degree of attention. However, his book solidified his relationship with Braun so it was understandable that Braun would enlist Sombart in discussions regarding the sale of his Archiv. Sombart was receptive to Braun’s idea of selling his Archiv to Edgar Jaffé and to a collective editorship. Sombart suggested Gustav Fischer and Max Weber as co-editors (Kroll et al. 2019: 16–17, 287, 291).5 Sombart’s reputation as a “Marxist” continued to follow him despite his movement away from Marxism and his insistence that politics and scholarship must be kept separate. vom Brocke noted that between 1896 and 1907 Sombart received calls from six universities. These included the call from Freiburg to replace Weber who had moved to Heidelberg and then the call from Heidelberg to replace the retiring Weber. vom Brocke also noted that the faculties were generally in favor of Sombart 5

For a discussion of the sale of the Archiv, its new editorship of Jaffé, Sombart, and Weber, and the change of name to the Archiv für Sozialwissenschaft und Sozialpolitik (see Weber 2015: 68–71). See also Lenger (1994: 177–178).

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but that the governments were mostly against his appointments. It was only after spending 16 years at Breslau that Sombart was finally offered a professorship in Berlin (vom Brocke 1972: 136–137; 1987: 28–30). But even here he was not appointed to the famous Berlin University but to the Berlin Handelshochschule (Kroll et al. 2019: 10–11). The fact that he was one of the founding members of the Deutsche Gesellschaft für Soziologie and was one of the main speakers at its inaugural conference in Frankfurt am Main in late October 1910 indicates how much he had been accepted over the preceding decade (Lichtblau 2019: 4–5). His topic was on technology, a subject that would continue to preoccupy him for much of the rest of his life. The outbreak of the war in August 1914 was not a surprise for Sombart and he greeted it as a very positive development (Kroll et al. 2019: 413–414). But his war propaganda books were not universally welcomed. He wrote to Alfred Weber to complain that his Händler und Helden was being attacked by a number of groups (vom Brocke 1972: 138; Kroll et al. 2019: 419–420. See also Lenger 1994: 379– 380). But Sombart was finally chosen as a professor at the Friedrich Wilhelms University in Berlin, but several leading scholars objected to this appointment (Appel 1992: 15). That was in 1918, the same year that Max Weber returned to teaching, first in Vienna for a semester and then in Munich. Both Weber and Sombart were adversely affected by the economic situation during the final two years of the war (Lenger 1994: 258–260). Germany’s defeat and the political difficulties of the first years of the Weimar period caused Sombart some difficulties but they paled in comparison with his personal situation. Sombart had met his future bride when she was still a teenager and because of his parents’ disapproval of her, Werner and Felicitas had a six-year period of engagement. It appears that she was often critical of her husband and he was likely unfaithful (Lenger 1994: 68–69). Sombart and his wife had four daughters: Clara was born in 1891, Gertrud in 1892, Charlotte in 1895, and Eva the following year. Felicitas died suddenly in December 1920. She had been suffering and was finally operated on but the doctors found that a cancer had spread. In a letter to his close friend Carl Hauptmann, Sombart wrote that she never came out of the anesthetic so at least she did not

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suffer any longer (Kroll et al. 2019). Sombart married Corina Leon in 1922 who was a Romanian student and had attended Sombart’s lectures (Kroll et al. 2019: 460, note 2286). Their son Nicolaus was born that same year and a daughter Ninette was born in 1925. Sombart was as popular at the Berlin University as he had been at the Handelshochschule.6 In 1919 he had 333 students attending his lectures; unfortunately, many of them were paying little or no “listeners’ money” (“Hörergeld”) and that severely reduced his income. At the same time, inflation was rising and while it was nowhere near the heights of the massive inflation of 1922–1923, it was high enough that it adversely affected Sombart’s standard of living. Sombart augmented his university salary and his income from his “Hörergeld” by giving public lectures, tutoring foreign students, and publishing articles in international journals. The biggest sacrifice that Sombart made was the sale of his library. Lenger pointed out that in the years of hyperinflation, many libraries left Germany for other countries. The German Karl Bücher and the recently deceased Carl Menger had their private libraries sold to buyers in Japan. Sombart had no other choice but to follow suit. However, by 1924, inflation was no longer such a danger; in fact, by 1927, Sombart and his second wife could afford the purchase of another large house (Lenger 1994: 262–274). His situation continued to improve and his presence was in high demand. Since the middle of the decade, Sombart regularly spoke on German radio programs and presented papers and gave speeches in different parts of the country (Lenger 1994: 276–277; Kroll et al. 2019: 22). Furthermore, Sombart and Corina held salons in which many of the leading scholars in Germany often attended. These included Bernhard Harms, Edgar Salin, among others. Lenger noted that unlike many salons given by German professors, those offered by the Sombarts were never pretentious nor rigid (Lenger 1994: 280–281; Kroll et al. 2019: 22). Besides these personal and professional enjoyments, Sombart was honored with a special “Festschrift” in 1932 in the Schmollers Jahrbuch (Lenger 1994: 487, note 120). But as the editors of Sombart’s letters pointed out “Institutionally Sombart was never as influential as 6 Lenger noted that not only was Sombart an extraordinarily popular professor, he was also very much in demand as a public speaker (Lenger 1994: 264–265).

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in the Weimar Republic” (“Institutionell war Sombart nie einflussreicher als in der Weimarer Replublik”) (Kroll et al. 2019: 23). During the final years of the Weimar period, Sombart was one of the leaders of the Deutsche Gesellschaft für Soziologie as well as the Verein für Sozialpolitik (Kroll et al. 2019: 27). Unfortunately, as the years were passing, the Nazi influence grew, so that by 1935 such scholarly groups could no longer be tolerated by the party. Both the DGS and the VSP were forced to disband (Lenger 1994: 378–379). Sombart’s long-held conviction in the importance to keeping politics out of scholarship was no longer tenable. Sombart certainly shared Weber’s position in the “Werturteilsfrage” and at the 1909 conference for the Verein für Sozialpolitik Sombart insisted that there is no scientific basis for deciding whether blondes or brunettes are prettier.7 In fact, Lenger maintained that there was no one whose position was closer to Max Weber’s than that of Sombart. Appel claimed that of the founders of the Deutsche Gesellschaft für Soziologie, no one was more historical oriented than Sombart and even during the Nazi era he insisted that value judgments had no place in scholarship. In his final work from 1938 Vom Menschen Sombart argued against racial prejudices in the discipline of anthropology. Sombart died on May 18, 1941, and he had lived longer than many of his close friends and colleagues: Max Weber, Ernst Troeltsch, Ferdinand Tönnies, and Robert Michels. They and many others had thought highly of Werner Sombart—they had valued his wide erudition, his generous friendship, and his single-minded dedication to understanding and explaining modern capitalism (Appel 1992: 18–19).

Chapter Overviews The following is an overview of the chapters. Chapter 2 is an extensive examination of Werner Sombart’s most complete, most original, and most lasting contribution to the exploration of the genesis and the essence of modern capitalism. Sombart’s 7 “wir nicht eher diskutirien können, ehe nicht der wissenschaftliche Nachweis geführt ist ob die Blondinen oder die Brünetten hübischer sind” (Lenger 1994: 223).

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Der moderne Kapitalismus was groundbreaking, not only for his investigation into the rise of modern capitalism but because he did so in a relatively objective manner. There had been those, like Karl Marx, who had written about capitalism but it was primarily to show how capitalism was riddled with inner contradictions and was not sustainable. Sombart surprised many people because they had read his earlier socialist-leaning works and some had expected something similar. Instead, Sombart’s two volumes are relatively clear accounts of the conditions that gave rise to modern capitalism and how capitalism differed so significantly from feudal economies. Much of the first “Buch” is devoted to the traditional production of crafts and how they were mostly local people who were trained by master craftsmen who then began their own workshops. The second “Buch” indicated some of the major differences between the feudal craftsman and the modern capitalist. The craftsman was relatively indifferent to competition; the modern capitalist was focused on minimizing if not eliminating it. The feudal craftsman focused on his handiwork and cared little about any income; the entrepreneur has little concern about his products because his single focus is on the accumulation of money. The craftsman was proud of his skills; the capitalist used his means toward the ends. Rationality, calculability, and marketing were simply means to more profit. This chapter also contains an account of Sombart’s Proletariat. This remarkable booklet contains some of Sombart’s most damning comments about the effects of modern capitalism on workers—in terms of working conditions, living arrangements, and physical and mental health issues. Chapter 3 is an account of Sombart’s writings on capitalism that he published between 1911 and 1915. It begins with a brief overview of scholars who had criticized and those who had praised Der moderne Kapitalismus. While there were a number who found fault with Sombart’s account, there was an astonishingly large number who considered it a major masterpiece. These years also saw the publication of some of Sombart’s lesser works but that does not mean that they were any less contentious than Der moderne Kapitalismus. There are two that drew considerable criticisms: Die Juden and Händler und Helden. The latter book was intended to be propaganda and Sombart intentionally

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described the English “tradesmen” as either being consumed with material goods or being dangerous enemies. But Sombart believed that he had offered a rather novel and certainly sympathetic discussion on how the Jews contributed to the rise of modern capitalism. He pointed out that they had some traits similar to the Puritans: they were devoted to God, they were intent on fulfilling their earthly obligations, and they were concerned with rationality and calculations. Sombart was taken aback by the vociferous complaints and he could not believe that people really thought that he wrote an anti-Semitic book. It was also during this time that Sombart wrote Der Bourgeois—while not as contentious as Die Juden, this book also caused some controversy. Sombart’s points were that the bourgeoise were not some monothecal culture but represented some major innovations which also led to capitalist enterprises. The other two books from this period should be regarded as companion volumes as that is what Sombart had intended. The first one was about luxury and capitalism and the second one was on war and capitalism. While it may seem counterintuitive to think that luxury goods could give rise to capitalism, Sombart makes a substantial case for why this did occur. Sombart is even more successful in arguing how the need for larger and more successful armies and navies contributed to the development of modern capitalism. He insisted that armies needed more and better developed weapons and that navies need bigger and more efficient warships. Sombart also showed how uniforms not only produced a psychological sense of unity but the manufacture of them helped to standardize production. The need for standardization was a process that occurred in many other military supply enterprises. These books which Sombart published prior to the war are major contributions to his developing and expanding sense of the origins of modern capitalism. Chapter 4 is focused on the revisions and additions that Sombart made to the later editions of Der moderne Kapitalismus. The chapter begins by providing an overview of the editions and how Sombart’s conception of modern capitalism was modified by comments and criticisms. But he still was convinced that his combination of the historical approach coupled with a theoretical one was the proper method to investigate the origins and essence of modern capitalism. One thing which is

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different is Sombart’s increasing interest in sociology and that is manifested in chapters on society, the city, and in legal thinking. The second thing which is different but is far more important is Sombart’s addition of two more volumes devoted to what he calls “High Capitalism” (“Hochkapitalismus”). If the first edition was primarily historical, the two volumes devoted to “High Capitalism” were designed to explain twentieth-century capitalism. Now, his concern is with modern businesses—what they are, how they function, and what is their purpose and goal. Sombart’s revision of moderne Kapitalismus may have lost its sense of originality, but it showed that Sombart had not lost his sense of understanding what modern capitalism was and would likely continue to be. Unlike the previous chapters which focused on Sombart’s books, Chapter 5 is devoted to covering only one book: Die Drei Nationalökonomien. This book has the bland title of three national economies but it is intended as a major corrective to the misunderstandings about economics that Sombart laid out. Much of Chapter 5 is focused on a number of smaller works. The chapter contains an examination of ten different essays and lectures, and six of them are found in Alfred Vierkandt’s massive Handwörterbuch der Soziologie. This book was published in 1931 and republished again in 1959—many of its chapters are still relevant and the book is highly recommended for its historical value as well as for its contributions to many of today’s issues. Vierkandt’s Handwörterbuch der Soziologie has a total of more than sixty essays—Sombart authored more than any other scholar. While there is some overlap among them, each essay focuses on distinctly different topics. These range from essays on workers, calling, and economy as well as on economic lifestyles. The essays on the worker (“Arbeiter”), on capitalism (“Kapitalismus”), and on economics (“Wirtschaft”) are wellwritten, clearly focused, and generally instructive. Less valuable but still mostly worth reading are the other three essays. There are also two essays which Sombart wrote for a two-volume collection on capitalism. The editor was Bernhard Harms, who is mostly remembered for his legal battle with Max Weber; however, that was when Harms was just finishing his doctorate. During the 1920s he established his reputation in large measure by founding an institution devoted to international economics.

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The collection published in 1931 was focused on capitalism so it was natural that Sombart would be asked to contribute to it. The first essay is mostly on the history of capitalism while Sombart’s second one is more theoretical. Chapter 5 concludes with a discussion of Sombart’s essay on the future of capitalism. While Sombart adheres to some of his earlier ideas about modern capitalism, some of his thinking reflects his growing interest in Nazi socialism. It was originally given as a lecture and Sombart rewrote it—both the lecture and the essay caused considerable controversy. Chapter 6 is a brief concluding chapter that summarizes some of the themes set out in the preceding chapters. It concludes with a tallying of the pros and cons to reading Sombart and it ends with the conviction that the pros greatly outweigh the cons and that one should read Sombart —at least one should read his writings on modern capitalism.

References Adair-Toteff, Christopher (2021) “Parsons as Economist: His Early Writings on Modern Capitalism.” The American Sociologist. Vol. 52. 19–37. Appel, Michael (1992) Werner Sombart. Theoretiker und Historiker des modernen Kapitalismus. Marburg: Metropolis Verlag. Gerhardt, Uta (2002) Talcott Parsons. An Intellectual Biography. Cambridge: Cambridge University Press. Grundmann, Reiner and Stehr, Nico (2001) “Why Is Werner Sombart Not Part of the Core of Classical Sociology? From Fame to (Near) Oblivion.” Journal of Classical Sociology. Vol. 1. No. 2. 257–287. Kroll, Thomas, Lenger, Friedrich and Schellenberger, Michael. Hrsg. (2019) Werner Sombart. Briefe eines Intellektuellen 1886–1937 . Berlin: Duncker & Humblot. Lenger, Friedrich (1994) Werner Sombart 1863–1941. Eine Biography. München: Verlag C.H. Beck. Lichtblau, Klaus, Hrsg. (2019) WernerSombart. Die Modernität des Kapitalismus. Wiesbaden: Springer Verlag. 2. Auflage.

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Parsons, Talcott (2019) Kapitalismus bei Max Weber—zur Rekonstruktion eines fast vergessenen Themas. Herausgegeben, eingeleitet und kommentiert von Uta Gerhardt. Wiesbaden: Springer Verlag. Stummvoll, Günter and Wearne, Bruce C., eds. (2018) Der Kapitalismus bei Sombart und Max Weber/Capitalism according to Sombart and Max Weber. Talcott Parsons’ Dr. Phil Dissertation in German and English. Zürich: Lit Verlag. vom Brocke, Bernhard (1972) “Werner Sombart.” In Deutsche Historiker V. Herausgegeben von Hans-Ulrich Wehler. Göttingen: Vanderhoeck & Ruprecht. 130–148. vom Brocke, Bernhard (1987) Sombarts’ “Moderner Kapitalismus”. Materialien zur Kritik und Rezeption. München: Deutscher Taschenbuch Verlag. Wearne, Bruce C. (1989) The Theory and Scholarship of Talcott Parsons to 1951. Cambridge: Cambridge University Press. Weber, Max (2015) Briefe 1903–1905. Herausgegeben von Gangolf Hübinger und M. Rainer Lepsius in Zusammenarbeit mit Thomas Gerhards und Sybille Oßwald-Bargende. Tübingen: J.C.B. Mohr (Paul Siebeck). Max Weber Gesamtausgabe. Band II/4.

2 Werner Sombart and the “Spirit” of Modern Capitalism 1900–1910

Introduction Werner Sombart’s Der moderne Kapitalismus was composed of two large volumes totaling more than 1300 pages. In comparison, Max Weber’s “Die protestantische Ethik und der “Geist” des Kapitalismus” was made up of two essays totaling just under 200 pages. Sombart’s book drew considerable attention from both the public and from scholars while Weber’s essays went largely unnoticed. That changed when Weber republished the Protestant Ethic in the first volume of his Gesammelte Aufsätze zur Religionssoziologie (1920) and then when Talcott Parsons translated it into English in 1930. By that time, Weber’s reputation was growing while Sombart’s had reached its peak. Weber’s work would become one of the most widely read books in sociology while Sombart’s Moderne Kapitalismus would fall into obscurity. Yet it is a fascinating work that deserves close attention. This chapter has four sections: two are major sections and one is minor; plus, there is a brief section containing some concluding comments. The first major section is devoted to the first volume of Moderne Kapitalismus while the second covers the second volume of that © The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 C. Adair-Toteff, Werner Sombart and the ‘Spirit’ of Modern Capitalism, Palgrave Studies in Classical Liberalism, https://doi.org/10.1007/978-3-031-54423-1_2

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work. The minor section is on Der Proletariat because it not only has intrinsic worth but it is Sombart’s exploration of some of the dismaying consequences of modern capitalism.

Moderne Kapitalismus Band 1 Each of the two volumes of Der moderne Kapitalismus has subtitles and the first volume has the subtitle The Genesis of Capitalism (Die Genesis des Kapitalismus). It is obvious what Sombart meant by this—what are the origins of capitalism—but the length of the volume indicates that the question of capitalism’s origins is neither clear nor easily explained. This degree of difficulty may help explain the motto that Sombart used in the title page to the first volume. It is from Kant’s Kritik der reinen Vernunft and has a famous history. A translation might read: “Thoughts without content are empty, sensations without concepts are blind” (“Gedanken ohne Inhalt sind leer, Anschauugen ohne Begriffe sind blind”) (Sombart 1902a: III; Kant 1976: 95. A 51/B 75). Kantian scholars have debated what Kant meant by this claim; the point that Sombart seemed to have been making is his inquiry into the genesis of capitalism will be composed of concepts and material; that is, theory and facts. This is underscored by Sombart’s indication that he will be examining the “Concept and Essence of the Business” (“Begriff und Wesen des Betriebs”). That is to be found in the “Introduction” but prior to that, Sombart provided an “Accompanying Word” (“Geleitwort”). To call this a “word” is a misnomer because Sombart’s “Geleitwort” is 28 pages in length and covers a number of points. One is his reference to Ferdinand Lassalle’s insistence that a “Preface” (“Vorrede”) is actually a “Post script” (“Nachrede”) because it may come before the work is begun but it can be written only after the work has been completed. That is, it is intended to serve as a guide for the reader and Sombart has a number of guiding points. The second and more important point clarifies his Kantian motto. Kant insisted that there is no doubt that all

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cognition begins with experience but that empiricism alone is insufficient to provide knowledge. Material must be combined with forms; empiricism must be joined with idealism in order to yield knowledge. Sombart acknowledged that Kant was absolutely correct to insist that the “raw material” (“rohe Stoff ”) must be aided by concepts for us to have knowledge about the phenomenal world (Sombart 1902a: XI). Sombart insisted on this because he contended that most of “national economists” (Nationalökonomen”) focused only on theory and neglected facts. His other complaint was that these theoreticians contended that either one begins with causes or one begins with goals; but that ignores the fact that social science has the determining principle that it is a historical problem (Sombart 1902a: XIII–XV). Sombart again invoked Kant who maintained that the two markers of science are “universality and necessity” (“Allgemeinheit und Notwendigkeit”) but that social sciences lack those two properties. The most that the social scientist can achieve is a type of regularity that can be described as rules. The third point that Sombart made in his “Geleitwort” was about his connection to the “two most famous living national economists in Germany: Gustav Schmoller and Adolph Wagner” (“beiden berühmstesten lebenden Nationalökonomen Deutschlands: Gustav Schmoller und Adolph Wagner”). As much as he was indebted to these two “Kathedersozialisten” Sombart complained that they did not invest enough time and energy in studying history. While there is no doubt that both professors belonged to the “German Historical School” of economics and they had objected to the theoretical emphasis of the “Austrian School” of economics, they did not explore historical epochs (Sombart 1902a: XX–XXI). Sombart insisted that he was able to connect the historical aspects of the German school with the theoretical tendencies of the Austrian school into a “higher unity” (“höhere Einheit”) (Sombart 1902a: XXIX). Sombart concluded his “Geleitwort” with an overview of the three economic epochs: the “peasant-feudal organization” (“bäuerlich-feudale Organisation”), the “craftsman-type organization” (“handwerksmässigen Organisation”), and the “calculation-speculative organizing activity” (“kalkulatorisch-spekulativ-organisierende Thätigkeit”). The purpose of this third type of economic organization is winning profits (“Zweck des

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Wirtschaftens der Geldgewinn ist”) and this is the capitalistic organization of the present. Sombart’s concern in both volumes of Moderne Kapitalismus is to provide an account of the genesis and the theory of modern capitalism (Sombart 1902a: XXXI–XXXIV). The first volume of Der moderne Kapitalismus has four major parts: an “Einleitung” and then the “Erstes Buch” and the “Zweites Buch”, and finally a conclusion (“Schluss”). The introduction alone is almost 75 pages while the first “Buch” is around 120 pages and the second “Buch” is more than 400. The conclusion is twenty pages. The “Einleitung” has a title “The Organization of Economic Labor” (“Die Organisation der wirtschaftlichen Arbeit”), the first “Buch” has the title “The Economy as Craftsmanship” (“Die Wirtschaft als Handwerk”), and the second “Buch” has a title that reflects the title of the first volume of Moderne Kapitalismus: “Die Genesis des modernen Kapitalismus.” The “Einleitung” has a motto from the jurist Blackstone: “Qui bene distinguit, bene docet” (“who distinguishes well, teaches well”) and that reflects Sombart’s preoccupation with classifications. Sombart began the “Einleitung” with the claim that all reasonable work is a result of a conscious purpose or goal and that needs a plan in order to achieve that goal. Work is not done for itself but for some end; it must have some order and structure. The questions are to what ends and with what order? His response was there is always the need for a unified ordering of the labor process but he maintained that there are two kinds of economic systems: between what Sombart referred to simply as an “economy” (“Wirtschaft”) and an “business” (“Betrieb”). He moved immediately to clarify that there is a significant overlap between the two and that the two classifications do not cover all of the possible instances. He offers a fourfold classification: (1) a “household economy” (“Hauswirtschaft”), (2) a “master household economy” (“Herrenhof Wirtschaft”), (3) a “capitalistic entrepreneur economy” (“kapitalistische Wirtschaft”), and (4) a “comrade (consumption association)” (“Genossenschaft [Konsumverein]”) (Sombart 1902a: 6–7). Sombart complained that much of the lack of understanding of economics is a result of the lack of interest in differentiating among the various types of economic activities. He set out to remedy that defect in the second chapter of his “Einleitung.”

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The second chapter is entitled “Betrieb und Betriebsformen” (“Business and Business Forms”). In order to explain the business forms Sombart believed it necessary to determine the “concept and the essence of the business” (“Begriff und Wesen des Betriebes”). He did so by contrasting the irregularity of a craftsman—that he lacked a plan of work. Instead, the craftsman worked when he felt like it—other times he would choose to relax. Sombart’s point was that this type of work was “planless” and it lacked order and regularity. That lack of order may still allow the craftsman to function; however, there needs to be order when there are two or more workers. These workers need to coordinate their efforts: they need to work in the right place, at the right time, in the right manner, and for the same goal. Sombart referred to this unity as the “unity of the business order” (“Einheit der Betriebsordnung”) (Sombart 1902a: 10–13). Sombart then offered a number of examples of businesses which functioned correctly and successfully before turning to the “forms of business.” Sombart again criticized his predecessors in their attempts to explain business practices because they mistakenly focused on the different sizes of businesses rather than concentrating on the different types of labor involved in them. He noted that this also involved three factors: the “labor conditions”, the “labor object”, and the “labor means.” “Labor conditions” include the location or building in which labor is performed—is it outside as in digging a canal or inside in a factory? “Labor object” is the object that is being worked upon—is it something natural like mining coal or is it something being finished like a tool? “Labor means” are the instruments being used in order to carry out that labor—is it one’s own physical labor or is it a machine that produces the result? (Sombart 1902a: 18–20, 23). Having set out those three types of labor factors Sombart turned to the two most important factors in labor: specialization and cooperation. In order to clarify this Sombart employed illustrations involving Robinson Crusoe and Friday: (1) Crusoe does everything for himself by himself, (2) Crusoe and Friday divide up the work so that one of them hunts while the other fishes, (3) Crusoe and Friday work together for some common purpose, such as working together on the boat and then rolling it down to the water, and (4) Crusoe and Friday work together but in

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such a way that they divide part of the labor and together achieved the result, such as when Friday chases the animal and then Crusoe shoots it. Sombart regarded (1) as not having either specialization or cooperation, (2) as simple specialization, (3) as simple cooperation, and (4) as a type of specialization that is then followed by cooperation (Sombart 1902a: 25). The next twenty-five pages are devoted to the eight types of “businesses”, ranging from the individual business to the family business to the manufacturing business to the factory business. The first three types have been found at all times, the fourth through the sixth are present starting around the Middles Ages, while the seventh was developing in the eighteenth century, and the factory is a nineteenth-century phenomenon (Sombart 1902a: 25–47). The major factor which differentiates the factory from all earlier forms of business is that it uses machines in order to have an “automatic process of production” (“automatische Produktionsprozesses”) (Sombart 1902a: 48–49). In a similar way Sombart quickly sets out the “economic steps, economic systems, economic forms, economic epochs” (“Wirtschaftsstufen, Wirtschaftssysteme, Wirtschaftsformen, Wirtschaftsepochen”) in the third chapter of the “Einleitung.” Much of the early part of this chapter is Sombart’s criticism of some of his immediate predecessors and he was particularly harsh regarding Karl Bücher and his book on the economic steps (Die Entstehung der Volkswirtschaft ). Sombart was far better disposed toward Ferdinand Tönnies’ observation in Gemeinschaft und Gesellschaft regarding the movement from the organic to the mechanical in economic life (Sombart 1902a: 50–60). He also suggested that Aristotle’s division between the household and the city economies was masterfully sketched and he divided needs and work into four categories: (1) satisfying one’s own needs through one’s own labor, (2) satisfying one’s own needs through someone else’s labor, (3) satisfying someone else’s needs through one’s own labor, and (4) satisfying someone else’s needs through someone else’s labor. (1), (2), and (3) have occurred throughout history and it is only (4) that is a modern invention. He then listed ten different types of economies ranging from the original household through village economies to city economies. But it is only the ancient slave economies and the modern colonial slave economies that share with capitalism the

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ability to use labor of others to satisfy more needs. These three are in the class called “Societal Economy” (“Gesellschaftwirtschaft”) (Sombart 1902a: 65–67). Sombart concluded his “Einleitung” by emphasizing that his investigation is largely historical and that he would be discussing the transitions of economic development from medieval times up to and including the modern period. He would begin with the medieval craftsman and work his way up to the modern industrial laborer. The “Erstes Buch” has the title “The Economy as Craftwork” (“Die Wirtschaft als Handwerk”) and has two mottos: both from the Reformation and both about work. Both are in the spelling of Luther’s time and it is Luther’s comments about the need to work in order to eat that is indicative of his reevaluation regarding the dignity of labor (Sombart 1902a: 73). Sombart relied on the brother Grimms’ famous dictionary to define what “Handwerk” (“Craftwork”) is: that which is completed by hand (as opposed to machines); it is that which is done by a specialized individual or specialized group; it is a type of economic activity that was found in the Middle Ages (Sombart 1902a: 74–78). This is the conclusion of the five-page fourth chapter. The fifth, sixth, and seventh chapters of the “Erstes Buch” take up more than a hundred pages. After having provided a definition of “Handwerk” and one for “Handwerker” Sombart offers several pages of information (with tables) about the various types of medieval “Handwerk” and how much each type earned. The incomes are irrelevant to this study but it is interesting to consider the types of guilds: these include butchers, bakers, tailors, and shoemakers, but it also included the modern ones like book binders, plumbers, and watchmakers (Sombart 1902a: 82–84). Sombart emphasized that the “Handwerker” was a specialist who had a specialized knowledge of his craft; that he owned his own tools; and that he also served as his own salesperson. Sombart added to other critical ideas to his conception of the “Handwerker”: his work provided him with his “material basis for his existence” by which Sombart meant food, clothing, and shelter which meant that the “Handwerker” was a “free man” (“freier Mann”) (Sombart 1902a: 86–88). Sombart spent several pages discussing how the medieval “Handwerker” not only produced his products but arranged to sell them in the markets and in the fairs (Sombart 1902a: 97–99).

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It is in the markets and fairs that the “Handwerker” traded his wares for others, but Sombart pointed to the introduction of metal coins as a means of exchange. The mining and minting of coins meant the beginning of cooperative businesses—small businesses which employed more than one or two people (Sombart 1902a: 107–110). Sombart stressed that the product that the “Handwerker” produced was a product of that person’s individuality—it was the craftsman’s “Lebensberuf ” (“life vocation” or “life calling”) (Sombart 1902a: 113–115). Sombart stressed that this is what the person chose as his “calling” and how he became “Master” (“Meister”). However, it was the essence of learning his craft that the craftsman becomes a “Meister”; that is, only after a specific period of being an apprentice (“Lehrling”). Sombart differentiated between a “Lehrling” as one who was learning and a “Geselle” or a “journeyman” as one who was already somewhat experienced. A “Geselle” is someone who helps the “Meister.” Sombart suggested the hierarchy was based upon degrees of knowledge beginning with the “Lehrling”, progressing as a “Geselle”, and finally achieving mastery as the “Meister” (Sombart 1902a: 119–120). The sixth chapter is devoted to “The Existence Conditions of Craftwork” (“Die Existenzbedingungen des Handwerks”) and Sombart began by paraphrasing Kant’s “How is pure mathematics possible” (“Wie ist reine Mathematik möglich?”) and “How is pure natural science possible?” (“Wie ist reine Naturwissenschaft möglich?”) by asking “How is craftwork possible?” (“wie ist Handwerk möglich?”) (Sombart 1902a: 122; Kant 1976: 52, B 52). In other words, Sombart was asking what are the conditions which make craftwork even possible. Instead of offering an answer right away, Sombart discussed some of his predecessors’ views and showing once again that their opinions were misguided because they neglected historical facts. After providing them, Sombart returned to his question “how is craftwork possible?” (Sombart 1902a: 135). He first considered many of the factors which would have made it unlikely and he included in this list the lack of hygiene, the frequency and the bloodiness of war, and the lack of food that spread epidemics (Sombart 1902a: 137). The conditions for the possibility of “Handwerk” included the necessary technical knowledge and the necessary number of individuals possessing that knowledge. It also included not just the knowledge but the practical

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application of that knowledge. Sombart placed considerable emphasis on the transmission of skill and that there was a tension between keeping this knowledge to one’s self, which meant that it died when the “Meister” died, and making it public to some degree by passing it on to the “Lehrling” (Sombart 1902a: 140–145). But it also includes the demand for what the “Meister” produces and once again there needs to be the proper balance between protecting one’s market and being too open. Part of the process of finding that balance is by regulating the number of products that the “Meister” produces. Sombart suggested that much of this regulation was ad hoc and happenstance and that it was only with the advent of what he called the “pre-capitalistic” (“vorkapitalitische”) age that it began to be more strictly controlled (Sombart 1902a: 150–154, 159–161). The transition from medieval craftwork to pre-capitalist trade is the subject of the seventh and final chapter of the “Erstes Buch.” Trade is now regarded as being more than the mere exchange of goods as there was the introduction of a means of exchange. Sombart was not denying that there was a type of pre-capitalistic trade; quite the contrary. He readily recognized the importance of trade cities such as Hamburg around 1400, Lübeck and Rostock around 1384, and Stralsund around 1378—these were just some of the German cities (Sombart 1902a: 166– 167). However, he offers several grounds for distinguishing medieval trade from the pre-capitalistic trade and these included the much smaller number of traders involved, the smallness of the ships used in trade, and the difficulties in transporting goods over land (Sombart 1902a: 169–174). Sombart then turned his attention to the people involved in trade. He repeated his notion that the origins of trade lay in providing for one’s self and one’s family, and he reminds us that the notion that the trader was no longer a negative one was a product of Luther and other Reformers. The “trader” (“Händler”) has his own “calling” (“Beruf ”) and that was his ability to determine the “‘just’ price” (“‘gerechten’ Preis”). As a result of his special talent, the “trader” was considered a technical worker. This, Sombart insisted, leads to the heart of the matter. To do this, he also insisted that we should forget much of what we think in

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terms of modern trade. That is because, for us, modern trade is exclusively devoted to making a profit. The modern salesman is preoccupied with markets and in developing his ability to calculate and to speculate. This need for profit is a mark of modern capitalism—the earlier “trader” had no time to invest in such calculations and speculations; he was too busy traveling in order to sell his wares (Sombart 1902a: 175–177). Sombart draws our attention to the fact that for most of the history of early trade the “trader” could not read or write and that began to change in thirteenth-century Italy. Sombart admitted that several centuries prior to that there were some people who could sign their names but he suggested that the numbers were small and that most of the individuals lived in cities such as Venice. Moreover, people lacked the means and the ability to “calculate.” Sombart insisted that people could keep numbers in their head for a short period of time—“As today with children” (“Als heute bei Kindern”) (Sombart 1902a: 179). He added that the medieval “trader” had the additional problem of lacking the proper instruments to provide exact weights and measures (Sombart 1902a: 180). Having sketched the problems that the medieval traders faced, Sombart devoted the remainder of the seventh chapter to setting out concrete examples of medieval trading. Sombart attached two mottos to the beginning of the “Zweites Buch”—one from Jakob Fugger and the other from Lucas de Burgo but both mottos reflect the concern with calculating profits. Both also reflect the title of the “Zweites Buch”: “Die Genesis des modernen Kapitalismus” (“The Genesis of Modern Capitalism”) (Sombart 1902a: 193). As he had done earlier, Sombart began with the “Concept and Essence of Capitalism” (“Begriff und Wesen des Kapitalismus”). He admitted that “I belong to the old-fashioned people who can only present the genesis of something if they know exactly by which it is understood” (“Ich gehöre zu den altmodischen Leute, die nur die Genesis von etwas darstellen können, von dem sie genau Wissen, was darunter zu verstehen ist”) (Sombart 1902a: 195). He offered an abstract definition of capital in terms of its goal and that is the accumulation of profit. He also provided three important markers of capitalism which he stressed were always present: (1) an impersonal organization, (2) an emphasis on calculation and speculation, and (3) a rationalistic approach

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(Sombart 1902a: 197–199). As he had earlier, Sombart again puts it into the Kantian formula: “How is capitalism possible?” (“Wie ist Kapitalismus möglich?”) (Sombart 1902a: 205). He answers by providing the presuppositions and conditions. Sombart emphasized that the capitalist is not just anyone who endeavors to increase his wealth; rather, the capitalist has the “special capitalistic spirit ” (“specifisch kapitalistische Geist ”) (Sombart 1902a: 208). This is exactly the point that Max Weber would make two years later in his “Protestantische Ethik und der ‘Geist’ des Kapitalismus.” But Sombart insisted that the capitalistic spirit manifested itself with “the striving for profit, the calculating sense, the economic rationalism” (“das Gewinnstreben, der kalkulatorische Sinn, der ökonomischen Rationalismus”) (Sombart 1902a: 208). Having set out the capitalistic spirit and what that entailed, Sombart then asked in his Kantian form: “How is profit possible?” (“Wie ist Profit möglich?”) (Sombart 1902a: 210, 213). His short answer is Marxist: the appropriation of labor; but his longer answer is far less Marxist and far more complicated. Sombart began to set it out in the second section of the “Zweites Buch” with “The Development of Capital” (“Die Entstehung des Kapitals”). This section is more than 150 pages and in it Sombart discussed a number of factors of medieval trade, including credit, taxes, and colonial issues but none of these really have much to do with the development of capitalism. Instead, they are only of historic importance, if even that. Sombart himself may have recognized that, because the title of the third section provides a variation of the title of the “Zweites Buch”: “The Genesis of the Capitalistic Spirit” (“Die Genesis des kapitalistischen Geistes”) (Sombart 1902a: 378–379). There is a fundamental difference between someone who amasses a fortune and a capitalistic enterpriser and that difference is found in the way in which each of these two individuals regard money. The person who hoards his fortune regards it as having primarily intrinsic worth; while it may serve other purposes like impressing people, its main function is to exist for the pleasure of its owner. In contrast, the capitalistic entrepreneur regards his money as an instrument for something else; while he may consider it valuable, he thinks of it primarily as means and not an end. Again, prefiguring the role that Weber accorded Calvin, Sombart pointed out the importance that Calvin gave to increasing

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wealth (Sombart 1902a: 378–379). However, Sombart did not believe that Calvinism or any form of Protestantism was a sufficient cause for the development of capitalism. Instead, Sombart suggested that the specific capitalistic spirit was driven by the urge for itself. He pointed to Georg Simmel who argued that money which had been the absolute “means” was elevated to be the highest end (“die Erhebung des absoluten Mittel— des Geldes—zum höchsten Zweck”) (Sombart 1902a: 383). Sombart did not elaborate on this idea but provided pages of historical examples intended to illustrate medieval trading practices. It is in the fifteenth chapter of the “Zweites Buch” that Sombart began his discussion of economic rationalism as one of the most important factors of a “new capitalistic spirit’ (“neuer kapitalistische Geist”) (Sombart 1902a: 391). He pointed to two practices which were being introduced toward the very end of the Middle Ages: the method of exact calculations and the method of double bookkeeping. He pointed to two individuals who helped develop these methods: Leonardo Pisano and Fra Luca. Both contributed to the replacement of accidental and arbitrary estimations with rational and deliberate calculations but Sombart gave more credit to Jakob Fugger for identifying the appropriate means to secure the goal of accumulating wealth (Sombart 1902a: 392– 397). Instead of expanding upon that notion Sombart again produced numerous examples how various “industries” grew in size and in profit. But he also recognized that there were certain obstacles to the development of the accumulation of wealth. Sombart devoted the seventeenth chapter to these obstacles which included war, famine, population fluctuations, and the varying of attitudes about wealth (Sombart 1902a: 409–422). The entirety of the nineteenth and twentieth chapters are filled with examples of how businesses grew and prospered in the eighteenth and early nineteenth centuries. The beginning of the twenty-first chapter appears to be a continuation of this litany of examples; however, Sombart began to remark on the changes in organizations and how that fostered greater economic speculation. He pointed in specific to the revolutionary changes in mining and how that generated growing economic interest in making money in mining. What was being mined became secondary to what profits it generated (Sombart 1902a: 491– 493). He pointed to a similar shift in building; while the housing and

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buildings continued to be crucial, there was the additional aspect that money could be made. In fact, while some businesses invested in mining, new institutions were invented to provide credit for building. “Building societies” were formed alongside traditional banks to provide funds on credit to go for builders (Sombart 1902a: 494–499). And the building boom prompted the need for additional businesses. These included furniture-making—not just tables and chairs but a whole new series of household furniture. Sombart gave a list of almost twenty different types of furniture that the modern house needed and these included “night tables” (“Nachttische”) and “wash tables” (“Waschtische”); and “men’s writing tables” (“Herrenschreibtische”) and “women’s writing tables” (“Frauenschreibtische”). This demand was far greater than any traditional household craftsman could meet; it needed factories that were organized specifically to turn out masses of pieces of furniture within a short time frame (Sombart 1902a: 500–508). This radical transformation from household crafts to industrialization did not totally eliminate the former. However, the traditional crafts people were limited in what types of wares they could produce and sell. Sombart spent the twenty-second chapter on these wares: clothing, shoes, and boots were still produced by people in homes and they continued to sell because they were easy to transport to nearby stores, they reflected individual tastes, and they appealed to women (and men) (Sombart 1902a: 509–516). The focus of the twenty-third chapter is on the city and Sombart set out many of the things that a city needs to function. These include the obvious, like housing for people and businesses and places to shop and to eat. But his list also includes things that are necessary but are not things that one tends to think about: paving of streets and pipes for water and sewage (Sombart 1902a: 517–523). This led Sombart to discuss businesses in the city and how many of them changed from traditional labor practices to modern industrial ones. He provided a number of instances: how the baker went from bread-making by hand to the use of machines; how the butcher exchanged knives for machines; how a shoemaker who had made shoes by hand moved to using machines to produce them. The same transition took place for those who used to make doors and windows by hand began to produce them with the

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aid of machines. Those who used to make porcelain with their hands changed (or were forced to change) to manufacturing porcelain pieces (Sombart 1902a: 524–550). After listing some manufacturing firms like Krupps and Weiss, Sombart returned in the twenty-sixth and twentyseventh chapters to the topic of craftwork and craftsmen in the “present.” He maintained that traditional craftspeople were appreciated more in rural areas and that was true in southern Germany. Sombart pointed to craftsmen who still stitched clothing by hand in the Schwarzwald in the southwest and those who continued to make handmade shoes in parts of Bavaria in the southeast (Sombart 1902a: 573–576). But Sombart pointed to places in the North where craftsmanship had not totally been replaced by machinery—certain areas around Hannover and certainly the Spreewald south of Berlin (Sombart 1902a: 577–578). But he also pointed out that in other parts of the world, craftsmanship had been dying out. He claimed that farmers in the United States had been forced to mechanize their agricultural practices by the use of tractors and other farm machinery (Sombart 1902a: 584–585). In contrast, craftspeople in the cities were rapidly being replaced by factory workers. Sombart pointed especially to the artisans who had hand-produced dresses, hats, and shoes (Sombart 1902a: 588–598). He also indicated that many of the craftsmen who build different types of furniture in their shops were having an almost impossible task of competing with goods produced by factories. While they could point to the fact that each table that they made was unique, they could not compete in terms of price and delivery time (Sombart 1902a: 606–607). Sombart concluded the chapter on craftsmanship with the observation that the old organizational form of craftwork had been replaced with “a new form of business activity: capitalism” (“eine neue Formgewerblicher Thätigkeit: das Kapitalismus”) (Sombart 1902a: 615). The penultimate chapter is Sombart’s less than convincing attempt to show that “craftsmanship” is fundamentally different from “craftsmen.” Why he sought to distinguish the two is also unclear. What is clear is that Sombart was convinced (correctly) that “craftsmen” and their “craftwork” was being replaced in rural areas and even more in urban centers by modern capitalism. Chapter twenty-eight is Sombart’s “Conclusion” (“Schluss”) but it is less a conclusion than it is a chapter filled with lists and tables (Sombart

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1902a: 636, 637, 638, 640, 652). However, he did provide a summation of sorts in the final three pages of Band 1. Sombart insisted that the results of the previous investigation show that within the previous fifty to a hundred years, there had been a radical transformation in all modern “cultural lands” (“Kulturländer”). This “new creation of the rational plans according to the capitalistic entrepreneur” (“Neuschöpfung nach den rationalistischen Plänen des kapitalistischen Unternehmers”) has caused an economic revolution; the “capitalistic-proletariat” (“kapitalistischproletarischem”) people have replaced the traditional “Handwerker.” This economic revolution was not a single act in some specific place; rather, it was a process that occurred in the West. It destroyed the “economic house” and forced its inhabitants to seek other places for shelter. This process was nothing less than the change of the entire “economic life” (“Wirtschaftsleben”). As he had indicated in his “Geleitwort”, the first volume was intended to set out the genesis of modern capitalism; the second volume is designed to explain “a theory of the capitalistic development ” (“eine Theorie der kapitalistischen Entwicklung ”) (Sombart 1902a: 653–656).

Band 2 Sombart transitioned from setting out the genesis of modern capitalism in the first volume to providing the theory of the capitalistic development (Die Theorie der kapitalistischen Entwicklung ). He did not need a “Geleitwort” and his “Einleitung”, at 21 pages, is considerably shorter than what he had written in the first volume. He acknowledged that many of the scholars and political thinkers have focused primarily on what he referred to as the “great social ideas” (“grossen socialen Ideen”) and he had in mind Locke’s notion of natural law and the Hegelian-Marxist dialectic, but he also included the emphasis on the individual. Sombart admitted that each of these theories has its own degree of attractiveness and he allowed that all of them contained some truth (Sombart 1902b: 3–7). However, he insisted that none of these explained the development of capitalism. Instead, Sombart insisted that he was investigating what he termed “the driving powers” (“die treibenden Kräfte”) and he identified three major

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ones. He did not discuss them in the “Einleitung”; instead, he offered fourteen pages of statistics and tables. The main point was similar to what he had recounted in the first volume: the unsuccessful struggle of the craftsman against the increasing domination of capitalism (Sombart 1902b: 24). The second volume of Der moderne Kapitalismus has three “books.” The “Erstes Buch” and the “Zweites Buch” share the emphasis on new: “The New Founding of Economic Life” (“Die Neubegründung des Wirtschaftslebens”) and “The New Formation of Economic Life” (“Die Neugestaltung des Wirtschaftslebens”); however, they differ considerably in length. The “Erstes Buch” is about sixty pages whereas the “Zweites Buch” is more than three hundred. In addition, the “Zweites Buch” has four major sections and eighteen chapters; in contrast, the “Einleitung” contained the first chapter and the “Erstes Buch” had three chapters. Another difference between the “Erstes Buch” and the “Zweites Buch” is the unity of the “newness” theme: “The New Law” (“Das neue Recht”), “The New Technic” (“Die neue Technik”), and “The New Type of the Economic Life” (“Der neue Stil des Wirtschaftsleben”). The opening page of “Das neue Recht” emphasized the importance of the new type of legal thinking which guaranteed “industrial freedom” (“Gewerbe Freiheit”) and the “system of free competition” (“System der freien Konkurrenz”). Sombart emphasized that this “new law” had a history of more than a century and that the laws designed for workers were enacted more recently. He also stressed the necessity for such worker protection laws but insisted that any discussion of them lay beyond the focus of his present work. Instead, Sombart maintained that his thesis was focused on understanding for the “essence and significance of the dominant economic law” (“Wesen und Bedeutung des herrschenden Wirtschaftsrechts”) (Sombart 1902b: 27–28). He did not claim either originality or completeness; he acknowledged that he was drawing on the relevant writings by Rodbertus, Lassalle, and Adolph Wagner. He also indicated that what he was offering was an “entire[ly] brief sketch” (“ganz kurz Skizze”) (Sombart 1902b: 28). Sombart identified five major legal factors of which the first four were types of “freedom.” “Freedom of business” (“Freiheit des Erwerbes”) or (“Gewerbefreiheit”) is the freedom to choose “how, where, when” (“wie, wo, wann”)

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he will engage in economic activity. “Freedom of contractual agreement” (“Freiheit kontraktlicher Vereinbarung”) or “contract freedom” (“Vertragsfreiheit”) is the freedom to enter into contracts governing almost every aspect of business practice, including sale and buying but also rent and lending practices. Sombart singled out taxation, the imposition of sales price and wage restrictions as well as the prohibition of lending and limiting the number of workers as the opposite of “freedom of business.” “Freedom of ownership” or “freedom of property” (“Freiheit des Eigentums”) covers the freedom to own not just consumer goods and the means of production, but also private property. The opposite of this type of freedom is found in socialist economies but he also noted that some of these restrictions were found in pre-capitalistic economies; notably, the possession of property. Sombart added that the “freedom of property” includes the following types of freedoms: the freedom to use one’s property as one chooses, the freedom to use it for gain or for debt. The final type of freedom is the “freedom to bequeath” (“Freiheit der Vererbung”). This is the freedom of continuity and guarantees one’s power over one’s property even after death. This leads to Sombart’s fifth point: the eternal protection of the individual’s right to choose—it is definitive recognition of “the superiority of the individual will over the will of the whole” (“die Superiorität des Einzelwillens über den Willen der Gesamtheit”) (Sombart 1902b: 28–29). Since this fifth point is also a type of freedom, albeit, a posthumous one, it is not clear why Sombart did not simply list it as the fifth type of legal freedoms. Having set out the five major legal freedoms, Sombart cautioned that finding an explanation for when and why these freedoms were secured was neither easy nor simple. That was because of the number of psychological ideas and because of the complexity of the causal connections. He added that there is a tension between the inclination toward monopoly and coercion and the striving for choice and freedom. He pointed in particular to the craftsman who seeks “guild-order” (“Zunftordnung”) and the entrepreneur who desires “business freedom” (“Gewerbefreiheit”) (Sombart 1902b: 29–30). The craftsman values “peace and stability” (“Ruhe und Stetigkeit”) in his economic life; the entrepreneur seeks opportunity and expansion. Sombart stresses the difference between traditional structure and modern freedom. Whereas the craftsman does

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not want a competitor, the capitalist believes that he can defeat the weak competition in a “free competition.” Sombart emphasized that the idea of free competition is the “cornerstone” (“Eckstein”) of modern economic law and he insisted that it grew from the earlier belief in the individualistic doctrine of natural law (Sombart 1902b: 32). This process reduced the number of craftspeople but increased the number of entrepreneurs. It was the legal notion of “business freedom” that overcame the limitations of the guilds and promoted innovation and expansion (Sombart 1902b: 40–41). The second new factor in capitalism is the development of new “technics” or new technologies. Sombart again contrasts the old, nature-based technology with the new, mechanical technologies. He referred to the old technology as “organic” and the new as “inorganic.” Traditional crafts augmented physical strength and workmanship expertise with wind, water, and fire. While each of these helped the craftsman, they were often unpredictable. Sombart noted that the new powers are nature based but are changed and channeled to be more useful. He had in mind steam power and electricity which help production and transportation of goods. Modern technology encompasses more than just these augmented powers; it also includes new machines and new methods to produce many new types of goods. These include the development of new items but also new ways of expanding old ones such as the development of new colors. Sombart pointed to the development of chemical factories and how new chemicals prompted the radical changes in the making of children’s shoes. But he also pointed to the rapid increase in the demand for coal: from 9,000,000 tons in 1853 to 101,639,000 in 1899 (Sombart 1902b: 42–46). Sombart’s focus was even more directed to the fundamental changes in the type of tools. The craftsman’s tools tended to be simple and required the physical strength and skill to be properly used. The type of motion involved in craftwork was mostly back and forth or a limited repetition. Sombart illustrated this by the back and forth of the handsaw and that the craftsman was limited in how long he could continue to saw before needing to rest. But this changed with the invention of the band saw and this machine was part of the revolution in motion. Previously, it had been directional and linear; now it is circular and rotational. He encapsulated the differences between the old and the

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new by suggesting that with the old “all flows” (“Alles fliesst”) while with the new “all rolls” (“Alles rollt”) (Sombart 1902b: 48). With this “principle of rotation” (“Rotationsprincip”) Sombart turned to the new “means of work” (“Arbeitsmittel”) which he referred to as machine (Sombart 1902b: 49). He devoted the remainder of the chapter to the nature and the history of machines but the important points for the purposes here are three. There are some improvements which are incremental, and an example is the difference between an old wagon wheel and a modern steel one. There are some improvements which are slightly less modest but not quite yet revolutionary. An example of this is the machine that breaks down grains far easier and far faster than a mortar and pestle. Then there are some improvements which are truly revolutionary, and the example Sombart gave was the development of steam. This source of power both intensified human strength and expanded human possibilities. In a similar manner, the increased use of electricity did much the same. Sombart concluded the third chapter by citing Andrew Ure, who in The Philosophy of Manufactures observed that mechanical science was substituted for hand skill, and with that, science was introduced into the “service of technology” (“Dienst der Technik”) (Sombart 1902b: 65–66). The fourth and final chapter of the “Erstes Buch” is focused on the new form or style of economic life. Sombart noted in the opening paragraph that he was not going to provide a thorough account of modern capitalism here but was only going to offer some fundamental notions. He offered as an antinomy the contrast between calculation and speculation. Calculation is rational and is based upon genuine information. Armed with that knowledge, one can be fairly confident in one’s prediction about the future. In contrast, the speculator is not especially rational but relies on his feelings. Lacking knowledge, the speculator can only hope that his guess is correct (Sombart 1902b: 68–69). This sort of opposition is often a factor in theories of production and Sombart pointed to the conflict between two of the most respected scholars of capitalism. Without going into the details, it involved the decade-long debate about the process of production and it occurred between the highly respected Austrian Eugen von Böhm-Bawerk and the equally wellregarded German Wilhelm Lexis (Sombart 1902b: 70–71). The focus

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of some of the debate revolved around the “subjectivism” of the Early Austrian School of Economics and the “objectivism” of the German Historical School of Economics (Sombart 1902b: 71, 80–81). What the debate also had to do with was the question of speed. Sombart noted the increase in speed in which an item could be produced but he was more interested in the decrease in time in order to ship those goods. He provided several examples including the decrease in time that it took something to travel within Germany. In 1590 it took six days to travel between Magdeburg and Hamburg; by 1690 it took between three and four days; and by 1890 it took nine hours by the post-train. He also gave the example of the decrease in time needed to sail from Europe to America. Christopher Columbus needed seventy days to reach the Bahamas; Benjamin Franklin needed forty-two days for travel from New York to Europe; a steamship from 1819 needed twenty-six days, but by 1897 it took only five (Sombart 1902b: 76–77). He also pointed to how the telegraph and the telephone have shortened distances and have reduced time. Sombart concluded the fourth chapter by clarifying his use of the term “Styl” and he tied it to modern culture. It changed our relationship to matter by increasing our mastery over it. It changed our perception of space by reducing the notion of distance. Perhaps most importantly it changed our appreciation of time. It allowed us to measure time more precisely—even the “cheapest pocket watches” (“billigsten Taschenuhren”) show the seconds—and it has increased our appreciation of time, even as our lives rapidly speed up (Sombart 1902b: 83–86). The “Zweites Buch” is about the new formation of economic life and it is the typical mixture of theory with facts. As with an account of previous chapters, the emphasis in my exploration is far more concerned with Sombart’s ideas rather than his examples. The first section has only one chapter with a lengthy title. The table of contents has a major error: it lists an appendix to the fifth chapter but it is found at the end of the fourth chapter. The listing is at the end of the final subsection that begins on page 130 but the “Exkurs” is correctly given as beginning on page 87 (Sombart 1902b: V). The appendix itself is about the developmental stages of capitalistic development but it is three pages devoted to criticizing some of Sombart’s contemporaries (Sombart 1902b: 87–89).

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A reader might have expected expect Sombart to begin Chapter Five with a theoretical introduction given its lengthy title: “The Development of the Modern Agrarian Economy and the Dissolution of the Old LandBased Economic Condition” (“Die Entstehung der modernen Landwirtschaft und die Auflosung der alten bodenständigen Wirtschaftsverfassung”).1 Instead, Sombart began Chapter Five by observing that the middle of the eighteenth century saw a new beginning of German agrarian economy and that was revealed by the increase in the price of grain. He provided statistics for Germany but also for England, Australia, and South Africa. Price increases also occurred with meat and dairy prices in various parts of Germany (Sombart 1902b: 93–95). These were not one time increases in price but were an unstoppable increase in prices. Sombart identified the proximate cause of these series of increases in the changed use of the land. That is, there was a change in the use of land from what had been a traditional agricultural point of view to a modern, capitalistic-rationalistic approach. Sombart acknowledged that it began early in the nineteenth century but that it was most prevalent in the last third of that century. The cause of this shift was the improvement of agricultural technology. Prior to the middle of the nineteenth century, German farmers worked the land as much as they had for centuries. However, in the second half of that century farmers began to see improvements in how they planted, cared for, and harvested their crops. Improvements were not limited to raising crops; they were also present in raising livestock and in lumbering (Sombart 1902b: 102– 109). Sombart suggested that there were three trends that helped account for these changes. The first was the immediate consequences of the change in the manner of production. Sombart pointed in particular to the decrease in the amount of land that was used for agriculture as well as the increase in cost of land (Sombart 1902b: 116–119). The second was the new formation of the agricultural condition. This implied the fundamental change from the old patriarchal labor relation to the modern capitalistic means 1

The term “Verfassung” is one of the most problematic of German terms because it is usually rendered “Constitution” as in “Weimarer Reichsverfassung” (Weimar Reich Constitution”) but it also means “condition” or even “formation.” It is in this use that Sombart employs the term “Verfassung.”

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of labor. He cited four factors which influenced this shift: (1) the change from hand thrashing to machine thrashing, (2) the disappearance of the old, tiny cottages that the agrarian laborer and his family rented from the estate owner, (3) the shift in terms of seasonal work, and (4) the reduction of forest work (Sombart 1902b: 124). The third change was the reduction of “income” that the agrarian worker could count on. Previously, the agricultural laborer would count on his wife and children to tend to the family’s goat or cow and that animal could help provide milk that the family could use themselves or to barter with others. This practice disappeared in different degrees in various areas in Germany, but it was reduced in almost all parts of the country (Sombart 1902b: 126– 129). Sombart’s general point was that labor conditions changed during the second part of the nineteenth century—changes which made farming much easier and more productive for the land owner but much harder and less beneficial for the land laborer. Sombart addressed the notion that this should be regarded as a positive for the agrarian worker. After all, it prompted the end of the medieval agricultural practices and the introduction of the modern state. It also seemed to mean the expansion of the household industries, and Sombart pointed to the increase of household weavers which went from 2,693 in 1831 to 4,447 thirty years later. However, he also noted that in 1840 there were 6,072 and even by 1846 there were still 4,515. His point was that in 1861 there were more than in 1831 and that the numbers had increased by 1840, but had decreased every year after that (Sombart 1902b: 130–131). This decline in household industries was seen all over Germany and in all kinds of household and small family firms. Two examples are very telling: in Prussia, the number of small distilleries went from 22,988 in 1831 to 7,771 in 1865, and the number of breweries went from 6,890 in 1839 to 3,683 in 1864 (Sombart 1902b: 140– 141). Sombart provided almost ten pages of additional examples of how the old agrarian economic life was replaced by the modern capitalisticrationalistic approach. He concluded chapter five with two observations: one, that many agricultural laborers were so disillusioned by these fundament changes that they left the land and two, that many of them chose to move to Germany’s growing cities but many more chose an even greater change and that was to leave their native land in the search for lands of

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better opportunities—including Great Britain (“the land of capitalism”) (Sombart 1902b: 152–153). The sixth and seventh chapters contain page after page of statistics and facts about economic activity in Great Britain, Belgium, Switzerland, and Italy and these pages are neither relevant nor interesting for the account of modern capitalism. It is also quite possible that Sombart’s numbers were slightly off or even wrong, but those issues are better left to the economic historian and not someone attempting to elucidate Sombart’s theory of capitalism. There is a fundamental shift in Sombart’s account with the five chapters which compose the second main section of the “Zweites Buch.” Sombart announced his new direction with the second main section’s title: “Origin and Essence of the Modern City” (“Ursprung und Wesen der modernen Stadt”) (Sombart 1902b: VI, 176). There are three things to note about the opening chapter of the second main section: (1) that the theme is taken from Adam Smith’s Wealth of Nations and is a reference to the importance of towns in surplus produce, (2) there are pages of statistics which serve to show the massive increases in various areas, (3) that in the second half of the nineteenth century, the populations of cities in Germany as well as in Austria, France, and England grew rapidly and exponentially (Sombart 1902b: 176–186). Having provided the statistical proof for this claim, Sombart turned to explaining the “Tasks of a Theory of Cities” (“Aufgaben einer Städtetheorie”). Sombart insisted that in the dearth of theories about cities, he felt it necessary to begin his theory with some remarks about methodology. He complained that what is often put forth as an argument is often no more than a tautology and he offered as an example of the claim that traffic creates the city. In contrast, he indicated that his theory had three tasks: (1) to uncover “the causes” (“die Ursachen”), (2) to discuss “the objective conditions” (“die objektiven Bedingungen”), and (3) to reveal “the effects of the creation of cities” (“die Wirkungen der Städtebildung”) (Sombart 1902b: 187). He admitted that the search for “causes” is difficult because there is no single motive which causes someone to leave the land and move to the city. Just as thousands chose to do so it is likely that those thousands each had his own motive or reason to do so. Some may have been drawn to do so; others may have felt forced. There are similar

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difficulties in attempting to determine the “objective conditions”—that there is a multitude of them. It is, however, less difficult to ascertain the “effects” of city creation. In fact, the “essence of the city” (“städtisches Wesen”) has frequently been described as “simply civilization” and as a “new culture”, and as the “Asphalt Culture” (“Asphaltkultur ”) (Sombart 1902b: 190). However, these approaches are insufficient because they overlook the economic factor. Those who have considered the economic factor have provided some much-needed clarification of what a city is, it is a place which does something. Sombart praises Wilhelm Roscher and Adam Smith. In particular, he singles out Smith’s observation that “the city lives from the surplus of the land” (“die Stadt lebt vom Überschuss des Landes”) (Sombart 1902b: 193–194). But Smith and even Roscher overlooked the main phenomena of the city—capitalism. Sombart insisted that only by recognizing the “necessary connection of the phenomenon of the city with the dominant economic systems” (“notwendigen Zusammenhangs des Städtphänomens mit dem herrschenden Wirtschaftssysteme”) can the tasks of the theorist of the city be accomplished. His task is to inquire into the “essence of the capitalistic city” (“Wesen der kapitalistischen Stadt”). To accomplish this, Sombart maintained that (1) he would investigate the direct and the indirect motivations to move into the city and (2) he would investigate the capitalistic interests connected with the city (Sombart 1902b: 194–195). The focus of chapter ten is on “The Origin of the Capitalistic City” (“Die Genesis der kapitalistischen Stadt”) and Sombart began with the assertion that the “mother” (“Mutter”) of the modern city was the “trade city” (“Handelsstadt ”) and he emphasized the crucial role that the tradesmen played in the centuries leading up to the development of the modern capitalistic city. He also pointed to the role that industrialization played in urbanization and he cited the textile industries in cities such as Leeds and Birmingham in England and Paderborn and Iserlohn in Germany. He also pointed out that these cities did not simply evolve from being “trade cities” and become textile centers; they also were centers of consumption (Sombart 1902b: 196–198). Sombart directed attention to general consumption but he also pointed out how certain medieval cities transitioned from the being artisan centers for the rich to being centers for the creation of luxury goods for a larger cliental. By

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this, Sombart meant a larger group of nobles—those who had the means to buy the increasing luxury goods and these cities were no longer in Italy but Paris in France and London in England (Sombart 1902b: 202–203). In comparison, Berlin began its transition later than Paris and London, but once it began late in the eighteenth century, its transformation was rapid (Sombart 1902b: 205). After a number of pages of statistics Sombart outlined some of the factors which led to the increase in urbanization. He suggested that there were two major factors, both of which involved centralization: the centralization of industries and the centralization of enterprises. Sombart also suggested that these processes of centralization were prompted by the change in sources of energy. By moving from wood to coal, firms were able to obtain fuel in a faster and more reliable way. Furthermore, the main industries required further manufacturers: what Sombart called the “help industries” (“Hilfsindustrien”), the “complement industries” (“Komplementärindustrien”), and the “supplemental industries” (“Supplementärindustrien”). Examples of the first were chemical industries; examples of the second included coal industries; and examples of the third included smaller industries which provided sustainable goods: weaving and mining (Sombart 1902b: 211–212). He offered as examples how cities increased in population; from the six that he gave for England it is sufficient to cite one: Manchester had 6,000 inhabitants around 1685 but had 30,000–45,000 around 1700, but grew to 393,676 by 1881. Sombart’s statistics for Germany differed from those given for England both in numbers and time frame. He provided numbers for 32 cities beginning in 1816 before moving to 1843/1849 and ending with 1900. To offer two examples: Aachen grew from 32,072 to 135,235 and Düsseldorf increased from 14,100 to 213,767 (Sombart 1902b: 213– 214). Sombart indicated that there were four factors which promoted industrial growth in cities: (1) the proximity to trade and credit firms, (2) the security of finding highly qualified workers, (3) the proximity to scientific and technological powers, and (4) the supply of especially cheap labor (Sombart 1902b: 218). Sombart built upon the draw of the city in the next chapter.

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The subtitle of chapter eleven indicates Sombart’s theme—“the the draw of the city” (“Der Zug nach der Stadt”) (Sombart 1902b: 228– 229). Sombart offered pages of facts and numbers regarding those young and old who left the land in droves for the attractiveness of the city. Sombart pointed to the ease in which they could make this journey—by improved roads and or by expanded rail (Sombart 1902b: 235). Once in the city, they found increased opportunities to work and with better pay. They also had increased chances for promotion based upon their qualifications. Sombart allowed that the small towns and villages had their pleasures that may have balanced the material advantages of the city but that the rural area lacked the one thing that the city had— personal freedom. By this, Sombart meant that the person was no longer as bound to the customs and the place of his birth; by moving to the city the person not only gained personal independence but also the freedom to move freely around his new city. In effect, the city exerted influence on the “reformulation of social life ideal” (“Umbildung des socialen Lebensideal”) (Sombart 1902b: 238–239). The entirety of chapter twelve consists of ten pages of facts, statistics, and tables on the changes in rent in German cities (London and Paris appear on the penultimate page) (Sombart 1902b: 239–249). Much of the third major section of the “Zweites Buch” is Sombart’s evidence for the expansion of consumption and again will appeal only to those concerned with historical statistics. He does, however, mention a few issues that are worth calling attention to. They are not only worth consideration in themselves but also reveal Sombart’s passion for economic reform and social justice. Sombart noted how much people spent on newly developed goods and services but he also pointed out that not everyone shared in the increase in consumption. He complained about the numbers of workers and their families who could not afford food or otherwise suffered from poverty. He provided a list of more that twenty-five books devoted just to the issue of poverty for the two decades 1830 and 1840 (Sombart 1902b: 265–267). He also drew attention to the increase in rail travel and mail service. And, he also noted the generation of telegraph messages and newspapers (Sombart 1902b: 270–289).

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It is in the fifteenth chapter that Sombart’s account returns to a subject of greater interest: the “refinement of needs” (“Verfeinerung des Bedarfs”) and the “history of modern taste” (“Zur Geschichte des modernen Geschmacks”). Sombart concentrated on the notion of “luxury” (“Luxus”) but he admitted that it was a concept that was resistant to definition. It is a matter of personal taste in the same way that “cold” and “warmth” are subjective. He added that what counted as being a luxury was also dependent on time and place. He contrasted the differences between what a French noble might regard as luxurious and what a Scottish landowner would consider as a luxury. He pointed to the differences between the “luxury” of the French Sun King and the “luxury” that Ludwig the Second regarded his nightly sleigh rides. Finally, Sombart pointed to the different ideas regarding luxury among classes (Sombart 1902b: 291–292). He also indicated that what counts as luxury may depend upon the type of material from which the item is made, the particular form that the item has, and finally, the specific purpose that the item is intended to have (Sombart 1902b: 202–293). Sombart turned his attention to modern culture and he reminded his readers that many high-class individuals looked upon the results of economic progress with a type of horror. And, many of these same people contended that the beginning of mass-produced items was wrecking decent taste. Capitalism may have expanded the numbers of goods that people could afford but capitalism was also regarded as the “destroyer of good taste” (“Zerstörer des guten Geschmacks”) (Sombart 1902b: 299). He considered how “good taste” seemed to have disappeared in Germany and the United States; England has also lost it in the early part of the nineteenth century but seemed to have reacquired it in the later part of that century (Sombart 1902b: 305–310). But he concluded the chapter by pointing out that what counts as tasteful changes over time and he pointed specifically to differences in German preferences in types of furniture compared to previous several decades (Sombart 1902b: 317–318). Sombart wrote about mass production and urbanization in the sixteenth chapter and he stressed again how manufacturers were drawn to cities. But he also stressed how entrepreneurs started up factories in order to satisfy the need for modern products. He pointed especially to the

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wide variety of firms needed to build housing: stones, doors, windows, flooring, staircases, lighting, heating, tables, and chairs are just some of the items needed to construct a home and to make it livable (Sombart 1902b: 321). The need for mass production leads to product uniformity and the impact of this process is what he called “urbanization of needs” (“Urbanisierung des Bedarfs”) (Sombart 1902b: 325). Sombart connected this with his theme of the seventeenth chapter on the mobilization of needs, which he subtitled “On the Theory of Style” (“Zur Theorie der Mode”). He contrasted the needs of the older generations whose members had little use for style; what was important for them was the item’s durability. People of the past chose things that they thought would last a long time whether the items were clothes, furniture, or household goods. In contrast, there had been a growing sentiment regarding massproduced objects—what mattered was not longevity, but style. This not only sped up the life expectancy of the objects, but it also increased the market for used things. Sombart emphasized that the need for something new and different also prompted people to move and that they were often seeking something “better.” He drew attention to how these desires were causing a new sense of nervousness, “the restlessness and unsteadiness of their inner essence” (“die Rastlosigkeit und Unstetigkeit ihres inneren Wesens”) (Sombart 1902b: 329). He pointed to three aspects of modern style: (1) the rapid increase in used items; (2) the “absolute universality of style” (“absolute Allgemeinheit der Mode”)—meaning that the regional and local differences in style are replaced by the general standard; and (3) the “racing tempo of the change of style” (“rasende Tempo des Modeswechsel”)—here Sombart notes how women’s clothing styles can change four to five times during a single season (Sombart 1902b: 332– 333). It is not just the women who desire the newest trend—many men also want to be in vogue (Sombart 1902b: 338–340). Sombart concluded the third main section with the observations that there is “a wild hunt for eternally new styles” (“ein wildes Jagen nach ewig neuren Formen”) and that style is “capitalism’s favorite child” (“Kapitalismus liebstes Kind”) (Sombart 1902b: 344–345). The fourth main section of the “Zweites Buch” has five chapters of differing lengths. The eighteenth and nineteenth chapters are both short—the first one briefly covered the expansion of trade while the

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second one discussed the decrease in traveling trade. It is in the lengthy twentieth chapter that Sombart explored the new organization of what he referred to as “detail trade” (“Detailhandels”). Sombart did not offer a definition of this term but instead provided five categories of it: (1) textile wares, (2) metal wares, (3) glass wares, (4) gallantry wares, and (5) old wares. The first three classifications are mostly self-evident; however, the fifth one appears to mean used goods while it is unclear what Sombart had in mind for “Galanterie-oder Nürnbergerwaren”) (Sombart 1902b: 368–369). But Sombart’s point was that the pre-capitalist idyll of being concerned only with the steady satisfaction that comes with earning one’s daily bread has been replaced with the restless, feverish, and nervosity of the modern capitalistic competition (Sombart 1902b: 371–372). It is no longer a matter of earning one’s daily bread; instead, it is now the perpetual striving for profits. This is a matter of developing new business principles and they revolve around the questions of how to lure the customer in and then make him return. Or, as Sombart suggested: “to chain him” (“ihn zu fesseln”) (Sombart 1902b: 373). The first task is accomplished by ads (“Reklame”). Sombart pointed out that there had been advertisements for many years and for many instances other than the sale of goods. However, modern advertising has expanded in terms of both quantity and quality—and not always for the good. He pointed in particular for the deceptive advertisements for curing children’s illnesses, not to mention the out and out swindles. The second task is accomplished by having seasonal and clearance sales (Sombart 1902b: 373–379). Sombart offered twenty pages of statistics and facts but he returned to the topic of sales in the twenty-first chapter. What Sombart referred to as “help organizations” (“Hilfsorgane”) were the “professional press” (“Fachpresse”), the middle men, and agents. Each of these was employed to impress upon people the goods that were being offered and the absolute need for the people to buy them (Sombart 1902b: 401–407). He expanded on this in the twenty-second chapter where he discussed the entrepreneur’s need to attract new customers to improve his earnings. One important means for this was the gaining of new customers by recommendations. He referred to this as a type of propaganda but he also pointed to organizations which also help spread the word. Sombart concluded the “long book” by claiming that

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he had set out the new formation of economic life and had discussed the “total revolutionizing of all economic conditions” (“totale Revolutionierung aller wirtschaftlichen Verhälnisse”) (Sombart 1902b: 409–420). The “Drittes Buch” would be devoted to exposition of the theory of business competition. The “Drittes Buch” has the title “The Theory of Business Competition” (“Die Theorie der gewerblichen Konkurrenz”) and it has four main sections. The first one has only one chapter (the twenty-third), the second has three (twenty-four through twenty-six), the third has seven (twenty-seven through thirty-three), and the fourth section has four chapters (thirty-four through thirty-seven) and an appendix (“Exkurs”). As Sombart often did, he began the “Drittes Buch” with the introductory chapter on the “Concept and Essence of Competition” (“Begriff und Wesen der Konkurrenz”). Sombart began by offering something of a history lesson—that the notion of competition was not regarded as being worthy of scholarly investigation until the 1880s when Gustav Schmoller, Wilhelm Roscher, and Lujo Brentano began to examine it. However, in Sombart’s opinion neither any of these three nor others like Karl Bücher and Gustav Schönberg put forth an adequate explanation for it (Sombart 1902b: 423–424). Unfortunately, Sombart did not offer a clear definition; rather, he regarded competition as being composed of two attitudes: (1) “the conflict over offering the best performance” (“Der Kampf um die beste Leistung”) and (2) “the conflict over the price” (“Der Preiskampf ”) (Sombart 1902b: 428–429). These two points may not appear to warrant much attention but Sombart’s exploration yields some critical points about modern capitalism, especially in relation to traditional craftwork. The term “Leistung” is difficult to translate as it tends to mean “performance”; however, Sombart employed the term in a slightly broader sense; that is, to cover the production of the goods and the means of delivering them. He began not so much with the production of the goods but in their delivery. Mass produced goods means that they are readily available. There is no waiting for the craftsman to decide to work on the product and then wait longer until he finishes it and then offers

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to deliver it. Instead, it is produced rapidly and delivered expedited— it gives new meaning to “fresh and new” (“Frisch und Neu”) (Sombart 1902b: 433–437). The twenty-fifth chapter is a contrast between what the craftsman and what the capitalist can offer: the former may produce something more artful and more exact but the capitalist can produce something similar but is more solid and more regular (Sombart 1902b: 441–444). Sombart noted that there is a difference in laborer—the skilled craftsman versus the modern factory worker. At first glance, it would seem that the craftsman has the advantage over the factory worker because of his skill. However, Sombart pointed out that the master craftsman does not produce his goods single handedly. Instead, he relies on his apprentices who may be lazy, infirm, or simply drunk—thus the master has unreliable help (Sombart 1902b: 446–450). Sombart provided a sketch of artisan history in chapter twenty-six before turning to the price conflict in chapter twenty-seven. The craftsman is at a disadvantage in determining the price of his wares, whereas the capitalist recognizes the need for flexibility in setting his price. That is why there was really no competition in terms of price fluctuation for craftsmen where there is with capitalists. But it is here that Sombart pointed to the ways in which the capitalist can lower the price: by reducing the quality of the product and/or by using inferior materials. He pointed specifically to the declining worth of surrogates which he called “the favorite child of modern industry” (“das Lieblingskind der modernen Industrie”) and he listed some favorite substitutions. Surrogates of material include: cotton is substituted for silk; artificial leather replaces leather; and cheap wood is used instead of “noble wood.” Surrogates of forms include: stamped metal instead of forged metal; pressed leather rather than cut leather; and glued book binding for sewed binding. Sombart added that this not only cheapened the article itself but made repairing it difficult if not impossible (Sombart 1902b: 468–471). The twenty-eighth chapter dealt with the means of lowering prices and the twenty-ninth chapter focused on the production of the goods. Sombart considered three issues: (1) the conditions of labor, (2) the objects of labor, and (3) the means of labor. What he meant by (1) is primarily the location of where the items are made and here the capitalist

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is both advantaged and disadvantaged. He is disadvantaged because his factory needs considerably more space than the craftsman’s work shed behind his house. But the capitalist has an advantage in that he has more means for paying for the land than the craftsman—he can bank on future profits to secure the necessary loan (Sombart 1902b: 472–477). What he means by (2) is that the capitalist has a similar advantage in purchasing the materials necessary to make the products. Again, he is able to buy on credit (Sombart 1902b: 477–482). Where the capitalist has the greatest advantage is in the means of production. This is the point of (3): the craftsman owns his own tools but they can be used only by him and when he has the energy, interest, and time to use them, otherwise they lay idle. In contrast, the capitalist can use his most important tool—the machine—almost anytime he wants. All he needs is some people with enough minimal training to use the machine properly. Sombart provided four pages of comparisons between old labor and new labor—all indicating that modern machines allow faster and more regular quality at a lesser labor rate than comparable handmade articles (Sombart 1902b: 484–487). The conflict over labor power is the focus of the thirtieth chapter and it is again filled with statistics about contrasting labor costs in crafts industries and factories. The bottom line is that while the cost of labor remains the same for the craftsman, the cost of labor declines because of the increase in the number of people who labor for the capitalist (Sombart 1902b: 492–503). A similar wall faces the craftsman in terms of production; he can only produce so much in a day. In contrast, the capitalist has several means of speeding up production and expanding it. He can lengthen the hours of labor, he can intensify the use of the machines, and he can count on labor throughout a longer season. In the conflict between experience and technology, it is apparent that the latter is winning (Sombart 1902b: 508–513). The next two chapters set out this conflict in great detail along with a plethora of numbers. It is evident from chapters thirty-two through thirty-four that the capitalists were winning if not won the economic battle. However, Sombart tried to argue in chapters thirty-five through thirty-seven that craftsmen had not totally lost. Sombart pointed to two trends that he thought supported his positive outlook: the dream of a craftsmen’s union

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and the increase in apprentices. Yet, the first one was only a dream and the second was simply a mirage (Sombart 1902b: 544–546, 573–582). At the conclusion of Moderne Kapitalismus he was forced to confront the drawbacks of modern capitalism and he did so in several works. The result of some of this rethinking is in Das Proletariat.

Proletariat The slender volume Das Proletariat is an important contribution to Sombart’s development of the notion of modern capitalism but it is also a significant work in its own right. Both of these are sufficient reasons for including it in this chapter. Before discussing it in detail, it is helpful to offer the extraordinary context of its place in Martin Buber’s series of monographs. Martin Buber is best known for his book Ich und Du (I and Thou); however, he did not write that book until 1923. When he was formulating his series Die Gesellschaft (The Society) he was a virtually unknown 32 year old. Buber set himself high standards for his sociologicalpsychological series. Each volume would be approximately 100 pages in length and would be intended to provide a clear and scholarly account of the topic. The monographs were also to be valuable literary contributions designed to educate the readers. In addition, each monograph was to be inexpensive enough to reach a wide audience (Buber 1906a). In a detailed “Geleitwort” Buber spelled out how his collection would differ significantly from others. While single books would address single issues, his “collections” (“Sammlungen”) were intended to socialize the issue. Furthermore, where a journal is “discrete”, his series is intentionally “indiscrete.” It is intended to make the reader uncomfortable—in the service of culture. Buber insisted that humans do not live in isolation but must live together. His Gesellschaft was designed to uncover problems and offer some possible solutions. In other words, Buber intended to provoke (Buber 1906b: V–X, IV). Buber was able to attract 25 of leading German scholars to write the first series of his monographs with another 25 planned for the second series. The first group included Georg Simmel who would write on religion; Ferdinand Tönnies who would

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write on “customs” (“Sitte”); Eduard Berstein who would write on the strike; and Gustav Landauer who would write on revolution. It was, however, Sombart who Buber chose to write the first book in the series. It was an indication of Sombart’s reputation that he had established with Der moderne Kapitalismus. Sombart’s Proletariat was clearly intended to be provocative. Sombart began his Proletariat in a scholarly way: he provided a definition of the proletariat and referred readers who wanted a scholarly account of modern capitalism to his Moderne Kapitalismus. That account might be needed because Sombart regarded the proletariat as a product of modern capitalism. The proletariat was a modern class of wage workers who lacked the means for individual self-sufficiency. Unlike the capitalist whose ultimate goal is the accumulation of money, the proletariat lacks the means of basic survival. Sombart sets out his own goal which was to explain the essence of the proletariat as a whole and that involved setting out the differences to other groups of people (Sombart 1906: 3–4). Sombart continued with his scholarly account by providing a full-page list of the type of workers and their numbers in Germany (Sombart 1906: 7). But he hints at the provocations to come by referring to the proletariat as “full-blooded proletarian” (“vollblutproletarier”) and to describe the proletariat child as one who knows nothing of those things that normal children do. The proletariat child knows nothing about a home and nothing about nature. Sombart contrasts what the proletariat child does not know in comparison with the “shepherd boys” (“Hirtenbuben”)—the city dweller does not recognize the bird songs and cannot understand what the bird’s flight signifies. The city dweller does not grow up with animals in the fields and has lost the “instinctive security of existence” (“Instinktmäßig-Sichere des Daseins”) (Sombart 1906: 5, 9). While the city dweller may have learned from books, magazines, and the street, he has replaced the natural rhythm of life with one that is artificial and monotonous. Sombart noted that the claim that the proletariat has no “fatherland” (“Vaterland”) may be correct, but it is more accurate to state that he has no “homeland” (“Heimat”). Sombart asks where should the proletariat child feel “at home”? and he answers, in the stench of the suburban streets or in the industrial city where he lives in a “room” (“Stube”) with his entire family; a room in a building with

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similar cramped quarters where hundreds of other families are forced to live. Sombart stresses the monotony of this existence, insisting that such apartment buildings are found in every major German city with thousands of workers and their families who try to survive (Sombart 1906: 10–11). Sombart also contrasts the modern factory worker with the traditional agricultural laborer—that even the poorest of the rural poor had a little house, a couple of animals, and a bit of land to tend. It might not have been much but the laborer’s family could hang their heart on it. In contrast, the industrial worker has virtually nothing; they need only a wheel barrow to move all of their worldly possessions (Sombart 1906: 13). Sombart continued his contrast but he moved to compare those who lived in villages with the modern city worker. Those in the village shared their lives and shared their work—it was a community. In the city, each individual is cut off from all others. He compared the sand pile with the individual grain of sand. Sombart did not deny that life in the village could be hard; he readily admitted that the villagers often faced difficulties. However, it was a community with common traditions: songs, festivals, clothing, and even the enemy. The community watched over the individual and guided him on the right path. In contrast, the proletariat knows nothing of community—he has no natural home; there is no place for him to feel homesick. Sombart insisted that the proletariat has no social sense—no special clothes, no important festivals, and no sense of connection with others. There is no common authority, no sense of security, and no feeling of belonging (Sombart 1906: 14–15). Sombart provided an extensive discussion of traditional family life and he divided it into three kinds of communities: the nutritional community, the living community, and the learning community. Each of these provided the material and spiritual basis for the common life (Sombart 1906: 16–19). What the village life also provided was a sense of home. Sombart’s term is difficult to translate: “Häuslichkeit” but it is clear that for him it has both a physical and a spiritual sense. It is physical in that it is a dwelling with a garden and a yard, with a basement for storage and a number of rooms to live in. He emphasized its importance—without this sense of home there is no family community (“Ohne Häuslichkeit keine Familiengemeinschaft”) (Sombart 1906: 20). Sombart returned

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to offering statistics for the number of people living in overcrowded apartments in German cities. “Overcrowded” meant when more than six people lived in one room or when more than eleven lived in two rooms. He noted that in Berlin, more than 30,000 people lived in such overcrowded one- and two-room apartments. He repeated for emphasis: “One thinks: 6 persons and more in 1 room, 11 and more in 2 rooms!” (“Man denke: 6 Personen und mehr in 1 Raum, 11 und mehr in 2 Raume!”) (Sombart 1906: 23). There follows a litany of fourteen cases of people suffering from various illnesses living in crowded rooms with horrifying problems. The rooms were dark, they were often smoky, some had low ceilings, and many of them smelled of illness and even death. Sometimes there was only one bed to share for a family of four; and other times husband and wife had to take turns sleeping (Sombart 1906: 24–28). Sombart added that many of these apartments were near factories so the inhabitants not only had to deal with the problems in the living quarters but that the factories contributed additional problems: pollution, noise, and simply masses of people laboring under terrible conditions. Sombart asked how one could expect any of these people to live a normal, moral life when there is nothing but poverty, sickness, and death. How can one expect from these people a feeling of sympathy, a regard for others, and a sense of belonging—especially since the sounds of love and hate come through the open windows (Sombart 1906: 30–31). The next topic for Sombart is work. Not only did the capitalistic spirit require people to move from one place of employment to another for seasonal work but that its factories demanded that workers labored during night shifts. Sombart discussed how these labor practices destroyed the family. The father is frequently away from the room: he might be at a poker game until five in the morning and then he may just go to the station to catch his train to work. He may not have time to come home for the midday meal and choose instead to go to the local pub for some bread and beer. The worker may be fortunate that his wife can bring him some food in a basket, but Sombart describes these poor women as not smiling, no joy but tired and depressed. He suggested that much of this is because when the husband does return after work he has no strength and therefore no interest in his wife and his children. The

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single day of the week that the worker “can be human” (“er Mensch sein kann”) is Sunday. In the summer, he may take his family to the beer garden and in winter they may go to a concert. That is the single day that the worker can see some sunshine and help the seed of the family happiness grow. But, as Sombart wrote “it is however, God knows, too little” (“ist es aber, weiß Gott, zu wenig”) (Sombart 1906: 33–39). Sombart turned from discussing the working man to the working woman. There are two gates open to her: to work from home or to work at the factory. Women had been working from home for centuries and while the handwork might have been drudgery, the mother would be at home and may be able to watch the children. But the factory woman has to leave the house early, rarely comes home midday, and frequently returns only in the evening. Sombart complained that that meant no fire in the stove and therefore no real meals. And the children?—they become “street children” (“Straßenkinder”) (Sombart 1906: 42–43). Sombart readily admitted that village children often spent much time outside, but he insisted that they played together as a group and adults were often around to watch them. In contrast, the street kids do not really know each other and have no real friendships. Their parents also are unfamiliar with each other—there is no village community, only the isolation of the city. The village children can play in the fields or in the town square, but the street children have no place to play except possibly in the street (Sombart 1906: 43–44). Sombart also admitted that there is prostitution in the village but he insisted that it is more manifest in the city and that is because the “protective walls of the house, the homeness” (“schützende Mauer des Hauses, der Häuslichkeit”) is gone. There is nothing to protect the child’s innocence (Sombart 1906: 44–45). While Sombart complained about the difficult life that the male worker lived and he bemoaned the terrible life that the female worker endured, he saved his most indignation and outrage for the plight of the child worker. The child’s “laughter and singing” (“Lachen und Singen”) were replaced with the “lifeless mechanism of a factory” (“leblosen Mechanismus einer Fabrik”). Children were forced to work not just in the factory, but also in the mine. While most children began to work in mines at the age of eight, Sombart insisted that some children were put

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to work there as young as five and six (Sombart 1906: 46–48). Sombart’s outrage extended to more than just children working; he was appalled that teens were forced to work in factories for 12, 13, and even 16 and 18 hours without any real break (Sombart 1906: 49–54). Sombart had no difficulty in admitting that during ancient times people were often forced to work and he allowed that working conditions were mostly unfavorable in the Middle Ages. But he insisted that even masters and slaves shared a common morality and he maintained that the medieval master and his apprentice had a familial relation. Again, he referred his reader to the first volume of Moderne Kapitalismus. As he put it, neither the slave nor the apprentice was ever alone (Sombart 1906: 56–58). In contrast the modern factory worker must fear for his work: “For no work means for him: no wage, but no wage: no bread, no life” (“Denn keine Arbeit bedeutet für ihn: keinen Lohn, kein Lohn aber: kein Brot, kein Leben”) (Sombart 1906: 60). For the young and healthy worker, there is some joy in work, but for the old and tired worker there is fear that he will not be healthy enough to work (Sombart 1906: 60– 61). It is similar for the person looking for work but is unable to get it. He wrote of the woman sitting at home waiting for her husband to come home with the news that he found work. But when he does appear, he has bad news. Sombart wrote that the “same song” plays for four weeks; the difference is that the bills keep piling up. Sombart noted that the family was forced to pawn whatever they could but the landlord was threatening eviction because of past-due rent. The man that Sombart describes is not a deadbeat; he is more than willing to work from morning to night. It is unfortunate for this man, but Sombart insisted that there are hundreds if not thousands of people who want to work but cannot find positions. Sombart maintained that this was a product of the rhythm of the “capitalistic economic system” (“kapitalistischen Wirtschaftssystems”). It is worth quoting Sombart’s trenchant observation: Thus, a hundred thousand and in bad times millions of people who are eager and able to work are in our lands of culture driven to need and hunger because society has no work for them.

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Also Hunderttausende und in schlimmen Zeiten Millionen arbeitswillige und arbeitsfähige Menschen sind in unseren Kulturländern der Not und dem Hunger preisgegeben, weil die Gesellschaft keine Arbeit für sie hat. (Sombart 1906: 63)

Sombart turned from unemployment back to employment and again contrasted modern industrial labor with traditional craftsmanship. Previously, one learned one trade and moved from being an apprentice to a master of the trade. In the modern factory system, one changes jobs even within a factory so one not only lacks a trade but lacks a sense of what it means to work. In addition, whereas the apprentice needed to learn the trade, the factory worker does not need any education—the machine does not need an educated worker. Furthermore, there is no sense in referring to the factory worker as having a “calling” (“Beruf ”); rather, the proletariat experiences “the same tortuous monotony drips in the hour in the day, the day in the year, the year in the life” (“In qualvollem Einerlei rinnt die Stunde in den Tag, der Tag ins Jahr, das Jahr ins Leben”) (Sombart 1906: 66–69). In addition, there is the whip—not an actual whip, but the whip of the threat of being fired. Again, Sombart emphasized the monotonous life of the modern worker: day in. day out the worker labors and when he finally is at home there is no enjoyment and little rest. The “room” (“Stube”) is overcrowded and without comfortableness, without peace. Or he can go to the “pub” (“Kneipe”) which is also a smoke-filled, stinking place. Month by month, year by year, Sombart asked what kind of life is that? (Sombart 1906: 73–74). Sombart moved to draw conclusions. Modern capitalism destroys the workers’ lives, it corrupts the workers’ souls, and it kills all reception of values (Sombart 1906: 76–77). Sombart had described the proletariat lives in all of its terrible details, but he was convinced that the proletariat could have a far better future. He was convinced that workers thirsted after a better life; one in which they were better educated and one in which they could enjoy life’s little pleasures. The future that Sombart envisioned was one in which the family life would be resurrected and the community would be restored. Sombart was convinced that the modern worker was still an Aristotelian “zoon politikon” and he believed that the workers would achieve better lives by adopting “socialism and social

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movement”—it would be a question of determination and a matter of time (Sombart 1906: 85–88).

Concluding Comments This chapter was devoted to two important yet different works on modern capitalism. Der moderne Kapitalismus was and is Sombart’s most influential work. It is a massive, scholarly book which contained pages and pages of facts and statistics. In contrast, Das Proletariat is not a massive scholarly tract but a fiery, polemical pamphlet. Each represented different sides of Werner Sombart—the scholar and the partisan. In the volumes that he wrote in the decades after 1910, each side would come to the forefront—depending on the circumstances. And, both volumes should be enough by themselves to have secured Sombart’s place near, if not alongside of, Max Weber as one of Germany’s leading social economists. For the next two decades that was the case.

References Buber, Martin (1906a) “Prospekt.” In Sombart 1906. No page numbers. Buber, Martin (1906b) “Geleitwort zur Sammlung.” In Sombart 1906. V–XIV. Kant, Immanuel (1976) Kritik der reinen Vernunft. Nach der ersten und zweiten Original-Ausgabe neu herausgegeben von Raymund Schmitt. Hamburg: Felix Meiner Verlag. Sombart, Werner (1902a) Der moderne Kapitalismus. Erster Band. Die Genesis des Kapitalismus. Leipzig: Duncker & Humblot. Sombart, Werner (1902b) Der moderne Kapitalismus. Zweiter Band. Die Theorie der kapitalistischen Entwicklung. Leipzig: Verlag von Duncker & Humblot. Sombart, Werner (1906) Das Proletariat. In Die Gesellschaft. Sammlung sozialpsychologischer Monographien. Band I. Frankfurt am Main: Literarische Anstalt Rütten u. Loening.

3 Sombart and Capitalism 1911–1915

Introduction Werner Sombart had established his reputation as a scholar and a political thinker prior to the publication of Der moderne Kapitalismus but he regarded his two-volume work as the crowning of his academic achievement—at least at the time. Sombart awaited the response and it was rather rapid. This chapter begins with that reception before moving to lengthy examinations of the five major books that he published between 1911 and 1915. The first one was, and is, his most contentious book because many people believe that Die Juden was anti-Semitic. An actual reading of this book strongly refutes that criticism. Two years later, Sombart published two companion volumes which dealt with the genesis of modern capitalism: one on luxury and capitalism and the other on war and capitalism. Although these two books did not provoke an uproar like the book on the Jews, some scholars dismissed one or both out of hand because Sombart was the author. The same year saw the appearance of a third book. Like Die Juden, Der Bourgeoise was a large volume, and like the three previous books, it was another one of Sombart’s attempts to uncover the roots of the “spirit” (“Geist”) of modern capitalism. The © The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 C. Adair-Toteff, Werner Sombart and the ‘Spirit’ of Modern Capitalism, Palgrave Studies in Classical Liberalism, https://doi.org/10.1007/978-3-031-54423-1_3

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final volume considered in this chapter was written at the end of the first year of the Great War and the beginning of the second. Sombart made no attempt to hide the fact that this was a political pamphlet and not a scholarly treatise. Nonetheless, he is comparatively restrained in his delineations of the English enemy and in his defense of his fellow Germans. He might have exaggerated business practices of the English and embellished the heroic attitude of the Germans, but he did not describe the enemy as blood-thirsty tyrants. What he does do in part is place a slightly different coloring on the “Geist” of modern capitalism.

The Reception of Der moderne Kapitalismus That Sombart’s Der moderne Kapitalismus prompted a large response is understandable given Sombart’s reputation and the nature of his book. Starting in 1903, more than thirty scholars reviewed Sombart’s book and these reviews ranged from brief reviews to full-scale review essays. The authors of these reviews were representatives of economics, sociology, philosophy, and history. These authors included Friedrich Naumann, Ferdinand Tönnies, Georg von Bulow, Hans Delbrück, Willy Hellpach, Wilhelm Lexis, Franz Oppenheimer, Gustav Schmoller, Rudolf Hilferding, Conrad Schmitt, Bernhard Harms, and Alfred Vierkandt. The last two scholars will play crucial roles in Sombart’s writings in the early 1930s. In his impressive collection Sombarts “Moderner Kapitalismus” Bernhard vom Brocke reprinted four of the most important review essays and they show a varied approach to Sombart’s book. Conrad Schmidt published “Sombarts Buch über den modernen Kapitalismus” in the Sozialistische Monatsheft in the year that Sombart’s book first appeared. Schmidt (1863–1932) is virtually forgotten now but in 1902 he was one of the leading socialist thinkers. He not only corresponded with Friedrich Engels but was a major figure in socialist journals, including the Sozialistische Monatsheft. He had received his doctoral degree in 1886 but failed to become “Habilitated” in Halle and Leipzig because of his socialist politics. He was not appointed professor until 1918 in Berlin (Brocke 1987: 124, note).

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Schmidt began promisingly enough by praising Der moderne Kapitalismus for being an excellent discussion of the genesis and the development of capitalism. He also complemented Sombart for his methodical use of historical material and he lauded him for his theoretical approach. Finally, he regarded Sombart’s passion positively, especially when it was joined with conceptual vigor. However, Schmidt’s review almost immediately became a defense of Marx—Sombart’s approach was merely derivative. Schmidt indicated that the greatest manifestation of the “theoretical-methodical spirit” (“theoretisch-methodischen Geistes”) in economics was Marx (Schmidt 1902: 124–125). In fact, more than half of Schmidt’s review of Sombart’s book is nothing more than praise for Marx’s approach to capitalism. When Sombart departed from Marx, his account of capitalism faltered, but when Sombart followed Marx, then his discussion of the origins of capitalism succeeded (Schmidt 1902: 128–130). Schmidt finally focused on Sombart and praised him for emphasizing the importance of craftwork and by showing how modern law and modern technology were being used to supplant craftwork. But Schmidt concluded with his emphasis on Marxist doctrine—while he praised Sombart’s two volumes for their breadth and depth in uncovering the genesis and the development of capitalism, he was waiting for Sombart to reveal the necessitated overcoming of capitalism by socialism (Schmidt 1902: 131–134). Friedrich Naumann shared some socialist inclination with Schmidt but his review was unlike Schmidt’s hymn to Marx. Naumann published his review of Sombart’s book in Die Zeit in four installments during 1902. Naumann (1860–1919) was an extraordinary figure: he was a nationally known preacher and an important social and political commentator. He was friends with Max Weber and influenced Theodor Heuss. Naumann made his opinion of Sombart’s book fully evident in his first several sentences. After praising it as a really significant work and a gift to German scholarship, Naumann described it as Sombart’s “life work” (“Lebenswerk”). Naumann noted that the first volume was 670 pages and the second one was only slightly smaller than the first (Naumann 1987: 107). He suggested that he would deal with the various sections before providing his estimation of the value of Sombart’s book. Before

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doing so, Naumann indicated that the schools of Roscher and Schmoller (by which he meant the older and the younger schools of German Historical Economics) had given rise to countless individual studies of modern economic thinking. However, all of those lacked a guiding idea and they each failed to provide something essential. This is what makes Sombart’s contribution so groundbreaking. Naumann praised Sombart for providing an historical account with a distinctive historical approach. He likened economic history to a large carpet that dazzled by its colors and its textures but that “One must have courage to lift the carpet up high in order to know what is beneath it” (“Man muß den Mut haben, den Teppich in die Höhe zu heben, um zu Wissen, was darunter ist”) (Naumann 1987: 108). Naumann also praised Sombart for showing that capitalism differed from medieval craftwork in its rational spirit. Naumann acknowledged that Sombart followed Marx in his discussion of capitalist terminology and concepts but he insisted that socialists and non-socialists were handicapped by Marx’s “purely dogmatic elements” (“rein dogmatischen Elementen”). In Naumann’s view, Sombart’s great service to the reader was to show his differences with Marx by replacing Marx’s philosophical construct with his historical construct (Naumann 1987: 109). Naumann’s next installment was devoted to Sombart’s history of capitalism. He noted that socialists had more than fifty years to contemplate Marx’ notion of capitalism. Socialists and non-socialists also had close to fifty years to observe how socialism failed to gain traction whereas capitalism was succeeding. The question is how best to explain capitalism’s domination. This is the critical question and so the issue is to what degree does Sombart address it. Naumann pointed out that at least Sombart was willing to tackle the issue and he faulted Conrad Schmidt for writing a “not very thorough review” (“nicht sehr grundsätzliche Besprechung”) and he criticized Karl Kautsky and others for ignoring Sombart’s book (Naumann 1987: 110–111). Naumann explained that what has been needed was a book steeped in philosophy and history and not “poetic construction” (“dichterische Konstruktion”). Rather than Marx’ ideal of the future, Sombart’s book is reminiscent of Hegel’s philosophy of history. But Naumann clarified: “Not as if he spoke in the heavy tone of high philosophy! Just the opposite!” (“Nicht als ob er im schweren

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Tone höher Philosophie sprach! Im Gegenteil!”) (Naumann 1987: 111). Rather it is like a naturalistic novel which is welcome, but more than that, Sombart places modern time before our eyes as a unity. It is the concept of capitalism that is this unity. Naumann explained that Sombart regarded the history of the West as having three periods: (1) the time of the landed nobility, (2) the time of the craftsmen, and (3) the time of capitalism (Naumann 1987: 111). Naumann revealed the contrast between Marx’ notion of capitalism and that of Sombart. For Marx, it was a type of “society” (“Gesellschaft”), but was something connected to the state and to ethics. Sombart revealed capitalism to be something fundamentally different: it is something “impersonal, unstately, a lifeform” (“Unpersönliches, Unstaatliches, eine Lebensform”) (Naumann 1987: 112). Naumann congratulated Sombart for his scholarly coolness but he suggested that Sombart had underestimated the role that the state played in capitalism’s rise. Naumann insisted that “A history of capitalism without Napoleon and Bismarck is at the outset something that contains gaps” (“Eine Geschicht des Kapitalismus ohne Napoleon und Bismarck is von vornherein lückenhaft”) (Naumann 1987: 112–113). But Sombart was correct to note that much of capitalism developed in England. Naumann lauded Sombart for emphasizing that fact but also for his astonishing ability to describe capitalism’s development in Germany. Furthermore, Sombart was able to unify so many individual cases under an overview. Taken as a whole, they are far more than a collection. The overarching point of both volumes was capitalism’s destruction of craftwork. That is what capitalism did; what capitalism is, is what Naumann took up in his next installment. In the section on the essence of capitalism Naumann sets out the fundamental difference between Marx and Sombart. Marx regarded capital as the specific subject but Sombart focused on the “capitalistic enterprise” (“kapitalistische Unternehmung”) (Naumann 1987: 114– 115). Capital is for Marx a particular force; it is “world-dominating something” (“Weltbeherrschende Etwas”) and something ahistorical and mythological. For Sombart, capitalism is something that is done by people in places—like banks, stores, and factories. Marx investigated the inner structure of capitalism, but Sombart revealed the “victory of the new world-view and method over the old” (“Sieg der neuen

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Weltanschauung und Methode über die alte”) (Naumann 1987: 116). Naumann emphasized the “economic man” (in English) and his economic rationalism. Naumann wrote “Thus the question arises: how and where did economic rationalism as world-historical appearance occur?” (“es entsteht also die Frage: wie und wo entstand der ökonomische Rationalismus als weltgeschichtliche Erscheinung?”) (Naumann 1987: 117). Sombart’s answer was composed of different parts—part money fever, part religious enthusiasm, and part historical influence. Naumann concluded that installment with the observation that “This [capitalism] is our destiny, the cause of our greatness and of our sufferings” (“Diese ist unser Schicksal, die Ursache unsere Größe und unserer Leiden”) (Naumann 1987: 118). Naumann’s final installment was devoted to the future of capitalism. He again contrasted Marx’ enthusiasm for the future in which the workers would triumph and inaugurate communism. The failed revolutions of 1848 would be replaced by the future revolution. Naumann suggested that Marx’ three volumes of future hope have been replaced by Sombart’s sober estimation of the capitalism of the future. That is because he, like others, had recognized that Marx had erred in his diagnosis of capitalism’s flaws. The real question is what is the capitalism of the future: is it the English family firm, the German syndicate, or the American trusts? Here Sombart does not say but offers hope for the future socialism. Naumann concluded by indicating that Sombart’s book on modern capitalism had its failings and specialists would be happy to point them out. Nonetheless, the book was a major improvement over previous attempts at explaining capitalism. Sombart’s Moderne Kapitalismus was more than a “colorful bunch of statistics and single points of view” (“bunte Menge von Statistik und Einzelgeschichtspunkten”); it was a general attempt at explaining the historical concept of capitalism (Naumann 1987: 122–123). It was clear that Naumann read Sombart’s book carefully and understood his points. It is also clear that while he disagreed with some of Sombart’s reasonings; he fully appreciated what Sombart had attempted to do. Rather than thinking Sombart was inferior to Marx, as Schmidt had indicated, Naumann contended that Sombart surpassed Marx in his understanding of the genesis and nature of capitalism.

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Gustav Schmoller (1838–1917) does not need much introduction. He was professor at Halle and then at Strassburg before being called to Berlin in 1882. He was a member of the so-called “Younger Historical School of Economics” and was regarded as one of the most influential “Kathedersozialisten.” He was involved in the “Methodenstreit” with Carl Menger of the “Early Austrian School of Economics.” The “Conflict over Method” lasted years and is far more nuanced than is usually noted. However, it may be simply reduced to the fact that Schmoller valued history in economics while Menger preferred theory. Schmoller published numerous articles and reviews in the journal that he founded. His review appeared in his journal Jahrbuch für Gesetzgebung, Verwaltung und Volkswirtschaft im Deutschen Reich in 1903. Schmoller’s review is noteworthy for a number of reasons. First, Schmoller had not intended to review Sombart’s book, but the scholar he had chosen asked to be released from that obligation. Hence, Schmoller decided that he would write the review himself. Second, Schmoller recognized that he had the duty to clarify his connection to Sombart. Sombart had been his student and was now a colleague and a friend. Third, Schmoller devoted the first two pages to describing Sombart and that in itself is revealing. He suggested that understanding Sombart’s personality was the key to understanding Sombart’s work. Fourth, although Schmoller and Sombart shared a number of beliefs about modern society and economics, Schmoller made clear in his review that he did not always understand or appreciate Sombart’s ideas (Schmoller 1987: 135). Sombart’s father was a “self-made man” according to Schmoller and the boy grew up in a rich urban household. He was able to travel and enjoy much of his younger years—Schmoller did not say that Sombart had been spoiled as a youngster but he indicated that as a man Sombart always spoke his mind, regardless of the consequences. Some friends jokingly regarded him as a “salon demagogue” while some of his enemies considered him the “most-hated man.” Schmoller emphasized that Marx’ philosophy had captivated Sombart as a student and even when he had found problems in Marx’ theory, Sombart continued to hold him in high regard. But Schmoller added that Sombart admired Adam Smith and that he had insisted on individual freedom—which was as much a nod

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to the men of Germany’s 1848 Revolution as it was to the English proponents of “Manchesterism.” Yet, Sombart was close to Heinrich Braun, the editor of an influential left-wing journal. Braun would end up selling that journal to Edgar Jaffè who would engage both Sombart and Max Weber as co-editors of the newly renamed Archiv für Sozialwissenschaft und Sozialpolitik. After sketching the contents of the two volumes of Der moderne Kapitalismus Schmoller offered his assessment of Sombart’s book. On the one hand, he regarded it as one of the most important works in the history of economic thought and he considered Sombart as an equal to Smith and Marx. He praised Sombart for the richness of his choice of material and his ability to synthesize his ideas. According to Schmoller, Sombart’s strengths included his abilities to observe, to describe, and to distinguish. It also included Sombart’s remarkable ability to prompt his readers to rethink what they had previously thought about craftwork and especially capitalism (Schmoller 1987: 137, 142–143). Schmoller recognized Sombart’s great achievement in clarifying the striving for profits as the defining characteristic of capitalism, but he faulted him for underestimating the ethical and social foundations of modern capitalism (Schmoller 1987: 143–145). Schmoller concluded by admitting that he was not certain how much he and Sombart would really agree on the “causes” of modern capitalism and he was not clear on how much Sombart would agree with Schmoller’s review. But Schmoller readily acknowledged Sombart’s talent and energy and he acknowledged his joy that Sombart’s Kapitalismus was such an important gift to German scholarship—whether one agreed or disagreed with some of Sombart’s points (Schmoller 1987: 146). Rudolf Hilferding published “Werner Sombart. Der moderne Kapitalismus” in the Zeitschrift für Volkswirtschaft, Sozialpolitik und Verwaltung in 1903. Hilferding (1877–1941) earned his medical degree in Vienna in 1901 and his review of Sombart’s book was one of his earliest publications on economic history. Hilferding was a member of the political party Sozialdemokratische Partie Deutschlands and was finance minister in the Weimar Republic during 1928 and 1929. After Hitler’s rise in 1933 Hilferding spent five years in Switzerland before moving to Paris where he was assassinated in 1939.

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Hilferding began his review by noting that Sombart’s achievement was to surpass previous studies of capitalism; whereas they were all single studies, Sombart’s moderne Kapitalismus combined his particular historical facts under a general theory. He praised Sombart for delineating the factors which accounted for the rise of modern capitalism: the urbanization, the development of new technology, and the formation of new law. He also underscored the importance that Sombart gave to rationalization. He congratulated Sombart for his attempt to overcome the opposition between empiricism and theory (Hilferding 1987: 147–150). Hilferding’s review was not entirely positive—he complained that Sombart never seemed to overcome that dualism and he failed to take into account psychological factors. Sombart’s biggest failure was in his attempt to offer a social analysis of capitalism. In this, “history” is only a pseudonym for “Karl Marx.” Hilferding concluded his review with the claim “The historian of economy was more successful than the social theorist” (“Der Wirtschaftshistoriker Sombart war glücklicher als der Sozialtheoretiker”) (Hilferding 1987: 140). These four reviews reveal a number of facts about the reception of Sombart’s Moderne Kapitalismus. Many people saw Marx as the slightly hidden but dominating figure in the book. For socialists such as Schmidt, this was a good thing; for less socialist inclined thinkers such as Hilferding, this was not such a good thing. More discerning thinkers such as Naumann and Schmoller saw that there was far more to Sombart’s work than Marx’ theory. Naumann and Schmoller did not agree with all of the conclusions that Sombart had, but both recognized the great achievement that he had made. Both recognized that Sombart’s Moderne Kapitalismus was a work of a lifetime and a genuine gift to scholarship. The first edition of Moderne Kapitalismus was the first of many more contributions that Sombart would make over the next two decades.

Die Juden Werner Sombart recognized that his book Die Juden would probably be misunderstood by most of his readers. However, he apparently hoped that people would pay attention to the book’s complete title because that

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was a reflection of what he was setting out to do: Die Juden und das Wirtschaftsleben. His book was not to be considered as an anti-Semitic tract but should be taken for what it is: a scholarly investigation of the Jewish contribution to the development of modern capitalism. In the “Vorwort” Sombart indicated what prompted him to write the book and how he hoped people would read it. He suggested that it was through a “coincident” (“Zufall”) that he had hit upon the topic. He was in the process of totally rewriting his Moderne Kapitalismus when Max Weber published his two-part article on the Protestant ethic and the spirit of capitalism in the Archiv für Sozialwissenschaft und Sozialpolitik in 1904 and 1905. Sombart explained that Weber’s understanding of the relationship between Puritanism and capitalism prompted him to reassess his earlier indifference to religious factors on the development of capitalism. His recent research suggested that the influence of the Jews on this process was much larger than previously thought. Sombart indicated that he believed that the wandering of the Jews throughout Europe contributed to the increase in economic activity. He realized that there was nothing in the existing literature that was devoted to this issue so he postponed revising Moderne Kapitalismus to investigate the matter. The result of the several years of study was Die Juden und das Wirtschaftsleben. Sombart explained that while much has been written about the Jews, there was virtually nothing about their influence on economic progress. He believed that his book was the first to draw attention to this influence. He did not insist that his research into hundreds of sources yielded a full picture but he did maintain that it was the first to offer a sketch (Sombart 1911: V–VII). Sombart recognized that such an investigation was problematic because of the stereotyping of Jews as greedy, cunning, and the like. Furthermore, he did not believe that he had made a convincing case; he wanted to provide a plausible account of Jewish economic activity during the last three centuries. Sombart was acutely aware of the difficulty of his task and he readily acknowledged that many readers had anti-Semitic sympathies. But he insisted that his investigation had not led to a discussion of race and that such a topic belonged elsewhere. Sombart insisted that his readers should keep three points in mind: (1) the book was a revealing of the significance of the Jews for modern economic life, (2) the book was not a “thesis book”

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(“Thesenbuch”) by which Sombart meant that it was not based upon any philosophical or historical presupposition. He hoped that his book would be evaluated on the accuracy of his facts and the soundness of his conclusions and not on the readers’ preconceived ideas. That led Sombart to make the remark about his third point: “Finally I stress with a so strong emphasis” (“Endlich betone ich mit einem so starken Nachdruck”), and (3) “the book is a strictly scientific book” (“das Buch ist ein streng wissenschaftliches Buch”). That means that Sombart focused on setting out facts and explaining them. It means restricting himself to objective facts and by refusing to make subjective value judgments. He recognized that value judgments were a problem with the “race question” (“Rassenfrage”) and even more so with the “Jewish question” (“Judenfrage”). Sombart insisted that in his 500 pages devoted to the Jews, not one contains an evaluation of the Jews. He concluded his “Vorwort” with the following sentences: “My book should certainly be a scientific book, and therefore it contains no value judgments. The personal opinion of the author does not interest the whole world, but rather only his friends. And they know that” (“Mein Buch aber soll ein wissenschaftliches Buch sein, und darum enthält es keine Werturteile. Die persönliche Meinung des Verfassers interessiert aber nicht die weit Welt, sondern nur seine Freunde. Und die kennen sie ja”) (Sombart 1911: X–XII, XVI). Die Juden und das Wirtschaftsleben is indeed a scholarly book. It has three main sections and fourteen chapters. The number of pages devoted to references is an impressive 39. However, the third major section is the least scholarly because it is Sombart’s attempt to discuss the “essence” of Judaism and that involved the exploration of race. Because of this, the third major section does not offer much enlightenment on the role of Judaism played in the development of capitalism and will be ignored. Sombart began his book by indicating in the first chapter that there are two methods for accounting for the influence that certain people have on economic activity. They are the statistical method and the genetic method. The statistic method may seem to have the advantage of sheer numbers but Sombart complained that numbers by themselves do not explain much. Therefore, it is necessary to introduce another method of explanation. Rather than doing that, Sombart insisted that the genetic method alone can provide an explanation for this issue and the genetic

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method has the added advantage of being dynamic. However, he did not rule out the use of statistics in his exploration of the role that the Jews played in modern capitalism (Sombart 1911: 3–5, 7, 12). The second chapter is Sombart’s reliance on numbers and it is composed of statistics regarding the number of Jews who lived in European countries since the sixteenth century. The third chapter is a similar recitation of statistics but here it is focused on trade. It is in the fourth chapter that Sombart turns to history for help in his explanations, and his first concern is with the founding of the modern colonial economy. Sombart pointed to the Jews who either helped finance colonial explorations or those who chose to accompany those explorers. He noted that these Jews were found in many European countries and he singled out England, The Netherlands, Italy, and Portugal (Sombart 1911: 31–34). While Jews traveled to all parts of the world, Sombart focused mostly on America. He insisted that the Jews who emigrated began banks and firms in many different cities and states and became leading financiers throughout the country (Sombart 1911: 44–47). The fifth chapter is focused on the expansion of colonial economies and the establishment of states. Sombart began his timeframe after 1500 because he believed there were no reliable numbers prior to that time (Sombart 1911: 51). Sombart pointed to two areas in which Jews played considerable roles throughout the sixteenth and seventeenth centuries: in delivering weapons to armies and in providing financing; they profited in both cases. More importantly, they helped establish systems of credit (Sombart 1911: 52–59). He expanded upon this process in the next chapter which was devoted to the commercialization of the economy. These systems of credit allowed individuals to have access to more credit; rather than one individual loaning money to another, a third individual was able to facilitate the exchange. This also involved the need for stocks, bonds, and banknotes which could be used as both security and means of transfer of money. Sombart’s point was that this process served to impersonalize transactions and allowed for exchanges over both space and time (Sombart 1911: 63, 68–72). After a dozen of pages of historical facts Sombart turned to the issue of modern exchange. Sombart meant “exchange” in two senses: “exchange” as transaction and “exchange” as the place of exchange (“Die Börse”) (Sombart 1911: 94).

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Sombart insisted that scholars had not offered a definitive definition of “speculation”—they were content to regard it as “wagering and profiting” (“Wagen und Gewinn”). He suggested that some of the basis for the lack of a sufficient definition was because of a lack of understanding the history of the exchange. He suggested that there have been two main periods: the first was between the beginning of the sixteenth century and lasted until the beginning of the nineteenth century. He noted that these exchanges were located in Venice and Genoa. However, each of these exchanges was rather limited and only a few individuals were wealthy enough to participate. Sombart indicated that the origin of the modern exchange was not to be found in Genoa in the thirteenth century but in Amsterdam in the seventeenth century (Sombart 1911: 95, 101). Sombart cited a book written by a Portuguese Jew who was living in Amsterdam for his source on the activity that Jews played in the Amsterdam exchange (Sombart 1911: 103–105). Similarly, Sombart referred to contemporary sources in documenting the prominent role that Jews played in the establishment of the London exchange. He cited a record from 1697 that indicated that of the approximately 100 brokers, at least 20 were foreigners and Jews. He cited a claim “The Hebrews flocked to ‘Change Alley’ from every quarter under heaven” (Sombart 1911: 107). He also pointed to the presence of Jews at the beginnings of the Paris exchange and the one in Frankfurt am Main (Sombart 1911: 108–110). Sombart also indicated that for much of this time period exchanges were regarded as disreputable places frequented by rogues and scoundrels. He referenced David Hume and Adam Smith who disapproved of these exchanges because they supported debts. Furthermore, exchanges encouraged private people to borrow, but it was even worse when the state went into debt (Sombart 1911: 111–113). Sombart pointed to the increase in states’ debts in the first half of the nineteenth century and he drew attention to the Rothschild name, and Sombart reminded his readers that “For the name Rothschild signified more than the firm that he covered” (“Denn der Name Rothschild bedeutet mehr als die Firma, die er deckt”) and “He signified the entire Judaism” (“Er bedeutet die gesamte Judenschaft”). Many people considered Rothschild as the only real power in Europe (Sombart 1911: 115–117). This farreaching influence was caused by a number of factors but the largest was

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the Rothschild bank. Sombart pointed to the Jewish contribution to the increasing dynamic nature of capitalism and to Rothschild’s role in this. Sombart provided a string of data. Of the 25 private lending houses, 16 had Jewish names. Of the six founders of the continental rail companies, four were Jewish. Of the 104 “building” banks, 37 were Jewish. Of the 49 founders of the north German gas works, 18 were Jewish. Of the north German textile mills, 27 were Jewish. These numbers represented only five of twelve that he gave (Sombart 1911: 123–124). He then cited numerous European banks whose founders were Jewish and even the founders of the Deutsche Bank were overwhelmingly Jewish (Sombart 1911: 126–129). The same was true regarding the directors and members of German industries. Of ten different types of industries, the percentage of Jewish directors ranged from 7 to 31.5% with the average being 13.3. Of ten different types of industries, the percentage of Jewish committee members ranged from 13.5 to 31.5 with the average being 24.4 (Sombart 1911: 135). The concluding chapter of the first main section was chapter seven which carried the title “The Expansion of a Capitalistic Economic Attitude” (“Die Herausbildung einer kapitalistischen Wirtschaftsgesinnung”). The main important points come in the second half of this almost fifty-page chapter. As in Der moderne Kapitalismus Sombart here contrasts the two different approaches to life: for the craftsmen, stability. The craftsman ruled over himself and was personally proud of his workmanship. This was also true regarding the store owners—they personally knew their customers and wanted a life-long relationship. In contrast, the modern businessman was interested in profit and he was willing to do what it takes to make a sale. It is crucial here to remind ourselves that Sombart was insisting that he was only recounting the history of economics and was not making any value judgments. It is in this “objective” light that one should read his contrast between the traditional “Christian” order and the modern restlessness of the Jews (Sombart 1911: 152–153). Sombart noted that historically, the Jews were regarded with suspicion and he cited a report from 1655 where a reverend claimed that Jews were only interest in money and their sole goal was profit (Sombart 1911: 157–158). What followed was a series

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of similar observations. But Sombart was asking were these claims legitimate and he focused on one claim in particular—the claim that Jews were “‘notoriously’ unjust” (“‘notorische’ Unrechtlichkeit”) because they offered lower prices (Sombart 1911: 168–170). Some had argued that they could afford to charge less because the quality was inferior while others suggested that they lived more frugally. But Sombart insisted that much of this was unfounded and that is because the Jews were more responsible for the economic institutes of modern capitalism. What had been the complaints about Jewish business practices in the pre-capitalistic age are now regarded as virtuous in the age of capitalism (Sombart 1911: 176–180). The title of the second main section accomplishes two purposes: it demonstrates Sombart’s scholarly approach to the topic and it removes doubts about any anti-Semitism. “The Qualification of the Jews to Capitalism” (“Die Befähigung der Juden zum Kapitalismus”) is around 150 pages in length and is composed of five chapters of very different lengths. The five chapters set out the problem, discuss the function of capitalism, discuss the objective inclination of Jews to capitalism, and conclude with an examination of the significance of the Jewish religion on economic life. The eighth chapter is simply entitled “Das Problem” and in its brief three pages Sombart set out the difficulties facing such an investigation. Sombart pointed out that there are two objections to an investigation into the Jewish contribution to modern capitalism’s life. One is the denial that there are Jews and the other is that Jews are so insignificant that they could not influence capitalism’s development. Sombart responded to both by pointing out that he had provided enough proof in the first main section of the book: Jews were the founders of world trade, modern finance, the exchange, commercialization, the originator of free trade and free competition, and the expanders of the “modern spirit” (“moderne Geist”) in economic life (Sombart 1911: 183). He insisted that the account that he was providing in this main section would set out the proof that the Jews not only provided the background for the development of capitalism but were among the most important forces for the furtherance of modern capitalism. He contended that his arguments and the bases upon which they rested were so convincing that

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they should convince everyone—philo-Semites as well as anti-Semites (Sombart 1911: 184–185). The ninth chapter was on the functions of the capitalistic economic subjects (“Die Funktionen der kapitalistischen Wirtschaftssubjekte”) and he began by defining capitalism as the economic organization that involved two groups: the owner of the means of production and propertyless worker and that they needed to function together in order for the capitalist enterprise to succeed. The purpose of the capitalistic enterprise was the increase in profit and the accumulation of wealth. Sombart repeated what he had shown in Der moderne Kapitalismus and that was the traditional peace and tranquility (“Ruhe”) of the craftsman has been supplanted by the “principle of movement” (“Bewegungsprinzip”) of modern capitalism. Sombart indicated that this was the second principle of capitalism, along with the principle of competition. With a nod to Max Weber, Sombart refers to the “principle of movement” as the rationalization of the economy. Sombart explained that this process of rationalization occurred in three areas: in ensuring that the economic leadership was developed “according to plan” (“Planmäßigkeit”), that it was developed “according to purpose” (“Zweckmäßigkeit”), and that it was developed “according to calculation” (“Rechnungsmäßigkeit”) (Sombart 1911: 186–187). This led Sombart to a discussion of what makes a successful business leader and he described it as being composed of one who can produce (the entrepreneur/ “Unternehmer”) and the one who can sell (salesmantrader/“Händler”). Sombart described the “Unternehmer” as “That is a man who has a task to fulfill and sacrifices his life in order to fulfill it” (“Das ist ein Mann, der eine Aufgabe zu erfüllen hat und dieser Erfüllung sein Leben opfert”). The “Händler” is “a man who wants to make lucrative businesses” (“Das ist ein Mensch, der lukrative Geschäfte machen will”) (Sombart 1911: 189). In what seems to be a contradiction to what Sombart has repeatedly written, he suggests here that it is the “constant” that the entrepreneur wants—but the salesman wants the “variable.” The difference is that the entrepreneur wants to fulfill his single overriding task whereas the salesman is constantly asking what does it cost (Sombart 1911: 190).

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There are four “function types” found in the entrepreneur: the “inventor” (“Erfinder”), “discoverer” (“Entdecker”), the “conqueror” (“Eroberer”), and the “organizer” (“Organisator”). The entrepreneur possesses all four qualities, but to differing degrees (Sombart 1911: 191–192). He draws the distinction between the entrepreneur and the salesman in that the former has a “determined calling” (“bestimmte Beruf ”) while the latter lacks that but has a “determined function” (“bestimmte Funktion”). The single function is to make a lucrative business and Sombart insisted “that means it is based upon a single formula: he must buy cheaply and sell expensively” (“das heißt auf eine einzige Formel gebracht: er muß billig einkaufen und teuer verkaufen”) (Sombart 1911: 194). Sombart insisted that the salesman needed “to see with a thousand eyes, hear with a thousand ears, feel with a thousand touches” (“mit tausend Augen sehen, mit tausend Ohren hören, mit tausend Tasten fühlen”) (Sombart 1911: 195). The successful salesman will “prompt interest, generate trust, and wake the desire to buy” (“Interesse erregen, Vertrauen erwecken, die Kauflust wecken”) (Sombart 1911: 197). The point is that the salesperson must be flexible and be able to adjust his approach if he wishes to be successful; in contrast, the entrepreneur must keep a steady eye on his life’s calling. In the tenth chapter Sombart switches his focus from the subject of capitalism to the objective part and it is in this chapter that he sets out “The Objective Aptitude of the Jews to Capitalism” (“Die objektive Eignung der Juden zum Kapitalismus”). This chapter sets out the four circumstances which Sombart insisted had shown how Jews were able to develop capitalism during the previous three centuries. First and foremost was the dispersion of Jews throughout the world. They not only moved or were forced to move to distant lands, but once there, they were highly successful in developing a variety of businesses (Sombart 1911: 197–203). Second, it was the “strangeness” (“Fremdheit”) that aided in their success. Sombart clarified this by contrasting Jews with colonists; where the colonists were unable to deal with foreign customs, the Jews were well-adapted to deal with strange ideas and practices. They were far more capable of adapting than most other peoples (Sombart 1911: 205–206). The third circumstance that aided the Jews was related to the second one. Because they were regarded as only being partial citizens,

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they were not as restricted by the ideas, ideals, and mores as full citizens. Again, that allowed the Jews to have a greater degree of flexibility than regular citizens (Sombart 1911: 207–208). Fourth and finally, Jews were among the richest people in many European countries. Sombart provided several pages of statistics regarding wealthy Jews in France and England in the seventeenth and eighteenth centuries before setting out tables listing the estimated wealth of Jews living in German cities around 1900 (Sombart 1911: 213–221). The wealth allowed the Jews to lend money to finance both the great and the small. This led Sombart to the claim “Thus: capitalism is born out of money lending” (“Denn: aus der Geldleihe ist der Kapitalismus geboren”) (Sombart 1911: 222–223). The eleventh and twelfth chapters are devoted to the particular and singular significance of religion for the Jews. Despite all of his sources, Sombart’s evidence is neither very complete nor very compelling. He seemed aware of these deficiencies because he began the eleventh chapter with a rather defensive “Preliminary Remark” (“Vorbemerkung”). He insisted that his approach was “objective” and was not susceptible to subjective influences. Having said that, Sombart acknowledged that he was not the first to draw attention to the connection between religious ideas and economic development. He admitted that Max Weber had demonstrated the connection between Puritanism and capitalism and he acknowledged that Weber’s investigations were in large measure the impetus for Sombart’s own book (“Und gerade Max Webers Untersuchungen haben ein gut Teil Schuld an die Entstehung dieses Buch”). Moreover, Sombart argued that there were massive similarities between Judaism and Puritanism (Sombart 1911: 225–226). In Sombart’s opinion, the Jews were among the most religious of groups to recognize the relationship between God and man and that this relationship was not just theological but was metaphysical as well as moral. Sombart cited a source that maintained that the Jewish doctrine of morals is nothing other than the Jewish doctrine of God. In addition, the Jews were different from many religious peoples because their religious ideas were not reserved for the Sabbath but were applicable every day of the week. This influence reached over every aspect of Jewish life—the admonishments and the prohibitions for how one could conduct one’s everyday life. This has prompted some to suggest that “the Jews are the

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‘most unfaithful’ of all people” (“Man hat gesagt, die Juden seien das ‘unfrömmste’ aller Völker”) (Sombart 1911: 228). Sombart declined to assess this claim but he did insist that the Jews were the most God-fearing of all peoples (Sombart 1911: 228–230). Nor was the sense of Godfearing restricted to the less fortunate; rather, the rich also understood the need for fearing God and they also put huge efforts into the study of the Talmud. “The greatest Talmud scholars were at the same time the most skillful of men of finance, doctors, jewelers, merchants” (“Die größten Talmudgelehrten waren zumeist gleichzeitig die geschicktesten Finanzmänner, Ärtze, Juweliere, Kaufleute”) (Sombart 1911: 230). After an exploration of some of the fundamental opinions about Judaism, Sombart set out the fundamental ideas of the Jewish religion. It is worth quoting what he insisted on at the beginning of this section: “I find in the Jewish religion the same leading ideas which characterize capitalism; I see those fulfilled from the same spirit as these” (“ich finde in der jüdischen Religion dieselben leitenden Ideen, die den Kapitalismus charakterisieren; ich sehe sie von demselben Geiste erfüllte wie diesen”) (Sombart 1911: 242). The main idea for both the Jews and the capitalists is the contract: both “win” by fulfilling their ends of the bargain (Sombart 1911: 251– 254). It does not really matter what religious document serves as the contract—whether it is the Talmud or the Bible. Sombart provides quotations from both (Sombart 1911: 254–260). Sombart reminded us that the covenant between Jehovah and his people was a “double-sided legal business” (“zweiseitiges Rechtsgeschäft”) that required his people to fulfill two obligations: “to be holy and fulfill my commands” (“seid heilig und erfüllt meine Gebote”)—which meant being just (Sombart 1911: 261–264). There is little doubt that the covenant was a legal-type relationship so there is little reason to take issue with Sombart’s account of fulfilling God’s commands. But Sombart insisted that being holy meant being rational. Sombart emphasized: “Holiness means with few words: The rationalization of life” (“Heiligkeit heißt mit einem Worte: Die Rationalisierung des Lebens”) (Sombart 1911: 265). But this apparent disconnect does not exist because Sombart stresses that being “holy” is following the law. That implies the need to overcome one’s natural desires and inclinations. The means to do this is basically one: through the process of

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rationalization, one denaturalizes one’s self and makes one holy. It is “selfmastery” (“Selbst-beherrschung”). This needed to be done in relation to the desire for food and the desire for love (Sombart 1911: 270–273). This self-mastery also governed one’s business practices which meant the accumulation of wealth. The point of rational life was the maximization of profit and the more freedom in business the greater the reward. That meant the need for the maximum of free competition (Sombart 1911: 292). The opening paragraph of the twelfth chapter on “Judaism and Puritanism” had Sombart again acknowledging how much Max Weber’s Puritanism study prompted his own reevaluation of the relationship between religious ideas and economic practices. But Sombart insisted as much that as Weber was correct to note the Puritan religious ideas and practices gave rise to capitalism, he was convinced that the same forces were found in a greater and certainly an earlier time in Jewish history. Sombart put it bluntly: “Puritanism is Judaism” (“Puritanismus ist Judaismus”) (Sombart 1911: 292–293). The twelfth and final chapter of the second main section is about the uniqueness of the Jews (“Jüdische Eigenart”) and in it, Sombart consolidates his notions of what set and sets the Jews apart from other peoples. It is the uniqueness of the Jews that made them so special in developing capitalism. These facts included the “inner alienation” of the Jews, the lack of full citizenship, and their ability to amass fortunes (Sombart 1911: 298–300). Sombart engaged in folk psychology and general speculation and neither withstand the tests of time. It is when he attempts to determine what makes the Jews stand out that he became successful again. He lists a number of attributes to Jews: their high degree of religiosity, their high degree of intellectualism, their high degree of understanding, their high degree of personal dedication, their high degree of practicality, their high degree of setting goals, and their high degree of restlessness (Sombart 1911: 312–328). Sombart concluded the final chapter in the second main section with a few words about how the Jewish “essence” (“Wesen”) was in the service of capitalism. Sombart insisted that the Jews possessed the key qualities that were necessary for capitalism’s success: they were smart (and clever) and full of spirit (rich in ideas). They were also “sober” and “hard-working.”

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By “sober” (“Nüchtern”) Sombart meant free from passionate affects, free from sentimentality, and free from unpractical idealism. By “hardworking” (“Tüchtig”) Sombart meant dependable, dutiful, orderly, and thrifty. Sombart ended with the comment: “I think that these few lines describe the fundamental basics of the good capitalist businessman as well as the Jew” (“Ich denke: mit diesen wenigen Strichen ist ebenso der gute kapitalistische Unternehmer wie der Jude in wichtigen Grundzügen gezeichnet”) (Sombart 1911: 333–334). Smart, sober, and dependable does not seem anti-Semitic.

Luxury, War, and Capitalism In 1913 Sombart published two books: one was named Luxus und Kapital-ismus and the other was entitled Krieg und Kapitalismus. The similarity in titles was not the only indication that Sombart believed the two books belonged together; he had a general title for them: Studien zur Entwicklungsgeschichte des modernen Kapitalismus (Studies on the Developmental History of Modern Capitalism). The first volume was on luxury and capitalism and the second was on war and capitalism. As with Die Juden, Sombart indicated the both volumes were products of his research for revising Der moderne Kapitalismus and both topics— luxury and war—were found to a small degree in the first edition of his famous work. He also directed the readers’ attention to the fact that both the volume on luxury and its companion volume on war should be regarded as two sides of the problem of capitalism. He also suggested that a more appropriate title for the first book might be Love, Luxury, and Capitalism (Liebe, Luxus und Kapitalismus) because after the Crusades there was a new marked change in the relationship between the sexes and with that a fundamental reformulation of the “entire manner of living” (“gesamte Lebensführung”) which had an essential influence on the development of the modern economic system (Sombart 1913a: V–VI). Luxus und Kapitalismus has five chapters but the first three are comparatively brief. The first one is twenty-four pages, the second one is twenty,

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and the third one is also twenty-four pages. In contrast, chapters four and five are each more than sixty pages in length. The first chapter focuses on the changes in royal courts. While Sombart acknowledged the changes in the Italian courts, they were connected to Popes and not to earthly royalty. The real changes occurred in the French royal courts at the end of the sixteenth century and the beginning of the seventeenth century. It was in France that women began to dominate the courts through their beauty and their charm— this was the beginning of “intrigue and gallantry” which Sombart would regard as luxury. He noted that this power of women in the royal courts was restricted primarily to France. He noted that in most of the other European courts, men preferred the countryside. Sombart also suggested that England lacked the essential factor of the modern court—namely the “dominance of the woman” (“Herrschaft der Frau”). He found that particularly paradoxical because Elisabeth the First was queen (Sombart 1913a: 2–5). A second transformation was the change in the sources of wealth. For the early Middle Ages, wealth was determined by ownership of land but by the seventeenth century wealth was measured by income (Sombart 1913a: 6–10). The third transformation was the rise of the new nobility. These new nobles came through business but more so through society. Sombart insisted that between 1600 and 1800 that “a fully new segment of society” (“eine völlige neue Gesellschaftsschicht”) developed. This new “ruling class” (“herrschende Klasse”) arose through three different methods. (1) Some were given money as part of an awarding of an honor in response to some service that the individual had performed, (2) some were awarded an order or an office which came with payment, and (3) some inherited some land which was accompanied by a noble title (Sombart 1913a: 10–11). There was a fourth means by which one became part of a noble family and that was through marriage. Sombart makes two points about this practice: that it was most often between families which were already part of the nobility and that the marriage of daughters of the American pig farmer (“amerikanischen Schweinezüchtertöchter”) of the past twenty years is very similar to what occurred in the 1700s (Sombart 1913a: 24). The second chapter is focused on the rise of the big city (“Großstadt”) and some of it is a repetition of what Sombart had written in

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Der moderne Kapitalismus. But here, much of his emphasis was on the trade cities like Amsterdam and Hamburg (Sombart 1913a: 29). His examples of great cities included more than these two; he also included Berlin, Paris, and Madrid but also Venice, Rome, and Naples (Sombart 1913a: 30–32). Naples was a particular “elementary example” (“Schulbeispiel”) because its greatness and its wealth flowed from two sources: the royalty and the Church. But the real power behind this was trade. London also had its trade but Paris had consumption (Sombart 1913a: 33–35, 40). Unfortunately, most scholars who had written on the rise of the city misunderstood why and how they had developed (Sombart 1913a: 41–44). It is in the third chapter that Sombart clarified why he thought the proper title of the book should be Love, Luxury, and Capitalism because the chapter title is “The Secularization of Love” (“Die Säkularisation der Liebe”). Sombart provided almost three full pages of sources and literature and it was most likely because he was concerned that his argument would be contentious. He began with the section title “The Victory of the Principle of Illegitimacy in Love” (“Der Sieg des Illegitimätsprinzip in der Liebe”) by contrasting the medieval principle of love with its replacement. The medieval principle of love was that love served a higher power. Love was a God-ordained and God-sanctioned union; a union that combined earthly and heavenly components. Sombart drew attention to the wandering magisters and the troubadours (Sombart 1913a: 49–52). By the seventeenth century love was no longer being revered as an earthly manifestation of the divine; instead, it was being considered solely as a human desire. Love and marriage may go together but the numerous instances of adultery reveal that they do not necessarily mean the same thing (Sombart 1913a: 55–59). The remainder of the third chapter is devoted to the notion of the court-esan and how various versions of the courtesan were found in all of Europe’s courts and cities. In fact, a courtesan was another name for “lady of the court” (“Hofdame”) and this reflected her high standing (Sombart 1913a: 61, 69). The fourth chapter was entitled “The Unfolding of Luxury” (“Die Entfaltung des Luxus”) and Sombart began it in his typical manner: “Concept and Essence of Luxury” (“Begriff und Wesen des Luxus”). Sombart remarked that “luxury” is a relational concept because it is the

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opposite of what is “necessary.” However, what is “necessary” for one person may not be “necessary” for another. Moreover, “luxury” has a dual sense as it can be considered as a quantitative or qualitative notion. The former is more easily understood; it can be considered the point at which the number goes from necessary to superfluous. The latter is more difficult to ascertain but Sombart suggested that what is luxurious may be determined by its form or its material. He also suggested that neither type was important but what was was that all luxurious items “spring first out of a purely sensitive delight of enjoyment” (“entspringt zunächst aus einer rein sinnlichen Freude am Genuß”) whether it is through the eyes, ears, nose, taste, or feeling does not matter. What does matter is that this is a physical enjoyment and he insisted that it leads back to the longing for love. Sombart maintained that wealth and love combine to encourage luxury (Sombart 1913a: 71–73). Sombart returned to his notion of the royal court and provided ten pages of statistics about luxury in those courts. The single point to take from that is the unbelievable amounts of money that royal courts paid for porcelain—Sombart mentioned that even the poor Prussian king spent thousands of “Talers” on Meißner porcelain (Sombart 1913a: 82–94). Sombart also pointed to luxurious clothing and not just for women. Adam Smith complained about “unproductive hands” which belonged to these men who were clothed in finery. Daniel Defoe pointed to the “tradesmen livery” and the serving girl’s dress, and Sombart drew attention to the number of servants for nobles in England, France, and even Germany (Sombart 1913a: 107–108). His larger point was that most of this desire for luxury was from men but that changed with the “victory of the women” (“Der Sieg des Weibchens”). He pointed expressly to the transition from the seventeenth century into the eighteenth, which he insisted was the shift from the baroque to the rococo periods. This “victory of the rococo” was the clear triumph of the female (Sombart 1913a: 111–113). Sombart returned to his notion of the large city and remarked that in the 1700s nobles had castles built but during the 1800s rich people built mansions in the city. Whereas the country had been the center of aristocratic life outside of court, the new cities drew new inhabitants. Sombart pointed to the luxuries which appealed to women: theaters, music houses

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and ball rooms, fine restaurants, luxurious hotels, and expensive stores (Sombart 1913a: 128–130). It is debatable whether Sombart deliberately employed Nietzsche’s first famous book when he entitled the fifth chapter “The Birth of Capitalism Out of Luxury” (“Die Geburt des Kapitalismus aus dem Luxus”) but there is little debate over the fact that Sombart frequently accused his predecessors of misunderstanding economic processes and trends. This was especially acute in his discussion about the connection between luxury and capitalism. He accused Adam Smith of looking in the wrong place when Smith insisted that capitalism stemmed from the “thrifty people” (“sparsame Leute”) and he similarly complained that Marx had the “unhappy idea” (“unglückliche Idee”) that capitalism grew from colonial profits (Sombart 1913a: 133, 137). The economists should not have been looking so much at profit but at demand. The demand for major goods remained as steady as during the rise of capitalism but it was the demand for the minor goods that radically increased (Sombart 1913a: 135–139). Instead, it was the growing demand for luxury goods that coincided with the growth of capitalism. But Sombart acknowledged that this thesis is difficult to prove because of the terminology of the economists. They insist on employing phrases such as the “economic upturn” (“wirtschaftlichen Aufschwung”), the “expansion of production” (“Ausdehnung der Produktion”), and the “increase in the area of profit” (“Erweiterung des Absatzgebietes”) (Sombart 1913a: 141). Sombart insisted that there was a real connection between luxury goods and trade and he listed silk, fine cotton, glass, and wine and weapons. But these were joined by medicines, spices, perfume, and materials for fine jewelry and fine clothing (Sombart 1913a: 141–147, 153– 154). The stores that sold such merchandise existed in the metropolitan centers (Sombart 1913a: 157–161, 166–167). Sombart spent some twenty-five pages discussing various luxury items: silk, mirrors, porcelain, cotton, leather, hats, and furniture (Sombart 1913a: 177–202). In contrast, his final section is not even five pages in length. But it carries the title “The Revolutionizing Force of Luxury Consumption” (“Die revolutionierende Kraft des Luxuskonsums”). Sombart maintained that the revolutionary force of luxury consumption prompted capitalism because capitalist production allowed for the manufacture of luxury goods for

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more people. Sombart’s concluding sentence was “So as we saw, luxury showed that capitalism was a legitimate child of an illegitimate love” (“So zeugte der Luxus, der selbst, wie wir sahen, ein legitimes Kind der illegitimen Liebe war, den Kapitalismus”) (Sombart 1913a: 202–206). The companion volume to Luxus und Kapitalismus can be considered its twin: it has a similar name, it has the same cover, and it is about the same length. The differences are also obvious: Krieg und Kapitalismus has six chapters rather than five, it deals with war rather than luxury, and it revolves around men rather than women. It also has to confront the fact that war has a double face: the one that is well-recognized is the negative one. History provides hundreds of cases in which war left destruction and this destruction destroyed people, property, countries, and fortunes (Sombart 1913b: 1–15). That is a story that Sombart did not need to tell because it was so familiar. The story that Sombart believed needed to be told is how war and the military were involved with the rise of modern capitalism. This was a story that needed to be told for two reasons: first, it was basically hidden by the negative account of war and second, because 1913 indicated that peace was fragile and there were warring sentiments in much of Europe. As was often typical for Sombart, he began Krieg und Kapitalismus with a discussion regarding the development of the modern military. The first major transition from the pre-modern to the modern military was the change in its organization. Previously it was composed of private individuals but now they were regarded as part of a state. Before they belonged to some noble; now they were part of a public-legal organization. The second major difference was that earlier soldiers were regarded as temporary; the modern soldier is a member of a “standing army.” Sombart contrasted the “vocational military” (“Berufsheer”) with a “militia” (“Miliz”). The third major difference is between those who are “free” to serve and those who are “forced” to serve. The modern military is primarily made up of people who have chosen to join. The fourth and final transformation was from an individual military to a collective one; the former is composed of individuals while the latter is a cohesive entity (Sombart 1913b: 16–20). Sombart provided some details of these transitions but what is more important is his discussion of the changes in navies. His main point was that the earlier naval ships

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were mostly trading vessels which were outfitted for battle whereas the modern fleet is made up of ships that were specifically designed for naval warfare (Sombart 1913b: 35–36). There was another major difference which had mostly remained unnoticed until the military historian Hans Delbrück published his fourvolume work on the history of warfare. Sombart relied on that to point out that throughout history most battles were fought by a relatively small number of combatants. Sombart argued that scholars had suggested that previously the estimate of participants in the Battle of Hastings ran into the hundreds of thousands. Some people estimated that there may have been over a million combatants. However, Sombart suggested that the number on the one side was probably fewer than 7,000 while the other side was even smaller at 4,000 to possibly 7,000. Sombart provided numerous other examples before commenting on how the growth of armies was rapid beginning in the late 1700s (Sombart 1913b: 37–44). There was a similar change in growth in terms of naval fleets. The Italian fleets of the twelfth century numbered between 100 and 200. The Spanish armada of 1588 also numbered under 200. The French fleet had some 30 ships in 1661 and had grown to more than 200 in just over twenty years. The Dutch fleet showed the most remarkable change, going from 43 mostly small boats in 1616 to more than 85 in 1666. More impressive still was the number of sailors: the earlier number of ships had between 2,000 and 3,000 sailors while the later ships had almost 22,000. Sweden became a sea power during the sixteenth and seventeenth centuries but it was England that became the most formidable navy. Henry the VIII began to build up his navy and that was continued by Edward VI. Queen Mary allowed the number of ships to decline but it was Queen Elisabeth who ordered an increase in naval building. Sombart again detailed the number of ships in England’s history and at the conclusion of the first chapter he provided an overview of the number of ships at the end of the eighteenth century: England had 278 ships, France had 221, The Netherlands had 95, while Denmark and Norway jointly owned 60 (Sombart 1913b: 44–50). Most of the second chapter was a detailed account of the costs of maintaining a military and Sombart provided dozens of pages of military accounting. Toward the end of the chapter, he made a number of

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crucial points about arming the military. But he insisted that money needed to be spent on more than just weapons and ammunition. There needed to be money for transportation, for food, clothing, and housing. He determined that different militaries approached these issues differently; some were centrally organized while others chose a decentralized approach. Furthermore, there was the matter of acquiring military goods: was it through self-production or through plundering? Was it through requisition or through purchase? (Sombart 1913b: 69–70). The third, fourth, and fifth chapters can be briefly treated. The third chapter focused on arming the military. His major point concerned the technical improvement in weapons during the fourteenth through the seventeenth centuries. Sombart noted that the term “artillery” did not mean what it does now; in fact, cannons and cannon balls were not invented until sometime in the fourteenth century. Similarly, “infantry” did not mean soldiers with guns until the end of the seventeenth century (Sombart 1913b: 74–79). Sombart made a related point about how the earlier soldiers had their own weapons and they differed from one another. It was not until the production of weapons in the eighteenth century that there was real standardization. Sombart did not dispute the fact that calibration had been introduced in the sixteenth century but the actual full standardization of cannon balls did not occur until later (Sombart 1913b: 80–85). Sombart turned to the process of weapons construction and he argued that the medieval craftsman could not turn out the quantity of weapons needed rapidly enough for the modern military. Nor were these crafted weapons uniform. It was with the introduction of machinery that the needed quantity and the desired quality of weapons could be produced. Hence, modern capitalism was the means of producing modern weapons (Sombart 1913b: 90–95). Again, Sombart pointed to the history of weapons production in European countries. He noted that Spain might lay claim to being the first military state but that others quickly joined. It was not just the weapons that needed to be manufactured; ammunition also needed to be produced in sufficient quantities and at a rapid pace (Sombart 1913b: 99–110).

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The concern of the fourth chapter was the task of ensuring that soldiers and sailors were adequately cared for. Prior to the modern military, the noble had a bodyguard who was either subsidized by his master or was expected to fend for himself. This changed in the seventeenth century, first in Spain and then in other countries. That is because the military ceased belonging to individuals but to the state (Sombart 1913b: 120–124). Discussions over the military often revolve around preparedness, tactics, and successes, but Sombart drew attention to the increasing need to provide food for soldiers and sailors. In particular, ships needed to have sufficient provisions as both the ships grew larger and the size of the crew increased. But the need for provisions also increased as the time at sea grew as well. That in turn meant that ports needed to expand and that the speed to replenish also had to increase (Sombart 1913b: 124–130). After a dozen plus pages Sombart announced that a discussion concerning the delivery of supplies to the military was an attractive task to investigate but could not be attempted because it would go beyond the boundaries of his study. However, he allowed himself to make a major point. Sombart repeated his claim from Die Juden that the Jews were largely responsible for arranging for supplies (Sombart 1913b: 146–149). The fifth chapter has an even less discussed topic and that is the change in clothing needed as the military changed. The early peasant soldier only needed his regular clothes but the seamen soon found that their “shop clothes” were not suitable. One of the problems that they recognized was that they not only “stank” but that the continuous wearing of the same outfit contributed to the outbreak of disease (Sombart 1913b: 151). Equally important was the need for standardization. Just as weapons needed to be much the same, clothing also needed standardization; hence, the invention of the uniform. This was not only a matter of mass production and thus economics; commanders found that there were psychological advantages to having uniforms. Sombart granted that the royal courts had their colors but he insisted that the uniform gave the wearer “a feeling of solidarity” (“ein Gefühl der Solidarität ”) (Sombart 1913b: 159–160). But uniforms cost money to produce and that again meant that credit needed to be involved. Furthermore, as the size of the militaries increased, so did the demand for more uniforms. This

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transition involved banks, factories, and stores—much of the modern economic life (Sombart 1913b: 170–172). The sixth chapter differs from the third, fourth, and fifth in its subject and in its importance—“ship building” (“Der Schiffbau”). Food, clothing, and weapons all require money but with the increase in size, capability, and complexity, they cannot compare to the increasing costs of building war ships. The sixth chapter may be the strongest of all because Sombart lays out his line of argument the fullest and the most decisive. He pointed out that the larger the ship, the more materials are required to build it. But the larger the ship, the greater workforce is needed to construct it. Just as importantly, the bigger the ship, the larger the wharf must be for it to be built. These are all economic issues and he insisted that there was no other “industry” with the exception of the textile industry that matched the ship building industry’s impact on the development of modern capitalism. But the ship building industry differed from textiles because of the nature of its product. Modern machines replaced craftsmen in textiles, but there are a number of crucial factors that make ship building unique (Sombart 1913b: 175–177). They are four in number. First is the number of ships. Sombart provided numbers for ship building in different European countries but his main point was that between 1600 and 1800, the number of trading vessels increased but the number of war ships increased far more rapidly. The more inclined a country is to see war break out, the greater the need for it to build more ships (Sombart 1913b: 177–182). Second is the size of the ship. Sombart again provides numbers but the most impressive number is the contrast of the tonnage of a ship in the sixteenth century with the tonnage in the following century. Out of 2,368 ships listed in 1664, 1,063 were between 10 and 30 tons with only 19 being between 300 and 400 tons. In contrast, in 1732 London had 1,417 ships of which 83 ranged between 200 and 300 tons while 130 were between 300 and 500 tons (Sombart 1913b: 182–183). Third is the speed in which the ships are built. Sombart first observed that the notion of “speed” was unknown in the economic life of the Middle Ages. “Faster is better” was totally foreign and no one ascribed any value to doing something faster. Sombart did admit that there were

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occasions in which ships could be built rather rapidly, but these were exceptions and not the rule. To take one example: in Genoa, eight galleys were built in 1204 and almost eighty years later the number was still only twelve. But in England 142 were built between 1559 and 1580 while between 1581 and 1602 the numbers went from 142 to 363 (Sombart 1913b: 187–189). Fourth is the organization of shipbuilding. This meant that more and larger ships needed to be built in a shorter time. But it also meant that the number of workers needed to be organized. The traditional crafts economy could not produce the ship; modern capitalism could and did (Sombart 1913b: 191–203). Sombart did not offer a separate conclusion; he ended with one page with one main point. It was shipbuilding that demonstrated the connection between itself and capitalism but it also indicated the connection between war and capitalism. But in the creation of the modern fleet, capitalism also destroyed something immensely important. The need for wood to build these ships ended up destroying the forests in Europe. Sombart’s final comment was that he had revealed the thread between the mercantile and the military interests (Sombart 1913b: 206). Sombart did not state it but it was the connection between “war and capitalism” (“Krieg und Kapitalismus”).

Der Bourgeoise The same year that the two capital volumes appeared, Sombart also published a much larger book; in fact, the final volume from 1913 was about the combined size of the two earlier books. This large volume had a small title: Der Bourgeoise which sufficiently indicated its subject matter. What also differentiated Der Bourgeoise from the two earlier books was Sombart’s renewed emphasis on “Geist.” In fact, “Geist” is far more prominent in Der Bourgeoise than in Der moderne Kapitalismus. There are a number of possible reasons for this emphasis: one might be as a reaction to Weber’s use of “Geist” in his Protestantische Ethik und der Geist des Kapitalismus. Another possible reason might be that under Weber’s influence he decided that it was preferable to replace “Wesen” (“essence”) with “Geist.” A third possible reason might be that Sombart recognized

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the growing linguistic power that “Geist” had over “Wesen”—a nod back to the Brothers Grimm with their thirty-three volume “dictionary” of German terms. “Geist” had some fifty columns devoted to it and its variations. A fourth possible reason might be that Sombart was prescient in understanding the future and he foresaw the increasing likelihood of war. “Geist” would play a major role in distinguishing the German “Geist” from the mundane traits of other countries. That would also help explain why Der Bourgeoise was printed in Fraktur. Whatever the reason or reasons, “Geist” is found in the book’s subtitle Zur Geistesgeschichte des modernen Wirtschaftsmenschen (On the History of the Spirit of the Modern Economic Men) and as titles of the two “Buch”: “Die Entwicklung des kapitalistischen Geistes” (“The Development of the Capitalistic Spirit”) and “Die Quellen des kapitalischen Geistes” (“The Sources of the Capitalistic Spirit”). In the “Vorwort” Sombart insisted that no one prior to him had managed to write a book about the people who manifested the spirit of the modern economic age that was neither too abstract nor too factual and he hoped that his readers would agree that he had struck the right balance in his Bourgeoise (Sombart 1913c: III–IV). In the “Einleitung” Sombart continued to seek the right balance between economists who stressed the body in their analyses: “the economic man” and the historians who emphasized the spiritual as in their discussions of the “spirit of the Roman Empire” (Sombart 1913c: 2–4). This led Sombart to discuss the “Pre-capitalistic Economic Attitude” (“Die vorkapitalistische Wirtschaftsgesinnug”) which he described as working only so far as to earn one’s daily bread (Sombart 1913c: 16–18). The pre-capitalist also was concerned with the here and now, and not with the future. There was no need for calculation beyond meeting the needs of the day. The pre-capitalist was a traditionalist and that meant that he accepted the values and the norms that had been passed down in the family and in the village. The principles of pre-capitalism both shared the emphasis on stability: they sought “secured/certain peace” (“sichere Ruhe”) (Sombart 1913c: 23). The book Der Bourgeoise is intended to reveal the capitalistic “Geist” with the first “Buch” showing “how all came” (“wie alles kam”) and the second “Buch” detailing “why all must have come so and not in other ways” (“weshalb alles so und nicht anders kommen mußte”) (Sombart 1913c: 24).

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The first “Buch” has four main sections and eleven chapters but not all of them are relevant to this discussion. The eleventh and twelfth chapters can be omitted because they are concerned with particulars and not with the spirit of capitalism. The sixth and seventh chapters can be dealt with rather quickly because the sixth is focused on the state and the church while the seventh is a discussion of the six types of capitalist entrepreneurs. The others are crucial because they contain Sombart’s exploration of the development of the capitalistic “Geist.” The sense of “spirit” is central to the initial chapter of the first “Buch” because it sets out the spirit of the entrepreneur with his hunger for “gold and money” (“Gold und Geld”). Sombart admits that humans have long treasured gold and they sought it for itself and its form in jewelry (Sombart 1913c: 37, 60). But Sombart insisted that this was a seeking after gold and money that was different that the entrepreneur’s desire for money and that was because the entrepreneur had plans to acquire money. However, the plans differed according to the different types of individuals. He listed three types of individuals: the conqueror, the organizer, and the trader. But it was the third type who manifested the genuine spirit of capitalism (Sombart 1913c: 69–76). Sombart regarded the conqueror to be present in the warrior group and, somewhat surprisingly, he suggested that that type was also present in the state and the church. That is because Sombart contended that both institutions were occupied with notions of war and conquest (Sombart 1913c: 77–85). It is only with the rise of the genuine traders that the capitalist “spirit” began to be developed. These he called the “merchants” (“Kaufleute”) (Sombart 1913c: 123–125). He declared there were three groups of “merchants”: the Florentines, the Scots, and the Jews. Sombart did not offer much of an account of the Florentines and even less about the Scots. For a discussion about the Jews, he directed his readers to Die Juden und das Wirtschaftsleben (Sombart 1913c: 126–132). It is in the second main section that Sombart began to focus on his actual topic; namely, the “bourgeois spirit” (“Bürgergeist”) and he began by setting out the “bourgeois virtues” (“bürgerlichen Tugenden”) (Sombart 1913c: 135). Sombart listed thirteen economic virtues which were considered “holy” during the end of the medieval period: (1) measuredness, (2) silence, (3) order, (4) decisiveness, (5) moderation, (6)

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industry, (7) innocence (8) justice, (9) avoiding extremes, (10) purity, (11) temperance, (12) chastity, and (13) modesty. Each of these is selfexplanatory with the exception of (1) and (9). (1) Measuredness is the admonition not to eat or drink to excessiveness. (9) Avoiding extremes is the admonition to be neither too dominating or to be too reserved (Sombart 1913c: 154–155, 158). Sombart maintained that these admonitions toward capitalist virtues were found in Alberti and in Franklin (Sombart 1913c: 160–163). Sombart turned to the subject of calculation and he directed his readers to Der moderne Kapitalismus where he had thoroughly discussed it (Sombart 1913c: 165). The fourth main section of the first “Buch” is devoted to the notion of the bourgeois. Sombart took issue with the idea that there is some general idea of the bourgeois and that is because he contended that there was an “old” type of bourgeois and a “new” type. The “old” type is the topic of chapter twelve while the modern one is the subject of chapter thirteen. Sombart admitted that the old and the new bourgeois shared many similarities: both had profit as their goal, both used business as their means, and both valued possessions. Both employed plans and both had certain virtues. However, Sombart insisted that what differentiated the new from the old was that the old still used “man as the measure of all things”—meaning that his life remained a natural, meaningful expression of his life. Sombart clarified this with the observation that the desire for profit was a goal but it was not the highest or the single goal (Sombart 1913c: 194–197). He set out Franklin’s daily routine: the overriding question was “What good could he do today?” He would wake at 5 and spend the next several hours engaged in prayer and getting ready for work. Work would commence at 8 and end at 12 noon. He would eat his midday meal and read his business books. Work would recommence at 2 and end at 5. From 6 in the evening until 10, he would make sure that everything was in its place, have his “evening bread” (“Abendbrot”), and entertain himself with music, reading, or discussion. He would end it by reflecting on the events of the day (Sombart 1913c: 199). Sombart then mentioned how the big trader in Bolzen would close up shop at the beginning of the summer and then spend the entire summer months in his mountain home. The Italian trading people would work but would

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also enjoy their time at home in their villas. The English would work but they lived as gentlemen enjoying the English life. Sombart’s point was that money-making was important but the old type of bourgeois was not consumed by it (Sombart 1913c: 198–199). This lack of being consumed by striving for money was reflected in how the old type of sales person set his price and how he responded to competitors and customers. His price was determined more by what he thought was fair rather than what he could gain. Regarding competitors and customers, while he wanted fewer of the former and more of the latter, “what he wanted even more was his peace and quiet” (“man will doch vor allem seine Ruhe haben”) (Sombart 1913c: 200–204). Finally, there was the question of technology. He insisted that the old type insisted that the savings of a few pennies by using modern technology was not worth it. “Progress in technology is only desirable, if it does not destroy human happiness” (“Fortschritte in der Technik sind nur wünschenswert, wenn sie kein Menschenglück zerstören”) (Sombart 1913c: 209). The thirteenth chapter has a number of important points. It is Sombart’s discussion of “the modern economic man” (“Der moderne Wirtschaftsmensch”), it has the signifier of the “capitalistic spirit of our day” (“kapitalistichen Geist unserer Tage”), it contains one of the earliest uses of the term “high capitalistic” (“hochkapitalistische”), and it offers the distinction between the old bourgeois and the new (Sombart 1913c: 212). Sombart wrote of two major areas in which the modern economic man differed from the earlier one—in terms of ideal and in terms of activity. The fact that he included four characteristics under the first classification makes it less than easy to explain. The first is an ideal type but was represented by a number of famous men. Sombart included Cecil Rhodes, Carnegie, Rockefeller, and Walther Rathenau. Each of these men incorporated four elementary values: (1) they appeared gigantic, (2) they moved rapidly, (3) they were entranced by the new, and (4) they possessed the feeling of power (Sombart 1913c: 213–225). These were the ideal characteristics but they manifested themselves in men’s activities. Sombart reminds his readers that he had already mentioned them: in conquering, in ordering, in handling, in speculating, and in planning (Sombart 1913c: 227–231). It also manifests itself in

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the need to seek out customers, to lessen the cost of business, to have the “free elbow room” (“Ellbogenfreiheit”), to engage in competition without regard to anything else, and in effect, to be merciless (Sombart 1913c: 232–236). The second “Buch” has a short introduction, three major sections, and a brief conclusion. The section on biological components can be left aside but the sections on “ethical powers” and “social conditions” are not only relevant but contain Sombart’s comparison of the religious factors that were his sources of the capitalist spirit (“Die Quellen des kapitalistischen Geist”). For some scholars this is not a problem because they contended that the capitalistic “spirit” was nothing more than a spirit of doing while others believed it was nothing more than some kind of instinct. Sombart countered that the capitalist “spirit” was neither an activity nor an instinct but was generated by a large number of factors. In this, he took issue with Weber’s explanation that the fundamentals of Puritanism gave rise to capitalism. It was to Sombart’s credit that he praised Weber for his work, but it was unfortunate that he ignored the emphasis that Weber placed on Luther’s notion of “calling” (“Beruf ”) and Calvin’s doctrine of predestination. This is especially troubling given that Sombart devoted so much of the second “Buch” to the significance of religion for the development of modern capitalism. Sombart discussed the pre-capitalists and how their religious ideas did or did not impact their economic impulses. He dismissed the Catholics as having no particular interest in making money; as to Protestants, he regarded the pre-capitalist Scotts as having the moral interest in saving. As he had argued in Die Juden Sombart placed emphasis on the Jewish covenant with God and their strict devotion to Jehovah (Sombart 1913c: 292–301). Sombart devoted three chapters to each of these three religions. The major thrust of the nineteenth chapter was that European Catholics were resistant to capitalism on both theological and ethical grounds (Sombart 1913c: 303–311, 319). Unlike Weber, Sombart insisted that Protestants were also reluctant to endorse capitalism. Sombart emphasized Luther’s admiration for the craftsman and he stressed Calvin’s “ideal of poverty” (“Armutsideal”) (Sombart 1913c: 323–324). Protestants of both Confessions placed the highest value on their relationship to God and that

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meant the devaluation of all earthly things (Sombart 1913c: 327, 324). Sombart admitted in the concluding paragraph to the twentieth chapter that some of the greatest capitalist entrepreneurs were Puritans (“Gewiß: auch unter den Puritanern sind große kapitalistischen Unternehmer gewesen”). But he doubted that the drive for money was based upon the Protestant “ethic” but was more likely to be prompted by other factors (Sombart 1913c: 336). The twenty-first chapter was devoted to Judaism and capitalism and Sombart drew attention to his book on Jews and the capitalistic life. He mentioned some of the key points but here he suggested that there may be some similarities between Puritanism and Judaism. These included the strict discipline and the reverence for law, but Sombart insisted that what was far more important for the development of capitalism was the ability to trade with “foreigners.” “God wants free trade, God wants business freedom!” (“Gott will den Freihandel, Gott will die Gewerbefreiheit!”) (Sombart 1913c: 348, 355). Sombart concluded his chapter on ethical powers with the identification of three factors which contributed to the development of the capitalistic “Geist”: “virtues”, “talents”, and “technologies” (Sombart 1913c: 358–359). He demonstrated this in a somewhat indirect way. The emphasis on virtue is shown by the way in which the state promoted capitalism. In this, Sombart was drawing on his book Krieg und Kapitalismus and how the state required discipline, order, and finance (Sombart 1913c: 361–374). The emphasis on “talent” is shown by the way in which Judaism promoted capitalism. Here, Sombart was drawing again from Die Juden and how their wanderings helped them to adapt to trade and business (Sombart 1913c: 383–384, 396). Finally, the emphasis on “technology” is indicated by the restlessness of the capitalist spirit. Sombart could have referred to passages in his earlier books but he did not. Instead, he emphasized how technology and progress have become ends in themselves and their combined over-valuing of material things (Sombart 1913c: 423–426). The final two chapters are also somewhat strange. In the chapter on “The Capitalism Itself ” (“Der Kapitalismus selbst”) Sombart reminded his readers that he began his examination of the development of modern capitalism more than a decade prior with the publication of Der moderne Kapitalismus. He also reminded his readers that he had placed great

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emphasis on “economic rationalism” which included calculation, planning, and thinking about the future. He insisted that the capitalistic system was an embodiment of an “invisible spirit” (“unsichbarer Geist”), one which not only inhabited the modern capitalist, but dominated him (Sombart 1913c: 446–447, 451–453). The final chapter is a look back and a look forward (“Rückblick und Ausblick”). He gave Weber credit for the Protestant ethic thesis but he insisted that the issue of the development of modern capitalism was far more complex than Weber had thought. In fact, Sombart admitted that it was even more difficult to answer than he himself had thought when he finished writing Der moderne Kapitalismus. Nonetheless, the capitalistic “Geist” can be described as being generated out of a combination of the “GermanicRomantic” spirit of nature and technology with the “Jewish spirit” of the exchange. And that from the eighteenth century, capitalism has evolved and grown. The question is “What will the future bring ?” (“Was wird die Zukunft bringen?”) (Sombart 1913c: 462). Sombart suggested that he drew three ideas from his study: (1) capitalism was inclined to selfdestruct, (2) capitalism was becoming increasingly bureaucratic, and (3) capitalism was suffering from over-population. Sombart concluded with a poetic metaphor and a metaphysical question: “Perhaps it is the twilight of the gods. The gold will be given back to the Rhein stream. Who knows?” (“Vielleicht auch ist es die Götterdämmerung. Das Gold wird dem Rheinstrom zurückgegeben. Wer weiß es?”) (Sombart 1913c: 457, 461–464). Sombart did not know what the future would bring but he suspected that the future was going to be cloudy. He had already anticipated a war breaking out and he was not surprised when August 1914 occurred.

Traders and Heroes In 1915 Sombart published a small volume that was full of patriotic feelings. The book had the provocative title of Traders and Heroes (Händler und Helden) and it was intended for a wide audience because it was priced at one German Mark. That it was highly successful is indicated by the fact that my copy was one of the volumes printed between eleven

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thousand and twenty thousand copies! Unlike most of Sombart’s books, Händler und Helden was printed in “Fraktur” the special German font that was going out of style and was being replaced by a more modern font. It is clear that Sombart’s book was intended to be propaganda and unfortunately he neglects to mention that both Germany and Britain engaged in crude attacks on each other. But Sombart’s book is more than mere propaganda: it is a wartime effort to highlight the fundamental differences between the Germans and the English. Sombart insisted that this was a “war of faith” (“Glaubenskrieg”) and that it would decide more than which country would rule the seas; in addition, it would determine which national spirit would prevail: the English tradesman or the German hero (Sombart 1915: 2–6). Sombart devoted the first chapter to setting out the English approach to life, to science, to the state, and to culture. He suggested that Spencer represented the English approach to life and science and that Hobbes represented the English conception of the state and culture (Sombart 1915: 9–39). Sombart summed up the focus of the English spirit was on comfort and sport (Sombart 1915: 50). Germany’s opponents tended to regard the war as Nietzsche’s war but Sombart argued that that was untrue. Nietzsche was not necessarily a good German and he probably did not represent the “German spirit” (“Deutscher Geist”). Rather, it was someone like Goethe who represented the German spirit with its sense of duty (Sombart 1915: 52–63). The English valued the individual and so cannot appreciate the German dedication to the nation. An Englishman prefers comfort in his home; the German is ready to sacrifice himself for his fatherland. The English state is minimal and exists so that people can buy and sell; the German state is maximal and its people exist for it. It is the difference between the “shopkeepers” (“Krämer”) and the “heroes” (“Helden”) (Sombart 1915: 67, 80–81). Sombart insisted that the “German spirit” revealed itself in the military spirit of German philosophy, literature, and even music. Treitschke, Fichte, Schiller, and Beethoven embodied the spirit of conflict and war. Even Kant, the author of the work on perpetual peace, recognized the German fighting “spirit” (Sombart 1915: 83–93). Sombart returned to his discussion of the English spirit and insisted that comfort and sport

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were twins because both were based upon pleasure (Sombart 1915: 103–107). Both also were focused on the individual, in contrast to the “German spirit” which was dedicated to something far higher and more essential than any single individual. The “German spirit” contains “the idea of the state’s community” (“Die Idee der staatlichen Gemeinschaft”) and is “the flame of the love of the fatherland” (“die Flamme der Vaterlandsliebe”) (Sombart 1915: 113–115, 119). The English cares for his body; the German cares for his soul. The English seeks happiness; the German wants danger (Sombart 1915: 122–123, 126–127). Sombart shifted his tone in the concluding chapter of Händler und Helden and he addressed the reader as “friend” (“Freund”) (Sombart 1915: 129, 130). He warned his friend of the seductiveness of “European” ideas and he insisted that German thinkers such as Herder, Humboldt, and Schiller had much greater ideas (Sombart 1915: 139– 140). England was a colonial power and sought expansion; Germany was a chosen power and sought further strength. It was the duty of every German to contribute to that exalted effort (Sombart 1915: 144–145).

Concluding Comments There is no doubt that the books that Sombart published between 1911 and 1915 contained a variety of topics. That has led some critics to suggest that Sombart moved from one topic to another. However, he made it clear in the introductions to these volumes that each of these were to be regarded as having been written as preliminary works to his revision of Der moderne Kapitalismus. The clearest formulation of his mature view of his work was that he, like other thinkers, had not appreciated the complexity of factors which led to the development of modern capitalism. The “spirit” might be the same, but its origins are not simple. It is this understanding that infuses the later editions of Der moderne Kapitalismus and is the focus of the following chapter.

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References Hilferding, Rudolf (1987) “Werner Sombart, Der moderne Kapitalismus.” In Brocke 1987. 147–160. Naumann, Friedrich (1987) “Die Vorgeschichte des Kapitalismus.” In Brocke 1987. 107–123. Schmidt, Conrad (1902) “Sombarts Buch über den modernen Kapitalismus.” In Brocke 1987. 124–134. Schmoller, Gustav (1987) “Werner Sombart, Der moderne Kapitalismus.” In Brocke 1987. 135–146. Sombart, Werner (1911) Die Juden und Wirtschaftsleben. Leipzig: Verlag von Duncker & Humblot. Sombart, Werner (1913a) Luxus und Kapitalismus. München und Leipzig: Verlag von Duncker & Humblot. Studien zur Entwicklungsgeschichte des modernen Kapitalismus. Erster Band. Luxus und Kapitalismus. Sombart, Warner (1913b) Krieg und Kapitalismus. München und Leipzig: Verlag von Duncker & Humblot. Studien zur Entwicklungsgeschichte des modernen Kapitalismus. Zweiter Band . Krieg und Kapitalismus. Sombart, Werner (1913c) Der Bourgeois. Zur Geistesgeschichte des modernen Wirtschaftsmenschen. München und Leipzig: Verlag von Duncker & Humblot. Sombart, Werner (1915) Händler und Helden. Patiotische Besinnungen von Werner Sombart. München und Leipzig: Verlag von Duncker & Humblot. vom Brocke, Bernhard (1987) Sombarts “Moderner Kapitalismus.” Materialen zur Kritik und Rezeption. München: Deutscher Taschenbuch Verlag.

4 Der moderne Kapitalismus Revisions 1917–1928

Introduction As was mentioned at the end of the previous chapter, Werner Sombart began to work on revising Der moderne Kapitalismus almost as soon as it was published. As was also mentioned at the end of that chapter, Sombart confessed that determining the origins of modern capitalism was far more complex and much more difficult that he had originally thought. Hence, he was relatively satisfied when the second edition of Der moderne Kapitalismus finally appeared with the first volume in 1916 and the second in 1917. The history of the editions of Der moderne Kapitalismus is confusing because while there are a total of some six editions, there are only three different ones: the first one from 1902, the second one from 1916/1917, and the final edition from 1928. The third edition from 1919, the fourth edition from 1921, the fifth edition from 1922, and the sixth edition from 1924 are all unchanged reprints from the edition from 1916/1917. Add to that the fact that the 1916 version was the first volume and the 1917 version was the second volume complicates things more. And, the full second edition had appeared in three volumes: the first book was a single volume while the second book was © The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 C. Adair-Toteff, Werner Sombart and the ‘Spirit’ of Modern Capitalism, Palgrave Studies in Classical Liberalism, https://doi.org/10.1007/978-3-031-54423-1_4

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split into two. Then, the 1921 volume was composed of four volumes with the first and the second book split into two. In 1927 Sombart published an additional book in two volumes and the following year the final edition of Der moderne Kapitalismus appeared in six volumes but in different versions: some have the first four volumes in one binding and the second version in a different type while others have all six volumes look the same. The main point to keep in mind is that there are really only the three editions: the original from 1902, the revision of 1916/ 1917, and the final one from 1928. Because the fourth edition of 1921 has four volumes, it is one that is easiest to cite and is also one of the most available, it will be used in this chapter. The final edition that I use is composed of the two volumes on Hochkapitalismus from 1927 and the four volumes from 1928. It is also noteworthy that none of the four volumes of the 1928 edition indicate that this is a revised edition of the 1916/1917 edition. This chapter has two main parts and a minor one. The first main part is focused on the changes Sombart made to the second edition while the second main part deals with the final edition. The minor part is comprised of some concluding comments as well as some indicating the direction of his thinking after 1927.

The Second Edition of Der moderne Kapitalismus To begin with some dry facts about the differences between the first edition and the second: The first edition was composed of two volumes with the first having a total of 704 (669 + XXXV) pages and the second having a total of 674 (646 + VIII), for a combined 1,378. The 1921 version has four volumes. The two half volumes of the first book have 948 (919 + XXII and VII) with the first volume having pages 1–462 and the second having pages 463–919. The two half volumes of the second book have 1248 (1229 + X and IX) with the first volume having pages 1–583 and the second 584–1229. So, the total number of pages of the second edition are 2,196. Put differently, the two halves of the

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second volume of the revised edition are not much smaller than the two volumes of the 1902 edition (1,248 versus 1,378). Sombart provided his own view of the changes that he made to his book in the opening pages of the second edition of Der moderne Kapitalismus. In the introductory “Geleitwort zur zweiten Auflage” he insisted that the second edition of his book was “a completely new work” (“ein völlig neues Werk”) and that was shown by the table of contents. He also insisted that not even a tenth of the earlier edition has been carried over into the second edition and even the old thoughts were at least reformulated to some degree. He admitted to not liking the title but decided to keep it because it indicated the fundamental problem. He again insisted that the new edition is “a new work” (“ein neues Werk”) and maintained that the reader would recognize that in reading just the first chapter. To support his contention, Sombart indicated that the new edition differed from the original in three ways. First, it differed in terms of the “material” that it incorporated. While the first edition offered minimal material, the second edition provided massive amounts of facts. Second, the new edition was much more complex than the “construction” contained in the original version. Third, he insisted that the second edition was much more rigorous in its “methodology” and he credited Max Weber for pointing out this failing of the first edition. Weber never wrote a review of Der moderne Kapitalismus and the notes in “Die protestantsiche Ethik” where he referred to Sombart’s book were not very full or very negative. Sombart wrote that Weber made his criticisms in their discussions. The fact that Weber made them several times indicated how strongly Weber thought that Sombart needed to make his book more rigorous. Not only did Sombart suggest that he had heeded Weber’s advice; he also indicated that he would be clarifying his own position in comparison to “different ‘directions’ or ‘schools’ or ‘methods’ of national economy” (“verschiedenen ‘Richtungen’ oder ‘Schulen’ oder ‘Methoden’ der Nationalökonomie”) (Sombart 1921a: IX–XII). Sombart insisted that he was neither an adherent to the entirely historical approach of the “Historical” school nor did he adhere to the “abstract-theory” of the “Theoretical” school. Rather, the approach that he was taking in the second edition was similar to that which he had taken in the original

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version and that was that he combined both history and theory (Sombart 1921a: XIII–XIV). Sombart then turned to the issue of one’s personal inclinations and he wrote that it was regretful that a scholar was now supposed to confess his own political inclinations along with stating his methodological approach. He suggested that it was a grave disservice to a scholar to have to declare his allegiance to either the entrepreneur or to the worker—as if he were “trying to be elected to the government” (“wie etwa zum Reichstage wählt”) (Sombart 1921a: XVI). Finally, Sombart defended himself from the criticism regarding “the manner of my citations” (“die Art meines Zitierens”). Sombart insisted that far from being filled with “dead material,” his book was filled with important citations. He indicated that he cited people regardless whether he personally approved of what they wrote but because it was necessary to provide as full of an account as was possible. As an historian, he felt it his duty to supply as much historical documentation as was needed (Sombart 1921a: XIX). Sombart concluded the “Geleitwort” with the observation that his critics seemed to lack a good will or did not read his book. He cited “the old Goethe” who wrote that one cannot protect oneself or defend oneself against criticism; one can only write what one believes is the truth (Sombart 1921a: XXII). Whether one believes that Sombart was not wounded by his critics and whether one is convinced that the second edition of Der moderne Kapitalismus is a completely new book may not be relevant. What is, is what Sombart wrote in the new edition. There is no doubt that Sombart was convinced that the origins of modern capitalism was one of, if not the, pressing issue of the day. As he pointed out, he had spent “half a generation” pursuing an answer to this question. He would spend another “half a generation” in continuing his quest to find a satisfactory solution. The second (third, fourth, fifth, and sixth) edition has an introduction (“Einleitung”) and two “books.” The “Einleitung” has three chapters, the first “book” has fifteen chapters in four major sections, while the second “book” has ten chapters in two major sections. In addition to the many changes in the text, Sombart added some “Preliminary Remarks” (“Vorbemerkung”), a “Post Remark to the Second Edition”” (“Nachtrag zur zweiten Auflage”), and an “appendix” (“Anhang”).

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The “Einleitung” has three chapters but they can be read as having a unifying thesis. This thesis is more than just economic life; it is the need for economizing in living. Sombart emphasized that humans are dependent on others for some things; hence; the need for order and organization. This is reflected in almost all aspects of life but it is particularly important in terms of work. Sombart defined “economy as the human need for sustenance” (“Wirtschaft heißt die menschliche Unterhaltsfürsorge”) and he indicated that it was objectified in three different principles: “a specific economic conviction” (“eine bestimmte Wirtschaftsgesinnung ”), “a specific technology” (“eine bestimmte Technik”), and “a specific organization of labor ” (“eine bestimmte Organisation der Arbeit ”) (Sombart 1921a: 3–13). The first principle is composed of two parts: the principle of satisfying needs and the principle of industry. The second principle is based upon the need to satisfy some goal or purpose. The third is focused on production and that involves the “means of production” (“Produktionsmittel”) and “labor power” (“Arbeitskrafts”) (Sombart 1921a: 14–15). Sombart’s more important point is his indication of the manifold factors involved in economic life. Rather than being a single factor about money, it involves the people, the land, the culture, and of course, the individual. These factors can be separated into those of a material nature, like people and land, or into those of an ideal nature, like culture, church, and other institutions. Sombart insisted that “culture” (“Kultur”) plays an inordinately large role in economic life (Sombart 1921a: 25–19). This emphasis on culture is revealed in how Sombart distinguishes “national economy” (“Nationalökonomie”) from law and technology. While both of these influence economics, he insisted that “national economy” is again defined as the “concern for human sustenance” (Sombart 1921a: 3, 21). The next issue was for Sombart to indicate his methodological approach and here he followed Weber’s advice to articulate it more clearly than he had in the first edition. Sombart suggested that there were three possible methodological approaches: (1) theoretical, (2) realistic-empirical, and (3) political. He rejected the third one as being idealistic and that it considered matters only in service of the ideal. As such, it was not worthy of being considered a scholarly approach. Instead, as he had indicated in the first edition, his approach was a

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combination of historical fact and general theory. Sombart further clarified his approach by laying out what he meant by economic beginnings and that meant approximately the fourteenth century. He clarified that he was investigating more of the European countries than he previously had. He also emphasized that his presentation was “genetic-systematic” (“Genetisch-systematisch”) which meant that he was inquiring into the different economic epochs which meant “craftwork” (“Handwerk”) and “capitalism” (“Kapitalismus”) (Sombart 1921a: 23). Sombart acknowledged that he was carrying over the notion of “Geist” from the first edition, but he clarified that he was improving the second edition by ensuring that the reader recognized that he was distilling the “Geist” of the “Handwerk” through its systematic explication and he was doing it for the “Geist” of “Kapitalismus” by its genetic exploration. He added that much of his focus is now on capitalism (Sombart 1921a: 25–26). Sombart cited Alfred Vierkandt’s 1908 work Die Stetigkeit im Kulturwandel to emphasize how dominate tradition and authority are for less educated human beings. He cited the second edition of Tönnies’ Gemeinschaft und Gesellschaft to emphasize the importance of “repeated experience” (“Gewohnheit”) is to the same less educated people (Sombart 1921a: 38–39). These citations not only indicate that Sombart had revised his work but that Vierkandt and Tönnies were scholars who recently stressed the notion of permanence in the pre-capitalist era. The fifth and sixth chapters are devoted to the two types of economic life during this early period. The “village economy” (“Dorfwirtschaft”) was the peasant economy and the “master estate economy” (“Fronhofwirtschaft”) was the economy of the feudal lord. The peasant economy went back more than a thousand years, while the estate economy was developed at the end of the Middle Ages (Sombart 1921a: 45–64). Sombart’s interest was more with the estate economy and he concentrated on the economic relationship that the estate owner had with his subjects. While the village economy operated due to its members’ the voluntary labor, the estate economy depended on the servitude of the workers for the landowner (Sombart 1921a: 72–73, 87). Having dispensed with the pre-capitalistic period, Sombart moved to the period of transition.

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Sombart indicated that in the earliest times there was only the “exchange economy” (“Tauschwirtschaft”) and that at one time “economies and exchanges” (“Wirtschaften und Tauschen”) were synonyms (Sombart 1921a: 93). However, the “Tauschwirtschaft” did not develop as a true economic method until the introduction of the “vocational trading” (“Berufshändlerschaft”) of the medieval period (Sombart 1921a: 95, 104, 117). As Sombart had emphasized the importance of the development of cities in the first edition, he did so in the second. But here he wrote of the different signs of what signified a city: walls and towers or markets or even universities. What set the city apart from the village or even the town was that the city was the place where the student could live his own life. “Those are the people who will live and let live” (“Das sind die Leute, die Leben und Leben lassen”) (Sombart 1921a: 129, 132). Sombart admitted that determining when a city came into being is far more difficult to determine in Europe than it is in the United States. In the United States, cities were “founded” and many of them in the recent past. In Europe, many cities started as villages, transitioned into towns, and then developed into cities (Sombart 1921a: 138–139). As Sombart had detailed in Luxus und Kapitalismus, cities grew largely because rich people lived there and they desired luxury objects. That meant that there needed to be artisans and craftsmen who would be talented enough to create these treasures. It also meant that there needed to be people who could facilitate trades and sales; not just between the artisans and the buyers, but also between people from outside of the city and those who were the city’s inhabitants (Sombart 1921a: 154– 155). This also involved certain cities becoming notable for what they produced. Sombart referred to the “salt cities” (“Salzstädte”), the “silver cities” (“Silberstädte”), the “wine cities” (“Weinstädte”), and even the “herring cities” (“Heringsstädte”). Although he did not refer to them as “bank cities,” he referred to the cities as “trading in money” (“Geldhandel”) (Sombart 1921a: 157–158). Sombart indicated that there were many different types of city dwellers and he included clerical and administrators. But his real concern was with two groups: the craftsmen and the traders (Sombart 1921a: 164–174). This involved drawing more people to the city in order to work and live. This was the “ideal of freedom”

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(“Ideal der Freiheit”) which many saw as an advantage (Sombart 1921a: 178–179). The eight chapters of the fourth and final main section of the first “Buch” are devoted to craftsmen economy. Much of this had been covered in the first edition. However, Sombart expanded his discussion to cover more than just German cities (Sombart 1921a: 214–244). He wrote about cities which had their own specializations but he insisted that between the Fourteenth and the early part of the Sixteenth centuries, cities did not grow much. That in turn made the shortage of skilled craftsmen even more serious. Sombart also attributed economic problems to the lack of hygiene and the prevalence of illness. He also pointed to the number and bloodiness of wars. Finally, hunger and even starvation reduced the numbers of qualified artisans, not to mention the reduction or stagnation of urban populations. He mentioned plagues but it seemed like an afterthought (Sombart 1921a: 253–256). Sombart concluded the sixteenth chapter with some theoretical remarks about the state of craftwork at the end of the pre-capitalistic period. Artisans were not concerned with prices but with stability; they were not interested in speeding up productions of their work. Finally, the craftsman made their wares for the local buyers (Sombart 1921a: 269–271). Of course, Sombart allowed that there were some “industries” which exported their goods, but most artisans were not involved in those projects (Sombart 1921a: 273–278). Much of the eighteenth chapter on trade is composed of numbers and facts, but Sombart included a full page “Vorbemerkung.” This “Preliminary Remark” is important because in it he clarified some terminology. He distinguished between producer and trader and between large and small traders and he indicated that size was relative. He also suggested that there was a variety of purchasers: the city rulers, the rich families, and religious orders of various kinds (Sombart 1921a: 279). At the conclusion of the chapter, Sombart added an appendix. It is mostly discussions of some comments made by other scholars about medieval trade. But he admitted that the chapter was mainly carried over from the first edition—one of the few places where he admitted that his claim that the second edition was a “completely new work” was not entirely accurate (Sombart 1921a: 399–415).

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The second “Buch” contained “The Historical Foundations of Modern Capitalism” (“Die historischen Grundlagen des modernen Kapitalismus”). It had two main sections: the first had two chapters with one on the essence of capitalism and the other on the “becoming” of capitalism. Both chapters total fifteen pages. In contrast, the second main section has eight chapters which total 125 pages. Sombart began the main section on the “Essence and Becoming of Capitalism” (“Wesen und Werden des Kapitalismus”) with a lengthy definition of capitalism. He insisted that it was provided in “conceptual purity” (“begrifflicher Reinheit”), no doubt in response to Weber’s criticism. It is not so much conceptually pure as it is lengthy. The main point was that capitalism is composed of two groups: the one which possesses the means of production and the other which provides labor. Both groups are bound together in terms of a market and by economic rationalism (Sombart 1921a: 319). The notion of rationalism is found in the capitalist’s striving for organization and in his reliance on calculation. It is also indispensable in production (Sombart 1921a: 320–326). In the twentieth chapter Sombart became somewhat poetic—he wrote of the “spirit” (“Geist”) that drove the capitalist—one that was restless and with a reference to Nietzsche was the “Will to Power” (“Wille zur Macht”). This “spirit” is of this world and wants to conquer it. In reference to Weber’s “world-fleeing” ascetics, the capitalist is “not world-fleeing, not world-negating” (“Nicht-Weltflüchtigen, NichtWeltverneinenden”). In reference to his book on the bourgeois Sombart insisted that the bourgeois spirit and the early entrepreneur spirit combined to create capitalism: “He had created capitalism” (“Er hat den Kapitalismus geschaffen”) (Sombart 1921a: 328–330). This individual may have created capitalism, but as Sombart argued in the second main section of the second “Buch” that he did it with the help of the state. Much of what Sombart wrote in the twenty-second chapter is a variation of what he had written in Krieg und Kapitalismus: the state needs capitalism to produce ships, weapons, and clothing for the state’s military (Sombart 1921a: 342–360). What he wrote in the twenty-third chapter is a variation of what he had said in Luxus und Kapitalismus— the rise of the city contributed to the manufacturing and sales of luxury goods (Sombart 1921a: 365–369). The next two chapters dealt with

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mercantilism; unfortunately, what Sombart wrote was neither very clear nor enlightening. However, what he wrote about the nature of money (“Geldwesen”) in the twenty-sixth chapter is relatively clear and quite informative. For one thing, he cited the noted economist Georg Friedrich Knapp’s Staatliche Theorie des Geldes (which contained a detailed argument about the need for the state to control money).1 For another thing, Sombart referred to Marx who, according to Sombart, insisted that the word “money” (“Geld”) meant two different things: as a function and as a thing. Sombart maintained that the inquiry into the “essence” of money is not very productive because the value of money does not lie in what it “is” but in what is “does.” It is a means of “exchange” (“Tausch”) (Sombart 1921a: 401–404). The remainder of the chapter is a detailed investigation into the nature and the function of money as well as a historical account. The twenty-seventh and twenty-eighth chapters seem to be add-ons: on colonial politics and religion. The only notable thing is Sombart’s mention of the special place of the Jews in the state and in the city and the reference to his Die Juden. What makes the reference puzzling in why he emphasized my book: “More about these things in my Jew-book” (“Naheres über diese Dinge in meinem Judenbuch”) (Sombart 1921a: 459, note 1). The entire second “book” is mostly a repetition of what Sombart wrote in his earlier books. This is indicated at the conclusion of the volume with his repeated discussion of the Jews (Sombart 1921b: 635–637, 909–920). It is also indicated in the section on luxury and in the one on war (Sombart 1921b: 719–748, 750–768). What is new and rather odd is that the chapter on “immediate increase in wealth” (“Die unmittelbare Vermögensbildung”) is followed by chapters on deceit, stealing, and robbery as means to increase wealth (Sombart 1921b: 651–680). It is difficult to believe that Sombart actually thought those chapters were appropriate to include in the “book” dedicated to “The Historical

1 Knapp’s argument countered the Early Austrian School of economics and in particular Carl Menger’s account of money. While Menger had his critics in Germany, his notion of money as arising out of exchange was mostly accepted by economists in England and the United States. Knapp’s book first appeared in 1905 with a second edition in 1918—not 1912, as Sombart wrote (Sombart 1921a: 399). A third edition followed in 1921.

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Foundations of Modern Capitalism” (“Die historischen Grundlagen des modernen Kapitalismus”). The two half volumes that make up the second book of Der moderne Kapitalismus are much richer and more informative than the second half of the first book. There are two noteworthy facts about the “Einleitung” and the first main section. The introduction has the title of “The Epoch of Early Capitalism in Overview” (“Die Epoche des Frühkapitalismus im Überblick”) and contains the concept of economic epochs as well as the concept of the early capitalistic epoch. Sombart referred to the first volume but here he defined it as a period of time that had special characteristics which set it apart from the earlier and the later periods. Sombart maintained that the early capitalistic period differed from what had dominated before because it had the beginnings of the capitalistic trade. It differed from the later period of modern capitalism because it still lacked a fully developed “spirit” of capitalism (Sombart 1921c: 4– 15). The second noteworthy fact is related to this as indicated by the title of the first main section: “Spirit and Form of Economic Leadership” (“Geist und Form der Wirtschaftsführung”). It is in the four chapters which make up this first main section that Sombart described the ethics of early capitalism. He emphasized how seriously citizens regarded the sanctity of contracts and he stressed the connections between economics and religion and morality. The codes of conduct in business were related to law but also to morality and this was revealed in both the notion of permitted business and the “doctrine of the just price” (“Lehre vom gerechten Preise”) (Sombart 1921c: 29–31, 38–42). Sombart’s points were that early capitalism was largely governed by conventions, rules, customs, and morals which promoted a fair and equitable trade. Prices were not too high because profit was not the motive; competition was tolerated as long as the competitors were honorable and honest. These chapters led to the one on “business style” (“Geschäftsstil”). This term is a slight misnomer because it does not mean “style” in an English sense but the approach to business. This is made clear when Sombart discussed the working time. The early capitalist was not consumed by business so his day, week, and year differed from the modern capitalist. Sombart insisted that the Frenchman supposedly worked only two hours

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a day. Sombart allowed that that number of hours might be an exaggeration but he pointed out that Benjamin Franklin, the author of “time is money” only allotted six hours a day for work (Sombart 1921c: 57). Furthermore, this businessman was not a servant of his work; instead, “He remained master of himself ” (“Er bleib Herr seiner selbst”) and he valued his peace and quiet. The businessman in America or in Scotland carried himself with dignity, was clothed to show his seriousness, and he walked with steady steps—never hurriedly (Sombart 1921c: 62–64). The entire second main section is an in-depth analysis of early capitalism practices, but what is crucial is what Sombart claimed were the later results of that period. He noted three major shifts from the beginning of the period until its end: (1) the change of character of the contract relationship—from the “natural” binding to one of “purpose,” (2) the change of character of the person—from one who owned the business to one who was owned by the business, and (3) the change of character of production—from the “productive powers” (“Produktivkräften”) to the “means of production” (“Produktionsmitteln”) (Sombart 1921c: 97–98). The two important chapters in the second main section are chapters ten and eleven. The tenth chapter is on the development of the capitalistic firm and the eleventh is on the capitalistic forms of society. Most of the points in chapter ten are repeated from the first edition: on the importance of rational calculation and on double book keeping, but he provided even more historical evidence for them (Sombart 1921c: 112–114, 119–123). Sombart insisted that there are two main types of social forms in business: the personal and the cooperative. Of course, he immediately clarified that there are mixed ones as well (Sombart 1921c: 141). There are the family businesses and the stock businesses and then there are the open ones and the closed ones. But Sombart seemed particularly concerned with the stock company (“Aktiengesellschaft”). These companies embodied the idea of capital and they differed from their predecessors with the notion of the dividend. They also differed because of the weight they placed in book keeping and the importance of records (Sombart 1921c: 150–162). Sombart offered pages of statistics before moving to the final brief chapter of the first main section. Chapter

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Twelve is on “The State Economic Forms” (“Die Staatswirtschaftsformen”) and while more than half of its eight pages contain historical information in small print, he noted that despite the “burning interest in the modern state,” there is almost no concern with the state as an economic form. That is why Sombart gave almost no comments on a pure state economic business—because none had yet existed. He gave slightly more comments on a mixed state and private economic business but these were either administrative or a bank (Sombart 1921c: 173–181). The second main section is devoted to the market and in the first part Sombart discussed the expansion of the markets and how they became a national institution rather than local. He also set out the conditions for supply in order to meet demand. But he spent most of this part explaining the shift from pricing in the pre-capitalist era to the method in the early capitalist period. Again, his primary emphasis was on the rationalist process. He noted that there is a limit to the “fixed price” (“feste Preise”) and how taxation affects the stability of prices. He also reminded his readers that the lure of speculation added to the variability of pricing (Sombart 1921c: 191–207). The second part of the second main section has the formation of the economic situation as its target and Sombart began with the claim that the economic situation is always in connection to the market. That means that the economic situation fluctuates between times when the market is favorable and times when it is unfavorable. Sombart reminded his readers that the market’s condition is not just determined by economic factors; rather, there are “natural conditions” such as a “loss of harvest, lack of water, fire, hail, drought, cold, heat, etc.” (“Ernteausfall, Wassernot, Feuer, Hagel, Dürre, Kälte, Hitze usw”) (Sombart 1921c: 210). There are also “social conditions” including “war, revolution, customs politics, currency conditions, luxury prohibitions, country grieving, style change” (“Krieg, Revolution, Zollpolitik, Währungsverhätnisse, Luxusverbote, Landestrauer, Modewechsel”) (Sombart 1921c: 210–211). Any of the natural or social conditions can lead to an “economic crisis” (“Wirtschaftskrisis”) or worse, a “profit crisis” (“Absatzkrisis”) (Sombart 1921c: 211). There is also something far worse because it is far more destructive and that is a “capital crisis” (“Kapitalkrisis”). This

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is when there is a sudden and massive upturn in the economic situation which is immediately followed by an equally sudden and just as massive downturn which leads to a wholescale financial collapse. Sombart noted that such massive fluctuations tended to be restricted to the capitalist period, if not to the most recent period of “high capitalism” (“Hochkapitalismus”) (Sombart 1921c: 212, 219). Sombart concluded the second main section with a reference to Engels who had noted that one of the defining characteristics of modern capitalism was its increasing speed. The pre-capitalist period was slower and more deliberate; the capitalist era is faster and more frenetic. Before the economy moved at a trot; now it is at a gallop (Sombart 1921c: 228). The third main section is lengthy and has four main parts and a total of nine chapters. However, it is on the various forms of transportation and need not be discussed, as much of it had been said by Sombart in the first edition of Der moderne Kapitalismus and in other works. But to Sombart’s credit, he was one of the few scholars who had addressed the change in capitalism and how much of that was due to the progress in transportation. It was not just that goods could be sent faster and safer at sea, but that the improvements in roads helped. Furthermore, he was one of the few who really concentrated on how the expansion of the inland waterways and the development of the railroads made shipping inland faster, safer, and more reliable (Sombart 1921c: 232–234, 355–357). Sombart also include the development of the modern postal service and how the post moved from being a personal type of postal delivery—by business people, butchers, and others—to a restricted city postal service. He then explained how the postal service grew into one run by the state and how international postal services were established. It was not just a matter of distance but matters of dependability and speed (Sombart 1921c: 373–391). If the third main section was lengthy and repetitive, it was relatively straightforward and mostly easy to comprehend. The fourth main section is neither straightforward nor easy to understand. Some of the difficulty seems to arise because Sombart appears less grounded on historical facts and more inclined to speculation. He had often complained that he was one of the first to investigate some economic topic and he bemoaned the lack of prior interest. But the sheer fact that he was pioneering

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meant that he lacked theories and facts of any predecessor. Accordingly, his exploration of the early markets and trade seem uneven. Similarly, his discussions of delivery and speculations are a bit tenuous (Sombart 1921c: 440–465, 494–510). There is marked improvement when he turned to the notion of exchange and the rise of payment. He was able to provide a rather detailed account of trade in England in the early 1700s by relying on Dafoe’s book The Tradesman (1727) (Sombart 1921c: 514–515). The second main part is the most developed and the most educational of the fourth main section. In it, Sombart sets out the vocational differences of businesses. He detailed how businesses grew in order to provide arms to kings. While some of this had been discussed in Krieg und Kapitalismus, his account here is brief and direct (Sombart 1921c: 534–537). It is much the same in his discussion of the large businesses and the importance of banks (Sombart 1921c: 539–543). It is also important that Sombart laid so much emphasis on the emergence of the stock exchange (“Börse”). It was, he maintained, a “totally new driving force” (“ganz neue Treibe”) (Sombart 1921c: 561–565). Sombart concluded the first volume of his second book on Der moderne Kapitalismus by indicating how much the “borse” facilitated trade—not just for England and Holland, but for much of Europe (Sombart 1921c: 579–585). The second volume of the second book is a composite of three different things. The first thirty some pages are given over to literature (Sombart 1921d: 589–621). The next two hundred pages are detailed accounts of “manufacturing” in an older sense in European countries and include labor conditions (Sombart 1921d: 629–830). It is only with the twenty-ninth chapter that Sombart began to discuss the causes of the new forms of business. Sombart began “The Causes of the New Formation of the Essence of Business” (“Die Ursachen der Neugestaltung des Gewerbewesens”) by criticizing the three typical causes for the transition to capitalism. He indicated that they are (1) the expansion of the profit areas, (2) the increasing poverty of the craftsman, and (3) technical progress. To these three, he added a fourth: (4) the population increase. He advised his readers to go back to the earlier pages of his book to see what can be said for or against these four typical grounds for the shift from the

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pre-capitalistic era to the period of capitalism. At the beginning of the fifteenth chapter Sombart again advises his readers to consult some of the earlier passages where he had written about the increase in the state’s interest in promoting businesses (Sombart 1921d: 841, 847–848). Here he offers four reasons for the state’s interest: (1) administrative, which would promote finance, (2) the need for high quality products, (3) the need for self-sufficiency, and (4) the interest in self-defense (Sombart 1921d: 848–849). Again, Sombart directed his readers to his earlier work, but here it is to the role of the state in military production that he had examined in Krieg und Kapitalismus (Sombart 1921d: 850). “The Developmental Reasons of the Capitalistic Industry” (“Die Entstehungsgründe der kapitalistischen Industrie”) began with Sombart’s assertion that there is one and only one reason for the rise of the capitalistic drive and that was the outlook for the rewarding sales. Sombart insisted that the reward of sales is predicated upon demand and demand can be the demand for finished products or the demand for means of production. By “Produktionsmitteln” he meant raw materials as well as labor. His main focus was on finished goods. Sombart pointed to Krieg und Kapitalismus as well as Luxus und Kapitalismus for his account of the demand for war ships and for luxury goods (Sombart 1921d: 860–863). However, he admitted that his earlier discussions sometimes lacked clarity which he intended to rectify in this chapter. He noted that the earliest “luxury” was produced by the sugar industry which was followed by the chocolate industry. Then came the luxury clothing industry which was developed alongside furniture industries and jewelry industries. Sombart allowed that many of the luxury industries arose at the time that craftsmen were producing luxury goods but he noted that the means used to produce the industrial goods differed significantly from how the craftsmen made their luxury items (Sombart 1921d: 867–875). Sombart admitted that the previous discussion answered only half of the question about the new forms of capitalism. The fifty-third chapter was intended to provide part of the second half of the answer and it was to be contained in the examination of the victory of capitalism. Part of this answer was in reference to the decline of the craftsmen. The section “Capitalism and Craftwork” (“Kapitalismus und Handwerk”) is one of

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the better sections of the second volume because he explains why the craftsman could not compete with capitalism. Sombart insisted that the craftsman would not adapt because he could not. The craftsman did not want to because he could not want to. Sombart explained this by pointing out that the craftsman’s “most inner spirit” (“innersten Geist”) was adamantly opposed to all things new: “horror novi.” Sombart also clarified that the nature of capitalism was the opposite of what the craftsman valued. The craftsman valued his product and almost nothing else was important. In contrast, the capitalist valued profit and almost nothing else mattered—including the product. In addition, the craftsman worked mostly in isolation and yet he was a member of a guild. Guilds promoted harmony but capitalism thrives on competition. That meant lowering prices to sell more, but the craftsman only wanted to sell what he needed to sell (Sombart 1921d: 890–892). The fifty-fourth chapter is similarly successful because it is focused on answering the question why is a firm in one particular location and not in some other place? It is clear that there are some industries which are bound to specific places—mining is one that readily comes to mind. But there are other industries which choose where to locate. Sombart offers several examples: a printing firm chooses to locate near the editorial offices of a newspaper and a tailor opens his practice near his potential customers. The last is “consumption determined” (“konsumbestimmt”), the middle is “work determined” (“arbeitsbestimmt”), while the first one is “means of production determined” (“produktionsmittelbestimmt”) (Sombart 1921d: 901–902). The sixth main section is also a mixed section. One would think that at the conclusion of the book, the author would be completing his discussion. Yet, Sombart spent ten chapters on material that he had already covered—the economies of the pre-capitalist countries and their colonies and their trade (Sombart 1921d: 912–1041). It is slightly more informative in the next several chapters. There he discussed the influence of the state and the regulations regarding labor. But it is with chapter sixty-eight that Sombart turns to something rather new and that is “The Beginning of the Mechanization of Business” (“Die beginnende Mechanisierung der Gesellschaft”). Sombart is using the term “Gesellschaft” in two different ways although he does not explicitly distinguish them. He

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is using it as “society” and that is shown by his reference to Tönnies as the author of Gemeinschaft und Gesellschaft. But it is also evident that Sombart is using the term as business or factory because he writes about the “deadness of machines” (Sombart 1921d: 1076–1077). The deadness of machines means much—it replaces the hand to hand and eye to eye human interactions. It does away with the living speech and counter-speech of people who are bound together. It replaces personal connections with a schematic. It is a “depersonalization” (“Entpersönlichung”) (Sombart 1921d: 1078). He referred to Das Proletariat and how he had shown that the modern worker was not only removed from nature but was being cut off to other humans (Sombart 1921d: 1083 and note 3, 1084). Chapter sixty-nine has a similar title to the previous one: “The Beginning Restructuring of Business” (“Die beginnende Umschichtung der Gesellschaft”) and again Sombart used “Gesellschaft” for “society” but more so for “business.” Sombart pointed to the high degree of permanence in vocations and how people stayed in their vocations through generations. He also pointed to a study that Gustav Schmoller had done that showed the remarkable shift in incomes between the fifteenth, seventeenth, and nineteenth centuries. He offered a table that indicated the differences between the Middle Ages, the early capitalism era, and the high capitalism epoch. There is a “poor” group in the first two but disappears in the last one; “needy” and “well off ” are present in all three. However, “rich” is found in the latter two while “very rich” is found only in the era of high capitalism (Sombart 1921d: 1085–1090). This may not seem very accurate because there were rich people in the Middle Ages and there seems to be poor people in the early twentieth century. But Sombart was not talking about a few individuals but of “social statuses” (“Stände”) and “classes” (“Klassen”). He noted that Europeans tended to use the terms interchangeably but he insisted that they mean different things. “Stände” is a term that applies to an organic group whereas “Klasse” is descriptive of a group that shares an economic interest. He drew a further distinction which was that “Stände” was destroyed and was replaced by “Klasse” and he pointed to the decline of the nobles. Once they were a “warrior caste” (“Kriegerkaste”) but they lost that

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sense in western Europe and became citizens (Sombart 1921d: 1091– 1096). Furthermore, “Stände” was a political or professional grouping but “Klasse” is an increasingly economical appellation (Sombart 1921d: 1105–1106). The sixth main section is the “Conclusion” (“Schluss”) and it is devoted to the obstacles to capitalism. Those discussions are rather interesting; what is less rewarding is Sombart’s conviction that capitalism will ultimately fail. Sombart maintained that there were psychological obstacles to capitalism. This manifests itself as either an ethical objection to the relentless pursuit of wealth or as a desire for a “peaceful life” (“ruhigen Leben”) (Sombart 1921d: 1113). There are also political obstacles and he counted legal hurdles, church politics, and war as obstacles to capitalism. There are also technical obstacles and these include the lack of hygiene, the lack of sufficient transportation, and the dearth of raw materials (Sombart 1921d: 1123–1124, 1134–1136). It is this final obstacle that Sombart believed would be the cause of the end of capitalism. In particular, he contended that the destruction of Europe’s forests would lead to the collapse of modern capitalism. He referred to this as the “The Struggle for the Forest” (“Der Kampf um den Wald”) and he insisted that almost all capitalistic enterprises depended upon wood, either as raw material for products or as material to be burned for machines. But despite his claim that the end of capitalism was soon, he admitted that the period of “high capitalism” had arrived. Sombart concluded his revision of Der moderne Kapitalismus with the promise that he would be investigating the “essence and origin of high capitalism” (“Wesen und Ursprung des Hochkapitalismus”) in the future volumes (Sombart 1921d: 1137–1140, 1143–1155).

Sombart’s Hochkapitalismus Werner Sombart finally fulfilled his promise beginning in 1927 with the publication of the “first half volume” (“erster Halbband”) of Der moderne Kapitalismus. This was followed by the “second half volume” (“zweiter Halbband”) the following year. The two half books made up the “Third Volume” of Der moderne Kapitalismus which meant that the edition of

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1927/1928 was composed of three books divided into six volumes. The subtitle was the same as in the earlier editions; what was different was that there was no indication of this specific edition. The two new half volumes had the title Das Wirtschaftsleben im Zeitalter des Hochkapitalismus (The Economic Life in the Age of High Capitalism) and the first half volume had the subtitle Die Grundlagen—Der Aufbau (The Foundation—The Structure) while the second half volume had a double subtitle Der Hergang der hochkapitalistischen Wirtschaft. Die Gesamtwirtschaft (The Course of High Capitalistic Economy. The Entire Economy). The first half volume ended with page 514 and the text of the second ended on page 1022. The indices ranged from 1025 to 1064. In the “Geleitwort” to the third book Sombart indicated that the time frame for what he referred to as “High Capitalism” began around 1760 and continued to the present day but he added that his account stops in 1914 at the beginning of the war. He noted that he cast a glance at the years after that, but he indicated that in certain respects the war altered capitalism (Sombart 1927a: XI). Actually, Sombart insisted that the age of high capitalism ended abruptly with the outbreak of the war and that every year after that meant fundamental changes. Moreover, Sombart did not insist on defining the beginning of high capitalism—others such as Friedrich Naumann and Johannes Plenges had different starting points. Instead, Sombart insisted that what he was interested in was the “spirit” (“Geist”) of the Age (Sombart 1927a: XII). Sombart maintained that the third book differed from the previous two in several ways. It was “poorer” in material but “richer” in theory. He insisted that he was discussing “high capitalism” differently because it was not comparable to the previous economic periods. That is because capitalism fundamentally altered economic life; not only was the striving for wealth different from economic well-being but that modern technology was altering almost every aspect of life on earth. In addition, capitalism was developing in different places at different times; it had its longest period in England and then throughout much of western Europe, but in the past thirty or forty years it has been manifested in the eastern part of the United States (Sombart 1927a: XIII–XIV). Sombart acknowledged that an investigation into economic life is fraught with difficulties and he suggested that the greatest problem was

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the attempt to match reality with the idea. That is, which grounds can be taken to be genuine and which ones are inauthentic? His answer was that there are certain conditions which apply to any legitimate inquiry into the essence and origin of high capitalism and he insisted that these must include the major forces of that type of capitalism: the increase in productivity, the unfolding of the system of credit, and the mobilization of the world of goods. He added that for this type of capitalism to develop it needed three things: capital, labor force, and sales (Sombart 1927a: XV). Those were the main themes of both half volumes but the following commentary will show that Sombart both exceeded those three as well as fell short of providing full explanations. He concluded his “Geleitwort” with an extended remark on his understanding and connection to Marx’ theory of capitalism. By referring to Max Weber’s demonstration of Marx’ magical powers, he side-stepped acknowledging his own earlier infatuation with Marx. Instead, he criticized Marx for writing about humans as he wanted them to be rather than studying them as they are. Marx wanted a new world and in this, Sombart regarded him as a thoroughly cultural optimist (“Marx war also durchaus Kulturoptimist”) (Sombart 1927a: XX–XXI). The first volume of Hochkapitalismus has three main sections: “The Foundations,” “The Development,” and “The Sales.” It is only the third main section (“Absatz”) which corresponds to the three main themes that he set out in the “Geleitwort.” This third main section is the shortest at just over forty pages; in contrast, the first main section is about 125 while the second main section has just under 350. But as the following commentary will also demonstrate, the length of the main sections does not reflect their importance. The first main section has three sections with each section having three chapters for the total of nine chapters. The first section has the title “The Driving Forces” (“Die treibende Kräfte”) but Sombart’s real focus is on “The New Leaders” (“Die neuen Führer”). It is appropriate to mention that Sombart was not referring to Hitler but to a new type of person. This new type of leader manifests himself with three tendencies: the move toward directorship, the move toward specialization, and the move toward the integration of functions (Sombart 1927a: 14–15).

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Sombart also distinguished three types of entrepreneurs: the specialist (“Fachman”), the salesman (“Kaufmann”), and the financial man (“Finanzmann”). The specialist is bound to his factory and preoccupied by the organization of his business. Sombart referred to this type (in English) as “Captain of Industry” (Sombart 1927a: 15). The salesman is concerned with sales and that means with planning. Sombart wrote that this person is referred to in English as “Business man” (Sombart 1927a: 16). The finance man is focused on ensuring that businesses have adequate capital so his interest is in the exchange. In the Anglo-Saxon world, he is called the “Corporation financier” (Sombart 1927a: 16). Without referring to Weber’s notion of “ideal types” Sombart indicated that these men are seldom found in their categorial purity but that real people have parts of all three and he provided almost three pages (in small print) of documentation of real people in Germany’s recent history. Sombart concludes the second chapter with another three small print pages discussing the origins of the new leader and makes reference to the predominance of Jews (Sombart 1927a: 17–19, 19–22). Sombart clarified that this new leader possessed thoughts and drives that he had discussed in his Bourgeois but here he suggested that the new leader has three key convictions: faith in progress, will to succeed, and unshakeable optimism. To these, Sombart also adds the “modern bourgeoise capitalistic concept of duty” (“modern bürgerlichkapitalistischen Pflichtbegriff ”) and the “love of his business” (“Liebe zu seinem Geschäft”) (Sombart 1927a: 27–28). The new leader is also free from older hindrances: he is not encumbered by tradition, family, and old business morality (Sombart 1927a: 29–30). Sombart referred to the previous volumes of moderne Kapitalismus where he described the essential characteristics of the capitalistic entrepreneur, but here he summarizes them into the claim that that individual has one and only one goal and that is profit. Anything else is subordinate to that single devotion (Sombart 1927a: 36–41). The second section is on the state (“Der Staat”) and Sombart began with almost six pages of small print devoted to his sources. Several of them are quite revealing: Sombart relied on the legal theorists Georg Jellinek and Hans Kelsen, the historians Otto von Gierke and Friedrich

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Meinecke, the social thinkers Alfred Weber (Max’ brother) and Ferdinand Tönnies. Perhaps the most surprising was Sombart’s reference to Alexis de Tocqueville’s book on the ancient regime. Sombart also relied on Georg Knapp, Max Weber, Ludwig von Mises, as well as Karl Kautsky, Rosa Luxemburg, and Robert Michels (Sombart 1927a: 42–47). The main focus on the state is on the liberal state. It is devoted to the minimizing of restrictions on economic development and to the elimination of obstacles. Again, he referred to previous works, including his “Judenbuch” (Sombart 1927a: 57–59). The remainder of that section is Sombart’s brief history of economics from 1800 to 1900. The third section in the first main section is devoted to one of Sombart’s favorite topics: technology. Much of this had been said before, but here Sombart insists that it is “the new spirit” (“Der neue Geist”) and he likens it to the world of natural science where everything can be categorized, studied, and systematized (Sombart 1927a: 78–85). The “new spirit” is also indicated by the “interest to invent, the desire for success, and the drive for business” (Sombart 1927a: 93–96). This “new spirit” requires a “new way” (“neue Weg”) which is the title of chapter eight. While his focus is on the wood industry, he also discusses a dozen other industries with metal fabrication being at the top (Sombart 1927a: 99– 100). This leads him to the brief discussion of the “new powers” (“neue Kräfte”) and he offers three new ones: steam, electric, and petroleum. All three power machines and that is the discussion for the remainder of this chapter. The main point that Sombart intended to stress was that machines can either augment human force or it can replace it; regardless of which is used, Sombart proclaimed “our age” is the “age of machines” (“Maschinenzeitalter”) (Sombart 1927a: 104). Machines are not the only thing that technology gives to the age. Sombart insisted that new medicines and better hygiene contributed to healthier and longer lives. This was not the only economic improvement; there was an increase in performance, an increase in exactness, and an increase in independence. By this last point Sombart suggested that people were no longer bound by tradition to their original location but were free to move to a place where they would have a better chance for better work (Sombart 1927a: 113–120).

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Sombart’s second main section has a complicated structure. “Der Aufbau” has two divisions: one is devoted to capital and the other is focused on labor. The division on capital has a total of nine chapters and the division on labor also has nine. The main difference is that the division on capital has close to 150 pages where the division on labor has 175. Of these, more than a hundred are found in the third subsection of the second division, which as the subtitle indicates, is “The Development of the Actual Proletariat” (“Die Entstehung des actuelles Proletariats”). The division on capital has three subsections: “On the Theory of Capital in General” (“Zur Theorie des Kapitals in Allgemeinen”), “The Money Capital” (“Das Geldkapital”), and “The Object Capital” (“Das Sachkapital”). This final one is less important than the first two because it dealt with production and distribution—points that Sombart had made in previous books. Sombart again provided two pages of sources and they are not only noteworthy for what they are but also for some of his comments. It is readily understandable that Sombart would include all three volumes of Marx’ Kapital and it is quite reasonable that he would refer to Böhm-Bawerk’s book on the history of capital interest (1884) and his two-volume work on capital interest (1884, 1889). Sombart was rather dismissive regarding the first because of its apologetic tenor but he thought highly of the second. But he insisted that its theme was outside his focus. But it was Sombart’s assessment of Rosa Luxemburg’s The Accumulation of Capital (Die Akkumulation des Kapitals) (1912) that is the most intriguing. He insisted that it was undoubtedly a work of the highest caliber, but that it was riddled throughout with “demagogic Kitsch” (“demogogischen Kitsch”). He added that one must simply accept it and while Sombart maintained that despite the wrong fundamental themes, there was nothing much done to the correctness of her actual treatment of the theme of accumulation (Sombart 1927a: 127–128). Sombart began his definition of capital with two points. His first point was that capital is both the process of exchange and the employment of double bookkeeping. But his second point was the admission that this definition is incomplete. But his final comment about capital accumulation is revealing because he suggested that it was laughable to regard a child’s collection of berries as being indicative of “capitalistic means

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of production” (“kapitalitische Produkionsweise”) (Sombart 1927a: 129, 134). Much of the chapter on the development of capital in general is not theory but statistics. Sombart did mention a few points which are relevant. He clarified that when he writes of capital he always means “money capital” (“Geldkapital”). He also referred to his Bourgeois where he demonstrated that the bourgeois is concerned with saving and that the bourgeois regards that as a virtue (Sombart 1927a: 152, 166–167). Although he did not explicitly state it, savings allow for credit. Credit is defined as “purchasing power without possessing money” (“Kaufkraft ohne Geldbesitz”) (Sombart 1927a: 175). This was the lead sentence of the fourteenth chapter which carries the slightly misleading title and subtitle “The Credit and its Development/The Essence of Credit” (“Der Kredit und seine Entwicklung/Das Wesen des Kredits”). It is misleading because Sombart did not spend much time on what credit is and how it was developed. Instead, he spent almost forty pages detailing European banking practices (Sombart 1927a: 177–217). It was only in the six and a half pages of chapter fifteen that Sombart set out the significance of credit for the capitalistic economy (“Die Bedeutung des Kredits für die kapitalistische Wirtschaft”). There Sombart explained that credit made capitalism possible and he cited John Stuart Mill for insisting “Money is the property in gold already acquired, credit is the property in gold to be acquired” (Sombart 1927a: 221). He also insisted that credit completed the process that money had begun: the “deconcretizing, denaturalizing of the economy” (“Entkonkretisierung, Entnaturalisierung der Wirtschaft”). What he meant by this is first, money/credit makes the economy less concrete and more abstract; second, money/credit makes the economy less personal and more impersonal; and three, money/ credit makes the economy less natural and more unnatural. Furthermore, money/credit makes the economy less a matter of real exchange of goods and more of a matter of faith. Rather than referring to Weber, Sombart cited Marx who had insisted that the monetary system was basically Catholic but that the credit system was essentially Protestant (“Das Monetarsystem ist wesentlich katholisch, das Kreditsystem wesentlich protestantisch”) (Sombart 1927a: 222–224).

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After a brief chapter sixteen on fundamentals, Sombart spent the next three chapters on production increase and decrease. There is no real theory here, just sixty-eight (!) pages of statistics (Sombart 1927a: 235–303). The second main division is ostensibly on labor power but Sombart often veers into different territories. For the first example, Sombart devoted several chapters to population. Some of his comments may not be relevant to capitalism but deserve being mentioned. An example is his references to Montesquieu and to Malthus in regard to population fluctuations. It is the latter who drew Sombart’s attention the most because it was Malthus who had discussed how the growth in populations would sometimes lead to the lack of food and that in turn would lead to the decline in the numbers of people. This is regarded by Sombart as the naturalistic theory of population (Sombart 1927a: 305–309). The economics theory relies on a number of thinkers, including Malthus, but also Adam Smith and Karl Marx. It was Marx who had suggested that the increase in workers will lead to increasing poverty which will, like the naturalistic theory, lead to a reduction of population (Sombart 1927a: 310–314). The final theory that Sombart addresses is the sociological theory. Here, Sombart indicated that there are three approaches: (1) the biological-technical in which food and hygiene play roles, (2) the spiritual in which the psychological inclinations of individuals and groups will influence ideas determining family planning and choosing how many children to have, and (3) the sociological in which economic factors will determine population growth (Sombart 1927a: 316–321). The focus of chapter twenty-two is on “unfree labor powers” (“Die unfreien Arbeitskräfte”) and Sombart meant slaves. One might not expect this to be part of a treatise on high capitalism but Sombart reminded his readers that slavery was a major part of American capitalism until the Civil War. Sombart considered the numbers of slaves involved in the cotton industry and provided statistics showing the increase in slaves translated into the increase in cotton. He provided a similar account for slaves in diamond mining in South Africa (Sombart 1927a: 326, 329). The dissolution of the old economics of the village is the topic of the twenty-third chapter and its twenty-two pages can be safely ignored

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because it is something that Sombart had covered in depth in the earlier editions of Der moderne Kapitalismus and because here there is Sombart’s typical use of statistics for many European countries (Sombart 1927a: 331–353). The underlying point of the chapter was the notion of the future proletariat; which was the topic of the twenty-fifth chapter. However, in between these two Sombart had a chapter on overpopulation replete with pages of numbers. But the key conclusion is similar to what he had drawn in chapter twenty-one about the lack of nutrition and the dearth of food that would lead to deaths. He had concluded that chapter with a reference to the combination of sickness and starvation that led some people to call it “Hungertyphus” (Sombart 1927a: 362). For the development of the actual proletariat Sombart provided a list of sources that covered eight pages in small print. None of this is relevant but it does attest to Sombart’s range of expertise. He provided literature on Germany, France, Italy, Britain, and Belgium. He offered references on colonization and the growth of cities as well as on geographical influences (Sombart 1927a: 363–371). Sombart then devoted ten pages of small print to the movement of peoples from agrarian areas to population zones. This was followed by another twenty-two of statistics (Sombart 1927a: 373–383, 385–407). The single theme of the entire twenty-fifth chapter was the draw of the city. In fact, the remainder of the first half volume is mostly composed of statistics and historical facts and can be safely omitted. However, Sombart made the astute observation that for capitalism to achieve its goal of profit, it needed a ‘new race” of men (“Was der Kapitalismus für seine Zwecke brauchte, war ein ‘neues Geschlecht’ von Menschen”) (Sombart 1927a: 424, see 514).

The Second Half Volume The second half volume of Das Wirtschaftsleben im Zeitalter des Hochkapitalismus has an even more complicated format than the first half volume did. It has three main sections of uneven length. The first one (“Erster Abschnitt”) has three chapters totally approximately thirty pages. The second one (Zweiter Abschnitt”) also has three chapters with again some

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thirty pages. But the third main section differs radically from the first two. Unlike the other two, the third (“dritter Abschnitt”) has three “under sections” (“Unterabschnitten”), with the first one having three chapters. The second having six chapters. The third one is broken into A, B, and C. A has three chapters, B has three (of different lengths), and C has three. Then there is a “Conclusion” (“Schluß”) which has six chapters. Some of the chapters in the second half volume are a brief five pages while some run more than forty pages. The “Conclusion” is seventy pages. Having set out the complex form, it is time to turn to the substance of that book. The first section has three chapters, each addressing the three parts of capitalism. There is the element of need, the element of marketing, and the element of business. Sombart indicated that the element of need or want could be individual or it could be collective. If it is collective it could be from a small group or it could be from masses These are all based upon actual needs but he suggested there are also speculative needs (Sombart 1927b: 510, 522–526). The market is defined as the place of exchange, including the price. Sombart maintained that there is a “market sense” (“Marktgesinnung”) that is the fluid atmosphere. This is what he referred to as the “inner market.” The “outer market” is the organization of the market and this is relatively fixed. Finally, there is the “market technology” which determines how the market actually functions (Sombart 1927b: 527). There are three types of markets: the “capital market,” the “labor market,” and the “goods market.” Normally, the price is determined by demand and supply, but it can be artificially affected by a cartel (Sombart 1927b: 528–532). Turning to “business” (“Betrieb”) Sombart concentrated largely on the means of production and that mostly meant labor. But he also discussed the differences between small businesses and large ones and how smaller ones can successfully grow into large ones and how specialization and mechanization play a role in either small or large businesses (Sombart 1927b: 535–546). This notion of motion led directly to the second main section which was focused on “The Movement Elements of the Economical Processes” (“Die Bewegungsformen des wirtschaftlichen Prozesses”). The notion of movement is crucial in this section because it is found in the need for dealing with competition. Competition can be countered

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by three means: by “out-performing” competitors, by out “suggesting” them by means of advertisements, and by “out doing” them by the use of force. By the first, Sombart meant that the business succeeded simply by providing a product or service that is superior to competitors. By the second, he meant that the advertisements were more successful due to their powers of persuasion. And, by the third he meant the reliance on means of excluding possible competitors. He claimed that this was the dominant form in early capitalism where one man would defeat the other by some form of physical competition. In the time of “high capitalism” the use of force is no longer individual or even physical—one relies on the state to exclude competition. Sombart’s larger interest was in advertisements which he suggested that the “‘spirit’ of the modern business advertisement” (“‘Geist’ der modernen Geschäftsreklame”) in that it draws the customer in by the power of suggestion rather than actual performance (Sombart 1927b: 557–662, esp. 561). Movement is also a key in chapter thirty-five on business cycles where he discussed market upswings and downswings and how they are indicative of modern capitalism. The increase and the decrease in business can be caused by many different things: the loss of interest in the product, the increase in price because of increase labor wages or increase in the cost of materials. Some of these swings are minimal, some are significant, and some downturns end in the collapse of the business itself (Sombart 1927b: 563–586, esp. 577 and 581). As mentioned above, the third main section is the longest and the most complex in form. But each of the three subsections has the overarching theme of rationalization. This is evident in the three titles of the three subsections: “The Rationalization of the Need for Goods” (“Die Rationalisierung des Güterbedarfs”), “The Rationalization of the Markets” (“Die Rationalisierung des Marktes”), and “The Rationalization of the Business” (“Die Rationalisierung der Betriebe”). The first subsection is relatively short and can be briefly explained. As Sombart had argued in his book on luxury and capitalism, he maintained here that as wealth spread, more people had greater demands for more goods. That meant that new techniques needed to be developed in order to meet the new demands (Sombart 1927b: 603, 616). Sombart explained this by contrasting the “earlier” time with the modern age but he was careful

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to point out that “earlier” was the appropriate modifier if one recognized that that “age” varied in terms of place and time. But he insisted what was common to each of the “earlier” ages was that the people had need for heavy and solid goods. This meant big and hearty meals full of carbohydrates and clothes made out of wool, linen, and pelts. Households were similarly furnished with solid and durable furniture: heavy tables and sturdy chairs, heavy beds and solid dressers. It was with the advent of modern times that everything became in Sombart’s words “lighter.” Food became less heavy with carbohydrates being replaced by meat and rice; heavy rye bread was no longer the bread of choice—light whitish bread was preferred. Clothes became lighter and less durable—all points he had made in his earlier works on “Mode.” Furniture became less massive and lighter which meant that they could be more easily moved. Hence the term “Möbel” as in moveable. Sombart probably did not need to remind his German readers that the term for houses and buildings is “Immöbilien” (Sombart 1927b: 617–621, 632–636). Despite Sombart’s insistence on the importance of rationalization, it is rarely mentioned in this subsection. “Rationalization” is also mostly absent in the subsection on markets. Sombart also clarified that there are no “capital markets” but are building banks and regular banks. Similarly, there are no longer any “labor markets” so the only markets that exist are markets for goods. But even here, Sombart did not discuss markets as much as he did “announcements” and other forms of advertisements (Sombart 1927b: 640–642, 644–650). He concluded with numbers pertaining to rail transportation and postal services (Sombart 1927b: 650–656). After a discussion of pricing Sombart turned to the matter of risk. Compared with the previous lengthy chapter on price, the five-page chapter on risk contains much more than statistics. Instead, Sombart noted how the chances of risk increased with the development of capitalism and how the smart businessman would try to ascertain the degree of risk and then determine a course of action that would minimize that. He gave an example of the risk of fire and how one would minimize that chance by reducing the amounts of flammable material, storing them in more secure places, and in investing in tools that would be used in putting out fires. He

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also noted the rise of insurance firms and how they would cover accidents (Sombart 1927b: 680–684). Chapter forty-four is a composite of comments and statistics about trade unions and cartels; the point of it appears to be that for both workers and business people, there is power in numbers (Sombart 1927b: 685–700). The final chapter of this second subsection is on stabilization. Sombart’s point of departure is Marx’ notion of the crises of capitalism and how the ups and downs of capitalism should ultimately lead to its collapse. Sombart suggested that the process of rationalization may help stabilize these swings but he was pessimistic (Sombart 1927b: 711). Rather than emphasizing rationalization, it might have been more relevant for Sombart to have stressed movement in these two subsections. The sources for the third subsection are notable for two reasons: they cover twelve pages and are divided into three groups: (1) bibliographies and sources, (2) general writings, and (3) writings on specific problems. This third group is nine pages in length. As with the sources, Sombart’s subsection is filled with information—facts and statistics—many of which were intended to prove his thesis about rationalism in business but the sheer numbers often make his thesis simply disappear. One needs only to consider some examples: the “discussion” about the increase in forms of business is mostly six pages of tables (Sombart 1927b: 729– 735). The “discussion” about banks’ involvement in business is three pages (Sombart 1927b: 741, 744–745). Sombart’s “discussion” about personnel in firms is a combination of statistics and small print digressions—all of which cover twelve pages (Sombart 1927b: 763–775). It is only when Sombart began the fiftieth chapter that he began to offer what purports to be a theory. His main point is that modern capitalism was and is highly specialized and in all of its branches. It is specialized in production, in sales, in distribution, and even in capital and credit (Sombart 1927b: 776, 778, 784–790). To support his theory Sombart then provided five pages of support (Sombart 1927b: 791–796). It is later that he returned to the theoretical aspects of the phenomenon of “concentration.” He argued that the issue of concentration in agrarian businesses was colored by two factors. One was that the process of production differed from non-agrarian businesses and the other was that the agrarian business was bound to its location (Sombart 1927b: 821,

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825). Rather than listing the pages of statistics, it is more important to skip over them and take up Sombart’s discussion of rationalism. It is what he has maintained for decades and that is that capitalism is founded upon double bookkeeping and that it is scientific because it is systematic. Sombart acknowledged that the restructuring of German businesses tended to lag behind other countries and he pointed out that it was Germany’s chemical industry that was one of the first to undertake this step (Sombart 1927b: 889–891). Sombart suddenly shifted gears and moved from technical to nontechnical matters. The fifty-third chapter opened with a provocative statement: “In these connections, I call spirit all that is immaterial [and] is not the soul” (“Geist nenne ich in diesem Zusammenhange alles Immaterielle, das nicht Seele ist”) (Sombart 1927b: 895). This is not clear but it seems that Sombart was making a distinction between the “soul” of the craftsman and the “spirit” of the capitalist. This interpretation is supported by the title of the chapter: “The Spiritualization of Business” (“Die Vergeistung des Betrieb”) and by his discussion of what he meant by the business having “Geist.” He maintained that every business has “Geist” and that every ordering is “Geist,” every number is “Geist,” every tool is “Geist” (Sombart 1927b: 896). This is again, not very clear but Sombart insisted that there is a three-fold system of capitalistic businesses. There is the “system of norms” (the administrative system), the “system of numbers” (the accounting system), and there is the “system of instruments” (the machine system) (Sombart 1927b: 901). Rather than clarifying this, Sombart embarked on a detailed structuring of it with horizontal and vertical planes as well as offering the numbers of workers in various businesses. It is only in the final two pages of this chapter that Sombart lets his readers know what its key is: that capitalism is increasingly depersonalized and is increasingly independent. It is the three-fold system that not only allowed for this process but actually demanded it (Sombart 1927b: 902–924, 926–927). The fifty-fourth chapter has an explanation of how capitalism intensified. Sombart claimed that it intensified in the sense that factories grew in number and in size, transportation grew in number but shrank the distance, and workers grew in number but machinery reduced the effort. In addition, the number of warehouses increased but the duration of

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storage time decreased. Sombart concluded this final subsection with the claim that modern capitalism sped up economic life while reducing the intellectual and bodily energy needed to produce things as well as making a reduction in the time needed to produce them. All of this was the result of “the rationality of the high capitalistic economy” (“die Rationalität der hochkapitalistischen Wirtschaft”) (Sombart 1927b: 928–942, 944–948).

“Schluß” The “Conclusion” began with Sombart’s admission that “we” are at the end of the lengthy wandering through a thousand-year period of economic changes. He could have also admitted that “we” are at the end of an almost thousand-page book. But he clarified that his entire work was focused on the last one hundred and fifty years and this book was devoted to the last fifty years (Sombart 1927b: 951). Although he maintained that this was his conclusion, much of the final five chapters introduce new information. He provided more statistics and he offered more defenses. And, instead of being devoted to capitalism, much of the “Conclusion” is on the peasant economies of the past (Sombart 1927b: 969–984). Then there is a twelve-page chapter on various types of communal organizations followed by an eight-page chapter on the “common economy” (“Gemeinwirtschaft”) (Sombart 1927b: 985–998; 999–1007). It is only in the sixtieth chapter that Sombart addressed the notion of economic life in the future. But here, he suggested that while predicting the future is problematic, predicting the future of economic and social matters is especially dangerous. He offered three significant thinkers who erred in their predictions: Tocqueville about how revolutions and wars would disappear; Schmoller who had predicted that the German state with its massive power would continue to exist after the war; and Marx who had prophesized the collapse of capitalism (Sombart 1927b: 1008). Rather than predicting the future, Sombart concluded with generalizations. The period of craftsmen ended, the era of capitalism was drawing to a close, and the age of high capitalism will also have its final moments. As with everything organic, the old dies out and is replaced with the new. As a we are driven by knowledge we must be

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resigned with what we find: “Vitam impendere vero” (Sombart 1927b: 1019–1022).

Concluding Comments Werner Sombart’s Der moderne Kapitalismus went through six editions with major changes to two of them and a significant addition to another one. But through these changes and additions, Sombart remained true to his guiding theme: to provide a thorough account of the rise of modern capitalism. It was no doubt repetitious and often boring but Sombart suggested that that which is correct is most often more boring than is the false (“Das Richtige ist meistens langweiliger als der Falsche”) (Sombart 1927b: 1022). One can agree with him that his works may have been boring, but he was most likely correct in his account of modern capitalism.

References Sombart, Werner (1921a) Der moderne Kapitalismus. Historisch-systematische Darstellung des gesamteuropäischen Wirtschaftslebens von seinen Anfängen bis zur Gegenwart. Erster Band. Einleitung—Die vorkapitalische Wirtschaft— Die historische Grundlagen des modernen Kapitalismus. Erster Halbband. München und Leipzig: Verlag von Duncker & Humblot. Vierte, unveränderte Auflage. Sombart, Werner (1921b) Der moderne Kapitalismus. Historisch-systematische Darstellung des gesamteuropäischen Wirtschaftslebens von seinen Anfängen bis zur Gegenwart. Erster Band. Einleitung—Die vorkapitalische Wirtschaft— Die historische Grundlagen des modernen Kapitalismus. Zweiter Halbband. München und Leipzig: Verlag von Duncker & Humblot. Vierte, unveränderte Auflage. Sombart, Werner (1921c) Der moderne Kapitalismus. Historisch-systematische Darstellung des gesamteuropäischen Wirtschaftslebens von seinen Anfängen bis zur Gegenwart. . Zweiter Band. Das europäische Wirtschaftsleben in Zeitalter des Frühkapitalismus, vornehmlich im 16., 17. und 18. Jahrhundert. Erster

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Halbband. München und Leipzig: Verlag von Duncker & Humblot. Vierte, unveränderte Auflage. Sombart, Werner (1921d) Der moderne Kapitalismus. Historisch-systematische Darstellung des gesamteuropäischen Wirtschaftslebens von seinen Anfängen bis zur Gegenwart. Zweiter Band. Das europäische Wirtschaftsleben in Zeitalter des Frühkapitalismus, vornehmlich im 16., 17. und 18. Jahrhundert. Erster Halbband. Zweiter Halbband. München und Leipzig: Verlag von Duncker & Humblot. Vierte, unveränderte Auflage. Sombart, Werner (1927a) Der moderne Kapitalismus. Historisch-systematische Darstellung des gesamteuropäischen Wirtschaftslebens von seinen Anfängen bis zur Gegenwart. Dritter Band. Das Wirtschaftsleben im Zeitalter des Hochkapitalismus. Erster Halbband. Die Grundlagen—Der Aufbau. München und Leipzig: Verlag von Duncker & Humblot. Sombart, Werner (1927b) Der moderne Kapitalismus. Historisch-systematische Darstellung des gesamteuropäischen Wirtschaftslebens von seinen Anfängen bis zur Gegenwart. Dritter Band. Das Wirtschaftsleben im Zeitalter des Hochkapitalismus. Zweiter Halbband. Der Hergang der hochkapitalistischen Wirtschaft/ Die Gesamtwirtschaft. München und Leipzig: Verlag von Duncker & Humblot.

5 Sombart on Capitalism 1925–1932

With the publication of the second half volume of Der moderne Kapitalismus in 1928, Werner Sombart did not cease writing about modern capitalism and its economic, social, and political effects. He wrote a noteworthy book that focused on capitalism and economics and equally important, he wrote a number of articles which explained how capitalism was affecting modern culture. These are the writings which will be the focus of this chapter. This chapter will have three main parts: the first part focuses on Sombart’s capitalism books from the nineteen-twenties with the obvious exception of Der moderne Kapitalismus, the second part contains discussions of the relevant essays which are found in Vierkandt’s Handwörterbuch, der Soziologie, and the third part focuses on several articles that Sombart wrote during the twenties and early thirties regarding the nature and the future of capitalism. As with the previous chapters, this one will also end with a very brief conclusion.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 C. Adair-Toteff, Werner Sombart and the ‘Spirit’ of Modern Capitalism, Palgrave Studies in Classical Liberalism, https://doi.org/10.1007/978-3-031-54423-1_5

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Sombart’s Later Capitalism Book Although it might seem somewhat odd to begin this chapter with a book that Sombart published in 1929, it is a worthy book that sets out some of Sombart’s earlier themes in a clearer and more coherent form than some of his earlier works.1 The book has a rather bland title: Die Drei Nationalökomien (The Three National Economies) but it also carries an interesting subtitle: Geschichte und System der Lehre von der Wirtschaft (History and System of the Doctrine of the Economy). It also has an intriguing motto: “Qui bene distinguit, bene docet” which can be translated as “Who distinguishes well, teaches well.” As was typical for Sombart, he had three main parts; the first part has three very brief chapters and totals 20 pages. The second part has three subsections with a total of twelve chapters. The total number of pages is close to 250. The third part has three chapters and is around 70 pages. The first part can be treated briefly; the third part deserves more attention; and the massive second part is the main topic of this section. The first part is more than an introduction because Sombart discusses the condition of today’s national economy (“Der heutige Zustand der Nationalökonomie”). He begins as usual with the complaint about the unworkable condition of understanding today’s economic situation. Either “economy” is a genuine academic discipline or it is merely a psychological approach. He thinks that it should be regarded as a discipline and he briefly discusses four German/Austrian economists: Wilhelm Roscher, Othmar Spann, Joseph Schumpeter, and Edgar Salin. Roscher published his history of national economy in Germany in 1874 and Schumpeter’s monograph appeared in the first volume of Weber’s Grundriss in 1914. Othmar Spann’s main theory of economics appeared in the sixteenth edition in 1926 and Salin’s history of the doctrine of economics was published in its second edition in 1929. Salin’s Geschichte der Volkswirtschaftslehre was the most recent and the best according to Sombart. However, Salin’s book suffered from the same type of errors that the others had—it was neither free of historical mistakes nor from 1

The title page of the book that I cite lists the date as 1930; however, the next page has the copyright date as 1929 which is what I use.

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political influence (Sombart 1929: 11–12). Sombart traces much of the problem of economics to the fact that it encompasses A to Z and that no one has appeared to agree with what it actually means. Sombart does not claim that he has given the definitive account in this book; but he does suggest that his account is one of the best (Sombart 1929: 17–20). Sombart contends that there are three different types of national economies: the scholastic, the harmonists, and the rationalists. These three can also be considered as theistic, deistic, and pantheistic (atheistic) (Sombart 1929: 23). The fourth and fifth chapters are Sombart’s historical overviews of these three types. He is not very interested in this except to show how mistaken they were. Sombart states his real objective when he asks: “How is the correct national economy possible?” (“Wie ist richtende Nationalökonomie möglich?”). This sentence is instructive for two major reasons: First, it is based upon Kant’s question of how is knowledge possible and second, it has the qualifying adjective of “correct” (Sombart 1929: 77). The similarity to Kant is unmistakable, especially when Sombart writes about “knowledge” (“Erkenntnis”) (Sombart 1929: 77, 80–84). Sombart criticizes his predecessors for engaging in metaphysics yet he also appears to philosophize. He mentions Descartes and Leibniz but also Dilthey and Simmel. What is even more interesting is his appeal to both Nietzsche for his “Wille zur Macht” and to Hans Vaihinger for the notion of “Als-ob” (“as-if ”) (Sombart 1929: 89, 92– 93). Sombart insists that science is positive and rational and he maintains that “An irrational, Dionysian, Romantic science is a contradiction in a double word” (“Eine irrationale, dionysische, romatische Wissenschaft ist ein Widerspruch im Beiwort”) (Sombart 1929: 97). As much as Sombart praises rationalism and upholds the value of science, he is not totally convinced that they are fully relevant to economics. What he does is investigate the nature of rationalism and the influence of natural science on national economics. Much of this means delving into the history of philosophy as well as the history of economics. The first is not really relevant to this account but the second contains some important insights. There is no doubt that universal laws are necessary in the natural sciences and they aid the scientists in making predictions. However, Sombart argues that what is beneficial in the natural sciences is not only unhelpful but destructive in the “science” of economics. That is because it leads one

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to think that economics is a pure science and can be as predictive and as authoritative as any natural science (Sombart 1929: 112–130). Instead, Sombart insists that there is a different and more appropriate type of “law” and he is thinking in particular of John Stuart Mill’s conception of induction or Carl Menger’s notion of “realistic” investigation (Sombart 1929: 130). Sombart decried Menger’s notion of “exact” and complained that it was the weakest portion of Menger’s Untersuchungen. As a student of Gustav Schmoller, Sombart would be likely to side with his mentor over Menger in the so-called Methodenstreit. Schmoller was the representative of the German Historical School of economics and believed that history provided much evidence for economics. In contrast, Menger was the founder of the Austrian School of economics and he followed Adam Smith with his conviction of the importance of theory. However, Sombart somewhat surprisingly sides with Menger and endorses methodology (Sombart 1929: 133, 144–155). Sombart follows the opposition between the “natural sciences” (“Naturwissenschaften”) and the “human sciences” (“Geisteswissenschaften”) but he argues that national economics does not belong in either science but is properly part of sociology. The use of Robinson Crusoe in economics is ill-advised because economics belongs in the realm of organized activity and “is therefore society” (“ist deshalb Gesellschaft”) (Sombart 1929: 161–170, 176–178, 181). Sombart turns to his discussion of economics as a system and he identifies three major factors: “the economic conviction” (“die Wirtschaftsgesinnung”), “the order” (“die Ordnung”), and “the technology” (“die Technik”). Rather than detailing these three major factors, Sombart makes a detour with the notion of “labor” (“Arbeit”) and he complains that it is connected to “value” (“Wert”). Sombart insists that he has long believed that the notion of “Wert” does not represent something but is nothing more than a “fiction.” The thirteenth, fourteenth, and fifteenth chapters are real appendices because they are Sombart’s discussions about “understanding” (“Verstehen”), “concepts” (“Begriffe”), and “laws” (“Gesetze”). One might get the sense that Sombart was building upon Max Weber’s later “verstehende Soziologie,” but one would be only partially right. Sombart’s larger goal is to insist that much of economics

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is neither rational nor conceptual but is largely built upon fictions (Sombart 1929: 238–248, 261–262). Sombart returns to an exploration of what economics really is in the third and final part. It is entitled “The Doctrine of the Economy as a Whole” (“Die Lehre von der Wirtschaft als Ganzes”). In it, Sombart returns to his Kantian thinking about knowledge and how it applies to various disciplines. For natural sciences, there is a causal explanation— one thing leads necessarily to another—and taken as a whole provides an entire “system of concepts” (“Begriffssystem”). But that approach is unworkable for economics. Unfortunately, some of Sombart’s predecessors learned the wrong lesson from that. Sombart complained that Adam Müller thought that national economics should be romanticized and Novalis contended that it should learn to poetize. Sombart repeats what he had maintained earlier and that is all science is anti-romantic (Sombart 1929: 278–279). Sombart takes up the issue of the relationship between metaphysics and economics. He does not mean metaphysics in the traditional senses of either ontology or first principles. Instead, he thinks of metaphysics as types of “world views” (“Weltanschauungen”) and he describes the world views that some of his predecessors had. Ricardo had basic returns as his main theme; Sisimodi had the problems of crises; Marx had the welfare of the working class; and the modern theorists have their fear of socialism. Sombart’s point is not that any of these themes are wrong but that they cannot be right or wrong (Sombart 1929: 282–285). Instead, these are all individuals’ standpoints and as such they are relative. This leads Sombart to three questions: (1) should a study be a type of “Wirtschaftsphilosophie” rather than a “Wirtschaftswissenschaft”— to which he answers in the affirmative, (2) should this “Wirtschaftsphilosophie” be separated from a “Wirtschaftswissenschaft”—to which he answers in the negative, and (3) should a scientific national economy be “value free” (“Wertfrei”)—to which Sombart gives a lengthy answer. He suggests that while Max Weber was credited with introducing the idea of “Wertfrei” in 1905; it goes back some thirty years before. Sombart does not claim that he had been the first to raise the issue, since it had been an Italian scholar. However, he insists that he had brought it up as early as 1894 (Sombart 1929: 288–289). Sombart clarifies his position

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by insisting that a “value judgment” is never “correct” and it certainly cannot be proven. As he writes: “A ‘valuing’ science [is]—a contradiction in term” (“Eine ‘wertende’ Wissenschaft [ist]—ein Widerspruch im Beiwort”) (Sombart 1929: 290). In the section “Naturwissenschaft und Nationalökonomie” Sombart suggests that there is a three-fold hierarchy: (1) pure natural appearances such as frequency of births which can be exactly determined, (2) mixed appearances which are at the limits of nature such as racial influence which can be tested, and (3) appearances which exceed the bounds of strict determination or testing such as the parallel between price increase and suicide. These are not yet open to understanding (Sombart 1929: 291–292). Sombart suggests that most of the human sciences are objects of understanding and he lists the study of law, the study of medicine, and the study of theology as having clear objects for investigation. In contrast, he suggests that the expression “national economy” lacks this clear definition. Instead, he lists three variations: (1) “economic philosophy” (“Wirtschaftsphilosophie”), (2) “economic science” (“Wirtschaftswissenschaft”), and (3) “an art of economic doctrine” (“Wirtschaftskunstlehre”). Under (1) Sombart indicates that there is an “ontology of economics” but he dismisses it as being outdated. He also thinks that there is a “philosophy of culture for economics” and he reminds his readers that that had been the object of some criticism in Der moderne Kapitalismus. Then there is an “ethics of economics” and he notes that this is the sense that dates back to Aristotle and continues throughout the history of philosophy. Sombart suggested that Max Weber could have written a “Wirtschaftsphilosophie” in this great style were it not for his critical and skeptical inclinations (Sombart 1929: 293–296). Under (2) Sombart suggests that there are two parts: theory and empirical. He claims that most economic theory is not worth its name and he insists that the notion of thinkability can be indicated in three steps: (1) the doctrine of possibilities, (2) the doctrine of probabilities, and (3) the doctrine of necessities (Sombart 1929: 298–300). Sombart simply lists these three and fails to explain them. Either he figured they were self-explanatory or that he had covered them sufficiently elsewhere. Instead, he repeats his denial of the worth of “understanding” and his

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criticism of “value” in national economics. But his biggest complaint is again that most economists who regard themselves as theoreticians do not deserve that title. Rather than spell that complaint out he refers again to his previously published writings (Sombart 1929: 302–304). Sombart then turns his attention to the second factor and that is the empirical. Again, he credits Aristotle for placing emphasis on it rather than Plato’s theoretical inclinations. Somewhat surprisingly, Sombart maintains that the empirical is dealt with in the “historical science” (“Geschichtswissenschaft”) and that it emphasizes the singular and the unrepeatable. He provides a very lengthy list of names in a footnote and these include Wilhelm Windelband, Heinrich Rickert, and Wilhelm Dilthey, but these were not historians but were philosophers of history. He also includes a number of others who would not likely be considered historians and these include Max and Alfred Weber, Max Scheler, and Martin Heidegger. Perhaps the one who comes closest to being an historian would be Eduard Meyer and perhaps even Ernst Troeltsch (It is interesting that Sombart insisted in using the old spelling of “Tröltsch” which Troeltsch had discontinued around the turn of the century) (Sombart 1929: 308–309). Sombart takes issue with the notion of history and argued that everything that has happened is historical yet historians pick and choose what they believe counts as being historically significant. He suggests that that is misleading and that his uncle Max is as historical as the great general Themistocles. Sombart indicates that historians insist that they choose the most “‘important, meaning the most destined connections between individual occurrences’” (“‘wichtigen, d.h. schicksalhaften Einzelzusammenhänge’”). But all that means is that historians regard those occurrences to be “valuable” (“Wertvoll”). Sombart again invokes Max Weber who had suggested that Eskimos and Indians should be as important historically as anyone else and he notes that there are people who consider stamps or boxing to be more interesting in history than the history of the Egyptian kings (Sombart 1929: 309–310). Sombart continued his diatribe against historians until he finally determined that there are three areas of the past: two are difficult to render into English because the term “historical” is used for both “Geschichtlichen” and “Historischen” while the third is “antiquarian” (“Antiquarischen”). He suggests that something similar

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can be applied to economic history, but that history involves what happened only once. But he insists that that does not apply to economic history. A scholar could write a monograph about the history of the Bank of England or a history of a farm house, but these would be exceptions. Instead, economic historians write about pluralities; thus, the economic historian is more likely to write a monograph about the history of English banks or the history of farm houses (Sombart 1929: 314– 315). Sombart complains that economic historians concentrate either on theory or the empirical. In contrast, Sombart invokes a variation of Kant’s dictum that one needs both concepts and intuitions. Sombart writes “a national economy without theory is blind, one such without empirical [is] empty” (“eine Nationalökonomie ohne Theorie ist Blind, eine solche ohne Empirie [ist] leer”) (Sombart 1929: 319). After again complaining that his predecessors were mostly wrong, Sombart further complains that the present situation is similar because economists cannot agree on what their discipline is and what its purpose should be. He concludes his book with the following words: “The national economy should be a science and not a doctrine of healing, a science and not a doctrine of art, a science and certainly not a natural science” (“Die Nationalökonomie soll eine Wissenschaft und keine Heilslehre, eine Wissenschaft und keine Kunstlehre, eine Wissenschaft und doch keine Naturwissenschaft sein”). Sombart insists that this goal has been his “life’s work” (“Lebenswerk”) (Sombart 1929: 342).

Sombart’s Essays in the Handwörterbuch As an indication of Sombart’s reputation at the beginning of the 1930s one need only consider the number of chapters that he had in Alfred Vierkandt’s Handwörterbuch der Soziologie. There were 37 contributors and the vast majority of them had one chapter. This was true for scholars such as Alfred Weber, Karl Mannheim, Robert Michels, and Hermann Heller. Aloys Fischer had two as did Alfred von Martin and Walter Sulzbach. Goetz Briefs, Leopold von Wiese, and S. R. Steinmetz had three. Ferdinand Tönnies had four and Theodor Geiger and Vierkandt himself had five. Only Sombart had six. Not only was he chosen to

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do the first one he also had one of the longest ones. Finally, Sombart is listed more times in the “Personenregister” than almost anyone else; only Georg Simmel, Ferdinand Tönnies, and Max Weber are listed more times. While all six chapters have something to do with capitalism there are three which are focused on capitalism, economy, and the worker. These will be explored first followed by the three less relevant chapters. The first and most important one is “Kapitalismus” and the fact that it is nearly twenty pages in length is an indication of its importance in the Handwörterbuch der Soziologie. While twenty pages may not seem particularly long, it needs to be remembered that the Handwörterbuch was printed in rather small type but that each page was composed of two columns. “Kapitalismus” has Sombart’s typical three parts with each of these also having three subsections. As is typical for Sombart, he carries over themes from earlier works and refers to some of his other ones in the Handwörterbuch. He refers to his chapter on “Wirtschaft” as an example of the latter and he refers to “Geist” as an example of the former. Sombart begins “Kapitalismus” by defining it as a particular type of economy that has the following characteristics: under the rubric of “subjective spirit” he maintains that capitalism has the dominating principle of profit. In fact, he insists that profit is both the point of departure of capitalism as well as its final goal. It is, he insists, a limitless striving for more money, a striving that knows no bounds and no constraints. Sombart notes that this can be taken negatively. That is, the unbounded striving for profits loosens the entrepreneur from any and all personal and private connections. In its place is a fully abstract limitless striving which means that he has no concern for anyone and that his sole purpose is gaining more and more profit. As Sombart writes, no amount is ever sufficient so “that one could say: it is enough” (“daß man sagen könnte: es ist genug”) (Sombart 1931f: 258). However, Sombart hints that this limitless striving for more profit may have a positive side. In his struggle for more money, the capitalist will use whatever means necessary and that will often necessitate trying to get others to help him. These others will do so only under the condition that they share some of his reward. It is the combination of the negative and the positive that makes the capitalistic enterprise so astounding (Sombart 1931f: 259).

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Sombart makes a similar point in the section “the indeterminate profit” (“der unbedingte Erwerb”). Everybody and everything is utilized in this striving. That means that humans are used solely for their labor and that nature is used only for its means of production. In fact, the entire world is nothing more than a single, colossal factory. Because of this, all personally oriented ideals disappear; all interests in human wellbeing are lost; only profit matters. The cheapest price and the fastest sales coupled with the highest technology and the greatest richness are all that matters. Together they join together in the “unclear concept of the future” (“unklaren Begriffe des Fortschrittes”). Only the final goal is left: “let there be profits even if the world perishes” (“Fiat quaestus et pereat mundus”) (Sombart 1931f: 259). Sombart makes a third and related point and this is the “lack of consideration profit” (“der rücksichtslose Erwerb”). The first two are results of this one. The capitalist will clear all obstacles out of the way without any regard for anyone or anything. The only thing which matters is the free path for the boundless and limitless striving for profit. The capitalist appears without scruples and unchained from all bindings (Sombart 1931f: 259). The second main capitalistic principle is its individualism. This is the belief that the capitalist is on his own and that intensifies his lack of regard for others. Sombart writes: “He expects no help, no support, no backing” (“Er erwartet keine Hilfe, keine Unterstützung, keine Förderung). There is no democratic or socialistic principle of equality, no principle of performance and counter-performance. This leads to the third main capitalistic principle. This is “economic rationalism” and it penetrates throughout capitalistic organizations. There are three components to this “economic rationalism”: (1) its planning; that is, everything is done according to the plan, (2) its purposefulness; that is, every means is chosen in light of the goal, and (3) its calculability; that is, everything needs to be calculated. Costs need to be calculated; accounting needs to be done, and all of this needs to be recorded (Sombart 1931f: 259–260). Having determined that “economic rationalism” means planning, purpose, and calculating, Sombart then launches into a more complex and more nuanced notion of rationalism in economics. He offers three different notions.

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1. Production. Sombart has in mind the working methods and working conditions. But he also has in mind the means of production and here he does not mean the workers as much as he means the tools used in producing objects for sale. He also means developing new methods for selling those objects. 2. Sombart then discusses the “form” of the capitalistic economy and offers the following schema: (a) It is “fundamentally free” and that refers to his earlier point about capitalistic individualism. (b) is “fundamentally a private economy” and that means that the enterprising individual assumes all risks and reaps all rewards. (c) Its structure is “aristocratic” and this seems to mean that there is a hierarchy of successful individuals with the most unsuccessful at the bottom and the few who have achieved at the very top. (d) It is very occupationally oriented. Sombart does not refer specifically to his chapter on “Beruf ” but he probably should have. Instead, he suggests that capitalism does not rely so much on individuals as it does on technical and professional expertise. That this seems to undercut his claim about individualism is not addressed. (e) It is basically a marketing situation and that the successful capitalist will find ways to sell his goods. 3. Capitalism is a technical business and those which can produce the most the fastest are at a distinct advantage. The greater productivity, the greater the profit. Sombart contrasts this with a hunter who is successful if he meets his need for that day; the capitalist needs to be concerned with the distant future. This is connected with Sombart’s notion of quantity. That implies that the successful capitalist can get his workers to worker faster and more efficiently to turn out an increasing number of products without diminishing the products’ quality. This connects to Sombart’s notion of quality of goods and that the successful capitalist will be concerned with the quality of his products. Of course, neither quantity nor quality are important compared to profit; they are simply means to that end. Technology is similarly unimportant except that it aids in making money (Sombart 1931f: 260–261). Yet, Sombart immediately qualifies that because technology can aid a businessman in his attempts to qualitatively and quantitatively improve his profits. In the first

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instance, it can do this by helping to improve the quality of his products, thus increasing his competitiveness and even helping to drive his competitors from the field. In the second instance, technology can speed up production of those goods as well as to deliver the products faster than any competitor. But in both instances, Sombart emphasizes the rationalism involved (Sombart 1931f: 261). In the next section Sombart discusses how capitalism has altered the ways in which humans live together and he begins with an analysis of the capitalist enterprise. The most important mark of capitalism is its domination over peoples’ lives. It is not only the central focus, but is almost the exclusive focus of capitalism. Its entire purpose is to make profits and all energy is devoted to this end. Whereas traditional economies were regarded as successful when daily needs were sufficiently covered, capitalism is simply the infinite drive for more money. This, Sombart describes as the “content” of capitalism. Under “form” of capitalism Sombart suggests that there are many. He offers six different classifications: (1) every kind of bureau and entertainment—including travel offices, hair dressers, and circuses, (2) every kind of service but here Sombart has in mind hotels, restaurants, and bathing facilities, (3) every kind of transport service, (4) every kind of credit service including banks, credit companies, and insurance companies, (5) every kind of productive company, meaning those which actually produce goods, and (6) every kind of combined company meaning those who not only produce goods but also ensure that they are delivered (Sombart 1931f: 263). Sombart discusses the various types of businesses and these include stock companies, subsidiary companies, holding companies, cartels, and worker-owned companies. Regardless of the difference in type, each capitalist type of company shares one defining characteristic and that is dehumanization. This is done because the capitalistic enterprise has the single purpose of making profits. This is the “meaning and essence” (“Sinn und Wesen”) of capitalism. Every means is used to achieve this—rationalism and experience are used together to gain ever increasing profits (Sombart 1931f: 264–265). This depersonalization is also revealed in the contrast between the former ways of gaining credit and the modern ones. Previously, one got loans because of a personal relation to the person who

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was in a position to offer credit; now, it is far more of an impersonal loan. Previously it was personal “debt relationships” (“Schuldbeziehungen”) between “A and B,” but now it is impersonal debt relations between “unknown and unknown” (“Unbekannt und Unbekannt”). Sombart explains that this new type of debt relationship can be based upon (1) banking, (2) paper money, and (3) money-less payment (Sombart 1931f: 266–267). The process of depersonalization is also found in the labor market. During the feudal era, labor markets and labor relations were governed by tradition, custom, and the law. There was no hint of rationalism and economic interests were subsidiary to “moral norms” (“sittlicher Normen”). Capitalism destroyed this situation and now economic interests and its accompanying rationalism rule. Any appearance of equality between employer and employee is illusionary and almost all strengths are on the capitalist side (Sombart 1931f: 267–268). Depersonalization is prevalent in the “goods markets” (“Warenmarkte”). Previously the sale was between seller and buyer who would personally discuss the situation and agree on a deal. Now, it is impersonally settled with a contract. In addition, capitalism makes it possible to have agreements made at a distance—there is no need to meet face to face; the contract can be settled by mail (Sombart 1931f: 268). Sombart emphasizes how much this process of depersonalizing affects the factory and he stresses that it manifests itself here the most clearly. He speaks of the factory being “de-souled” (“Entseelung”) and instead it is permeated with the capitalistic “Geist.” This “Geist” manifests itself through impersonal systems. After some confusing comments about vertical and horizontal axes, Sombart discusses various processes of systemization. This can be the normalization of cases, the centralization of bureaus, and the systematic development of calculation. Everything that had been singular and unique has now been replaced with that which is universal and standard. Individual crafts have been superseded by mass produced products. Sombart indicates that people have been replaced by numbers—in the need for standard sizes and standard payments but also in calculation and in bookkeeping. Finally, numbers appear with the introduction of standardized machines (Sombart 1931f: 269–270).

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The structure of the capitalist society is Sombart’s next topic and he devotes the remaining six plus pages to it. He begins by suggesting that there are four groups which make up the structure of capitalist society. These are (1) consumers, (2) business owners, and (3) wage laborers. Sombart devoted considerable efforts in explaining the first two groups and not even a half page to the final group. In discussing consumers, Sombart notes that there are three ways in which the modern consumer differs from its earlier form. First, the modern consumer now comes from the middle and lower incomes—his unstated point is that previously only the rich could afford to buy things. Second, consumers are now found in the larger cities. Third, consumers are now dependent on those who produce these goods and those who sell them. Sombart apparently believed that the first two claims did not need explanation but he spends some time in setting out the third point. There are many “tricks” that the modern producer uses in order to convince the consumer that he or she absolutely needs to purchase some specific object. Of all of the tricks that the producer uses, the most successful one is the one regarding “style” (“Mode”). Sombart also notes how free time has shrunken: Goethe took three hours to eat compared to the ten minutes that the American clerk takes to eat. It would take an hour to smoke a pipe but it only takes five minutes to smoke a cigarette. He adds that this increase in speed is accompanied by the increase in speed in manufacturing and in delivery. Sombart offers three reasons for this increase in speed: first, there is the increasing sense overall that time is worth more. He explains that “Goethe had ‘time’ to sit at the table for three hours, the clerk in New York does not because he has something better to do than Goethe” (“Goethe hatte ‘Zeit,’ drei Stunden bei Tisch zu sitzen, der Clerk in New York nicht, weil er hat besseres zu tun als Goethe”) (Sombart 1931f: 271). Second, the increase in speed is in connection with the increase in profits. Third, technology makes things faster but also determines the tempo. Using the subway means submitting to the subway’s determining when I can get on and when I can get off. Sombart points to a rather odd increase due to capitalism. That is the increase in what he calls “collective” and it is odd because capitalism emphasizes individuality. But Sombart lists six different ways in

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which modern life revolves around what he calls the increase in “collectives”: (1) education through the increasing numbers of public schools, libraries, and museums, (2) health through the increasing numbers of hospitals, invalid, and mental institutions, (3) entertainment through the increasing numbers of theaters, concert halls, and movie theaters, (4) lodging and eating through the increasing numbers of restaurants, hotels, and boarding houses, (5) house needs through the increasing use of water, gas, and electricity, and (6) transportation through the increase in the use of railroads, street cars, and steam ships, as well as the increase in the use of mail, photography, and telephones (Sombart 1931f: 271). These increases are matched by increases in manufacturing. Here Sombart provides six ways: (1) the need to increase means of production, (2) the need for the increase in producing large goods (like furniture), (3) the need for the increase in producing small goods (like clothing), (4) the need for the increase in substitute goods (substituting inexpensive but inferior materials for higher quality and more expensive materials), (5) the need for increasing the standardization and the uniformity of goods, and (6) the need to increase the range of goods to reflect in the growing differences in taste and style (Sombart 1931f: 271–273). In the (second) section on the entrepreneur Sombart sets out his fourfold classification: (1) The “inventor” (“Erfinder”) but Sombart again explains that this entrepreneur’s does not discover something new as much as inventing new forms of production and new means of transportation. (2) The “discoverer” (“Entdecker”) who does uncover new ways of expanding his rate of profit. This may be intensive or extensive but the resulting increase in making money is much the same. (3) The “conqueror” (“Eroberer”) who eliminates all obstacles to his success. This may mean increasing his production but it can also mean the elimination of his competition. (4) The “organizer” who has the capacity to motivate people to increase their performance and to strive harder to achieve a specific goal. The organizer may lack a particular skill that others have but has the talent to motivate them to use their skill for his benefit. Of course, they share in the results, at least to some degree. While Sombart has in the past emphasized the entrepreneur’s individuality, here he stresses the shared benefits. Regardless of which of these four types of capitalist entrepreneur he is, his success is also a success

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of his workers. It is to the entrepreneurs’ advantage to ensure that those who work for him are assured of their mutual benefits (Sombart 1931f: 273). The entrepreneur is not just the person who makes things, Sombart also includes the salesman. The salesman in Sombart’s discussion is not so much a matter of “vocation” (“Beruf ”) as it is his function and the salesman’s function is to run a lucrative business. That implies that the salesman actually has two purposes: as someone who calculates and as someone who “trades.” Here, Sombart plays on two German words “Handlung” and “Verhandlung” and that to act or trade is to handle matters. He emphasizes that this handling need not be face to face and he points to advertisements which take the place of person to person advertisement. Sombart indicates that the advertisement is intended to “arouse interest, gain trust, wake desire to buy” (“Interesse erregen, Vertrauen erwerben, die Kauflust wecken”). He stresses that this is not an oppositional approach because that might be self-defeating. Rather, it is a process that is intended to show that the salesman shares the same values and goals and is actually on the side of the consumer. He suggests that the entrepreneur is someone who is highly intellectual and very motivated. Whether this is a question of nationality, race, or class is something he does not address. However, Sombart directs the readers’ attention to specific parts of Der moderne Kapitalismus as well as particular pages of his book on the bourgeois. He also suggests that the reader consult his book on the Jews (Sombart 1931f: 274). As he has in the past, Sombart suggests that there are three types of entrepreneurs: (1) the specialist (“Fachmann”), (2) the salesman (“Kaufmann”), and (3) the finance man (“Finanzmann”). He indicates that the “Fachmann” is closely bound up with the “Erfinder” and he repeats what he has said elsewhere that he is called a “Captain of Industry.” The “Kaufmann” creates the need for products that the consumer does not really need nor want. In other words, this is the “Business man.” The “Finanzmann” provides the capital for the other two to function and is referred to as a “Corporation financier.” The “Fachmann” belonged to the early type of capitalism as much as modern capitalism; the other two types are more products of modern capitalism. But all three types suggest a “new human

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type” (“neuer Menschentyp”). This new type is democratic, racially indifferent, and seeks something new and different (Sombart 1931f: 275). They also seek to maximize their potential, they seek to specialize their function, and they seek to prompt others to join in increasing not only the individual’s performance but the joint one as well. Sombart concludes this section with some emotional elements. The entrepreneur has “faith in progress” (“Glaube an den Fortschritt”), possesses a “concept of duty” (“Pflichtbegriffes”), and replaces his love of family with a “love of his business” (“Liebe zu seinem Geschäft”). What this last one means is that the businessman has no time and no interest in anything but his business. He has no time for nature, for art, for literature, for the state, for friends, and even for his family. This is the totality of the world for the modern capitalist. It is evident that Sombart finds this rather pathetic and he points to the article on the “Present I” (“Gegenwart I”) for a discussion of the “value poverty of the capitalistic life style” (“Wertarmut des kapitalistischen Lebensstiles”) (Sombart 1931f: 276). Sombart probably did not think it necessary to spend much effort on the brief (third) section on wage laborers because of his earlier chapter on the “Arbeiter.” In “Kapitalismus” Sombart restricts himself to mentioning only a few things. He insists that the wage earner is an indispensable part of capitalism but that the term “Lohnarbeiter” has many different variations. He merely lists these six as (1) based upon age and gender, (2) based upon race, (3) based upon nationality, (4) based upon labor types such as rural versus urban/agrarian versus industrial, (5) based upon hierarchy from temporary help to permanent worker, and (6) qualification from uneducated to trained specialist. Sombart refers the reader not just to his “Arbeiter” article but also to Goetz Brief ’s lengthy entry on the “Proletariat” (Sombart 1931f: 276–277). One wonders whether Sombart was unhappy that he was not the author of that chapter. Closely related to the chapter “Kapitalismus” is the one on economics (“Wirtschaft”). As is typical of Sombart, he begins with a remark about the concept of “economy” and then discusses the system of capitalism as well as its “Geist.” What is different from his earlier writings is Sombart’s repeated emphasis on “ideas.” He begins with his usual complaint that the term has many meanings; but, he does insist that it is limited mostly

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to the fact that humans have needs which need to be satisfied with the fact that the supply of things which can satisfy those needs is relatively small. He qualifies this by suggesting that this limited supply is the material sense of “economy” so that it is less a part of a sociological theory of economy. He also insists that an economy is formed by a system and that involves ideas. Before discussing the various types of ideas involved in an economic system, Sombart explains how the system is based upon a “fundamental idea” (“Grundidee”). He does not elaborate on why this is so, but he does explain that all cultural sciences are based upon some fundamental idea. This applies to the law, the state, the arts, and the languages. This basic idea mirrors that discipline’s “Geist” and for him that basic idea is important for determining what the sociology of economy is. He again suggests that economy is the attempt to cover needs when faced with limited resources (Sombart 1931h: 652–653). Instead of discussing that fundamental idea, he explains that all economies contain three parts: (1) what he calls “subjective Geist” or a person’s goal, the means to achieve that, and the thought-out “regulations” which will govern that attempt, (2) the “Form Idea” or the “objective plan” that one actually employs, and (3) the technical means that one uses in order to secure the object that will satisfy one’s needs. Sombart explains that economy and technology are different: economy is part of culture whereas technology is a means. Those who speak as if these two are part of the same thing are mistaken. As he says “There is no mundus technicus next to a mundus oeconomicus” (“Es gibt keinem mundus technicus neben einem mundus oeconomicus”). He cites Andreas Voigt’s suggestion that economy is the goal and technology is the means to achieve that goal. Sombart refers to Dostoevsky’s comments about having only five more minutes to live so that one needs to “economize” that remaining time before his death. Regarding death’s opposite “love,” Casanova provided “technical assistance” with his “tract on (love) technic” (Sombart 1931h: 653). Sombart does not dispute the importance of the “fundamental idea” (“Grundidee”) of economy but he insists that alone it is insufficient for developing a “cultural science” (“Kulturwissenschaft”) and it needs what he listed in the above as (2) the “Form Idea” (“Gestaltidee”). He suggests

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that while it may seem as if the idea of economy is a timeless and spaceless idea; it is really temporally and spatially bound. Just as there is no religion, art, speech, or state that exists in the abstract, so there is no economy that exists as an abstract idea. Just as there are specific religions, specific arts, specific languages, and specific state, there are also specific economies. He thinks there are ways to show that is correct, just as the science of language has the idea of an inner form of speech and the science of theology has the idea of dogma. In a similar vein, economy exists in determined forms. Sombart reminds his reader that economy is built from three parts so that there is (1) a specific economic conviction, (2) a specific economic order, and (3) a specific economic technology (Sombart 1931h: 654). He explains (1) by insisting that the economic “Geist” is individualistic but operates with others. It is either “free” or is “bound” by tradition. It is either private or is communal and it is either oligarchical or it is democratic. Finally, economies can be either small or large (Sombart 1931h: 655–656). After this brief digression Sombart returns to the topic of technology. Here he emphasizes several points—that technology provides for production but also for transportation. In addition, technology is not simply a matter of theory and invention; it is also a matter of experience and repetition. He stresses the importance of the words “I can” (“Ich kann”) and “I know” (“Ich weiß”) and how they play important roles in technology (Sombart 1931h: 656–657). Sombart concludes with some remarks about how economy is neither organic nor mechanic but is a type of hybrid. This was a nod to Tönnies’ distinction between the “organic” traditional rural economy and the “mechanical” modern urban economy. But he emphasizes that economy is not something arbitrary but is the necessary satisfaction of needs. This is not something merely a posteriori but is a matter that is a priori. It is the need for providing for one’s self as well as for others and Sombart suggests that all economies are fundamentally similar to the relationship between mother and child. That is why Sombart insists that economy (and sociology) is really the understanding of humans living together (Sombart 1931h: 658–659). The third important chapter is the one on the “worker” (“Arbeiter”). Sombart begins with a provocative declaration that “‘Worker’ is one of those totally meaningless words” (“‘Arbeiter’ ist eines jener völlig

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sinnlosen Worte”) that we tend to use in social, political, and scholarly discussions. He contrasts it with the “non-worker” which he suggests is not very helpful. But he adds that the contrast between “worker” and “non-worker” is actually helpful. Sombart explains that workers clearly out number non-workers. He also explains that we tend to think of workers in only the economic sphere but that limitation is unrealistic. That is because there are many different types of individuals who labor but we do not regard them as “workers.” This is unfortunate because this group includes housewives, peasants, and craftsmen. It is unfortunate that the term “worker” is now used only to describe the “wage-earner” (“Lohnarbeiter”). Having clarified this, Sombart defines the modern worker as someone who does not work for himself but labors for someone else. Sombart offers three terms for the person who employs the worker: “work giver, work master, bread master” (“Arbeitgeber, Arbeitherrn, Brotherrn”). “Brotherrn” is not necessarily a master of bread as he is one who can provide food and sustenance. The second two indicate the degree of submission that the worker must endure. The term “Brotherrn” in particular signifies that the employer determines whether or not the worker eats. Sombart insists that a sociology of the worker is really the theory of labor relations and that there are three: “the doctrine of possibilities, the doctrine of necessities and the doctrine of probabilities” (“die Lehre von den Möglichkeiten, die Lehre von den Notwendigkeiten und die Lehre von den Wahrscheinlichkeiten”) (Sombart 1931c: 1). However, Sombart appears to restrict his account to the doctrine of possibilities, and he focuses on the relationship between the employer and the employee. That is the relationship between the person who pays the other to produce things and Sombart emphasizes the rationalism that is found in this relation. By fulfilling each side’s promises, each side achieves what it wants. Sombart then distinguishes between the types of organization: it can be “free” in the sense that both sides agree to this relationship or it can be “bound.” Sombart does not mean forced labor; rather, there are norms or traditions which appear to govern the labor relation. Later he does discuss forced labor when he distinguishes between an unrestricted working relation such as a slave who has a life-long labor relation with his master in contrast to a restricted labor relation such as a capitalistic

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worker who has a specifically determined length of his labor contract (Sombart 1931c: 2, 4). Sombart turns his attention to the question of payment and he suggests that it really involves two issues: how much does the worker get in exchange for his labor and in what form is this payment made? The answer to the first question varies widely from the vary minimum needed to keep the worker alive enough to labor to real payments for his work. Sombart calls the first type “hunger rations” and he contrasts that with the massive compensation that some renowned chefs and state ministers receive. The second question is somewhat easier to answer because payment is either in some form of money or in goods (Sombart 1931c: 4–5). Under “technology” (“Technik”) Sombart explains that different types of work demand different types of education in order to carry out that type of labor. A person who works in a cigarette factory will need a level of training to operate a machine that differs from a person who operates some complicated machinery. Some factory jobs are simply drudgery while others are highly challenging (Sombart 1931c: 5–6). In “Section II” Sombart provides a historical overview of the types of labor relations. These ranged from the ancient slaves in the Greek households to the slaves on the Roman plantations. The Middle Ages saw the demise of most slavery and its replacement with the feudal system. This was one in which the worker earned his wages which were mostly in the form of food, clothing, and shelter. Sombart emphasizes that this age was the age of stability. He differentiates among three types of workers: the ones who were bound to the land and its owner, the ones who were not bound but were either temporary workers or ones who traveled, and the feudal craftsman who belonged to guilds (Sombart 1931c: 7–9). Sombart then discusses the modern age which is the age of capitalism. He begins with the English factories of the early decades of the nineteenth century and he insists that when the worker entered the factory, his freedom ended. He argued that it was not until the end of the century that the workers began to gain some protections. These included the minimum wage, the worker’s insurance, and the prohibition against child labor (Sombart 1931c: 9–11). This leads to “Section III” and the discussion of the worker as a member of a group. Sombart does not discuss this

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in much detail but refers the reader to his chapter on “Grundformen des menschlichen Zusammenlebens.” He also refers the reader to his chapters on “Kapitalismus,” “Beruf,” and “Wirtschaft.” In his references, Sombart complains that there is little to recommend because the few scholars who have written on the worker have offered only historical accounts. In contrast, he points to his examination in Der moderne Kapitalismus (Sombart 1931c: 13–14). The three less important articles but still relevant are the ones on “Calling” (“Beruf ”), on “city settlements” (“Städtisch Siedlung”), and finally “Fundamental Forms of Human Living Together” (“Grundformen des menschlichen Zusammenlebens”). “Beruf ” is rather short as is “Städtisch Siedlung’ in contrast, “Grundformen” is lengthy at eighteen pages. Sombart’s term “Beruf ” is somewhat puzzling in that he provides a fairly competent discussion of what “Beruf ” is and what it means sociologically. However, there is a giant gap in his examination, which will be addressed at the conclusion of this investigation. For many scholars “Beruf ” is a clearly defined concept—it is one’s “vocation,” “calling,” or simply one’s job. Sombart does not believe in this simplicity and maintains there are many definitions of “Beruf ” and he insists that there are at least two different senses of “Beruf ”: an objective one and a subjective one, although it is unclear how these are really different. They both mean a “vocation” or an “occupation”; it seems that Sombart wants to maintain that what one actually is and what one believes one to be are not always the same. What lends that interpretation credence is his assertion that there can be a “false” vocation. By this, Sombart means that person can have a day job such as a state attorney (“occupatio”) and a night job such as a criminal (“vocation”) (Sombart 1931d: 25–27). The remainder of Sombart’s “Beruf ” essay is devoted to the various organizations based upon one’s “Beruf ” and he offers some statistics about the different types of organizations and clubs. His main distinction is between “official” organizations and private clubs (Sombart 1931d: 30– 31). Sombart’s “Beruf ” is one of his most obtuse and least satisfactory essays. What makes it even less satisfactory is that he totally ignores one of the most important discussions of “Beruf ” for the development of modern capitalism; namely, Max Weber’s discussion of Martin Luther’s

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expansion of the notion of “Beruf ” from ecclesiastical authorities to the “Beruf ” that God has chosen for each and every individual (Weber 2014: 178–215). The essay on “Städtische Siedling, Stadt” is far more instructive. Sombart begins by differentiating the urban area from the natural ones. The villages remain connected to the earth but the towns and cities have broken that link. It is no longer a natural phenomenon; it is a cultural one. This concept can be illustrated in three different ways: by its geographical significance, by its economic significance, and by its sociological significance. Sombart then offers definitions in several different languages: “Polis” in Greek, “town” in English, “ville” in French, and “Stadt” in German. A “Stadt” can be a “location” for God or it can be a “location” of fortification. It can be a “location” of military presence or it can be a “location” of an office of statistics. It can be a “location” for architecture, for a population, or for a place of justice (Sombart 1931g: 527–529). After producing a few pages of statistics, Sombart provides a detailed list of references. They include a number of works in English by Robert E. Park and by Ernst W. Burgess and Roderick D. McKenzie. Sombart, of course, cites his own moderne Kapitalismus but somewhat surprisingly he refers to Max Weber’s extensive discussion of the “Stadt” in Wirtschaft und Gesellschaft (Sombart 1931g: 532–533). Sombart’s final essay in Vierkandt’s Handwörterbuch is on the foundational forms of human society and his focus is on the various types of societies. It is the fundamental task of sociology to explain the different ways in which humans band together. Because this is a sociological issue and not an economic one, it can be briefly treated. As with “Städtische Siedlungen” Sombart provides an extensive list of types of groups. These include political groups, language groups, and vocational groups. Sombart discusses in some detail how groups originate, continue, and then dissolve and notes how space and time affect the strength of the bonds which bind the members together. Sombart’s essay differs from his others in that here he does not provide a list of references but gives endnotes. These include references to sociologists such as Georg Simmel and Johannes Plenge, but also to legal theorists such as Rudolph von Jhering and Carl Schmitt (Sombart 1931e: 221–225, 238–239). The reader of these six entries comes away with the sense that as Sombart

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moves from the economics of modern capitalism to modern sociology, he loses his sense of focus. That sense is also shown to some degree even in his late works on capitalism.

Sombart’s Late Essays on Capitalism Sombart’s essay in the volume of the Grundriss der Sozialökonomik is one of his best—it is clear and concise; compared with most of Sombart’s writings, it is free from polemics and free from extraneous information. In under thirty pages, Sombart provides an outline of the nature of capitalism, how it functions, and how it came about. If there is a defect in it, it is his insistence on promoting his own publications in the section on literature (Sombart 1925: 2). His “concept of capitalism” contains three factors: form, spirit, and action. The form is private and includes the owner of the means of production, the production leader, and the worker. The spirit is the desire for profit and has the means of rationalization. The action is through modern technology (Sombart 1925: 2–3). Sombart maintains that capitalism is founded upon three key ideas: the idea of profit which is the overwhelming motive; the idea of competition which is limitless; and the idea of rationalism which is three-fold: it is planned, it is purposeful, and it is calculable (Sombart 1925: 3–9). He distinguishes between a house-hold business and a capitalistic one by showing that the former is limited by one’s reliance only on hand tools whereas the capitalist’s employees use machines for speed, uniformity, and ease (Sombart 1925: 14–15). Sombart pays particular attention to the concept of the capitalist entrepreneur and how he is affected by the various functions of his enterprise. He believes that many of these different functions are derived from the differences in the sizes of the businesses. The differences in size affects the degree of success that each entrepreneur believes is necessary for the proper degree of profit to be made (Sombart 1925: 15–16). Sombart also divides the entrepreneur into five categories: (1) the inventor, (2) the discoverer, (3) the conqueror, (4) the organizer, and (5) the salesman. Sombart’s preoccupation is with this last individual because it appears that he embodies the capitalist spirit the most. All capitalists possess pronounced

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intellectual capacities and extraordinary vitality. But Sombart also noted that there are two groups whose individuals do not appear to meet these requirements: the Jews and the bourgeoise (Sombart 1925: 20– 21). Nonetheless, Sombart insisted that the capitalist must meet three fundamental conditions: (1) he has the “will” for capitalism; that is, he has the right amount of inclination toward accumulation, (2) he has the capacity toward being a capitalistic entrepreneur; that is, he accepts the functions necessary to succeed, and (3) he has the right approach to capitalistic accumulation; that is, he recognizes the need for profit and will arrange his approach to business in order to reach that amount (Sombart 1925: 21). Sombart emphasizes various types of “freedom” (“Freiheit”)— freedom of competition, freedom of contractual obligations, freedom of ownership, and freedom of inheritance (Sombart 1925: 22–23). What Sombart does not mention is the freedom to work. Instead, he briefly notes the three stages of capitalism: the early stage (“Frühkapitalismus”), high capitalism (“Hochkapitalismus”), and late capitalism (“Spätkapitalismus”). Whether capitalism will continue to exist is a question that Sombart declines to answer (Sombart 1925: 24–26). It is a question that Sombart attempted to answer in some other essays, including in a collection which was edited by Bernhard Harms. Bernhard Harms is mostly forgotten today and if his name has any recognition it is because of his youthful conflict with Max Weber over the legal issue governing what became the Grundriss der Soziologie. In 1909 there was even talk of a duel between Weber and Harms but it did not occur. In 1914, Harms established what would become the World Economic Forum at the university in Kiel and certainly by 1930, he had become one of Germany’s leading economists. In 1931 Harms published a two-volume collection of essays that had begun as lectures. The two volumes of Kapital und Kapitalismus contain names of some of the most famous and most influential thinkers of the previous several decades. These included Joseph Schumpeter, Emil Lederer, Edgar Salin, and Melchoir Palyi. It also included two essays by Sombart. It is important to keep in mind that both were lectures; hence, they are oversimplifications of Sombart’s normally complex explorations. Sombart’s first one is “Introduction in Concept and Essence of the Economic System” (“Einführung in Begriff und Wesen des

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Wirtschaftssystems”) and that reflects Sombart’s tendencies to write in terms of concepts and essences as well as systems. He attempts to answer the question “What is capitalism” by indicating that it is not just an economic system but one that possesses three points: (1) the “subjective spirit” (“subjektive Geist”), (2) the order, and (3) the technology. The first one is the specific purpose, the specific means, and the specific rules which to follow. The second one is the order needed because economics is always between two or more individuals. The third one is the means by which goods are produced and the means by which they are transported (Sombart 1931a: 77–78). Sombart turns his attention to more specific factors of capitalism and he insists that capitalism is the continuous striving for profit and for the eternal attempt at accumulating more money. He notes that this is in opposition to the traditional economy that strove to satisfy everyday needs (Sombart 1931a: 79). Besides the stiving for profit, capitalism has the second distinguishing feature of rationalism. Sombart again contrasts the older economy which was based upon tradition with modern capitalism which is founded upon rationalism. The third distinguishing feature is the primacy of the individual and the need for competition. This is Sombart’s emphasis on capitalism as a private economy. That was adapted from his earlier discussions regarding capitalism as well as his claim that capitalism is aristocratic (Sombart 1931a: 80–82). What is different here is that Sombart adds that speculation and calculation are the foundations of capitalism (Sombart 1931a: 82). After mentioning technology once more, Sombart concludes that he has provided a theoretical account of capitalism; now, what is warranted is an attempt to explore it in its historical appearance. Of course, Sombart indicates that he is unable to provide much of an account in the time allotted to him but suggests that capitalism developed from the feudal craftsmen period. He ends that lecture and provides his historical account in his second lecture. This second lecture reflects Sombart’s historical investigation and has the title “Unfolding of Modern Capitalism” (“Entfaltung des modernen Kapitalismus”). Sombart differentiated early capitalism and modern capitalism by emphasizing the impressive energy that modern capitalists have. These are the “captains of industry,” which he gives in English. But Sombart provides the names of the Germans Alfred Krupp and

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Werner Siemens as examples of what he calls the specialist “Fachman” (Sombart 1931b: 85–87). In contrast, the “Kaufman” is concerned with his goods and the means to promote them. Sombart refers to this person as a “business-man” and while he does not invent things, he sees that these are things of the future. The third type is a “corporate financier,” a “Finanzmann” who provides the money for both the inventor and the sales person (Sombart 1931b: 87–88). What all three types have is energy and the will to succeed. Nothing else is more important than making a profit—this is the “capitalistic spirit” (“kapitalistische Geist”). Before turning to a detailed and repetitive account of technology, Sombart maintains that the state provided two impulses for modern capitalism: (1) liberalism which provided the freedom and the security which allowed businesses to flourish and (2) imperialism which provided the expansion of the reach of businesspeople. Sombart maintains that these two are fundamentally political but have far-reaching economic results (Sombart 1931b: 91–94). Sombart concludes with the comment that he has explained capitalism by virtue of its spirit, its politics, and its technology and that his audience now has an understanding of the monstrous advancement of the capitalistic development (Sombart 1931b: 103–104). The final essay of the four was based upon a lecture Sombart gave in February 1932. The response was so heated that he rewrote it to reflect the nature of his remarks (Sombart 1932: 394, note). Just how vociferous the reaction was is indicated by one published reply. Before turning to it, it is necessary to discuss some of Sombart’s points in “The Future of Capitalism” (“Die Zukunft des Kapitalismus”). Some of the points that Sombart makes are familiar and unobjectionable such as his claim that there is such a thing as the capitalistic spirit. But there are others that lead to a more political notion such as his claim that the future of capitalism lies in planning. Moreover, this planning must be total; that is, it must cover all aspects of economics (Sombart 1932: 396–403). In addition, Sombart speaks of the German national identity and how it differs from other European countries and that Germany’s destiny is greater than that of other countries. Furthermore, earlier Sombart had emphasized that capitalism was a private economy and that meant the individuals were free to conduct business as they saw fit. Now, the state is all important and that the time of the world economy is past (Sombart 1932:

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408–412). In addition, Sombart is now denigrating imperialism and liberalism; now he embraces autarky. He writes of foreign lands and how they are arrayed against Germany and are trying to thwart its destiny. Sombart concludes his appeal by insisting that it must be everyone’s wish that Germany confronts its future with the will that is “unifiedgoal-conscious and still clear-visioned ” (“einheitlich-zielbewußt und doch klarsichtig ”). Without such a will, we will all sink into chaos (Sombart 1932: 414–415). That Sombart’s lecture caused an uproar is an understatement. No fewer than thirty-two publications had printed major reactions to Sombart’s thesis. T. Altwirt provides the clearest denunciation of Sombart’s transition from a Marxist “socialist of the chair” (“Kathedersozialist”) to an admiral Tirpitz “naval fleet enthusiast” (“Flottenschwärmer”), to a Friedrich Ebert “Reason Republican” (“Vernunftrepublikaner”). So why is it at all surprising that Sombart has become Hitler’s “court fool” (“Hofnarr”)? Altwirt insists that Sombart is convinced that the only means to save capitalism is through total planning. This means not just the socialist planning of the past which insisted on regulating production; Sombart’s socialism of the future insists on planning and regulating consumption. Altman insists this is the plan of the “Third Reich” and is Hitler’s “new order of economic life” (“Neuordnung des Wirtschaftslebens”). Altwirt concludes his “‘The Future of Capitalism’ or Sombart’s kneeling in front of Hitler” (“‘Die Zukunft des Kapitalismus’ oder Sombarts Kniefall vor Hitler”) with the observation that Sombart has become the “national economic court fool” (“nationalökonomie Hofnarr”) who is the “very best servant” (“kein besserer Diener”) for “poor capitalism” (“armer Kapitalismus”) (Altwirt 1932: 419–423). Unfortunately, Altwirt was right; not only did Sombart abandon socialism and capitalism for National Socialism; he abandoned economics for bogus sociology.

Concluding Comments This chapter began with a book that Sombart wrote in 1929 which reflected some of his later ideas regarding modern capitalism. It was a rather mixed book in that it demonstrated Sombart’s incredible mastery

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of his material but was coupled with his increasing preoccupation with an unfortunate form of sociological thinking. That mixture is also apparent in his six chapters in Vierkandt’s Handwörterbuch der Soziologie. Some, like the chapter on capitalism, are impressive but some, like the one of calling, are plainly frustrating. His final lectures and writings from the early 1930s are also mixed. Some, like the two essays in Harm’s collection are imposing while his essay on the future of capitalism is simply a disappointment. It was a clear signal that Sombart understood the demise of the Weimar Republic and he appreciated the opportunities that might come his way with the National Socialists. But it is sobering to think that an accomplished scholar and a world-famous thinker could buy into the Nazi propaganda. But, as Reiner Grundmann and Nico Stehr had argued in their article on Sombart’s lack of place in the classical sociological canon is difficult to account for. They suggested that it could not be attributed to Sombart’s late politics because Heidegger’s even more fervent embrace of Nazi philosophy did not diminish his standing in the history of twentieth-century philosophy (Grundmann and Stehr 2000). What Grundmann and Stehr overlooked was that Heidegger was convinced that he had to overthrow two thousand years of false philosophy; Sombart only needed to explain modern capitalism. But to Sombart’s credit, he did a more than just credible job during the two decades that he had devoted to doing his life’s work. One may grant that Sombart’s writings are not the easiest to read and are sometimes resistant to understanding. But one also needs to acknowledge that Sombart’s works contain many insightful ideas regarding the development of modern capitalism. His writings are sometimes a challenge but they are always well worth the effort to read Sombart.

References Altwirt, T (1932) “‘Die Zukunft des Kapitalismus’ oder Sombarts Kniefall vor Hitler.” In Sombarts “Moderner Kapitalismus” Materialien zur Kritik und Rezeption. Herausgegeben von Bernhard Vom Brocke. München: Deutscher Taschenbuch Verlag 1987. 419–423.

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Grundmann, Reiner and Stehr, Nico (2000) “Why Is Werner Sombart Not Part of the Core of Classical Sociology? From Fame to (Near) Oblivion.” Journal of Classical Sociology. Vol. 1. No. 2. 257–287. Sombart, Werner (1925) “Prinzipielle Eigenart des modernen Kapitalismus.” In Grundriss der Sozialökonomik. IV. Abteilung. Spezifische Elemente der modernen kapitalistischen Wirtschaft. I. Teil. Tübingen: Verlag von J.C.B. Mohr (Paul Siebeck). 1–26. Sombart, Werner (1929) Die Drei Nationalökonomien. Geschichte und System der Lehre von der Wirtschaft. München und Leipzig: Verlag von Duncker & Humblot. Sombart, Werner (1931a) “Einführung in Begriff und Wesen des Wirtschaftssystems.” In Kapital und Kapitalismus. Herausgegeben von Bernhard Harms. Berlin: Verlag von Reimar Hobbing. Erster Band. 77–84. Sombart, Werner (1931b) “Entfaltung des modernen Kapitalismus.” In Kapital und Kapitalismus. Herausgegeben von Bernhard Harms. Berlin: Verlag von Reimar Hobbing. Erster Band. 85–104. Sombart, Werner (1931c) “Arbeiter.” In Vierkandt 1931. 1–14. Sombart, Werner (1931d) “Beruf.” In Vierkandt 1931. 25–31. Sombart, Werner (1931e) “Grundformen des menschlichen Zusammenlebens.” In Vierkandt 1931. 191–201. Sombart, Werner (1931f ) “Kapitalismus.” In Vierkandt 1931. 258–277. Sombart, Werner (1931g) “Siedlungen. II. Städtische Siedlungen.” In Vierkandt 1931. 527–533. Sombart, Werner (1931h). “Wirtschaft.” In Vierkandt 1931. 652–659. Sombart, Werner (1932) “Die Zukunft des Kapitalismus.” In Sombarts “Moderner Kapitalismus” Materialien zur Kritik und Rezeption. Herausgegeben von Bernhard vom Brocke. München: Deutscher Taschenbuch Verlag. 1987. 394–418. Vierkandt, Alfred (1931) Handwörterbuch der Soziologie. Herausgegeben von Alfred Vierkandt. Stuttgart: Verlag. Weber, Max (2014) Asketischer Protestantismus und Kapitalismus. Schriften und Reden 1904–1911. Herausgegeben von Wolfgang Schluchter in Zusammenarbeit mit Ursala Bube. Tübingen: J.C.B. Mohr (Paul Siebeck). Max Weber Gesamtausgabe. Band I/9.

6 Conclusion: Read Sombart

This book began with the question “why read Sombart?” and this entire book is intended to show that that question should be answered in the affirmative. Before recounting the reasons for reading Sombart’s writings, I want to address some reasons which have been given for not reading his work. One criticism is the claim that in the final decade of his life Sombart embraced Nazi ideology. This is not the place to debate that accusation; but I will simply grant that it is true. Nonetheless, it is irrelevant to Sombart’s earlier writings on modern capitalism. A second complaint is that Sombart was anti-Semitic, but a careful reading of Die Juden reveals that not only was Sombart not anti-Semitic but that he was arguing that the Jewish religious philosophy was a major factor for the development of capitalism. A third criticism is that Sombart’s approach to modern capitalism is mostly a “scatter shot” approach. This claim is slightly more relevant but is not entirely accurate. There is no question that Sombart argued that different groups had contributed to the development of capitalism. These groups ranged from the bourgeoise to the Jews, but it also included luxury manufacturers and military suppliers. But he was not insisting that each of these were somehow the definitive group which developed capitalism; rather, Sombart was © The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 C. Adair-Toteff, Werner Sombart and the ‘Spirit’ of Modern Capitalism, Palgrave Studies in Classical Liberalism, https://doi.org/10.1007/978-3-031-54423-1_6

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suggesting that in some overlapping ways, they all contributed to the rise of modern capitalism. There is also the issue of whether to regard Sombart as Max Weber’s “junior partner” as Lenger had suggested that some scholars believed (Lenger 1994: 387). Certainly, Max Weber’s Protestantische Ethik und der Geist des Kapitalismus deserves its rightful position in sociological literature. However, that was one rather short work that lacked much scholarly documentation. In contrast, Sombart wrote numerous books loaded with facts, statistics, and even tables. Like Sombart, Weber regarded capitalism as one of the most powerful forces in history. But unlike Sombart, Weber did not pursue its origins nearly to the degree that Sombart did. While there are a few justifications offered for ignoring Sombart’s work, there are more that argue for careful readings of his writings. I hope that I have provided a sufficiently compelling account of Sombart’s writings on modern capitalism. This book was not intended to be an examination of all of Sombart’s writings because that would have been a huge undertaking. The sheer number of Sombart’s publications would have required the writing of a book much larger than this one. Michael Appel has nine pages devoted to just Sombart’s books, articles, and reviews (Appel 1992: 275–284). Nor was this book intended to be a full defense of Sombart’s opinions. Some people regarded him as arrogant and others thought him vain, and even he seemed to admit that he often struck people the wrong way. But very few of the people who knew him questioned his dedication to understanding modern capitalism and his facility in explaining its immense importance. This book is an attempt to show that Sombart’s ideas on the genesis, essence, and effects of modern capitalism are almost always thoughtful and sometimes even penetrating. Even the most critical of his critics admitted that Sombart was a genius. On occasion, it seemed that Sombart believed that and he often wrote as if other scholars were mostly mistaken. He contended that his approach was superior to his predecessors because he combined theory and fact and that his theoretical account was supported by an abundance of historical material. In addition, he changed his mind and altered his approach when he found new facts that warranted revising his theories. What some of his detractors derided as changing his mind was his willingness to adapt his theory to accommodate new facts. He happily accepted that there

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were many challenges to the exploration into a very difficult topic— modern capitalism (Grundmann and Stehr 2000). The point that needs to be repeatedly emphasized is that Werner Sombart was one of the most respected political economists between 1902 and 1932. For much of that time, his reputation equaled, if not exceeded that of Max Weber. Without intending to diminish the impact of Max Weber’s contributions to the genesis of capitalism, they cannot really be compared to the dozens of books and articles which Werner Sombart devoted to understanding how and why modern capitalism developed. Each of these reasons should be sufficient to justify my recommendation to “read Sombart!”

References Appel, Michael (1992) Werner Sombart. Theoretiker und Historiker des modernen Kapitalismus. Marburg: Metropolis Verlag. Grundmann, Reiner and Stehr, Nico (2000) “Why Is Werner Sombart Not Part of the Core of Classical Sociology? From Fame to (Near) Oblivion.” Journal of Classical Sociology. Vol. 1. No. 2. 257-287. Lenger, Friedrich (1994) Werner Sombart. 1863–1941. Eine Biographie. München: Verlag C.H. Beck.

Index

A

B

Aachen 39 activity 17, 18, 21, 28, 31, 37, 64, 65, 67, 89, 90, 136 advertisements 43, 125, 126, 148 advertising 43 age 5, 23, 51, 69, 86, 116, 119, 125, 126, 129, 149, 153 Amsterdam 67, 77 animal 20, 36, 48, 49 Appel, Michael 2, 5, 6, 8, 164 apprentice 22, 45, 47, 52, 53 Aristotle 20, 138, 139 army 80 artisans 28, 38, 45, 103, 104 Australia 35 Austrian School of Economics 34, 61, 106, 136

Bahama 34 Belgium 37, 123 Berstein, Eduard 48 Bismarck, Otto von 59 Blackstone, William 18 boat 19, 81 Böhm-Bawerk, Eugen von 33, 120 bookkeeping 26, 120, 128, 145 bourgeois 87–89, 105, 118, 121, 148 Braun, Heinrich 5, 62 Bremen 5 Breslau 5, 6 Brocke, Bernhad von 4–6, 56 Buber, Martin 47, 48 Bücher, Karl 7, 20, 44 building 19, 26, 27, 49, 81, 84, 126, 136

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 C. Adair-Toteff, Werner Sombart and the ‘Spirit’ of Modern Capitalism, Palgrave Studies in Classical Liberalism, https://doi.org/10.1007/978-3-031-54423-1

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168

Index

business 11, 18–20, 26–28, 31, 44, 56, 70, 71, 73, 74, 76, 88, 91, 107–109, 111, 114, 118, 119, 124, 125, 127, 128, 143, 146, 148, 156, 159

C

calculation(s) 10, 24, 26, 33, 70, 88, 92, 105, 145, 158 Calvinism 26 Calvin, Johannes 25, 90 Carnegie 89 Casanova 150 Catholics 90, 121 children 4, 24, 32, 36, 43, 48, 50–52, 122 citations 100, 102 city 11, 20, 23, 24, 27, 36–41, 48, 49, 51, 66, 77, 78, 103–105, 123, 155 class 21, 41, 48, 114, 137, 148 clothing 21, 27, 28, 42, 49, 78, 79, 82–84, 105, 112, 147, 153 clubs 154 coal 19, 32, 39 coins 22 Columbus, Christopher 34 companies 68, 108, 144 competition 9, 30, 32, 43–45, 69, 70, 90, 113, 124, 125, 156, 158 complaint 10, 17, 69, 134, 139, 149, 163 concepts 16, 17, 19, 41, 58–60, 77, 107, 118, 136, 137, 142, 149, 155, 156, 158 concert halls 147

conclusion 18, 21, 28, 47, 53, 63, 65, 81, 90, 106, 115, 124, 129, 154 conditions 9, 22, 35, 36, 44, 50, 90, 109, 111, 134, 141, 143, 157 conqueror 71, 87, 147, 156 cooperation 19, 20 cotton 45, 79, 122 country 5, 7, 36, 66, 72, 78, 82–84, 86, 109, 113, 159 courts 76–78, 83, 160 craftsman 9, 19, 22, 27, 30–32, 45, 46, 70, 90, 111, 113, 128, 153 craftsmanship 28, 53 crisis 109 crops 35 Crusoe, Robinson 19, 20, 136 culture 10, 34, 41, 47, 52, 93, 101, 133, 150 customers 43, 68, 89, 113, 125 customs 40, 48, 71, 107, 109, 145

D

Dafoe, Daniel 111 death 4, 31, 50, 123, 150 Delbrück, Hans 56, 81 delivery 28, 44, 83, 111, 146 Descartes, René 135 destiny 60, 159, 160 Deutsche Gesellschaft für Soziologie 6, 8 development 3, 4, 6, 10, 21, 25, 26, 29, 32–34, 47, 57, 63, 64, 69, 72, 75, 84, 87, 91, 94, 108, 110, 119, 121, 123, 145, 159, 163 dictionary 21, 86 Dilthey, Wilhelm 135, 139

Index

discoverer 71, 147, 156 disease 83 dissertation 1, 2, 5 distances 34, 128, 145 doctors 6, 73 doctrine 32, 57, 72, 107, 134, 138, 140, 152 documentation 100, 118, 164 Dostoevsky 150 Düsseldorf 39

E

economists 17, 79, 86, 106, 134, 140, 157, 165 economy(ies) 9, 11, 18, 20, 31, 35, 63, 66, 70, 85, 99, 101–103, 110, 113, 121, 129, 134, 135, 138, 140, 141, 143, 144, 150, 151, 158, 159 electricity 32, 33, 147 empiricism 17, 63 end 9, 12, 18, 25, 26, 34, 56, 62, 73, 76, 81, 82, 87, 88, 91, 97, 104, 115, 125, 129, 133, 143, 144, 153, 158 Engels, Friedrich 56, 110 entrepreneur 9, 18, 25, 29, 31, 32, 41, 43, 70, 71, 87, 100, 118, 147–149, 156, 157 epidemic 22 Europe 34, 64, 67, 77, 80, 85, 103, 111, 115, 116 exchange 22, 23, 66, 67, 69, 103, 106, 111, 120, 124, 153 experience 17, 46, 53, 102, 144, 151

169

F

factors 19, 20, 22, 25, 26, 30, 32, 33, 36, 38, 39, 63, 64, 67, 76, 84, 90, 91, 94, 101, 122, 139, 158, 163 factory 20, 28, 45, 49, 51, 53, 114, 142, 145, 153 facts 3, 6, 17, 24, 28, 37, 40, 56, 59, 61, 75, 79, 80, 82, 89, 92, 97, 99, 102, 104, 107, 110, 135, 141, 150, 164 fairs 21, 22, 89, 107 famine 26 farmers 28, 35, 76 feelings 33, 50, 78, 89, 92 food 21, 22, 40, 50, 74, 82–84, 122, 123, 126, 152, 153 fortune 25, 74, 80 foundations 62, 158 France 37, 39, 72, 76, 78, 81, 123 Frankfurt 6, 67 Franklin, Benjamin 34, 88, 108 freedom 30–32, 40, 61, 74, 91, 103, 153, 157, 159 Freiburg 5 Fugger, Jakob 24, 26 furniture 27, 28, 41, 42, 79, 112, 126, 147 future 2, 5, 6, 12, 33, 46, 53, 58, 60, 86, 92, 115, 123, 129, 133, 142, 143, 159–161

G

gas 68, 147 gender 149 genesis 3, 8, 16, 18, 24, 29, 55, 57, 60, 164, 165 Genoa 67, 85

170

Index

German Historical School of Economics 34, 136 glass 43, 79 goal 11, 17–19, 24, 26, 48, 68, 74, 88, 101, 123, 140, 142, 147, 150 Goethe 93, 100, 146 Great Britain 37 Grimm, brothers 21, 86 group 6, 8, 21, 39, 47, 48, 51, 70, 72, 87, 103, 105, 114, 122, 124, 127, 146, 153, 155, 163 guild 21, 32, 113, 153

H

Halle 56, 61 Hamburg 23, 34, 77 hand 3, 21, 27, 36, 55, 62, 114, 156 Harms, Bernhard 7, 11, 56, 157 hats 28, 53, 70, 73, 79, 105 Hegel, Georg Friedrich Wilhelm 58 Heidegger, Martin 139, 161 Heller, Hermann 140 Heuss, Theodor 57 Hilferding, Rudolf 56, 62, 63 historian 2, 37, 81, 86, 100, 118, 139, 140 history 2, 12, 17, 20, 24, 30, 33, 44, 45, 56, 58, 59, 61–63, 66, 67, 74, 81, 100, 118–120, 134–136, 138–140, 164 Hitler, Adolf 62, 117, 160 Hobbes, Thomas 93 hospitals 147 hotels 79, 144, 147 housing 26, 27, 42, 82 Hume, David 67 husband 2, 6, 50, 52

hygiene 22, 104, 115, 119, 122

I

idea 5, 26, 32, 58, 73, 88, 94, 108, 137, 150, 151, 156 ideal 58, 72, 89, 90, 101, 103, 104, 118, 142 idealism 17, 75 ideology 163 imperialism 159, 160 individual 20–22, 24–27, 29, 31, 41, 48, 49, 58, 61, 66, 67, 80, 83, 87, 94, 105, 118, 124, 137, 139, 143, 145, 149, 152, 155, 156, 158, 159 inflation 7 information 21, 33, 109, 127, 129, 156 instinct 90 institutions 11, 27, 87, 101, 109, 147 instruments 19, 24, 25, 128 introduction 16, 18, 22, 23, 35, 36, 61, 82, 90, 94, 100, 103, 107, 134, 145, 157 inventor 71, 156, 159 investigation 2, 9, 21, 29, 44, 64, 69, 72, 106, 116, 136, 138, 154, 158 Italy 5, 24, 37, 39, 66, 123

J

Jaffé, Edgar 5, 62 Japan 7 Jehovah 73, 90 jewelers 73 jewelry 79, 87, 112

Index

Jhering, Rudolph von 155 journeyman 22 Judaism 65, 67, 72–74, 91 justice 40, 88, 155

171

luxury 10, 38, 39, 41, 55, 75–80, 105, 109, 112, 125, 163

M K

Kant, Immanuel 16, 17, 22, 93, 135, 140 Karl Kautsky unity 58, 119 knowledge 17, 21–23, 33, 129, 135

L

labor 18, 19, 21, 27, 36, 46, 53, 111, 120, 122, 124, 142, 145, 149, 152, 153 laborer 21, 36, 45, 49, 149 land 23, 35–37, 40, 46, 49, 76, 101, 153 Landauer, Gustav 48 landowner 41, 102 language 150, 151, 155 laws 30, 135, 136 leather 45, 79 lectures 7, 11, 12, 157–161 Leibniz, Gottfried Wilhelm 135 Leipzig 56 Lenger, Friedrich 2, 4–8, 164 Lexis, Wilhelm 33, 56 library(ies) 7, 147 Lichtblau, Klaus 1, 6 literature 64, 77, 93, 111, 123, 149, 156, 164 livestock 35 Locke, John 29 London 39, 40, 67, 77, 84 Luther, Martin 21, 90, 154 Luxemburg, Rosa 119, 120

machine 19–21, 27, 28, 32, 33, 36, 46, 53, 84, 114, 119, 145, 153, 156 Malthus, Thomas Robert 122 Manchester 39 Mannheim, Karl 140 markets 21–24, 42, 103, 105, 109, 111, 124, 126, 145 Marxism 5 Marx, Karl 9, 57–61, 63, 106, 117, 121, 122, 137 master 9, 18, 45, 52, 53, 83, 102, 152 material 10, 16, 17, 21, 40, 41, 45, 46, 49, 62, 78, 84, 91, 99, 101, 113, 115, 116, 126, 147, 161, 164 measures 11, 24, 34, 72, 88 medicines 79, 119, 138 Menger, Carl 7, 61, 106, 136 merchants 73, 87 methodology 37, 99, 136 Meyer, Eduard 139 Michels, Robert 8, 119, 140 Middles Ages 20 Mill, John Stuart 121, 136 mining 19, 22, 26, 39, 113, 122 mirrors 79, 150 money 4, 7, 9, 25–27, 60, 66, 72, 76, 82, 83, 87, 90, 101, 106, 108, 121, 141, 143, 144, 147, 153, 159 Montesquieu, Charles-Louis de Secondat 122

172

Index

mother 38, 51, 151 motto 16, 18, 21, 24, 134 Müller, Adam 137 Munich 6 museums 147 N

nationality 148, 149 Naumann, Friedrich 56–60, 63, 116 Nazi 8, 12, 161, 163 Netherlands 66, 81 newspapers 40, 113 New York 34, 146 Nietzsche, Friedrich 79, 93, 105, 135 Novalis 137 O

Oppenheimer, Franz 56 order 4, 17–20, 24, 34, 58, 70, 76, 87, 91, 103, 109, 125, 136, 150, 151, 153, 157, 158, 160 organization 17, 18, 24, 26, 43, 70, 80, 101, 105, 124, 142, 152, 154 organizer 71, 87, 147, 156 origins 2, 3, 10, 16, 23, 57, 67, 94, 97, 100, 117, 118, 164 P

pamphlet 54, 56 Paris 39, 40, 62, 67, 77 payment 76, 111, 145, 153 peace 31, 53, 70, 80, 86, 89, 93, 108 people 5, 9, 10, 22–25, 27, 29, 40–43, 46, 48, 50, 52, 55, 63,

64, 67, 71–73, 78, 80, 86, 88, 93, 100–103, 114, 118, 119, 123, 125, 127, 139, 144, 145, 147, 164 perfume 79 plan 2, 18, 19, 29, 70, 87, 88, 142, 150, 160 Plenge, Johannes 116, 155 porcelain 28, 78, 79 Portugal 66 predictions 33, 129, 135 principle 17, 43, 70, 77, 86, 101, 137, 141, 142 problem 17, 24, 47, 50, 61, 65, 75, 90, 104, 127, 135, 137 process 10, 18, 20, 23, 29, 32, 33, 39, 42, 64, 66, 70, 73, 79, 82, 109, 120, 121, 127, 128, 145, 148 production 9, 10, 20, 31–33, 41, 44–46, 70, 79, 82, 83, 101, 105, 108, 112, 113, 121, 124, 127, 143, 144, 147, 151, 156, 160 profit 9, 17, 24–26, 43, 62, 68, 70, 79, 88, 107, 109, 111, 118, 123, 141–144, 146, 147, 156–159 progress 41, 64, 89, 91, 110, 111, 118, 149 proletariat 48, 49, 53, 123, 149 property 17, 31, 80, 121 Prussia 36 Puritanism 64, 72, 74, 90, 91 purpose 3, 11, 17–19, 25, 33, 41, 69, 70, 101, 108, 140–142, 144, 148, 158

Index

R

race 64, 65, 148, 149 rail 40, 68, 126 Rathenau, Walther 89 rationalism 25, 26, 60, 92, 105, 127, 128, 135, 142, 144, 145, 156, 158 Reformation 21 reputation 2, 5, 11, 15, 48, 55, 56, 140, 165 restaurants 79, 144, 147 Rhodes, Cecil 89 Rickert, Heinrich 139 Rockefeller 89 Rome 5, 77 Roscher, Wilhelm 38, 44, 58, 134 Rothschild 67, 68 rules 17, 85, 93, 107, 145, 158

S

sailors 81, 83 salesperson 21, 71 Scheler, Max 139 Schmidt, Conrad 56–58, 60, 63 Schmitt, Carl 155 Schmoller, Gustav 5, 17, 44, 56, 58, 61–63, 114, 129, 136 Schumpeter, Joseph 134, 157 Schwarzwald 28 science 17, 33, 93, 119, 135–140, 150, 151 scientists 17, 135 sections 1, 15, 16, 25, 30, 37, 40, 42, 44, 57, 59, 65, 68, 69, 73, 74, 77, 79, 87, 88, 90, 100, 104–111, 113, 117–120, 123–125, 134, 138, 142, 144, 147, 149, 156

173

shed 46 shelter 21, 29, 153 ships 23, 34, 80, 81, 83–85, 112 silk 45, 79 Simmel, Georg 26, 47, 135, 141, 155 sketch 30, 45, 64 skill 9, 23, 32, 33, 45, 147 slave 20, 52, 122, 152, 153 Smith, Adam 37, 38, 61, 62, 67, 78, 79, 122, 136 sociology 2, 11, 15, 56, 136, 150–152, 155, 156, 160 soldier(s) 80, 82, 83 South Africa 35, 122 space 34, 46, 66, 155 Spann, Othmar 134 specialist 21, 60, 118, 148, 149, 159 speculations 24, 26, 33, 67, 74, 109–111, 158 speed 34, 83, 84, 110, 144, 146, 156 Spencer, Herbert 93 spices 79 spirit 2, 3, 25, 26, 50, 55, 57, 58, 64, 73, 74, 86, 87, 90–94, 105, 107, 113, 119, 125, 128, 141, 156, 158, 159 state 36, 48, 59, 66, 67, 80, 82, 83, 87, 91, 93, 94, 104–106, 109, 110, 112, 113, 118, 119, 125, 129, 149–151, 153, 154, 159 steam 32, 33, 119 steamship 34, 147 Strassburg 61 street 27, 48, 51, 147 structure 18, 31, 59, 120, 143, 146 struggle 30, 141

174

Index

subtitle 16, 40, 86, 116, 120, 121, 134 suicide 138 Switzerland 37, 62 systems 18, 20, 52, 53, 66, 75, 92, 117, 121, 128, 136, 145, 149, 150, 153, 158

truth 29, 100

U

uniforms 10, 82, 83

V T

technologies 6, 32, 35, 46, 63, 89, 91, 92, 101, 119, 124, 142–144, 150, 151, 153, 156, 158, 159 telegraph 34, 40 telephone 34, 147 terminology 58, 79, 104 theaters 78, 147 theory 3, 16–18, 29, 33, 34, 37, 44, 61, 63, 100, 102, 111, 116, 117, 121, 122, 127, 134, 136, 138, 140, 150–152, 164 time 1, 7, 10, 15, 17, 19, 21, 27, 28, 34, 35, 39, 41, 42, 46, 50, 51, 54, 55, 59, 66, 67, 73, 74, 83, 85, 89, 103, 107–109, 112, 116, 121, 124–126, 129, 146, 150, 155, 158, 159, 165 title 2, 11, 16, 18, 21, 24, 25, 35, 37, 44, 63, 68, 69, 75–77, 79, 92, 99, 107, 114, 117, 119, 121, 128, 134, 139, 158 Tönnies, Ferdinand 8, 20, 47, 56, 102, 114, 119, 140, 141, 151 tools 21, 32, 46, 126, 128, 143, 156 town square 51 translation 2, 16 tricks 146 Troeltsch, Ernst 8, 139

Vaihinger, Hans 135 value judgments 8, 65, 68, 138 Venice 24, 67, 77 Verein für Sozialpolitik 5, 8 Vienna 6, 62 Vierkandt, Alfred 11, 56, 102, 133, 140, 155, 161 village 20, 40, 49, 51, 86, 102, 103, 122, 155 vocation 22, 114, 148, 154 Voigt, Andreas 150

W

Wagner, Adolph 17, 30 war 6, 8, 10, 22, 26, 55, 56, 63, 75, 80, 84–87, 92, 93, 104, 106, 112, 115, 116, 123, 129 water 19, 27, 32, 109, 147 wealth 25, 26, 70, 72, 74, 76–78, 106, 115, 116, 125 weapons 10, 66, 79, 82–84, 105 Weber, Alfred 6, 119, 139, 140 Weber, Marianne 2 Weber, Max 1–6, 8, 11, 15, 25, 54, 57, 62, 64, 70, 72, 74, 99, 117, 119, 136–139, 141, 154, 155, 157, 164, 165 weights 24, 108 Weimar 6, 8 Weimar Republic 8, 62, 161

Index

wife 5–7, 36, 50 Willy Hellpach, Willy 56 Windelband, Wilhem 139

wine 79, 103 woman 51, 52, 76

175