The Economic Sociology of Capitalism
Weber and Schumpeter
RICHARD SWEDBERG Cornell University
ABSTRACT This article points to a distinct puzzle in the analyses of capitalism
that can be found in the works of Weber and Schumpeter, and gives a new
introduction to their analysis of capitalism. Both Weber and Schumpeter wrote
voluminously on capitalism, as testified to by such giant works as Economy and
Society (Weber, 1978c [1922]) and Business Cycles (Schumpeter, 1939). One can
also discern a distinct development in their thought over time: from emphasizing
the role of various voluntaristic elements (such as the spirit of capitalism and the
spirit of entrepreneurship) to stressing the role of institutions. The puzzle that
one can find in their writings is as follows. Weber and Schumpeter both argue that
a vigorous and healthy capitalism requires certain economic and non-economic
institutions, in addition to something else. An absence of this ‘something else’
may lead to capitalist petrification or collapse, according to both authors. The
answers of Weber and Schumpeter to the above puzzle, it is shown in the article,
is somewhat different in their early and in their later works.
KEYWORDS capitalism, economic sociology, Schumpeter, spirit of capitalism,
Weber
This article has two purposes: to point to a distinct puzzle in the analyses of
capitalism that can be found in the works of Weber and Schumpeter, and to give
a new introduction to the sociology of capitalism that can be found in the works
of these two scholars. The puzzle is as follows. Weber and Schumpeter both argue
that certain economic and non-economic institutions are needed for there to be a
vigorous and healthy capitalism, but also that this is not enough. Something else
is needed – but what? In situations where this ‘something else’ is needed, but
where otherwise perfectly adequate institutions are present, Weber and Schump-
eter agree that capitalism may either petrify or become so weak that it may fall
Journal of Classical Sociology
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