According to Weber, what is the meaning of capitalism?
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Weber defines capitalism as follows:
Where we find property is an object of trade and is utilized by individuals for profit-making enterprise in a market economy, there we have capitalism.
But Weber was not as interested in analyzing the economic aspects of capitalism as he was its cultural underpinnings. In fact, that is, in a way, Weber's point in his most famous treatment of the subject, The Protestant Ethic and the Spirit of Capitalism. There, he argued that capitalism was the product of material conditions, conscious decisions, and cultural changes. Weber locates the cultural origins of capitalism in the emergence of Protestantism, with its emphasis on "callings" which sanctified work. Protestantism also carried with it a certain asceticism which encouraged successful businessmen to invest earnings back into their businesses as capital rather than spending money on finery. Over time, Protestants came to view work, and material success, as a function of spiritual worth. Over time, this spirit, Weber argues, became "demystified," or disconnected from its religious origins. Thus was born modern capitalism, in which one's worth is calculated by earnings potential, and the emphasis on frugality mutates into rationalization, organization, and bookkeeping. Work becomes not so much an expression of piety, but rather a way of surviving within a system which they could not escape or transcend. Accordingly, Weber characterized modern rational capitalism as an "iron cage."
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