Sombart Hochkapitalismus

Sombart's Hochkapitalismus Author(s): Wesley C. Mitchell Source: The Quarterly Journal of Economics, Vol. 43, No. 2 (Feb.
, 1929), pp. 303-323 Published by: Oxford University Press Stable URL: http://www.jstor.org/stable/1882475 . Accessed: 05/04/2014 21:34
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SOMBART'S HOCHKAPITALISMUS 1 Der moderne Kapitalismus madeitsfirst appearance in 1902. The work then oftwostout consisted volumes, some1350pages,tracing theriseofcapitalism from its tentative in the MiddleAgesto its fulldebeginnings in the nineteenth velopment century.At once,this vigorous studyof economic behavior excited keeninterest. The wide scope of the investigation, the full the constructive documentation, power revealedin a vastmassofmaterials organizing elicited admiration. Werner Sombart seemed to recapture thatblendofhisand theory tory which had lentintellectual distinction to Marx'sKapital- thatblendwhichSchmoller had striven after withless success. But in detailthework
1. Der moderne Kapitalismus.Dritter Band. Das Wirtschaftsleben im Zeitalter des Hochkapitalismus. One volumebound as two; large 8vo; pp. xxii,1064. Munichand Leipzig. DunkerundHumblot, 1927. 29 marks in papercovers;34 marks bound. All threevolumesof Der moderne Kapitalismus(boundas six), in theirseverallatest editions, may now be had from the publishers in uniform style. As thework nowstands, thetitles maybe rendered thus: - An historicaland systematicexpositionof Modern Capitalism Europe'seconomic lifefrom its beginning to thepresent day. Vol. I. Pre-Capitalism. Part i. Introduction, The Pre-capitalistic Economy. Pp. xxii+ 462. Part ii. The Historical Foundations of ModernCapitalism. Pp. viii + 463-919. Vol. II. Early Capitalism. Partsi and ii. Economic LifeofEuropein theAge ofEarly Capitalism, chiefly the sixteenth, seventeenth and eighteenthCenturies.Pp. x + x + 1229. Vol. III. High Capitalism. Part i. Foundations and Structure. Pp. xxii+ 514. Part ii. Economic Processes of High Capitalism. Economic Organization as a Whole. Pp. x + 515-1064.
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was uneven. A succession of critics cast doubtupon ofthewriter's several contentions. fondest Fortunately for therestofus, Sombart was driven by thedemoniac of one of thosecapitalist energy at whose enterprisers irrational he marvels. Spurred on by self-exploitation praiseand blame,he set himself to re-work thewhole more field intensively. In 1916 the first volumeof the expandedtreatise cameout in twoparts. A secondvolume, also in two in 1917. Ten years parts, followed later"the third and " provisionally the last volume appeared another set oftwins. ofthis related tovarious strucClosely parts imposing - Warand Capitalism, tureare Sombart's other books The Jews and Economic Luxury and Capitalism, Life, The Futureof the Jews, The Bourgeois, Tradersand Heroes, Proletarian Socialism, The Nineteenth Century in Germany. Trulya prodigious pileto comefrom one pen! The quality ofthisoutput is as intriguing as itsquanis impressive. Werner Sombart tity putshisownstamp he writes. From its metaphysical upon everything to its literary hiswork infoundations is highly finish, He has brought to light dividualized. buried treasures of dailylifein the MiddleAges. He has foundnew in familiar He has challenged meanings materials. conwhich inoureconomic clusions and passmuster histories in ourtheoretical treatises.In view concepts accepted of the of seeming the German "historical collapse school," his methodof workhas an interest approaching the dramatic. Everyserious of student economics should withSombart's acquaint himself contribution. nottobe wellknown Yet thatcontribution seems outto translate sidethewriter's land. No onehasventured thethree thousand pagesofDer moderne Kapitalismus
SOMBART'S HOCHKAPITALISMUS
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into English. The books which have been translated are lessimpressive thanthemagnum opus. And German is a glass throughwhich most English-speaking economistssee but darkly. The competent scholarwho presketchofSombart'sworkand sentsus witha full-length its bearing upon other approaches to economicswill merit our thanks. Meanwhile, the best service a recan render viewerof the volume on Hochkapitalismus is to tell what the book contains. I The age of high capitalismbegan in the 1760's and ended in August, 1914. A series of great inventions, ironwas deamongwhichthe coke processof smelting end cisive,usheredin the age. Signsofits approaching appeared before 1914- the intrusionof normative of ideas into business practice, the disestablishment of the profit-seeking as sole guide economic activity, the steadiercourseofevolution, the declining flexibility, the substitutionof agreementsfor free competition, standardizingof industrialorganization. Capitalism old - its spiritwas suffering was growing change. The war made this changemanifest. To Sombart,capitalismis an "historicalindividual," "a peculiar episode in the historyof mankind." At bottom,money makinghas no relationwith the economiclifethat matters. Yet because a handfulof men witha passion to make money,hundreds were smitten of humanbeingshave been called into exisofmillions has been made over. The revtence,and humanculture olutionary changesspread at extraordinary speed from overwestern England,theirculturalcenter, Europe and easternNorth America. From these strongholds high capitalismturnedto its uses the restof the earth.
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It is an idea which has wrought thesewonders.But idea and actuality cannotbe causallyrelated. How comes it,then, thattheactualworld has beenstamped withthepattern of the capitalist idea? Sombart surmounts thisartificial difficulty by a mostcharacteristic argument.(1) We mustaccept certainfundamental factsofeconomic evolution as historical accidents.In recent times thefundamental economic facts happened - thatis the to fit wellwith thepremises ofcapitalism basicreason evolution why followed thelinemarked out bythecapitalistic idea. The facts inquestion arethree: a newtypeofman assumed the direction of economic activities; a new typeof statedeveloped; a newtechniquecameto dominate The business industry. enterpriser, themodern state,themachine process are "the foundations" uponwhich highcapitalism is built. (2) The conditions under which high capitalism waserected upon thesefoundations mighthave been such as to hinder thework. Whatcapitalism neededforfulldevelopment was capital,labor,markets.These needs weremetin optimal fashion.Againaccident playeda role, as inthediscovery ofgreat golddeposits, therapid increase ofpopulation, theexistence ofvirgin resources awaiting exploitation. But otherfavorable factorsincreased productivity, thecredit system, the" mobilizing of commodities" -were evokedby the primary forces themselves.(3) The capitalistic as it process, forced in the direction unfolded, developments which suited itsspirit, economic by rationalizing activity. in This curiousargument the preface controls the whole discussion of High Capitalism. Book I, The deals successively withthe capitalist Foundations, enthe modernstate, and moderntechnique. terpriser, Book II, The Building, deals withcapital,labor and
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and here Sombart'smetaphysics gets in his way -
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Book III, The Process, markets. therationdealswith of production. alizingof wants,of marketing, There a briefsectionupon non-capitalistic follows forms of which havelastedoverfrom an earlier organization age, ofan age to come. The or which appearas harbingers ofall dipsinto thefuture. lastchapter Whatever doubts abouttheprofessed of this onemayfeel of scheme origin theoutline organization, is neat. II theleading ofhigh Sombart rolein thedrama assigns It is he and he to the business capitalism organizer. the driving alonewho furnishes power. Whether pria merchant, a financier, a captainof industry, marily all minor functions thebusiness leader to others. assigns it in hisenand install He can buyroutine intelligence are not terprise like a masterclock. His operations of his ownproperty, forhe uses boundby the limits ofothers.He is nothampered theproperty mainly like fortradition or regard his predecessors for by regard religion. Desireofgain,a willto power, a drive toward activity inspire his restlessness. These dynamic imeconomic pulsesaredisciplined bya sublime rationality. haveproduced Handinhand, andreason an unpassion precedented outburst ofhuman which efficiency, is blind - theendofall this to butonething teeming activity. oftwoincomThe modern theunion staterepresents - liberalism ofpower. patible andthepolicy principles Domesticpolicyis liberalin the sensethat economic are left to individual initiative. affairs mainly Foreign fora policyalso was affected by the liberalideology time, inEngland.But thefree-trade particularly movementnevercut verydeep,and thelast quarter of the a reaction nineteenth toward"Realcentury brought was the prophet.Neopolitik,"of whichBismarck
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the field, mercantilism now dominates withits high and imperialism. militarism tariffs, hasto sayaboutthethird WhatSombart corner-stone a bitmore ofhigh to give capital maybe reported fully, ofhischaracteristic modeof elabat leastoneexample oration. Industrial technique is twin sister ofnatural science. discoveries Scientific inventions giveriseto inventions; lead to discoveries; often frequently discoveries are inin technical ventions. Hencethestages progress derive from the stagesof scientific advance. The theoretical ofEuler,Maclaurin workof Galileoand Newton, and ofPoinsotand RobertMayerlaid thebasis Lagrange, forthreesuccessive stagesof appliedmechanics.In Lavoisierand Priestley laid the foundachemistry, and Liebigpushed intotheorganic tions;Wdhler field; Kekuleand van t'Hoff founded stereochemistry. Simifield:Farady and Ampere larlyin the electric establishedthe basic conceptions; Gauss and Weberdevelof conduction, Maxwelland Herz the oped thetheory of electrical waves. Our dynamos, theory telegraphs and radiosgrewout of thesesuccessive achievements. in theage ofearlycapitalism Cosmical was contheory traditional of a tentwiththe view craftsman God who it good,and made the worldin six days,pronounced on the seventh rested day. Modernscienceconceives ofrelationships theuniverse as a system electriamong cal charges.Industrial likewise has moved technique out ofthecraftsman Uresaid stage, trying (as Andrew mechanical a century sciencefor ago) "to substitute thinks theworld a physico-chemical handskill."Science industrial makes a world on this mechanism; technique model. Trade secrets scientific jealously guarded give rules baseduponexperiplaceto scientific publications; laws whichare demonence give place to scientific
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so faras possible all operations are transferred strated; from thevariable personal factor to automatic mechanisms.
all this,the crucial Granted question remains: How ofinventions can we explain theextraordinary number madein ourepoch? Sombart answers, "By observing and thesubjective which boththeobjective conditions I shallsave spaceby listhave stimulated invention." in quasi-tabular form. ingtheseconditions
Objective Conditions 1. The scientific basis of moderntechnique. (a) The objectiverecording of technicalknowledge guarantees its spread. its preservation and facilitates (b) The systematizing of technical knowledgebinds one problem to another,so that one invention leads to otherinventions. (c) The mathematicalformin which technicalknowledgeis extension ofa solucast tendsto producea quasi-automatic tion foundforone problemto otherproblems. 2. The favorablereception accordedto inventions. (a) The hostility towardinventors and theirworks,violentin the Middle Ages,stillstrong in the earlycapitalisticera,has turnedinto a spiritof admiring welcome. (b) The striving aftermaterialprogress, so characteristic of our time,createsan eager demandforinventions. (c) Capitalism favors inventionsfor the profitshoped from them. in threeways. 3. The active stimulation of inventions (a) Technical schoolswithresearchlaboratories. (b) Researchbureaus set up by greatcorporations. of inventing (c) The subvention by A payingforpatents, B granting subsidies, C offering prizes. Conditions Subjective In former timesthefiner to vulgarmatspirits paid scantattention ters of technique. As forthe hewersof wood and the drawersof as theyhad been taught. Not untilthe dawn water,theydid things in inventionappear. At firstthis of moderntimes did an interest interest was irrational, romantic, baroque. Graduallyit grewinto of our time. interest the many-sided
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In theepochofhigh capitalism we havethree types ofinventors: or Solvay,whoinvents (a) The genius, likeBessemer newprocessesdespite his lack of technical training. Such casesare exceptional. who happensupon one, perhapsupon (b) The lay inventor, several, ingenious contrivances. But moreimportant, and to ourage,is peculiar whomaybe a manworking (c) The professional inventor, on his likeEdison, butis usually ownaccount a highly trained emin someresearch ployee laboratory. which The motives stimulate modern invention maybe classified as follows: in inventing. 1. Pleasure 2. Interest in the results of an invention from arising philanenthusiasm forprogress, thropy, military considerations, amand so on. bition, ? doubtless remains 3. Desireforgain,which the mostpowerful ask: Whatinventions aremade? The answer we should Finally, decides whether is: The business organizer an invention is "good," which inventions a profit are thatis,profitable. Onlythose promise in theeraofhigh serves busiputto use. Thusinvention capitalism interests of mankind ness, and business alone. Other are not cared is goodbusiness. savein so faras service for,
incentive.
runa thousand volumes Sombart's pages apiecebeoutafter thisfashion. causenearly every topicis drawn on the scale of one to twelve. DesI have condensed hisgift for pitetheauthor's gusto, despite phrase-makas he descends interest theladder ing,thereader's flags and then to Greek to Roman But from numerals letters. idea springs from itsformal everand againan arresting From andgrips hisattention. forward this setting point I shallnoteonlytheintriguing parts. idea that modern favorite One such is Sombart's from the hobbles oflivseeksemancipation technique it chooses as possible, mateingnature.So far inorganic - metals rialsinplaceoforganic replace wood,coal-tar mineral lubricants dyesreplace vegetable dyes, replace withprime movers: animaloils,and so on. Similarly man powerand animalpowerare replaced by steam,
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and theinternal combustion electricity engine.Worka like transformation. ing processes undergo For the of modern ordinary processes nature, technique substitutes artfully chemicalor mechanical arranged proto convert standardized materials into cesses, designed a continuous seriesof standardized products, through on a quantity basis. And of course operations human natural laboris one of theerratic agentsofwhich the technician is mosteagerto be rid. III Book II, as said above,dealswith and capital, labor, markets. defines Sombart capitalas "thosesumsofexchange basisfora capitalist serveas thematerial value which enterprise." Capital comesinto existence whenever or enlarge a business.The is used to establish money ofourerais thatit premost characteristic conspicuous forthe growth sentedoptimalconditions of capital. Large"savings"weremadepossible by theincrease in unevendistribution production, by the exceedingly of in accumulating. and by theprevalent interest wealth, inducements to invest Therewerealso strong theseacin business, thusconverting cumulations potential into actual capital. Credithas contributed to enormously of capitalby the facilities the growth for it provides use of scattered making business savings, by enabling manto expandhis operations the able business farbeofhis ownfortune, yondthe limits "into by bringing commerce value offuture thepresent and by profits," the wholebusiness structure an extraordinary giving ofintricate combination and flexibility. organization of the commodities in which Capital goodsconsist capital"clothesitself"fora time. The problem conis theproblem ofproduction. their cerning origins There
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can be heightened, are threeways in whichproduction and high capitalismhas made use of all three- more use of given resources,exploitationof new effective of nature. areas, drawingupon the past accumulations of methods the many upon at length dwells Sombart of spread and upon the making labor more effective, capitalist exploitation into the crannies of western Europe, thenceeastwardacrossRussia into Asia, westand southward to theAmericas, wardacrosstheAtlantic the he of all emphasizes Most to Australiaand Africa. by robextentto whichhigh capitalismhas flourished and drawinglavishly bing the soil, fellingthe forests, mineralresources.The greaterpart upon irreplaceable and transat of capital goods, least in manufactures not annual income but the conportation,represents ofman's naturalpatrimony. sumption capitalto labor,Sombartattacksa simiPassingfrom came the labor powerwhichhigh Whence lar problem: flow ofcapital neededto handletheenormous capitalism goods? Several sourceswere drawnupon. Capitalists stole savages and worked them as slaves. But that was resource. Far moreimportant proved a dwindling of the old rural and craftorganizations the dissolution in which and by which a large part of the European populationsstill lived in the age of early capitalism. the directcomcouldnotwithstand These organizations upon techniqueand its influence petitionofrationalized legislationand administration.Deprived of their old a largepart ofthe peasantryand methodsoflivelihood, to seek capitalistemployment. had handicraftsmen the But the richestsourceof labor power was the spontain population.Neverhad theworldknown neousgrowth century. such an increaseas appearedin the nineteenth The increase came not froma rise in birthrates, but froma fallin death rates. Hygieneand medicinemade
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but the chiefcreditmust be asremarkableprogress, signed to the more abundant means of livelihood. In the last resort, capitalism itself produced the labor the bellies of the multitude power it needed by filling whichhad hungered. The productionof abundant labor power,however, merelyprovideda raw material,whichhigh capitalism had to adapt to its exactingneeds. First, populationhad to be shiftedabout fromthe places whereit was producedto the places wheregoods of ofthe old forms wereto be handled. The dissolution rural and the growthof numbersleftthe organization and smalltownswithfarmorehandsthancould districts of these local surbe used there. The redistribution ofhistory.By migrations the greatest produced pluses to city, from country wereshifted families the millions, to another. fromone countryand fromone continent capitalism shiftings, And beside these quasi-permanent whichcarriedlaborershunestablisheda seasonal flow, tasksto summer winter ofmilesfrom dredsor thousands tasks and back again. had to be adapted to the techniSecond,the workers of capitalism. Sombart recalls the cal requirements in managers by the earlyfactory experienced difficulties humanbeings,accustomedto irregteachingrefractory of ular paroxysmsof labor, the sustained regularity -difficulties half effort demandedby machinetending in Europe, but experiencedafresh in each forgotten backward land invaded by the machine process. To to be inhad further induce steady habits,the workers spiredwith the desireto get on in the world afterthe of stupidities capitalistideal. " It is one ofthe strangest inthe desireforgain as an theoryto represent current it seemednecesborn traitof human nature." At first so that men sary to keep wages down to a minimum,
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orgohungry. must work somemeassteadily But when ureofsteadiness it appeared thatintense was attained, application couldnotbe sustained on minimum wages. So employers adopted variousschemesintendedto stimulate effort. Sombart Max Weber's While questions thatpuritanism thesis had a largesharein forming the capitalist spirit ofbusiness it didhelpto men, he thinks in thenewwayoflife. But more discipline workers imin his eyeswas thedirect portant influence ofthenew environment. As capitalism produced its own labor force, soitshaped itsproducts after itsownimage.With characteristic itfacilitated thetaskofadaptrationality, ingtheworkers to itsneeds by adapting itsneeds to the workers. Splitting up its processes into numberless it produced successive steps, massjobs of the simplest whichrequired scarcely any training, and confined its demandforintelligence within limits whichcouldbe met.Recently ithasbegun to grade itshuman material, to putevery manintoa job which seeking suitshispeculiarcapacities. In thisway, capitalism can getthe most outofitsemployees, themost for them, andprovide Third, capitalism had to adjustlaborto itseconomic - thatis,toestablish needs sucha relationship between thetotalvalueoftheproduct and totalwagedisbursements as meets ofprofits. The itsprimary requirement onlyreal "law" ofwagesis thelaw of supplyand demand. As shown an enorabove,capitalism produced moussupply oflaborinEurope;itmadeuse ofchildren, andtherural alsoupon at needit drew women, surplus; thepopulation ofbackward lands. On theother hand, forlabormounted its demand everhigher, threatening toraisetheprice oflabor tolevels encroach which would But highcapitalism uponprofits. provided safeguards it reduced againstthisdanger.At recurrent intervals for itsdemand labor thecurrent wellbelow supply.The
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"reserve ofthefamous army"is an indispuexistence menout in technique keptthrowing tablefact. Changes and the quasi-rhythmical fluctuations of employment, reducedthe demandwhenever of capitalistactivity as finalsafemargins shrank.Thereremained profit thoearnings ofphysical increases output.Hence, guard the cost of century, per capita rosein the nineteenth declined.The net resultant laborper unitofproduct forcesis best shownby the Amof the complicated Labor's sharein the erican Censusof Manufactures. directly.One can approximate productis reported costsof materials plus capital'sshareby subtracting from thevalueofproducts.Thus wagedisbursements showan average annual theAmerican figures analyzed, the65 yearsfrom riseof2.52 percentin wagesduring still- 3.08 per rosefaster 1850 to 1915. But profits maydoubtthisuse ofthecencentperannum.Others thathigh has capitalism Sombart susdata; it convinces in adapting laborto its needseconomically, succeeded as wellas technically. ofhigh howthethird requirement It remains to show -has been met. Who bought capitalism markets outin suchmasses? theproducts turned - the ofdemand mustbe distinguished Two sources -the demand from outandtheendogenous exogenous and from insidethe side the capitalist system proper, system. is theolder. Nasdemand Ofthetwo,theexogenous to peoplewho sold its products centcapitalism mainly ofbusinor business were neither enterprisers employees has continued Andthisdemand large. nessenterprises. ofhigh theworld finance It includes proprietors, landed of all grades, and speculators), governments (brokers of the Balkan Asia, Russia, States, the population and LatinAmerica.In thisclass,too,Sombart Africa
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whose and handicraft reckons theagricultural workers, capitalism has for themselves practiceof producing inlarge hementions the broken down measure.Finally, theproduction ofgold, from demand arising monetary and credits. theissueofuncovered papercurrency, of both the buying demandembraces Endogenous and their enterprisers consumers' goodsby capitalist ofindustrial equipment by and thebuying employees, thrive on canreally Highcapitalism business concerns. each unitof economists claimed, itself: as theclassical forother goods. It is a demand its output constitutes byaltera demand for itsownproducts forever creating railways, ships, factories, ing its methods.Machines, suchthings withinstallations -it needs mines, electric are fed,clothed, out number.And its ownpersonnel moreand more by whatit makesand lodged, amused, French withits variedequipment.British, transports statistics show that real wages have and American Thisfindtheperiod ofhigh doubled capitalism. within thatthe and is confirmed by an estimate ingconfirms thesame oflabor within has aboutdoubled productivity still,as seemsto be have grown faster time. If profits of have got the better true, it mustbe thatcapitalists classes and with the non-capitalist theirexchanges countries. IV Book III, The Process, is as longas BooksI and II It dealswith theactivities characteristic put together. is to gain The endoftheseactivities ofhigh capitalism. to thisend are contracts The meansemployed profits. to be rendered in terms services of money concerning of organizathisscheme and received.Paradoxically, neverthewhich doesnotaim at satisfying wants, tion, better for human incomparably lessdoesprovide wants
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whichmen have on thewholethananyotherscheme tried. The reconciliation between making money and wants is effected market A satisfying by prices. price showswhena need is felt;it also showsthe chance and determines the capitalist to of profit enterpriser ofneeds.Hence, tothesatisfying make hiscontribution in the capitalistic "elements" thereare three process: thebusiness To these theneed, themarket, enterprise. three elements sets of activities: correspond consumpandproduction. tion, circulation, the pure conceptsof Afterexpounding abstractly and industry, needs,markets Sombartturnsto the ofmotion ofhigh types characteristic capitalism. Competitionis one type. It is treatedwith pregnant brevity. Second come "conjunctures." Whereascrisesocin pre-capitalistic andearly-capitaliscurred frequently arepeculiar tothelater tictimes, business booms period. he advancedin Sombart stillholdsto the hypothesis in bringing factor 1903- thedecisive on a crisis is the increase theboomin the outdisproportionate during put ofinorganic products.Agriculture and theindustries which fabricate organic materials havebuta small the balanceof the and so disturb sharein expansion, business world. is characterized Third, high capitalism by a tendency of its phenomena.It towardincreasing uniformity us all in a school which inculcates itsownpeculiar drills thespirit ofourinstitutions rationality. Absorbing and coerced theseinstitutions we by the conditions create, evermoreuniformly to theone great devoteourselves we make aimof money making.In thispreoccupation more rational more standardized ever useofever means. environment of money We live in an economic prices and oursurvival depends uponourcapacity to adjust
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and toitsdemands.So wegetrationalized ourbehavior and the handiourselves- the farmer standardized tender andthebusiness craftsman lessthanthemachine degree. man,but all ofus in increasing moreand itself is becoming The business enterprise in form and funcand standardized morerationalized the stillconstitute ventures tioning.Whileindividual in every orofenterprises corporate country, majority of do most of the business. A network ganizations entities separate bindsthese legally varied relationships intriitpossible to organize large, toeachother, making in a fashion undertakings cate and rapidlyshifting indetailwithcentralwhich combines closesupervision ized planning.On the industrial side,there has been of organivaried adaptation achieveda remarkably of money makingpresented zationto the conditions here,combination trades- specialization by different of and each in a bewildering array forms, there, each theimportant theother.With ofunion with susceptible oftrade branch of agriculture, almostevery exception inthesizeofthebusia tendency toward increase shows has actuconcentration fields, In a few nessenterprise. of independent enterprises. ally reducedthe number an has brought merely Morecommonly, concentration obtained bythegiants. ofbusiness intheshare increase concenno suchsweeping there has occurred Certainly ofbusiness as Karl Marx forecast.As tration control of businessenterprises, forthe internal organization related outthree Sombart developments. closely points it bemore administration becomes scientific; Business more itbecomes andlesspersonal; more comes objective utilizsetofoperations, speeding up thewhole intensive, and perthe materials, equipment ingmoreperfectly at itsdisposal. sonnel
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Having concluded his surveyof capitalism "from to Stinnes orPierpont Sombart Charlemagne Morgan," takesa bird's-eye viewofmodern economic organization as a whole. At its apogeejustbefore thewar,capitalism did not or a third of the breadmorethana quarter employ in western and central winners Europe. If thisproporin theUnited tionroseto twofifths it sankto a States, intheoutinRussia. Doubtless tenth capitalism's share thanits sharein thelaborforce; put is larger yettwo oforganization itsprimacy evenon older forms dispute thisbasis. Handicraft shopswithless thansix employees profor halfofall German workers outside videda living of to the occupational agriculture, according censusof forall branches data arenotavailable of 1907. Similar trade in other countries; butcommon observation, eked thatin all capioutbysuchfigures as canbe had,shows ofwork arestillcarried on talistic countries many types or exclusively prevailingly by small personalenterprises, whichretainmuchof the old-time handicraft ofeconomic form By farthemostimportant organizationin theworld, is small-scale however, agriculture. the nineEurope's peasantry did not declineduring teenth Whenthe warbrokeout,there century. must from have been 27 or 28 million peasantenterprises morein Russia. To and 22 million Polandwestward, inNorth farms be added6 or7 million number this must oftheworld's twothirds America.Altogether, perhaps fashion. livesin thisnon-capitalistic population havemadeconsiderable Cooperative enterprises progress in retail trade,wholesaletrade,manufacturing,
spirit.
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- thothey from rivalling andfinance arefar agriculture inextent ofoperaoforganization forms anyoftheolder promise for liesrather in their tions. Theirimportance enterThe likecanbe saidaboutcommunal thefuture. do a and local,already national prises. Governments, realwork thanis commonly ofeconomic larger volume to grow. ized,and thissharepromises
VI in the three chapters One of the most interesting ofall, is thelastchapter ofModern Capitalism volumes intothefuture. wherein Sombart dipsdiscreetly he is surewillnotbe realized. Certain expectations ofeconomic willprevail to organization No single form For an indefinite time theexclusion ofall other forms. communal enterprises, to comecapitalism, cooperation, handicraft shops, inbusiness by themselves, individuals side operating willcontinue agriculture and small-scale a violent whoanticipates change byside. Alsoeveryone adin economic is mistaken.The recent organization themost ofSoviet Russiashould convince skepventures ticalthatthepast willlive on in thefuture.Nor can ofpre-capitalistic life backto thesimpler mankind turn thatmodern will or fears, technique days. The hopes, thenatural which resources enditscareer byexhausting one seemingly overlook it is exploiting so recklessly, of inexhaustible resource the inventiveingenuity itself. thattechnique to On thepositive capitalism expects side,Sombart in the but to continue endureindefinitely, changing in thepast. It willgradually as it has changed future of economic form as the dominating lose its position measureof it will suffer an increasing organization; a steadier it willpursue as befits course, publiccontrol; of organization which its advancing years. The forms
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willbe those at thecostofcapitalism willgainground - planning moreconscious whichrepresent planning needs. money, but at satisfying aimednot at making islittle between stabilthatthere difference We shallfind on the one side,and a capitalism ized and regulated rationalized socialismon the developed, technically form of organization organized other. But thishighly craftsallworkers into itsfold.The small willnotgather to to the continue manand shopkeeperwill exist, perhaps Thepeasant andhisAmerican the counterpart, flourish. foragriculture's sharein will growstronger; farmer, of the needs will mountwith the growth satisfying Doubtless come over will changes world's population. the cultivators theywill acquire a morescientific and morebusiness-like habits;but theywill technique ofcapitalism. notbe enslaved by thespirit in conclusion, a sketch so artistic Not,saysSombart ourofthefuture as Marx drew. But we mustresign and expecttheworldto selvesto the factsof science, and thenew. a jumble oftheold,thechanging, remain VII beIf economic theory aspiresto explaineconomic thenSombart's HighCapitalism is a theoretical havior, It differs fromordinary of expositions contribution. in respect it to theproblems primarily economic theory in our bulklargest which attacks.Abouttheproblems it sayssomething, butnotmuch. bookson "principles," Sombart nowand thentouches uponvalue and distritofind whatfeatures concerned buthe is chiefly bution; of ecodifferentiate from otherforms highcapitalism present features gottheir howthese nomic organization, And about theseproband how theyfunction. form, lems ourbooksoneconomic saysomething "principles" butnotmuch.Yet ifeconomics is togiveus understand-
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ing of economic treatment of the one set of behavior, problems is as indispensable as treatment of the other set. The twoapproaches each other, complement and an economist needsintimate with acquaintance both. Sombart's methods differ from themethods employed likeMarshall by a writer muchas Marshall's methods in Industry and Trade differ from Marshall'smethods in thePrinciples ofEconomics. In thesuperficial jargonwe ought to banish, "induction" playsthe stellar rolewhich is usuallyassigned by theorists to "deduction." But no one can readSombart critically without realizingthat speculative notionscontrolthe whole courseof his investigation. The materials he chooses are thosewhich fitintoa moreor lessfixed scheme of I gettheimpression ideas. Indeed, thatSombart's chief weakness as a scientific is thathe doesnotkeep inquirer restudying and enriching hispreconceived notions as he gathers and assimilates hisdata. His framework is too hardandfast. It doesnotgrow outofhissubject-matter so muchas his subject-matter out ofhim. One grows telltale bit ofevidence is the frequency with which he finds three in his problems.Do economic factors phenomena really occurso commonly in triplets? Sombart is nottheonlyeconomic theorist whoseinterest centers in the problems of economic evolution. Karl Marxhad thatorientation in hisscientific moods. So, too,has Thorstein Veblenwhen he is not indulging hissatiric vein. For thatmatter, is notevery economic historian whotries tomakethematerials he presents fit intoa pattern, in so faras he succeeds, contributing, to ourunderstanding ofeconomic behavior? That theories oftheevolution ofourcurrent scheme - just as ofinstitutions differ appreciably is disturbing as are thedifferences disturbing ofdisamong theories tribution.Every original inquirer findshis eminent
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offers a particularly broadtarget critics.Sombart for attack. He has organized an enormous massofmaterials, and fewthings are easierthanto pickflaws in his details. Also,onewhodoesnotsharehismetaphysical ofa and psychological mustfeeldoubts preconceptions To takebut a single moresearching character. point: that the riseof Can we acceptSombart's contention thetransformation ofthestate, mento power, business of modern and the development were"histechnique " I should to givean think it possible torical accidents? inwhich account ofthedevelopment ofcapitalism these as inevitable and phenomena closelyrelated prodappear ofcumulative uctsin theprocess change. Bothby whatits readers and willtaketo be defects Sombart's work willhailas merits, bywhatthey promfurther ises to stimulate inquiry.That is the greatest a scientific service investigation canperform. Certainly HighCapitalism willgivea direct impetus toresearch in the evolution of institutions. Perhapsit willrender a wider all ofus to see howmuchan service by helping economic historian needs to be a theorist, and how limited is the theoretical graspof an economist who neglects history.
COLUMBIAUNIVERSITY
WESLEY
C. MITCHELL

Sombart Hochkapitalismus

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Sombart's Hochkapitalismus Author(s): Wesley C. Mitchell Source: The Quarterly Journal of Economics, Vol. 43, No. 2 (Feb.

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and here Sombart'smetaphysics gets in his way -

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