« Previous Article Next Article »

Benjamin Franklin And The Spirit Of Capitalism

| 10.29.2015 |

Running a small business entails many difficulties, and one of the most problematic is finding hard workers. A committed employee who truly wants to earn his or her way is a priceless commodity, but where does such a work ethic come from? Our media has thrown out various ideas, from higher wages or incentives to training a new work force via STEM initiatives, but the answer remains elusive.

 

Max Weber, one of the fathers of sociology, pursued this issue in The Protestant Ethic and the 'Spirit of Capitalism'. To Weber, there appeared to be a relationship among an individual's work ethic, business success, and moral code. Although often connected to the Calvinistic denominations, the moral code was ingrained in many populations, especially those found in the United States. By pursuing the nature and origin of the capitalistic spirit, we can gain an understanding of how the spirit develops and establish methods to instill it among our employees.

 

Weber begins by quoting Benjamin Franklin's aphorisms on wasting time and money when defining characteristics of capitalism. He then argues that the aphorisms contain, "the spirit of capitalism which here speaks in characteristic fashion, no one will doubt, however little we may wish to claim that everything which could be understood as pertaining to that spirit is contained in it... Truly what is here preached is not simply a means of making one’s way in the world, but a peculiar ethic. The infraction of its rules is treated not as foolishness but as forgetfulness of duty. That is the essence of the matter. It is not mere business astuteness, that sort of thing is common enough, it is an ethos. This is the quality which interests us."

 

Franklin's perspective on constant hard work and productivity "takes on the character of ethically colored maxim for the conduct of life. The concept spirit of capitalism is here used in this specific sense, it is the spirit of modern capitalism. For that we are here dealing only with Western European and American capitalism is obvious from the way in which the problem was stated. Capitalism existed in China, India, Babylon, in the classic world, and in the Middle Ages. But in all these cases, as we shall see, this particular ethos was lacking."

 

Weber then explains, "Now, all Franklin’s moral attitudes are colored with utilitarianism. Honesty is useful, because it assures credit; so are punctuality, industry, frugality, and that is the reason they are virtues. A logical deduction from this would be that where, for instance, the appearance of honesty serves the same purpose, that would suffice, and an unnecessary surplus of this virtue would evidently appear to Franklin’s eyes a unproductive waste."

 

Franklin's views are an economic version of "idle hands are the devil's playthings," with the devil in this case being a loss of prosperity. Weber continues, "According to Franklin, those virtues, like all others, are only in so far virtues as they are actually useful to the individual, and the surrogate of mere appearance is always sufficient when it accomplishes the end in view. It is a conclusion which is inevitable for strict utilitarianism."

 

Although Franklin was a deist and rejected organized religion, his moral beliefs were not derived from secular beliefs. The pursuit of money and success is not to glorify the self but is part of a higher calling: "Benjamin Franklin’s own character, as it appears in the really unusual candidness of his autobiography, belies that suspicion. The circumstance that he ascribes his recognition of the utility of virtue to a divine revelation which was intended to lead him in the path of righteousness, shows that something more than mere garnishing for purely egocentric motives is involved."

 

The pursuit of money for a higher, moral purpose can be very confusing to an individual who lacks the intrinsic motivation of those like Franklin: "It is thought of so purely as an end in itself, that from the point of view of the happiness of, or utility to, the single individual, it appears entirely transcendental and absolutely irrational. Man is dominated by the making of money, by acquisition as the ultimate purpose of his life. Economic acquisition is no longer subordinated to man as the means for the satisfaction of his material needs. This reversal of what we should call the natural relationship, so irrational from a naive point of view, is evidently as definitely a leading principle of capitalism as it is foreign to all peoples not under capitalistic influence. At the same time it expresses a type of feeling which is closely connected with certain religious ideas."

 

Ultimately, this moral purpose is the fundamental component of capitalism itself, and the two are forever linked: "The earning of money within the modern economic order is, so long as it is done legally, the result and the expression of virtue and proficiency in a calling. And in truth this peculiar idea, so familiar to us today, but in reality so little a matter of course, of one’s duty in a calling, is what is most characteristic of the social ethic of capitalistic culture, and is in a sense the fundamental basis of it. It is an obligation which the individual is supposed to feel and does feel towards the content of his professional activity, no matter in what it consists, in particular no matter whether it appears on the surface as a utilization of his personal powers, or only of his material possessions (as capital)."

 

Capitalism, in a manner of speaking, is not an economic system that naturally evolved from rational thought. Instead, it is a moral code that appeared in a revolutionary manner and sought to upend the previous understanding of the relationship between work and product: "The spirit of capitalism, in the sense in which we are using the term, had to fight its way to supremacy against a whole world of hostile forces. A state of mind such as that expressed in the passages we have quoted from Franklin, and which called forth the applause of a whole people, would both in ancient times and in the Middle Ages have been proscribed as the lowest sort of avarice and as an attitude entirely lacking in self-respect. It is, in fact, still regularly thus looked upon by all those social groups which are least involved in or adapted to modern capitalistic conditions."

 

The attacks on the capitalistic spirit are still present today. There are many who mock the hard worker as lacking a “social life” or being incomplete. The childless, single woman in the workforce comes under the most brutal of assaults, and often she is unfairly labeled “unnatural,” because of her situation and behavior, by the whole political spectrum. She is a true capitalist with a goal her detractors are unable to comprehend.

 

Often, those who lack the capitalistic spirit believe that merely providing a higher wage would increase productivity or benefit corporations. However, higher wages can often lead to less effort: "One of the technical means which the modern employer uses in order to secure the greatest possible amount of work from his men is the device of piece rates... But a peculiar difficulty has been met with surprising frequency: raising the piece rates has often had the result that not more but less has been accomplished in the same time, because the worker reacted to the increase not by increasing but by decreasing the amount of his work."

 

If an individual lacks the capitalistic spirit, then they are not working to work. They do not have some ultimate goal to maximize their productivity and ensure the greatest wage. Instead, their goal is merely to further their current existence: "The opportunity of earning more was less attractive than that of working less. He did not ask: how much can I earn in a day if I do as much work as possible? but: how much must I work in order to earn the wage, 2½ marks, which I earned before and which takes care of my traditional needs? This is an example of what is here meant by traditionalism. A man does not 'by nature' wish to cam more and more money, but simply to live as he is accustomed to live and to earn as much as is necessary for that purpose."

 

Weber continues, "Wherever modern capitalism has begun its work of increasing the productivity of human labor by increasing its intensity, it has encountered the immensely stubborn resistance of this leading trait of pre-capitalistic labor. And today it encounters it the more, the more backward (from a capitalistic point of view) the laboring forces are with which it has to deal."

 

Many employees seek only what they need to survive. They lack an ultimate goal, but they do have many immediate goals. There might be some competition (“Keeping up with the Joneses”), but effort is minimized. The ramification of Weber's statement is that socialistic systems, where needs are met without requirement, would cater to the natural desire for minimum effort, and productivity would stop because there would be no incentive to work.

 

Only the capitalist spirit inspires the need to work for some higher purpose: "Labor must, on the contrary, be performed as if it were an absolute end in itself, a calling. But such an attitude is by no means a product of nature. It cannot be evoked by low wages or high ones alone, but can only be the product of a long and arduous process of education. Today, capitalism, once in the saddle, can recruit its laboring force in all industrial countries with comparative ease."

 

Education is necessary, but it is a social and moral education that will always be met by resistance: "The question of the motive forces in the expansion of modern capitalism is not in the first instance a question of the origin of the capital sums which were available for capitalistic uses, but, above all, of the development of the spirit of capitalism. Where it appears and is able to work itself out, it produces its own capital and monetary supplies as the means to its ends, but the reverse is not true. Its entry on the scene was not generally peaceful. A flood of mistrust, sometimes of hatred, above all of moral indignation, regularly opposed itself to the first innovator."

 

The moral indignation against capitalism continues to dominate our society, though it is secularized. Often, organized labor, environmentalists, and other political ideologies use moralistic language in their attack on "big business." Someone is always the victim, and the message always tries to evoke a sympathetic response. Emotions, not reason, are their methods.

 

But the capitalistic spirit is just as emotional and exists to serve humanity.

 

Weber asks, "Now, how could activity, which was at best ethically tolerated, turn into a calling in the sense of Benjamin Franklin? ... What was the background of ideas which could account for the sort of activity apparently directed toward profit alone as a calling toward which the individual feels himself to have an ethical obligation? For it was this idea which gave the way of life of the new entrepreneur its ethical foundation and justification."

 

His answer: "Labor in the service of a rational organization for the provision of humanity with material goods has without doubt always appeared to representatives of the capitalistic spirit as one of the most important purposes of their life-work. It is only necessary, for instance, to read Franklin’s account of his efforts in the service of civic improvements in Philadelphia clearly to apprehend this obvious truth. And the joy and pride of having given employment to numerous people, of having had a part in the economic progress of his home town in the sense referring to figures of population and volume of trade which capitalism associated with the word, all these things obviously are part of the specific and undoubtedly idealistic satisfactions in life to modern men of business."

 

The capitalistic spirit is dedicated to improving the human condition: "Similarly it is one of the fundamental characteristics of an individualistic capitalistic economy that it is rationalized on the basis of rigorous calculation, directed with foresight and caution toward the economic success which is sought in sharp contrast to the hand-to-mouth existence of the peasant, and to the privileged traditionalism of the guild craftsman and of the adventurers’ capitalism, oriented to the exploitation of political opportunities and irrational speculation."

 

Hard work leads to productivity, and productivity leads to personal development. Your hard work can inspire the hard work in your employees. The greatest individual you and your employees can become is directly connected to the greatest society you can create. Capitalism is a set of moral principles based around hard work, and the taking of hand outs or cheating the system is anathema to the system. Thus, crony "capitalism" is a misnomer, with it being just another welfare type system that is connected to pre-capitalistic mentality.

 

If you want to develop the spirit of capitalism among your own employees, then you will need to develop a moral code that opposes idleness. You will need to teach your employees that there is some greater goal beyond satisfying their personal needs or wants. You will need to inspire a higher purpose that exists beyond wages.

 

Capitalism is not just about making money but creating a productive world. In the words of Franklin, "time is money," and wasted time hinders the progress of the world.

 

Jeffrey Peters is an Annapolis, Md.-based writer and political consultant.