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Fayol's 14 Principles of Management

Fayol's principles are listed below:


1.

Division of Work When employees are


specialized, output can increase because they become
increasingly skilled and efficient.
2. Authority Managers must have the authority to
give orders, but they must also keep in mind that with
authority comes responsibility.
3. Discipline Discipline must be upheld in
organizations, but methods for doing so can vary.
4. Unity of Command Employees should have only
one direct supervisor.
5. Unity of Direction Teams with the same objective
should be working under the direction of one manager,
using one plan. This will ensure that action is properly
coordinated.
6. Subordination of Individual Interests to the
General Interest The interests of one employee
should not be allowed to become more important than
those of the group. This includes managers.
7. Remuneration Employee satisfaction depends on
fair remuneration for everyone. This includes financial
and non-financial compensation.
8. Centralization This principle refers to how close
employees are to the decision-making process. It is
important to aim for an appropriate balance.
9. Scalar Chain Employees should be aware of
where they stand in the organization's hierarchy, or
chain of command.
10. Order The workplace facilities must be clean, tidy
and safe for employees. Everything should have its
place.
11. Equity Managers should be fair to staff at all
times, both maintaining discipline as necessary and
acting with kindness where appropriate.

12. Stability of Tenure of Personnel Managers


should strive to minimize employee turnover. Personnel
planning should be a priority.
13. Initiative Employees should be given the
necessary level of freedom to create and carry out
plans.
14. Esprit de Corps Organizations should strive to
promote team spirit and unity.

Fayol's Six Functions of Management


Fayol's six primary functions of management, which go
hand in hand with the Principles, are as follows:
1.

Forecasting.

2.

Planning.

3.

Organizing.

4.

Commanding.

5.

Coordinating.

6.

Controlling.

Key Points
Henri Fayol's "14 Principles of Management" have been a
significant influence on modern management theory. His
practical list of principles helped early 20th century
managers learn how to organize and interact with their
employees in a productive way.
Although the 14 Principles aren't widely used today, they
can still offer guidance for today's managers. Many of the
principles are now considered to be common sense, but
at the time they were revolutionary concepts for
organizational management.

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Henri Fayol
From Wikipedia, the free encyclopedia

For the French singer, see Lily Fayol.

Henri Fayol

Henri Fayol (Istanbul, 29 July 1841 Paris, 19 November 1925) was a French mining
engineer and director of mines who developed a general theory of business administration that is
often called Fayolism.[1] He and his colleagues developed this theory independently of scientific
management but roughly contemporaneously. Like his contemporary,Frederick Winslow Taylor,
he is widely acknowledged as a founder of modern management methods.
Contents
[hide]

1 Biography

2 Work
o

2.1 Mining engineering

2.2 Fayolism

2.2.1 Functions of management

2.2.2 Principles of management

3 Publications

4 References

5 External links

Biography[edit]
Fayol was born in 1841 in a suburb of Istanbul, Ottoman Empire. His father (an engineer) was
appointed superintendent of works to build Galata Bridge, which bridged the Golden Horn.[1] The
family returned to France in 1847, where Fayol graduated from the mining academy "cole
Nationale Suprieure des Mines" inSaint-tienne in 1860.
In 1860 at the age of nineteen Fayol started the mining company named "Compagnie de
Commentry-Fourchambault-Decazeville" in Commentry as the mining engineer. In 1888 he
became managing director, when the mine company employed over 10,000 people, and held
that position over 30 years until 1918. By 1900 the company was one of the largest producers of
iron and steel in France and was regarded as a vital industry.[1]
Based largely on his own management experience, he developed his concept of administration.
In 1916 he published these experience in the book "Administration Industrielle et Gnrale", at
about the same time as Frederick Winslow Taylor published his Principles of Scientific
Management

Work[edit]
Fayol's work became more generally known with the 1949 publication of General and industrial
administration,[2] the English translation[3] of the 1916 article "Administration industrielle et
gnrale". In this work Fayol presented his theory of management, known as Fayolism. Before
that Fayol had written several articles on mining engineering, starting in the 1870s, and some
preliminary papers on administration.[4]

Mining engineering[edit]
Starting in the 1870s, Fayol wrote a series of articles on mining subjects, such as on the
spontaneous heating of coal (1879), the formation of coal beds (1887), the sedimentation of
the Commentry, and on plant fossils (1890),
His first articles were published in the French Bulletin de la Socit de l'Industrie minrale, and
beginning in the early 1880s in the Comptes rendus de l'Acadmie des sciences, the
proceedings of the French Academy of Sciences.

Fayolism[edit]
Main article: Fayolism
Fayol's work was one of the first comprehensive statements of a general theory of management.
[5]
He proposed that there were five primary functions of management and fourteen principles of
management[6]
Functions of management[edit]
1. Planning[7]
2. Organizing
3. Leading
4. Controlling

5. Coordinating
The control function, from the French contrler, is used in the sense that a manager must receive
feedback about a process in order to make necessary adjustments and must analyse the
deviations. Lately scholars of management combined the commanding and coordinating function
into one leading function.
Principles of management[edit]
1. Division of labor - The division of work is the course of tasks assigned to, and completed
by, a group of workers in order to increase efficiency. Division of work, which is also
known as division of labor, is the breaking down of a job so as to have a number of
different tasks that make up the whole. This means that for every one job, there can be
any number of processes that must occur for the job to be complete.
2. Authority - Managers must be able to give orders. Authority gives them this right. Note
that responsibility arises wherever authority is exercised.
3. Discipline - Employees must obey and respect the rules that govern the organization.
Good discipline is the result of effective leadership.
4. Unity of command - Every employee should receive orders from only one superior.
5. Unity of direction - Each group of organizational activities that have the same objective
should be directed by one manager using one plan for achievement of one common
goal.
6. Subordination - The interests of any one employee or group of employees should not
take precedence over the interests of the organization as a whole.
7. Remuneration - Workers must be paid a fair wage for their services.
8. Centralization - Centralization refers to the degree to which subordinates are involved in
decision making.
9. Scalar chain - The line of authority from top management to the lowest ranks represents
the scalar chain. Communications should follow this chain.
10.Order - this principle is concerned with systematic arrangement of men, machine,
material etc. there should be a specific place for every employee in an organization
11. Equity - Managers should be kind and fair to their subordinates.
12.Stability of tenure of personnel - High employee turnover is inefficient. Management
should provide orderly personnel planning and ensure that replacements are available to
fill vacancies.
13.Initiative - Employees who are allowed to originate and carry out plans will exert high
levels of effort.
14.Esprit de corps - Promoting team spirit will build harmony and unity within the
organization.
Fayol's work has stood the test of time and has been shown to be relevant and appropriate to
contemporary management.[citation needed] Many of todays management texts including Richard L.

Daft's[8] have reduced the six functions to five: (1) planning; (2) organizing; (3) leading; (4)
controlling (5) forecasting. Daft's text is organized around Fayol's five functions.

Frederick Winslow Taylor


From Wikipedia, the free encyclopedia

Frederick Winslow Taylor

Taylor circa 1900

Born

March 20, 1856


Philadelphia, Pennsylvania, U.S.

Died

March 21, 1915 (aged 59)


Philadelphia, Pennsylvania, U.S.

Cause of death Pneumonia[1]

Resting place

West Laurel Hill Cemetery


Bala Cynwyd, Pennsylvania, U.S.

Nationality

American

Occupation

Efficiency expert
Management consultant

Known for

"Father" of the
Scientific management
& Efficiency Movement, Father of Industrial
Engineering

Home town

Germantown, Philadelphia, Pennsylvania

Religion

Quaker

Spouse(s)

Louise M. Spooner

Children

Kempton, Robert and Elizabeth(all adopted orphans)

Parent(s)

Franklin Taylor
Emily Annette Winslow

Awards

Elliott Cresson Medal (1902)

Frederick Winslow Taylor (March 20, 1856 March 21, 1915) was an American mechanical
engineer who sought to improve industrial efficiency.[2] He was one of the first management
consultants.[3] Taylor was one of the intellectual leaders of the Efficiency Movement and his ideas,
broadly conceived, were highly influential in theProgressive Era. Taylor summed up his efficiency
techniques in his book The Principles of Scientific Management. Taylor's pioneering work in
applying engineering principles to the work done on the factory floor was instrumental in the
creation and development of the branch of engineering that is now known as industrial
engineering. Taylor was also an athlete who competed nationally in tennis and golf.
Contents
[hide]

1 Biography

2 Work

2.1 Managers and workers

2.2 Rhetorical techniques

2.3 Scholarly confirmation of increased efficiency moving pig iron at Bethlehem Steel

2.4 Management theory

2.5 Relations with ASME

2.6 Patents
3 Taylor's influence

3.1 United States

3.2 France

3.3 Switzerland

3.4 USSR

3.5 Canada

3.6 Criticism of Taylor

4 Tennis and golf accomplishments

5 Publications

6 References

7 Sources

8 Further reading

9 External links

Biography[edit]
Taylor was born in 1856 to a Quaker family in Germantown, Philadelphia, Pennsylvania. Taylor's
father, Franklin Taylor, a Princeton-educated lawyer, built his wealth on mortgages.[4] Taylor's
mother, Emily Annette Taylor (ne Winslow), was an ardent abolitionist and a coworker
with Lucretia Mott. His father's ancestor, Samuel Taylor, settled in Burlington, New Jersey, in
1677. His mother's ancestor, Edward Winslow, was one of the fifteen original Mayflower Pilgrims
who brought servants or children, and one of eight who had the honorable distinction of Mister.
Winslow served for many years as the Governor of the Plymouth colony.
Educated early by his mother, Taylor studied for two years in France and Germany and traveled
Europe for 18 months.[5] In 1872, he entered Phillips Exeter Academy in Exeter, New Hampshire,
with the plan of eventually going to Harvard and becoming a lawyer like his father. In 1874, Taylor
passed the Harvard entrance examinations with honors. However, due allegedly to rapidly
deteriorating eyesight, Taylor chose quite a different path.
Instead of attending Harvard University, Taylor became an
apprentice patternmaker and machinist, gaining shop-floor experience at Enterprise Hydraulic
Works in Philadelphia (a pump-manufacturing company whose proprietors were friends of the
Taylor family). He left his apprenticeship for six months and represented a group of New England
machine-tool manufacturers at Philadelphia's centennial exposition. Taylor finished his four-year
apprenticeship and in 1878 became a machine-shop laborer at Midvale Steel Works. At Midvale,
he was quickly promoted to time clerk, journeyman machinist, gang boss over the lathe
hands, machine shop foreman, research director, and finally chief engineer of the works (while
maintaining his position as machine shop foreman). Taylor's fast promotions reflected not only
his talent but also his family's relationship with Edward Clark, part owner of Midvale Steel.
(Edward Clark's sonClarence Clark, who was also a manager at Midvale Steel, married Taylor's
sister.)

Midvale Steel Works Aerial View, 1879.

Early on at Midvale, working as a laborer and machinist, Taylor recognized that workmen were
not working their machines, or themselves, nearly as hard as they could (which at the time was
called "soldiering") and that this resulted in high labor costs for the company. When he became a
foreman he expected more output from the workmen. In order to determine how much work
should properly be expected, he began to study and analyze the productivity of both the men and
the machines (although the word "productivity" was not used at the time, and the applied science
of productivity had not yet been developed). His focus on the human component of production
Taylor labeled scientific management.[6]
While Taylor worked at Midvale, he and Clarence Clark won the first tennis doubles tournament
in the 1881 US National Championships, the precursor of the US Open.[2] Taylor became a
student of Stevens Institute of Technology, studying via correspondence[7] and obtaining a degree
in mechanical engineering in 1883. On May 3, 1884, he married Louise M. Spooner of
Philadelphia.

The Bethlehem Steel plant, 1896.

From 1890 until 1893 Taylor worked as a general manager and a consulting engineer to
management for the Manufacturing Investment Company of Philadelphia, a company that
operated large paper mills in Maine and Wisconsin. He spent time as a plant manager in Maine.
In 1893, Taylor opened an independent consulting practice in Philadelphia. His business card
read "Consulting Engineer - Systematizing Shop Management and Manufacturing Costs a
Specialty". Through these consulting experiences, Taylor perfected his management system. In
1898 he joined Bethlehem Steel in order to solve an expensive machine-shop capacity problem.
As a result, he and Maunsel White, with a team of assistants, developed high speed steel, paving
the way for greatly increased mass production. Taylor was forced to leave Bethlehem Steel in
1901 after discord with other managers.
After leaving Bethlehem Steel, Taylor focused the rest of his career on publicly promoting his
management and machining methods through lecturing, writing, and consulting. In 1910, owing
to the Eastern Rate Case, Frederick Winslow Taylor and his Scientific Management
methodologies become famous worldwide. In 1911, Taylor introduced his The Principles of
Scientific Management paper to the American mechanical engineering society, eight years after
his Shop Management paper.
On October 19, 1906, Taylor was awarded an honorary degree of Doctor of Science by
the University of Pennsylvania.[8] Taylor eventually became a professor at the Tuck School of
Business at Dartmouth College.[9] In early spring of 1915 Taylor caught pneumonia and died, one
day after his fifty-ninth birthday, on March 21, 1915. He was buried in West Laurel Hill Cemetery,
in Bala Cynwyd, Pennsylvania.

Work[edit]
Taylor was a mechanical engineer who sought to improve industrial efficiency. Taylor is regarded
as the father of scientific management, and was one of the first management consultants and
director of a famous firm. In Peter Drucker's description,
Frederick W. Taylor was the first man in recorded history who deemed work deserving of
systematic observation and study. On Taylor's 'scientific management' rests, above all, the
tremendous surge of affluence in the last seventy-five years which has lifted the working masses
in the developed countries well above any level recorded before, even for the well-to-do. Taylor,
though the Isaac Newton (or perhaps the Archimedes) of the science of work, laid only first
foundations, however. Not much has been added to them since even though he has been dead
all of sixty years.[10]
Taylor's scientific management consisted of four principles:
1. Replace rule-of-thumb work methods with methods based on a scientific study of the
tasks.
2. Scientifically select, train, and develop each employee rather than passively leaving them
to train themselves.
3. Provide "Detailed instruction and supervision of each worker in the performance of that
worker's discrete task" (Montgomery 1997: 250).
4. Divide work nearly equally between managers and workers, so that the managers apply
scientific management principles to planning the work and the workers actually perform
the tasks.
Future US Supreme Court justice Louis Brandeis coined the term scientific management in the
course of his argument for the Eastern Rate Case before theInterstate Commerce Commission in
1910. Brandeis argued that railroads, when governed according to Taylor's principles, did not
need to raise rates to increase wages. Taylor used Brandeis's term in the title of his
monograph The Principles of Scientific Management, published in 1911. The Eastern Rate Case
propelled Taylor's ideas to the forefront of the management agenda. Taylor wrote to Brandeis "I
have rarely seen a new movement started with such great momentum as you have given this
one." Taylor's approach is also often referred to as Taylor's Principles, or, frequently
disparagingly, as Taylorism.

Managers and workers[edit]


Taylor had very precise ideas about how to introduce his system:
It is only through enforced standardization of methods, enforced adoption of the best implements
and working conditions, and enforcedcooperation that this faster work can be assured. And the
duty of enforcing the adoption of standards and enforcing this cooperation rests
withmanagement alone.[11]
Workers were supposed to be incapable of understanding what they were doing. According to
Taylor this was true even for rather simple tasks.
'I can say, without the slightest hesitation,' Taylor told a congressional committee, 'that the
science of handling pig-iron is so great that the man who is ... physically able to handle pig-iron
and is sufficiently phlegmatic and stupid to choose this for his occupation is rarely able to
comprehend the science of handling pig-iron.[12]
Taylor believed in transferring control from workers to management. He set out to increase the
distinction between mental (planning work) and manual labor (executing work). Detailed plans,
specifying the job and how it was to be done, were to be formulated by management and
communicated to the workers.[13]

The introduction of his system was often resented by workers and provoked numerous strikes.
The strike at Watertown Arsenal led to the congressional investigation in 1912. Taylor believed
the laborer was worthy of his hire, and pay was linked to productivity. His workers were able to
earn substantially more than those under conventional management,[14] and this earned him
enemies among the owners of factories where scientific management was not in use.

Rhetorical techniques[edit]
Taylor promised to reconcile labor and capital.
With the triumph of scientific management, unions would have nothing left to do, and they would
have been cleansed of their most evil feature: the restriction of output. To underscore this idea,
Taylor fashioned the myth that 'there has never been a strike of men working under scientific
management', trying to give it credibility by constant repetition. In similar fashion he incessantly
linked his proposals to shorter hours of work, without bothering to produce evidence of
"Taylorized" firms that reduced working hours, and he revised his famous tale of Schmidt carrying
pig iron at Bethlehem Steel at least three times, obscuring some aspects of his study and
stressing others, so that each successive version made Schmidt's exertions more impressive,
more voluntary and more rewarding to him than the last. Unlike [Harrington] Emerson, Taylor was
not a charlatan, but his ideological message required the suppression of all evidence of worker's
dissent, of coercion, or of any human motives or aspirations other than those his vision of
progress could encompass.[15]

Scholarly confirmation of increased efficiency moving pig iron at


Bethlehem Steel[edit]
A study published in the Journal of Management written by Jill R. Hough and Margaret A. White,
titled: Using stories to create change: The object lesson of Frederick Taylors pig-tale, provides
compelling historical evidence of the truth of the assertions Taylor made regarding the quite
substantial increase in productivity, for even the most basic task of picking up, carrying and
dropping pigs of iron. [16]

Management theory[edit]
Taylor thought that by analyzing work, the "one best way" to do it would be found. He is most
remembered for developing the stopwatch time study, which combined with Frank Gilbreth's
motion study methods, later becomes the field of time and motion study. He would break a job
into its component parts and measure each to the hundredth of a minute. One of his most
famous studies involved shovels. He noticed that workers used the same shovel for all materials.
He determined that the most effective load was 21 lb, and found or designed shovels that for
each material would scoop up that amount. He was generally unsuccessful in getting his
concepts applied, and was dismissed from Bethlehem Steel. Nevertheless, Taylor was able to
convince workers who used shovels and whose compensation was tied to how much they
produced to adopt his advice about the optimum way to shovel by breaking the movements down
into their component elements and recommending better ways to perform these movements. It
was largely through the efforts of his disciples (most notably H.L. Gantt) that industry came to
implement his ideas. Moreover, the book he wrote after parting company with Bethlehem
Steel, Shop Management, sold well.

Relations with ASME[edit]


Taylor's own written works were designed for presentation to the American Society of Mechanical
Engineers (ASME). These include Notes on Belting (1894), A Piece-Rate System (1895), Shop
Management (1903), Art of Cutting Metals (1906), and The Principles of Scientific Management
(1911).
Taylor was president of the ASME from 1906 to 1907. While president, he tried to implement his
system into the management of the ASME but was met with much resistance. He was only able
to reorganize the publications department and then only partially. He also forced out the ASME's
long-time secretary, Morris L. Cooke, and replaced him with Calvin W. Rice. His tenure as

president was trouble-ridden and marked the beginning of a period of internal dissension within
the ASME during the Progressive Age.[17]
In 1911, Taylor collected a number of his articles into a book-length manuscript, which he
submitted to the ASME for publication. The ASME formed an ad hoc committee to review the
text. The committee included Taylor allies such as James Mapes Dodge and Henry R. Towne.
The committee delegated the report to the editor of the American Machinist, Leon P. Alford.
Alford was a critic of the Taylor system and the report was negative. The committee modified the
report slightly, but accepted Alford's recommendation not to publish Taylor's book. Taylor angrily
withdrew the book and published Principles without ASME approval.[18] Taylor published the trade
book himself in 1912.

Patents[edit]
Taylor authored 42 patents.[19]

Taylor's influence[edit]
United States[edit]

One of Carl G. Barth's speed-and-feed slide rules.

A Gantt chart.

Carl G. Barth helped Taylor to develop speed-and-feed-calculating slide rules to a


previously unknown level of usefulness. Similar aids are still used in machine shops today.
Barth became an early consultant on scientific management and later taught at Harvard.

H. L. Gantt developed the Gantt chart, a visual aid for scheduling tasks and displaying
the flow of work.

Harrington Emerson introduced scientific management to the railroad industry, and


proposed the dichotomy of staffversus line employees, with the former advising the latter.

Morris Cooke adapted scientific management to educational and municipal organizations.

Hugo Mnsterberg created industrial psychology.

Lillian Gilbreth introduced psychology to management studies.

Frank Gilbreth (husband of Lillian) discovered scientific management while working in the
construction industry, eventually developing motion studies independently of Taylor. These

logically complemented Taylor's time studies, as time and motion are two sides of the
efficiency improvement coin. The two fields eventually became time and motion study.

Harvard University, one of the first American universities to offer a graduate degree in
business management in 1908, based its first-year curriculum on Taylor's scientific
management.

Harlow S. Person, as dean of Dartmouth's Amos Tuck School of Administration and


Finance, promoted the teaching of scientific management.

James O. McKinsey, professor of accounting at the University of Chicago and founder of


the consulting firm bearing his name, advocated budgets as a means of assuring
accountability and of measuring performance.

France[edit]
In France, Le Chatelier translated Taylor's work and introduced scientific management
throughout government owned plants during World War I. This influenced the French
theorist Henri Fayol, whose 1916 Administration Industrielle et Gnrale emphasized
organizational structure in management. In the classic General and Industrial Management Fayol
wrote that "Taylor's approach differs from the one we have outlined in that he examines the firm
from the 'bottom up.' He starts with the most elemental units of activity the workers' actions
then studies the effects of their actions on productivity, devises new methods for making them
more efficient, and applies what he learns at lower levels to the hierarchy..." [20] He suggests that
Taylor has staff analysts and advisors working with individuals at lower levels of the organization
to identify the ways to improve efficiency. According to Fayol, the approach results in a "negation
of the principle of unity of command."[21] Fayol criticized Taylor's functional management in this
way: In Shop Management, Taylor said[22] ... the most marked outward characteristics of
functional management lies in the fact that each workman, instead of coming in direct contact
with the management at one point only, ... receives his daily orders and help from eight different
bosses... these eight were (1) route clerks, (2) instruction card men, (3) cost and time clerks, (4)
gang bosses, (5) speed bosses, (6) inspectors, (7) repair bosses, and the (8) shop
disciplinarian. [22] Fayol said that this was an unworkable situation and that Taylor must have
reconciled the differences in some way not described in Taylor's works.
Around 1922 the journalist Paulette Bernge became interested in Taylor's theories, which were
popular in France in the post-war period.[23] Bernge became the faithful disciple of the Domestic
Sciences Movement that Christine Frederick had launched earlier in the United States, which
Bernge adapted to French homes. Frederick had transferred the concepts of Taylorism from the
factory to domestic work. These included suitable tools, rational study of movements and timing
of tasks. Scientific standards for housework were derived from scientific standards for
workshops, intended to streamline the work of a housewife. [24] TheComit national de
lorganisation franaise (CNOF) was founded in 1925 by a group of journalists and consulting
engineers who saw Taylorism as a way to expand their client base. Founders included prominent
engineers such as Henry Louis Le Chtelier and Lon Guillet. Bernge's Institute of
Housekeeping Organization participated in various congresses on the scientific organization of
work that led up to the founding of the CNOF, and in 1929 led to a section in CNOF on domestic
economy.[25]

Switzerland[edit]
In Switzerland, the American Edward Albert Filene established the International Management
Institute to spread information about management techniques.

USSR[edit]
In the Soviet Union, Vladimir Lenin was very impressed by Taylorism, which he and Joseph
Stalin sought to incorporate into Soviet manufacturing. Taylorism and the mass production
methods of Henry Ford thus became highly influential during the early years of the Soviet Union.

Nevertheless, "[...] Frederick Taylor's methods have never really taken root in the Soviet
Union."[26] The voluntaristic approach of the Stakhanovite movement in the 1930s of setting
individual records was diametrically opposed to Taylor's systematic approach and proved to be
counter-productive.[27] The stop-and-go of the production process workers having nothing to do
at the beginning of a month and 'storming' during illegal extra shifts at the end of the month
which prevailed even in the 1980s had nothing to do with the successfully taylorized plants e.g.,
of Toyota which are characterized by continuous production processes (heijunka) which
arecontinuously improved (kaizen).[28]
"The easy availability of replacement labor, which allowed Taylor to choose only 'first-class men,'
was an important condition for his system's success."[29] The situation in the Soviet Union was
very different. "Because work is so unrhythmic, the rational manager will hire more workers than
he would need if supplies were even in order to have enough for storming. Because of the
continuing labor shortage, managers are happy to pay needed workers more than the norm,
either by issuing false job orders, assigning them to higher skill grades than they deserve on
merit criteria, giving them 'loose' piece rates, or making what is supposed to be 'incentive' pay,
premia for good work, effectively part of the normal wage. As Mary Mc Auley has suggested
under these circumstances piece rates are not an incentive wage, but a way of justifying giving
workers whatever they 'should' be getting, no matter what their pay is supposed to be according
to the official norms."[30]
Taylor and his theories are also referenced (and put to practice) in the
1921 dystopian novel We by Yevgeny Zamyatin.

Canada[edit]
In the early 1920s, the Canadian textile industry was re-organized according to scientific
management principles. In 1928, workers at Canada Cotton Ltd. inHamilton, Ontario went on
strike against newly introduced Taylorist work methods. Also, Henry Gantt, who was a close
associate of Taylor, re-organized theCanadian Pacific Railway.[31]
With the prevalence of US branch plants in Canada and close economic and cultural ties
between the two countries, the sharing of business practices, including Taylorism, has been
common.

Criticism of Taylor[edit]
Management theorist Henry Mintzberg is highly critical of Taylors methods. Mintzberg states that
an obsession with efficiency allows measureable benefits to overshadow less quantifiable social
benefits completely, and social values get left behind. [32]
Harry Braverman's work, Labor and Monopoly Capital: The Degradation of Work in the Twentieth
Century, published in 1974, was critical of scientific management. This work pioneered the field
of Labor Process Theory.
Taylor's methods have also been challenged by socialist intellectuals. The arguments put forward
relate to progressive defanging of workers in the workplace and the subsequent degradation of
work as management, powered by capital, uses Taylor's methods to render work repeatable,
precise yet monotonous and skill-reducing.[33] James W. Rinehart argued that Taylor's methods of
transferring control over production from workers to management, and the division of labor into
simple tasks, intensified the alienation of workers that had begun with the factory system of
production around 18701890.[34]

Tennis and golf accomplishments[edit]


Taylor was an accomplished tennis and golf player. He and Clarence Clark won the
inaugural United States National tennis doubles championship at Newport Casino in 1881,
defeating Alexander Van Rensselaer and Arthur Newbold in straight sets.[2] In the 1900 Summer
Olympics, Taylor finished fourth in golf.

Dr. Philip Kotler

Dr. Philip Kotler is the S.C. Johnson & Son Distinguished Professor of
International Marketing at the Northwestern University Kellogg Graduate
School of Management in Chicago. He is hailed by Management Centre
Europe as "the world's foremost expert on the strategic practice of marketing."

Publications
Dr. Kotler is known to many as the author of what is widely recognized as the most authoritative textbook on
marketing: Marketing Management, now in its 13th edition. He has also authored or co-authored dozens of
leading books on marketing. A list of books by Dr. Kotler is available here.
In addition, Dr. Kotler has published more than one hundred articles in leading journals, including the Harvard
Business Review, Sloan management Review, Business Horizons, California Management Review, and the
Journal of Marketing.

Speaking & Consulting


Dr. Kotler presents continuing seminars on leading marketing concepts and developments to companies and
organizations in the U.S., Europe and Asia. Upcoming speaking locations are listed here.
He participates in KMG client projects and has consulted to many major U.S. and foreign companies - including
IBM, Michelin, Bank of America, Merck, General Electric, Honeywell, and Motorola - in the areas of marketing
strategy and planning, marketing organization, and international marketing.

Mary Parker Follett (September 3, 1868 December 18, 1933) was an American social
worker, management consultant and pioneer in the fields of organizational
theory and organizational behavior. Along with Lillian Gilbreth, Mary Parker Follett was one of
two great women management gurus in the early days of classical management theory. Follett is
known to be "Mother of Modern Management".[2]

Biography[edit]
Follett was born in 1868 in Quincy, Massachusetts to a wealthy Quaker Family. Her family was
composed of Charles Allen Follett, a machinist in a local shoe factory, and Elizabeth Curtis (ne
Baxter) Follett, respectively of English-Scottish and Welsh descent, and a younger brother.
Follett attended Thayer Academy, a collegiate preparatory day school in Braintree, while
spending much of her free time caring for her disabled mother. In September 1885 she enrolled
in Anna Ticknor's Society to Encourage Studies at Home.[3]
From 1890-91, she studied at the University of Cambridge and then moved to study at Society
for the Collegiate Instruction of Women in Cambridge (later known as Radcliffe College).[4] For the
next 6 years Follett attended the university on an irregular basis eventually graduating summa
cum laude in 1898. Her Radcliffe thesis, The Speaker of the House of Representatives, was
published in 1896. She would go on to apply to Harvard but would be denied entrance to the
university on the basis that she was a woman.[5]
Over the next three decades, she published many works. She was one of the first women ever
invited to address the London School of Economics, where she spoke on cutting-edge
management issues. She also distinguished herself in the field of management by being sought
out by President Theodore Rooseveltas his personal consultant on managing not-for-profit, nongovernmental, and voluntary organizations.[citation needed]

Ideas and influences[edit]

Folletts educational and work background would shape and influence her future theories and
writings. One of her earliest career positions would see her working as a social worker in the
Roxbury neighborhood of Boston from 1900-08. During this period her interactions with the
Roxbury community would lead her to realize the importance of community spaces as areas to
meet and socialize.[6]
Her experience in developing vocational guidance and evening programs in public schools, she
would develop what would be her life's work and her theories in group dynamics. "The New
State", her second writing published in 1918, would evolve from a report into her second
published work. This publication would go on to lay the foundational theories for her most
important theories and become a major center of attention of her career. [7]

Organizational theory[edit]
In her capacity as a management theorist, Follett pioneered the understanding of lateral
processes within hierarchical organizations (which recognition led directly to the formation of
matrix-style organizations, the first of which was DuPont, in the 1920s), the importance of
informal processes within organizations, and the idea of the "authority of expertise"which really
served to modify the typology of authority developed by her German contemporary, Max Weber,
who broke authority down into three separate categories: rational-legal, traditional and
charismatic.[8]
She recognized the holistic nature of community and advanced the idea of "reciprocal
relationships" in understanding the dynamic aspects of the individual in relationship to others.
Follett advocated the principle of what she termed "integration," or noncoercive power-sharing
based on the use of her concept of "power with" rather than "power over." [citation needed]
Follett contributed greatly to the win-win philosophy, coining the term in her work with groups.
Her approach to conflict was to embrace it as a mechanism of diversity and an opportunity to
develop integrated solutions rather than simply compromising. [9] She was also a pioneer in the
establishment of community centers.

Follett's writings[edit]
Follett's writings span the decades. In The New State, she ponders many of the social issues at
hand today:
It is a mistake to think that social progress is to depend upon anything happening to the working
people: some say that they are to be given more material goods and all will be well; some think
they are to be given more "education" and the world will be saved. It is equally a mistake to think
that what we need is the conversion to "unselfishness" of the capitalist class." [10]

Transformational Leadership[edit]
This section needs additional citations for verification. Please help improve this
article by adding citations to reliable sources. Unsourced material may be
challenged and removed. (June 2015)
Ann Pawelec Deschenes (1998) found obscure reference pointing to Mary Parker Follet having
coined the term "Transformational Leadership". She quotes from Edith A. Rusch's The Social
Construction of Leadership: From Theory to Praxis (1991):

... writings and lectures by Mary Parker Follet from as early as 1927 contained references to
transformational leadership, the interrelationship of leadership and followership, and the power of
collective goals of leaders and followers (p. 8).
Burns makes no reference to Follett in Leadership. However, Rusch was able to trace what
appear to be parallel themes in the works of Burns and Follet." Rusch presents direct references
in Appendix A. Pawelec (Deschenes) found further parallels of transformational discourse
between Follet's (1947, 1987) work and Burns (1978). [citation needed]

Influences[edit]
Although most of Follett's writings remained known in very limited circles until republished at the
beginning of this decade, her ideas gained great influence afterChester Barnard, a New Jersey
Bell executive and advisor to President Franklin D. Roosevelt, published his seminal treatment of
executive management, The Functions of the Executive. Barnard's work, which stressed the
critical role of "soft" factors such as "communication" and "informal processes" in organizations,
owed a telling yet undisclosed debt to Follett's thought and writings. Her emphasis on such soft
factors paralleled the work of Elton Mayo at Western Electric's Hawthorne Plant, and presaged
the rise of the Human Relations Movement, as developed through the work of such figures
as Abraham Maslow, Kurt Lewin,Douglas McGregor, Chris Argyris and other breakthrough
contributors to the field of Organizational Development or "OD".[11]
Her influence can also be seen indirectly perhaps in the work of Ron Lippitt, Ken Benne, Lee
Bradford, Edie Seashore and others at the National Training Laboratories in Bethel, Maine,
where T-Group methodology was first theorized and developed. [12] Follett's work set the stage for
a generation of effective, progressive changes in management philosophy, style and practice,
revolutionizing and humanizing the American workplace, and allowing the fulfillment of Douglas
McGregor's management visionquantum leaps in productivity effected through the
humanization of the workplace.[13]

Later life and legacy[edit]


Follet died on December 18, 1933, in Boston, Massachusetts. After her death her work and ideas
would disappear from American organizational and management circles of the time but would
continue to gain followership in Great Britain. In the last decades her work has been
rediscovered. During the 1960s her ideas would re-emerge in Japan where management
thinkers would apply her theories to business.
Her texts outline modern ideas under participatory management: decentralized decisions,
integrating role of groups, and competition authority. Follett managed to reduce the gap between
the mechanistic approach and contemporary approach that emphasizes human behavior.[14]
Her advocacy for schools to be used after hours for recreational and vocational use affected the
Boston area where schools opened their doors after hours for such uses, and community centers
were built where schools were not located, a revolutionary concept during the 20th century. Her
experience working in this area taught her a lot about notions of democracy and led her to write
more for a wider audience particularly the business world. She believed that good practice
amongst business people would have a significant impact on other institutions. [13]

Publications[edit]
She authored a number of books and numerous essays, articles and speeches
on democracy, human relations, political philosophy, psychology,organizational
behavior and conflict resolution.

The Speaker of the House of Representatives(1896)[15]

The New State (1918)[16]

Creative Experience (1924) [17]

The Giving of Orders(1926)

Dynamic Administration: The Collected Papers of Mary Parker Follett (1942) (a collection
of speeches and short articles was published posthumously)

[18]

References[edit]
1.

Jump up^

Douglas McGregor
From Wikipedia, the free encyclopedia

This article is about the professor from MIT. For others named, see [[Douglas Macgregor (human
side enterprise). (disambiguation)]].
Douglas Murray McGregor (1906 1 October 1964) was a management professor at the MIT
Sloan School of Management and president of Antioch Collegefrom 1948 to 1954.[1] He also
taught at the Indian Institute of Management Calcutta. His 1960 book The Human Side of
Enterprise had a profound influence on education practices.
Douglas McGregor is a contemporary of Abraham Maslow. Likewise, he also contributed much to
the development of the management and motivational theory. He is best known for his Theory X
and Theory Y as presented in his book The Human Side of Enterprise (1960), which proposed
that managers individual assumptions about human nature and behaviour determined how
individual manages their employees.[2]
Contents
[hide]

1 Career

2 The Human Side of Enterprise

3 Legacy

4 See also

5 Notes and references

6 External links

Career[edit]
McGregor was born in Detroit. He earned a B.E. (Mechanical) from Rangoon Institute of
Technology, an A.B. from Wayne State University in 1932, then earned an M.A. and Ph.D. in
psychology from Harvard University in 1944 and 1955 respectively.[3]

The Human Side of Enterprise[edit]


In the book The Human Side of Enterprise, McGregor identified an approach of creating an
environment within which employees are motivated via authoritative, direction and control or
integration and self-control, which he called theory X and theory Y,[4] respectively. Theory Y is the
practical application of Dr. Abraham Maslow's Humanistic School of Psychology, or Third Force
psychology, applied to scientific management.
He is commonly thought of as being a proponent of Theory Y, but, as Edgar Schein tells in his
introduction to McGregor's subsequent, posthumous (1967), book The Professional Manager :
"In my own contacts with Doug, I often found him to be discouraged by the degree to which
theory Y had become as monolithic a set of principles as those of Theory X, the overgeneralization which Doug was fighting....Yet few readers were willing to acknowledge that the
content of Doug's book made such a neutral point or that Doug's own presentation of his point of
view was that coldly scientific".
Graham Cleverley in Managers & Magic (Longman's, 1971) comments: "...he coined the two
terms Theory X and theory Y and used them to label two sets of beliefs a manager might hold
about the origins of human behaviour. He pointed out that the manager's own behaviour would
be largely determined by the particular beliefs that he subscribed to....McGregor hoped that his
book would lead managers to investigate the two sets of beliefs, invent others, test out the
assumptions underlying them, and develop managerial strategies that made sense in terms of
those tested views of reality. "But that isn't what happened. Instead McGregor was interpreted as
advocating Theory Y as a new and superior ethic - a set of moral values that ought to replace the
values managers usually accept."
The Human Side of Enterprise was voted the fourth most influential management book of the
20th century in a poll of the Fellows of the Academy of Management.[5]

Max Weber
From Wikipedia, the free encyclopedia

For other people named Max Weber, see Max Weber (disambiguation).

Max Weber

Weber in 1894

Born

Karl Emil Maximilian Weber


21 April 1864
Erfurt, Saxony, Kingdom of Prussia

Died

14 June 1920 (aged 56)


Munich, Bavaria, Germany

Nationality

Fields

German
Economics
Sociology
History
Law
Politics
Philosophy

Institutions

Universities of Berlin
Freiburg
Heidelberg
Vienna
Munich

Alma mater
University of Berlin

University of Heidelberg
Doctoral

Levin Goldschmidt

advisor
Known for
Weberian bureaucracy
Disenchantment Ideal type
Iron cage Life chances
Methodological individualism
Monopoly on violence
Protestant work ethic
Rationalisation Social action
Three-component stratification
Tripartite classification of authority
Verstehen
Influences
Hermann Baumgarten[1]
Immanuel Kant Friedrich Nietzsche
Sigmund Freud Wilhelm Dilthey
Heinrich Rickert Georg Simmel
Werner Sombart[2]
Influenced
Karl Jaspers Georg Simmel
Talcott Parsons Ludwig von Mises
Gyrgy Lukcs Theodor W. Adorno

Carl Schmitt Jrgen Habermas


Joseph Schumpeter C. Wright Mills
Cornelius Castoriadis Ludwig
Lachmann Karl Polanyi

Karl Emil Maximilian "Max" Weber (German: [maks veb]; 21 April 1864 14 June 1920) was
a Germansociologist, philosopher, jurist, and political economist whose ideas profoundly
influenced social theory andsocial research.[3] Weber is often cited, with mile Durkheim and Karl
Marx, as among the three founders of sociology.[4][5][6][7][8]
Weber was a key proponent of methodological antipositivism, arguing for the study of social
action throughinterpretive (rather than purely empiricist) means, based on understanding the
purpose and meaning that individuals attach to their own actions. Weber's main intellectual
concern was understanding the processes ofrationalisation, secularisation, and "disenchantment"
that he associated with the rise of capitalism andmodernity,[9] and which he saw as the result of a
new way of thinking about the world.[10]
Weber is best known for his thesis combining economic sociology and the sociology of religion,
elaborated in his book The Protestant Ethic and the Spirit of Capitalism, in which he proposed
that ascetic Protestantismwas one of the major "elective affinities" associated with the rise in the
Western world of market-driven capitalism and the rational-legal nation-state. Against Marx's
"historical materialism", Weber emphasised the importance of cultural influences embedded in
religion as a means for understanding the genesis of capitalism.[11] The Protestant Ethic formed
the earliest part in Weber's broader investigations into world religion; he went on to examine
the religions of China, the religions of India and ancient Judaism, with particular regard to their
differing economic consequences and conditions of social stratification.[a]
In another major work, Politics as a Vocation, Weber defined the state as an entity that
successfully claims a "monopoly of the legitimate use of physical force within a given territory".
He was also the first to categorise social authority into distinct forms, which he labelled as
charismatic, traditional, and rational-legal. His analysis of bureaucracy emphasised that modern
state institutions are increasingly based on rational-legal authority.
Weber also made a variety of other contributions in economic history, as well as economic theory
and methodology. Weber's analysis of modernity and rationalisation significantly influenced
the critical theoryassociated with the Frankfurt School.
After the First World War, Max Weber was among the founders of the liberal German Democratic
Party. He also ran unsuccessfully for a seat in parliament and served as advisor to the committee
that drafted the ill-fated democratic Weimar Constitution of 1919. After contracting Spanish flu, he
died of pneumonia in 1920, aged 56.[4]
Contents
[hide]

1 Biography
o

1.1 Early life and family background

1.2 Education

1.3 Early work

1.4 Later work

1.5 Political involvements

1.6 Last years

2 Max Weber's thought


o

2.1 Max Weber's Bureaucratic Model (Legal-Rational Model)

2.2 Inspirations

2.3 Methodology

2.4 Rationalisation

2.5 Sociology of religion

2.5.1 The Protestant Ethic and the Spirit of Capitalism

2.5.2 The Religion of China: Confucianism and Taoism

2.5.3 The Religion of India: The Sociology of Hinduism and Buddhism

2.5.4 Ancient Judaism

2.5.5 Economy and Society

2.5.6 Theodicy of Fortune and Misfortune


2.6 Politics and government

2.6.1 Social stratification

2.7 The City

2.8 Economics

2.8.1 Methodological individualism

2.8.2 Marginalism and psychophysics

2.8.3 Economic history

2.8.4 Economic calculation

3 Legacy

4 Critical responses to Weber

5 Notes

6 See also

7 References

8 Further reading

9 External links

Biography[edit]
Early life and family background[edit]
Karl Emil Maximilian Weber was born in 1864, in Erfurt, Province of Saxony, Prussia.[4] He was
the oldest of the seven children of Max Weber Sr., a wealthy and prominent civil servant and
member of the National Liberal Party, and his wife Helene (Fallenstein), who partly descended
from French Huguenot immigrants and held strong moral absolutist ideas.[4][12] Weber Sr.'s
involvement in public life immersed his home in both politics and academia, as his salon
welcomed many prominent scholars and public figures. [4] The young Weber and his
brother Alfred, who also became a sociologist and economist, thrived in this intellectual
atmosphere. Weber's 1876 Christmas presents to his parents, when he was thirteen years old,
were two historical essays entitled "About the course of German history, with special reference to
the positions of the Emperor and the Pope", and "About the Roman Imperial period from
Constantine to the migration of nations".[13] In class, bored and unimpressed with the teachers
who in turn resented what they perceived as a disrespectful attitude he secretly read all forty
volumes of Goethe,[14][15] and it has been recently argued that this was an important influence on
his thought and methodology[16] Before entering the university, he would read many other
classical works.[15] Over time, Weber would also be significantly affected by the marital tension
between his father, "a man who enjoyed earthly pleasures", and his mother, a
devout Calvinist "who sought to lead an ascetic life".[17][18]

Max Weber and his brothers, Alfred and Karl, in 1879

Education[edit]
In 1882 Weber enrolled in the University of Heidelberg as a law student.[19] After a year of military
service, he transferred to theUniversity of Berlin.[14] After his first few years as a student, during
which he spent much time "drinking beer and fencing", Weber would increasingly take his
mother's side in family arguments and grew estranged from his father.[17][18][20]Simultaneously with
his studies, he worked as a junior lawyer.[14] In 1886 Weber passed the examination
for Referendar, comparable to the bar association examination in the British and American legal
systems. Throughout the late 1880s, Weber continued his study of law and history.[14] He earned
his law doctorate in 1889 by writing a dissertation on legal history titledDevelopment of the
Principle of Joint Liability and the Separate Fund in the Public Trading Company out of

Household and Trade Communities in Italian Cities. This work was used as part of a longer
work On the History of Trading Companies in the Middle Ages, based on South-European
Sources, published in the same year.[21] Two years later, Weber completed
hisHabilitationsschrift, Roman Agrarian History and its Significance for Public and Private Law,
working with August Meitzen.[22][23]Having thus become a Privatdozent, Weber joined the
University of Berlin's faculty, lecturing and consulting for the government. [24]

Early work[edit]
In the years between the completion of his dissertation and habilitation, Weber took an interest in
contemporary social policy. In 1888 he joined the Verein fr Socialpolitik,[25] a new professional
association of German economists affiliated with the historical school, who saw the role of
economics primarily as finding solutions to the social problems of the age and who pioneered
large scale statistical studies of economic issues. He also involved himself in politics, joining the
left-leaning Evangelical Social Congress.[26] In 1890 the Verein established a research program to
examine "the Polish question" or Ostflucht: the influx of Polish farm workers into eastern
Germany as local labourers migrated to Germany's rapidly industrialising cities.[4] Weber was put
in charge of the study and wrote a large part of the final report, [4][25] which generated considerable
attention and controversy and marked the beginning of Weber's renown as a social scientist.
[4]
From 1893 to 1899 Weber was a member of the Alldeutscher Verband (Pan-German League),
an organization that campaigned against the influx of the Polish workers; the degree of Weber's
support for the Germanisation of Poles and similar nationalist policies is still debated by modern
scholars.[27][28] In some of his work, in particular his provocative lecture on "The Nation State and
Economic Policy" delivered in 1895, Weber criticises the immigration of Poles and blames
the Junker class for perpetuating Slavic immigration to serve their selfish interests. [29]

Max Weber and his wife Marianne in 1894

Also in 1893 he married his distant cousin Marianne Schnitger, later a feminist activist and author
in her own right,[4][30] who was instrumental in collecting and publishing Weber's journal articles as
books after his death, while her biography of him is an important source for understanding
Weber's life.[31][32] They would have no children and it is usually acknowledged that their marriage
was never consummated.[20] The marriage granted long-awaited financial independence to
Weber, allowing him to finally leave his parents' household. [18] The couple moved to Freiburg in
1894, where Weber was appointed professor of economics at the university,[23][24] before accepting
the same position at the University of Heidelberg in 1896.[23][24] There Weber became a central
figure in the so-called "Weber Circle", composed of other intellectuals such as his wife
Marianne,Georg Jellinek, Ernst Troeltsch, Werner Sombart, Marc Bloch, Robert
Michels and Gyrgy Lukcs.[4] Weber also remained active in the Verein and the Evangelical
Social Congress.[4] His research in that period was focused on economics and legal history.[33]
In 1897 Max Weber Sr. died two months after a severe quarrel with his son that was never
resolved.[4][34] After this, Weber became increasingly prone to depression, nervousness
and insomnia, making it difficult for him to fulfill his duties as a professor.[14][23] His condition forced

him to reduce his teaching and eventually leave his course unfinished in the autumn of 1899.
After spending months in a sanatorium during the summer and autumn of 1900, Weber and his
wife travelled to Italy at the end of the year and did not return to Heidelberg until April 1902. He
would again withdraw from teaching in 1903 and not return to it till 1919. Weber's ordeal with
mental illness was carefully described in a personal chronology that was destroyed by his wife.
This chronicle was supposedly destroyed because Marianne Weber feared that Max Weber's
work would be discredited by the Nazis if his experience with mental illness were widely known. [4]
[35]

Later work[edit]
After Weber's immense productivity in the early 1890s, he did not publish any papers between
early 1898 and late 1902, finally resigning his professorship in late 1903. Freed from those
obligations, in that year he accepted a position as associate editor of the Archives for Social
Science and Social Welfare,[36] where he worked with his colleagues Edgar Jaff (de) and Werner
Sombart.[4][37] His new interests would lie in more fundamental issues of social sciences; his works
from this latter period are of primary interest to modern scholars.[33] In 1904, Weber began to
publish some of his most seminal papers in this journal, notably his essay The Protestant Ethic
and the Spirit of Capitalism, which became his most famous work[38] and laid the foundations for
his later research on the impact of cultures and religions on the development of economic
systems.[39] This essay was the only one of his works from that period that was published as a
book during his lifetime. Some other of his works written in the first one and a half decades of the
20th century published posthumously and dedicated primarily from the fields of sociology of
religion, economic and legal sociology are also recognised as among his most important
intellectual contributions.[4]
Also in 1904, he visited the United States and participated in the Congress of Arts and Sciences
held in connection with the World's Fair (Louisiana Purchase Exposition) in St. Louis. Despite his
partial recovery, Weber felt that he was unable to resume regular teaching at that time and
continued on as a private scholar, helped by an inheritance in 1907. [24][36] In 1909, disappointed
with the Verein, he co-founded the German Sociological Association (Deutsche Gesellschaft fr
Soziologie, or DGS) and served as its first treasurer.[4] He would, however, resign from the DGS
in 1912.[4] In 1912, Weber tried to organise a left-wing political party to combine socialdemocrats and liberals. This attempt was unsuccessful, in part because many liberals feared
social-democratic revolutionary ideals.[40]

Political involvements[edit]

Max Weber (foreground) in 1917 with Ernst Toller (facing)

At the outbreak of World War I, Weber, aged 50, volunteered for service and was appointed as a
reserve officer and put in charge of organizing the army hospitals in Heidelberg, a role he fulfilled
until the end of 1915.[36][41] Weber's views on the war and the expansion of the German
empire changed during the course of the conflict.[40][41][42] Early on he supported the nationalist
rhetoric and the war effort, though with some hesitation as he viewed the war as a necessity to
fulfill German duty as a leading state power. In time, however, Weber became one of the most
prominent critics of German expansionism and of the Kaiser's war policies.[4] He publicly attacked
the Belgian annexation policy andunrestricted submarine warfare and later supported calls for
constitutional reform, democratisation and universal suffrage.[4]
Weber joined the worker and soldier council of Heidelberg in 1918. He then served in the
German delegation to theParis Peace Conference and as advisor to the Confidential Committee

for Constitutional Reform, which drafted the Weimar Constitution.[36] Motivated by his
understanding of the American model, he advocated a strong, popularly elected presidency as a
constitutional counterbalance to the power of the professionalbureaucracy.[4] More controversially,
he also defended the provisions for emergency presidential powers that became Article 48 of the
Weimar Constitution. These provisions were later used by Adolf Hitler to subvert the rest of the
constitution and institute rule by decree, allowing his regime to suppress opposition and gain
dictatorial powers.[43]
Weber also ran, unsuccessfully, for a parliamentary seat, as a member of the liberal German
Democratic Party, which he had co-founded.[4][44] He opposed both the leftist German Revolution
of 19181919 and the ratification of the Treaty of Versailles, a principled position that defied the
political alignments in Germany at that time,[4] and which may have prevented Friedrich Ebert, the
new social-democratic President of Germany, from appointing Weber as minister or ambassador.
[41]
Weber commanded widespread respect but relatively little influence. [4] Weber's role in German
politics remains controversial to this day.

Last years[edit]

Weber's grave in Heidelberg

Frustrated with politics, Weber resumed teaching during this time, first at the University of
Vienna, then, after 1919, at the University of Munich.[4][24][36] His lectures from that period were
collected into major works, such as the General Economic History, Science as a
Vocation and Politics as a Vocation.[4] In Munich, he headed the first German university institute
of sociology, but never held a professorial position in sociology. Many colleagues and students in
Munich attacked his response to the German Revolution and some right-wing students held
protests in front of his home.[40]Max Weber contracted the Spanish flu and died of pneumonia in
Munich on 14 June 1920.[4] At the time of his death, Weber had not finished writing his magnum
opus on sociological theory: Economy and Society. His widow Marianne helped prepare it for its
publication in 192122.

Max Weber's thought[edit]


Max Weber's Bureaucratic theory or model is sometimes also known as the "Legal-Rational"
model. The model tries to explain bureaucracy from a rational point of view via nine (9) main
characteristics or principles; these are as follows: [45]

Max Weber's Bureaucratic Model (Legal-Rational Model) [edit]


Weber wrote that the modern bureaucracy in both the public and private sector relies on the
following principles.
"First, it is based on the general principle of precisely defined and organized across-the-board
competencies of the various offices. these competencies are underpinned by rules, laws, or
administrative regulations."[46] For Weber, this means[47]

1. A rigid division of labor is established which clearly identifies the regular tasks and duties
of the particular bureaucratic system.
2. There are firmly established chains of command, and the duties and capacity to coerce
others to comply is described by regulation.
3. Regular and continuous execution of the assigned duties is undertaken by hiring people
with particular qualifications which are certified.
Weber notes that these three aspects "constitute the essence of bureaucratic administration...in
the public sector. In the private sector, these three aspects constitute the essence of a
bureaucratic management of a private company."[48]
Main Principles (Characteristics):
1. Specialized roles.
2. Recruitment based on merit (e.g. tested through open competition).
3. Uniform principles of placement, promotion, and transfer in an administrative system.
4. Careerism with systematic salary structure.
5. Hierarchy, responsibility and accountability.
6. Subjection of official conduct to strict rules of discipline and control.
7. Supremacy of abstract rules.
8. Impersonal authority. (e.g. Office bearer does not bring the office with him).
9. Political neutrality.
Merits: Max Weber himself noted, real bureaucracy will be less optimal and effective than his
ideal type model. Each of Weber's principles can degenerate, more so, when it is utilized to
analyze the individual level in the organization. But when implemented in a group setting in
organizational, some form of efficiency and effectiveness can be achieved, especially with
regards to better output. This is especially true when the Bureaucratic model emphasis on
qualification (merits), specialization of job-scope (labour), hierarchy of power, rules and
discipline.[49]
Demerits: However, competencies, efficiency and effectiveness can be unclear and contradictory
especially when dealing with oversimplified matters. In a dehumanized bureaucracy, inflexible in
distributing the job-scope, with every worker having to specialize from day one without rotating
tasks for fear of decreasing output, tasks are often routine and can contribute to boredom. Thus,
employees can sometimes feel that they are not part of the organization's work vision and
missions. Consequently, they do not have any sense of belonging in the long term. Furthermore,
this type of organization tends to invite exploitation and underestimate the potential of the
employees, as creativity of the workers is brushed aside, in favour of strict adherence to rules,
regulations and procedures.[45]

Inspirations[edit]
Weber's thinking was strongly influenced by German idealism and particularly by neoKantianism, to which he had been exposed through Heinrich Rickert, his professorial colleague
at the University of Freiburg.[4] Especially important to Weber's work is the neo-Kantian belief that
reality is essentially chaotic and incomprehensible, with all rational order deriving from the way in
which the human mind focuses its attention on certain aspects of reality and organises the

resulting perceptions.[4] Weber's opinions regarding the methodology of the social sciences show
parallels with the work of contemporary neo-Kantian philosopher and pioneering
sociologist Georg Simmel.[50]
Weber was also influenced by Kantian ethics, which he nonetheless came to think of as obsolete
in a modern age lacking in religious certainties. In this last respect, the influence of Friedrich
Nietzsche's philosophy is evident.[4] According to the Stanford Encyclopedia of Philosophy, the
"deep tension between the Kantian moral imperatives and a Nietzschean diagnosis of the
modern cultural world is apparently what gives such a darkly tragic and agnostic shade to
Weber's ethical worldview".[4] Another major influence in Weber's life was the writings of Karl
Marx and the workings of socialist thought in academia and active politics. While Weber shares
some of Marx's consternation with bureaucratic systems and maligns them as being capable of
advancing their own logic to the detriment of human freedom and autonomy, Weber views
conflict as perpetual and inevitable and does not host the spirit of a materially available utopia.
[51]
Though the influence of his mother's Calvinist religiosity is evident throughout Weber's life and
work, and though he maintained a deep, lifelong interest in the study of religions, Weber was
open about the fact that he was personally irreligious. [52][53]
As a political economist and economic historian, Weber belonged to the "youngest"
German historical school of economics, represented by academics such asGustav von
Schmoller and his student Werner Sombart. But, even though Weber's research interests were
very much in line with that school, his views on methodology and the theory of value diverged
significantly from those of other German historicists and were closer, in fact, to those of Carl
Menger and theAustrian School, the traditional rivals of the historical school.[54][55] (See section
on Economics.)

Methodology[edit]

A page from the typescript of the sociology of law within Economy and Society

Unlike some other classical figures (Comte, Durkheim) Weber did not attempt, consciously, to
create any specific set of rules governing social sciences in general, or sociology in particular.
[4]
In comparison with Durkheim and Marx, Weber was more focused on individuals and culture
and this is clear in his methodology.[14] Whereas Durkheim focused on the society, Weber
concentrated on the individuals and their actions (see structure and action discussion) and
whereas Marx argued for the primacy of the material world over the world of ideas, Weber valued
ideas as motivating actions of individuals, at least in the big picture. [14][56][57]
Sociology, for Max Weber, is:
... a science which attempts the interpretive understanding of social action in order thereby to
arrive at a causal explanation of its course and effects.

Max Weber[58]
Weber was concerned with the question of objectivity and subjectivity.[4] Weber
distinguished social action from social behavior, noting that social action must be understood
through how individuals subjectively relate to one another.[4][59]Study of social action
through interpretive means (Verstehen) must be based upon understanding the subjective
meaning and purpose that individuals attach to their actions.[4][33] Social actions may have easily
identifiable and objective means, but much more subjective ends and the understanding of those
ends by a scientist is subject to yet another layer of subjective understanding (that of the
scientist).[4] Weber noted that the importance of subjectivity in social sciences makes creation of
fool-proof, universal laws much more difficult than in natural sciences and that the amount of
objective knowledge that social sciences may achieve is precariously limited. [4] Overall, Weber
supported the goal of objective science, but he noted that it is an unreachable goal although
one definitely worth striving for.[4]
There is no absolutely "objective" scientific analysis of culture.... All knowledge of cultural
reality ... is always knowledge from particular points of view.... an "objective" analysis of cultural
events, which proceeds according to the thesis that the ideal of science is the reduction of
empirical reality to "laws", is meaningless ... [because] ... the knowledge of social laws is not
knowledge of social reality but is rather one of the various aids used by our minds for attaining
this end.
Max Weber, "Objectivity" in Social Science, 1904[60]
The principle of "methodological individualism", which holds that social scientists should seek to
understand collectivities (such as nations, cultures, governments, churches, corporations, etc.)
solely as the result and the context of the actions of individual persons, can be traced to Weber,
particularly to the first chapter of Economy and Society, in which he argues that only individuals
"can be treated as agents in a course of subjectively understandable action". [55][59] In other words,
Weber argued that social phenomena can be understood scientifically only to the extent that they
are captured by models of the behaviour of purposeful individuals, models that Weber called
"ideal types", from which actual historical events will necessarily deviate due to accidental and
irrational factors.[55] The analytical constructs of an ideal type never exist in reality, but provide
objective benchmarks against which real-life constructs can be measured. [61]
We know of no scientifically ascertainable ideals. To be sure, that makes our efforts more
arduous than in the past, since we are expected to create our ideals from within our breast in the
very age of subjectivist culture.
Max Weber, 1909[62]
Weber's methodology was developed in the context of a wider debate about methodology of
social sciences, the Methodenstreit.[33] Weber's position was close to historicism, as he
understood social actions as being heavily tied to particular historical contexts and its analysis
required the understanding of subjective motivations of individuals (social actors). [33] Thus
Weber's methodology emphasises the use of comparative historical analysis.[63] Therefore, Weber
was more interested in explaining how a certain outcome was the result of various historical
processes rather than predicting an outcome of those processes in the future. [57]

Rationalisation[edit]
Many scholars have described rationalisation and the question of individual freedom in an
increasingly rational society, as the main theme of Weber's work.[4][64][65][66] This theme was situated
in the larger context of the relationship between psychological motivations, cultural values and
beliefs (primarily, religion) and the structure of the society (usually determined by the economy).
[57]

By rationalisation, Weber understood first, the individual cost-benefit calculation, second, the
wider, bureaucratic organisation of the organisations and finally, in the more general sense as the
opposite of understanding the reality through mystery and magic (disenchantment).[66]

The fate of our times is characterised by rationalisation and intellectualisation and, above all, by
the "disenchantment of the world"
Max Weber[67]
Weber began his studies of the subject in The Protestant Ethic and the Spirit of Capitalism, in
which he argued that the redefinition of the connection between work and piety in Protestantism
and especially in ascetic Protestant denominations, particularly Calvinism, shifted human effort
towards rational efforts aimed at achieving economic gain.[68][69] In Protestant religion, Christian
piety towards God was expressed through one's secular vocation (secularisation of calling).[69]The
rational roots of this doctrine, he argued, soon grew incompatible with and larger than the
religious and so the latter were eventually discarded. [70]
Weber continued his investigation into this matter in later works, notably in his studies
on bureaucracy and on the classification of legitimate authority into three types Rationallegal, traditional and charismatic of which the legitimate (or rational) is the dominant one in the
modern world.[4] In these works Weber described what he saw as society's movement towards
rationalisation.[4] Similarly, rationalisation could be seen in the economy, with the development of
highly rational and calculating capitalism.[4] Weber also saw rationalisation as one of the main
factors setting the European West apart from the rest of the world. [4]Rationalisation relied on deep
changes in ethics, religion, psychology and culture; changes that first took place in the Western
civilisation.[4]
What Weber depicted was not only the secularisation of Western culture, but also and especially
the development of modern societies from the viewpoint of rationalisation. The new structures of
society were marked by the differentiation of the two functionally intermeshing systems that had
taken shape around the organisational cores of the capitalist enterprise and the bureaucratic
state apparatus. Weber understood this process as the institutionalisation of purposive-rational
economic and administrative action. To the degree that everyday life was affected by this cultural
and societal rationalisation, traditional forms of life which in the early modern period were
differentiated primarily according to one's trade were dissolved.
Jrgen Habermas, Modernity's Consciousness of Time, 1990 [1985][9]
Features of rationalisation include increasing knowledge, growing impersonality and enhanced
control of social and material life.[4] Weber was ambivalent towards rationalisation; while admitting
it was responsible for many advances, in particular, freeing humans from traditional, restrictive
and illogical social guidelines, he also criticised it for dehumanising individuals as "cogs in the
machine" and curtailing their freedom, trapping them in the bureaucratic iron cage of rationality
and bureaucracy.[4][64][71][72] Related to rationalisation is the process of disenchantment, in which the
world is becoming more explained and less mystical, moving from polytheistic religions
to monotheistic ones and finally to the Godless science of modernity.[4] Those processes affect all
of society, removing "sublime values... from public life" and making art less creative.[73]
In a dystopian critique of rationalisation, Weber notes that modern society is a product of
an individualistic drive of the Reformation, yet at the same time, the society created in this
process is less and less welcoming of individualism.[4]
How is it at all possible to salvage any remnants of "individual" freedom of movement in any
sense given this all-powerful trend?
Max Weber[4]

Sociology of religion[edit]
Weber's work in the field of sociology of religion started with the essay The Protestant Ethic and
the Spirit of Capitalism and continued with the analysis of The Religion of China: Confucianism
and Taoism, The Religion of India: The Sociology of Hinduism and Buddhism and Ancient
Judaism. His work on other religions was interrupted by his sudden death in 1920, which
prevented him from following Ancient Judaism with studies of early Christianity and Islam.[74] His
three main themes in the essays were the effect of religious ideas on economic activities, the

relation between social stratification and religious ideas and the distinguishable characteristics of
Western civilisation.[75]
Weber saw religion as one of the core forces in the society.[63] His goal was to find reasons for the
different development paths of the cultures of the Occidentand the Orient, although without
judging or valuing them, like some of the contemporary thinkers who followed the social
Darwinist paradigm; Weber wanted primarily to explain the distinctive elements of the Western
civilisation.[75] In the analysis of his findings, Weber maintained that Calvinist (and more widely,
Protestant) religious ideas had had a major impact on the social innovation and development of
the economic system of the West, but noted that they were not the only factors in this
development. Other notable factors mentioned by Weber included the rationalism of scientific
pursuit, merging observation with mathematics, science of scholarship and jurisprudence,
rational systematisation and bureaucratisation of government administration and economic
enterprise.[75] In the end, the study of the sociology of religion, according to Weber, focused on
one distinguishing part of the Western culture, the decline of beliefs in magic, or what he referred
to as "disenchantment of the world".[75]
Weber also proposed a socioevolutionary model of religious change, showing that in general,
societies have moved from magic to polytheism, then topantheism, monotheism and
finally, ethical monotheism.[76] According to Weber, this evolution occurred as the growing
economic stability allowedprofessionalisation and the evolution of ever more
sophisticated priesthood.[77] As societies grew more complex and encompassed different groups,
a hierarchy of gods developed and as power in the society became more centralised, the
concept of a single, universal God became more popular and desirable. [78]
The Protestant Ethic and the Spirit of Capitalism[edit]
Main article: The Protestant Ethic and the Spirit of Capitalism

Cover of a German edition of The Protestant Ethic and the Spirit of Capitalism

Weber's essay The Protestant Ethic and the Spirit of Capitalism is his most famous work.[38] It is
argued that this work should not be viewed as a detailed study of Protestantism, but rather as an
introduction into Weber's later works, especially his studies of interaction between various
religious ideas and economic behaviour as part of the rationalisation of the economic system.
[79]
In The Protestant Ethic and the Spirit of Capitalism, Weber put forward the thesis that Calvinist
ethic and ideas influenced the development of capitalism. [79] He noted the post-Reformation shift
of Europe's economic centre away from Catholic countries such as France, Spain and Italy, and
toward Protestant countries such as the Netherlands, England, Scotland and Germany. Weber
also noted that societies having more Protestants were those with a more highly developed
capitalist economy.[80]Similarly, in societies with different religions, most successful business
leaders were Protestant.[79] Weber thus argued that Roman Catholicism impeded the
development of the capitalist economy in the West, as did other religions such
asConfucianism and Buddhism elsewhere in the world.[79]

The development of the concept of the calling quickly gave to the modern entrepreneur a
fabulously clear conscience and also industrious workers; he gave to his employees as the
wages of their ascetic devotion to the calling and of co-operation in his ruthless exploitation of
them through capitalism the prospect of eternal salvation.
Max Weber[69]
Christian religious devotion had historically been accompanied by rejection of mundane affairs,
including economic pursuit.[81]Weber showed that certain types of Protestantism
notably Calvinism were supportive of rational pursuit of economic gain and worldly activities
dedicated to it, seeing them as endowed with moral and spiritual significance. [68] Weber argued
that there were many reasons to look for the origins of modern capitalism in the religious ideas of
the Reformation.[82] In particular, the Protestant ethic (or more specifically, Calvinist ethic)
motivated the believers to work hard, be successful in business and reinvest their profits in
further development rather than frivolous pleasures.[79] The notion of calling meant that each
individual had to take action as an indication of their salvation; just being a member of the
Church was not enough.[69] Predestination also reduced agonising over economic inequality and
further, it meant that a material wealth could be taken as a sign of salvation in the afterlife.[79]
[83]
The believers thus justified pursuit of profit with religion, as instead of being fuelled by morally
suspect greed or ambition, their actions were motivated by a highly moral and respected
philosophy.[79] This Weber called the "spirit of capitalism": it was the Protestant religious ideology
that was behind and inevitably led to the capitalist economic system.[79] This theory is often
viewed as a reversal of Marx's thesis that the economic "base" of society determines all other
aspects of it.[68]
Weber abandoned research into Protestantism because his colleague Ernst Troeltsch, a
professional theologian, had begun work on the book The Social Teachings of the Christian
Churches and Sects. Another reason for Weber's decision was that Troeltsch's work already
achieved what he desired in that area: laying the groundwork for a comparative analysis of
religion and society.[84]
The phrase "work ethic" used in modern commentary is a derivative of the "Protestant ethic"
discussed by Weber. It was adopted when the idea of the Protestant ethic was generalised to
apply to the Japanese people, Jews and other non-Christians and thus lost its religious
connotations.[85]
The Religion of China: Confucianism and Taoism[edit]
Main article: The Religion of China: Confucianism and Taoism
The Religion of China: Confucianism and Taoism was Weber's second major work on the
sociology of religion. Hans H. Gerth edited and translated this text into English, with an
introduction by C. K. Wang.[86] Weber focused on those aspects of Chinese society that were
different from those of Western Europe, especially those aspects that contrasted with Puritanism.
His work also questioned why capitalism did not develop in China.[87] He focused on the issues of
Chinese urban development, Chinese patrimonialism and officialdom and Chinese
religion and philosophy (primarily, Confucianism and Taoism), as the areas in which Chinese
development differed most distinctively from the European route.[87]
According to Weber, Confucianism and Puritanism are mutually exclusive types of rational
thought, each attempting to prescribe a way of life based on religious dogma. [88] Notably, they
both valued self-control and restraint and did not oppose accumulation of wealth. [88] However, to
both those qualities were just means to the final goal and here they were divided by a key
difference.[83] Confucianism's goal was "a cultured status position", while Puritanism's goal was to
create individuals who are "tools of God".[88] The intensity of belief and enthusiasm for action were
rare in Confucianism, but common in Protestantism.[88] Actively working for wealth was
unbecoming a proper Confucian.[83] Therefore, Weber states that it was this difference in social
attitudes and mentality, shaped by the respective, dominant religions, that contributed to the
development of capitalism in the West and the absence of it in China. [88]
The Religion of India: The Sociology of Hinduism and Buddhism[edit]

Main article: The Religion of India: The Sociology of Hinduism and Buddhism
The Religion of India: The Sociology of Hinduism and Buddhism was Weber's third major work
on the sociology of religion. In this work he deals with the structure of Indian society, with
the orthodox doctrines of Hinduism and the heterodox doctrines of Buddhism, with modifications
brought by the influence of popular religiosity and finally with the impact of religious beliefs on the
secular ethic of Indian society.[89] Like Confucianism in China, for Weber, Hinduism in India was a
barrier for capitalism.[83] The Indian caste system made it very difficult for individuals to advance in
the society beyond their caste.[83] Activity, including economic activity, was seen as unimportant in
the context of the advancement of the soul.[83]
Weber ended his research of society and religion in India by bringing in insights from his previous
work on China to discuss similarities of the Asian belief systems.[90] He notes that the beliefs saw
the meaning of life as otherworldly mystical experience.[90] The social world is fundamentally
divided between the educated elite, following the guidance of a prophet or wise man and the
uneducated masses whose beliefs are centered on magic.[90] In Asia, there was noMessianic
prophecy to give plan and meaning to the everyday life of educated and uneducated alike.
[90]
Weber juxtaposed such Messianic prophecies (also called ethical prophecies), notably from
the Near East region to the exemplary prophecies found on the Asiatic mainland, focused more
on reaching to the educated elites and enlightening them on the proper ways to live one's life,
usually with little emphasis on hard work and the material world. [90][91] It was those differences that
prevented the countries of the Occident from following the paths of the earlier Chinese and
Indian civilisations. His next work, Ancient Judaismwas an attempt to prove this theory.[90]
Ancient Judaism[edit]
Main article: Ancient Judaism (book)
In Ancient Judaism, his fourth major work on the sociology of religion, Weber attempted to
explain the factors that resulted in the early differences
betweenOriental and Occidental religiosity.[92] He contrasted the
innerworldly asceticism developed by Western Christianity with mystical contemplation of the
kind developed in India.[92] Weber noted that some aspects of Christianity sought to conquer and
change the world, rather than withdraw from its imperfections. [92]This fundamental characteristic
of Christianity (when compared to Far Eastern religions) stems originally from ancient
Jewish prophecy.[93]
Weber claimed that Judaism not only fathered Christianity and Islam, but was crucial to the rise
of the modern Occidental state; Judaism's influence was as important as Hellenistic and Roman
cultures.
Weber's premature death in 1920 prevented him from following his planned analysis of Psalms,
the Book of Job, Talmudic Jewry, early Christianity and Islam.
Economy and Society[edit]
Main article: Economy and Society
In his magnum opus, Economy and Society, Weber distinguished three ideal types of religious
attitudes: world-flying mysticism, world-rejecting asceticism, and inner-worldly asceticism. He
defined magic as a pre-religious activity.[94]
Theodicy of Fortune and Misfortune[edit]
The Theodicy of fortune and misfortune within sociology is the theory, as Weber suggested, of
how "members of different social classes adopt different belief systems, or theodices, to explain
their social situation".[95]
The concept of theodicy was expanded mainly with the thought of Weber and his addition of
ethical considerations to the subject of religion. There is this ethical part of religion, including "(1)
soteriology and (2) theodicy. These mean, respectively, how people understand themselves to be
able to be in a correctrelationship with supernatural powers, and how to explain evil or why bad
things seem to happen to those who seem to be good people".[96] There is a separation of
different theodicies with regard to class. "Theodicies of misfortune tend to the belief that wealth

and other manifestations of privilege are indications or signs of evil.... In contrast, theodicies of
fortune emphasise the notion that privileges are a blessing and are deserved." [96] Weber also
writes that "the affluent embrace good fortune theodicies, which emphasise that prosperity is a
blessing of God...[while] theodices of misfortune emphasise that affluence is a sign of evil and
that suffering in this world will be rewarded in the next."[95] Thus these two distinctions can be
applied not only to class structure within society but denomination and racial segregation within
religion.
Weber defines the importance of societal class within religion by examining the difference
between the two theodicies and to what class structures they apply. The concept of "work ethic"
is attached to the theodicy of fortune; thus, because of the Protestant "work ethic", there was a
contribution of higher class outcomes and more education among Protestants. [97] Those without
the work ethic clung to the theodicy of misfortune, believing wealth and happiness were granted
in the afterlife. Another example of how this belief of religious theodicy influences class, is that
those of lower status, the poor, cling to deep religiousness and faith as a way to comfort
themselves and provide hope for a more prosperous future, while those of higher status cling to
the sacraments or actions that prove their right of possessing greater wealth. [95]
These two theodicies can be found in the denominational segregation within the religious
community. The main division can be seen between the mainline Protestant and evangelical
denominations and their relation to the class into which their particular theodicy pertains. For
example, mainline churches, with their upper class congregations, "promote[d] order, stability,
and conservatism, and in so doing proved to be a powerful source of legitimation of the status
quo and of existing disparities in the distribution of wealth and power" because much of the
wealth of the church comes from the congregation. [98] In contrast, Pentecostal churches adopted
the theodicy of misfortune. They instead "advocated change intended to advance the cause of
justice and fairness".[98] Thus the learned and upper class religious churches who preach the
theodicy of fortune, ultimately support capitalism and corporation, while the churches who
adopted the theodicy of misfortune, instead preached equality and fairness.

Politics and government[edit]


In political sociology, one of Weber's most influential contributions is his Politics as a
Vocation essay. Therein, Weber unveils the definition of the state as that entity that possesses
a monopoly on the legitimate use of physical force.[99][100] Weber wrote that politics is the sharing of
state's power between various groups, and political leaders are those who wield this power.[99] A
politician must not be a man of the "true Christian ethic", understood by Weber as being the ethic
of the Sermon on the Mount, that is to say, the injunction to turn the other cheek.[101] An adherent
of such an ethic ought rather to be understood to be asaint, for it is only saints, according to
Weber, that can appropriately follow it.[101] The political realm is no realm for saints; a politician
ought to marry the ethic of ultimate ends and the ethic of responsibility and must possess both a
passion for his vocation and the capacity to distance himself from the subject of his exertions (the
governed).[101]
Weber distinguished three ideal types of political leadership (alternatively referred to as three
types of domination, legitimisation or authority):[45]
1. charismatic domination (familial and religious),
2. traditional domination (patriarchs, patrimonialism, feudalism) and
3. legal domination (modern law and state, bureaucracy).[102]
In his view, every historical relation between rulers and ruled contained such elements and they
can be analysed on the basis of this tripartite distinction.[103] He notes that the instability of
charismatic authority forces it to "routinise" into a more structured form of authority.[71] In a pure
type of traditional rule, sufficient resistance to a ruler can lead to a "traditional revolution". The
move towards a rational-legal structure of authority, utilising a bureaucratic structure, is inevitable
in the end.[104] Thus this theory can be sometimes viewed as part of the social evolutionism theory.

This ties to his broader concept of rationalisation by suggesting the inevitability of a move in this
direction.[71]
Bureaucratic administration means fundamentally domination through knowledge.

Adam Smith
From Wikipedia, the free encyclopedia

For other people named Adam Smith, see Adam Smith (disambiguation).

Adam Smith

Born

16 June 1723 NS
(5 June 1723 OS)

Kirkcaldy, Fife, Scotland,United Kingdom

Died

17 July 1790 (aged 67)


Edinburgh, Scotland, United Kingdom

Nationality

Scottish[1]

Alma mater

University of Glasgow
Balliol College, Oxford

Notable work The Wealth of Nations, The Theory of Moral


Sentiments

Religion

Christian

Region

Western philosophy

School

Classical economics

Main

Political philosophy, ethics, economics

interests
Notable ideas Classical economics,
modern free market,
division of labour,
the "invisible hand"

Influences[show]

Influenced[show]

Signature

Adam Smith (16 June 1723 NS (5 June 1723 OS) 17 July 1790) was a British moral philosopher,
pioneer of political economy, and key Scottish Enlightenment figure.[2]
Smith is best known for two classic works: The Theory of Moral Sentiments (1759), and An
Inquiry into the Nature and Causes of the Wealth of Nations (1776). The latter, usually
abbreviated as The Wealth of Nations, is considered his magnum opus and the first modern work
of economics. Smith is cited as the father of modern economics and is still among the most
influential thinkers in the field of economics today.[3]
Smith studied social philosophy at the University of Glasgow and at Balliol College, Oxford,
where he was one of the first students to benefit from scholarships set up by fellow Scot, John
Snell. After graduating, he delivered a successful series of public lectures at Edinburgh, leading
him to collaborate with David Hume during the Scottish Enlightenment. Smith obtained a
professorship at Glasgow teaching moral philosophy, and during this time he wrote and
published The Theory of Moral Sentiments. In his later life, he took a tutoring position that
allowed him to travel throughout Europe, where he met other intellectual leaders of his day.
Smith laid the foundations of classical free market economic theory. The Wealth of Nations was a
precursor to the modern academic discipline of economics. In this and other works, he
expounded upon how rational self-interest and competition can lead to economic prosperity.
Smith was controversial in his own day and his general approach and writing style were often
satirised by Tory writers in the moralising tradition of William Hogarth andJonathan Swift. In
2005, The Wealth of Nations was named among the 100 Best Scottish Books of all time.[4] It is
said former UK Prime Minister Margaret Thatcher carried a copy of the book in her handbag.[5]
Contents
[hide]

1 Biography
o

1.1 Early life

1.2 Formal education

1.3 Teaching career

1.4 Tutoring and travels

1.5 Later years

2 Personality and beliefs


o

2.1 Character

2.2 Religious views

3 Published works
o

3.1 The Theory of Moral Sentiments

3.2 The Wealth of Nations

3.3 Criticism and dissent

3.4 Other works

4 Legacy
o

4.1 In economics and moral philosophy

4.2 In British Imperial debates

4.3 Portraits, monuments, and banknotes

4.4 Residence

4.5 As a symbol of free market economics

5 See also

6 Notes

7 Citations

8 References

9 Further reading

10 External links

Biography[edit]
Early life[edit]

Portrait of Smith's mother, Margaret Douglas

Smith was born in Kirkcaldy, in the County of Fife, in Scotland. His father, also of the same
name, was a Scottish Writer to the Signet(senior solicitor), advocate, and prosecutor (Judge
Advocate) and also served as comptroller of the Customs in Kirkcaldy.[6] In 1720 he married
Margaret Douglas, daughter of the landed Robert Douglas of Strathendry, also in Fife. His father
died two months after he was born, leaving his mother a widow.[7] The date of Smith's baptism
into the Church of Scotland at Kirkcaldy was 5 June 1723,[8]and this has often been treated as if it
were also his date of birth,[6] which is unknown. Although few events in Smith's early childhood
are known, the Scottish journalist John Rae, Smith's biographer, recorded that Smith was
abducted by gypsies at the age of three and released when others went to rescue him. [N 1] Smith
was close to his mother, who probably encouraged him to pursue his scholarly ambitions. [10] He
attended the Burgh School of Kirkcaldycharacterised by Rae as "one of the best secondary
schools of Scotland at that period"[9]from 1729 to 1737, he learned Latin, mathematics, history,
and writing.[10]

Formal education[edit]

A commemorative plaque for Smith is located in Smith's home town ofKirkcaldy.

Smith entered the University of Glasgow when he was fourteen and studied moral
philosophy underFrancis Hutcheson.[10] Here, Smith developed his passion for liberty, reason,
and free speech. In 1740 Smith was the graduate scholar presented to undertake postgraduate
studies at Balliol College, Oxford, under the Snell Exhibition.[11]
Adam Smith considered the teaching at Glasgow to be far superior to that at Oxford, which he
found intellectually stifling.[12] In Book V, Chapter II of The Wealth of Nations, Smith wrote: "In the
University of Oxford, the greater part of the public professors have, for these many years, given
up altogether even the pretence of teaching." Smith is also reported to have complained to
friends that Oxford officials once discovered him reading a copy of David Hume's Treatise on
Human Nature, and they subsequently confiscated his book and punished him severely for

reading it.[9][13][14] According to William Robert Scott, "The Oxford of [Smith's] time gave little if any
help towards what was to be his lifework."[15] Nevertheless, Smith took the opportunity while at
Oxford to teach himself several subjects by reading many books from the shelves of the
large Bodleian Library.[16]When Smith was not studying on his own, his time at Oxford was not a
happy one, according to his letters.[17] Near the end of his time there, Smith began suffering from
shaking fits, probably the symptoms of a nervous breakdown.[18] He left Oxford University in 1746,
before his scholarship ended.[18][19]
In Book V of The Wealth of Nations, Smith comments on the low quality of instruction and the
meager intellectual activity atEnglish universities, when compared to their Scottish counterparts.
He attributes this both to the rich endowments of the colleges at Oxford and Cambridge, which
made the income of professors independent of their ability to attract students, and to the fact that
distinguished men of letters could make an even more comfortable living as ministers of
the Church of England.[14]
Adam Smith's discontent at Oxford might be in part due to the absence of his beloved teacher in
Glasgow, Francis Hutcheson. Hutcheson was well regarded as one of the most prominent
lecturers at the University of Glasgow in his day and earned the approbation of students,
colleagues, and even ordinary residents with the fervor and earnestness of his orations (which
he sometimes opened to the public). His lectures endeavoured not merely to teach philosophy
but to make his students embody that philosophy in their lives, appropriately acquiring the
epithet, the preacher of philosophy. Unlike Smith, Hutcheson was not a system builder; rather it
was his magnetic personality and method of lecturing that so influenced his students and caused
the greatest of those to reverentially refer to him as "the never to be forgotten Hutcheson" a
title that Smith in all his correspondence used to describe only two people, his good friend David
Hume and influential mentor Francis Hutcheson.[20]

Teaching career[edit]
Smith began delivering public lectures in 1748 in Edinburgh, sponsored by the Philosophical
Society of Edinburgh under the patronage of Lord Kames.[21] His lecture topics
included rhetoric and belles-lettres,[22] and later the subject of "the progress of opulence". On this
latter topic he first expounded his economic philosophy of "the obvious and simple system
of natural liberty". While Smith was not adept at public speaking, his lectures met with success.[23]

David Hume was a friend and contemporary of Smith.

In 1750, he met the philosopher David Hume, who was his senior by more than a decade. In
their writings covering history, politics, philosophy, economics, and religion, Smith and Hume
shared closer intellectual and personal bonds than with other important figures of the Scottish
Enlightenment.[24]
In 1751, Smith earned a professorship at Glasgow University teaching logic courses, and in 1752
he was elected a member of the Philosophical Society of Edinburgh, having been introduced to
the society by Lord Kames. When the head of Moral Philosophy died the next year, Smith took
over the position.[23] He worked as an academic for the next thirteen years, which he

characterised as "by far the most useful and therefore by far the happiest and most honorable
period [of his life]".[25]
Smith published The Theory of Moral Sentiments in 1759, embodying some of his Glasgow
lectures. This work was concerned with how human morality depends on sympathy between
agent and spectator, or the individual and other members of society. Smith defined "mutual
sympathy" as the basis of moral sentiments. He based his explanation, not on a special "moral
sense" as the Third Lord Shaftesbury and Hutcheson had done, nor on utility as Hume did, but
on mutual sympathy, a term best captured in modern parlance by the twentieth-century concept
of empathy, the capacity to recognise feelings that are being experienced by another being.
Following the publication of The Theory of Moral Sentiments, Smith became so popular that
many wealthy students left their schools in other countries to enroll at Glasgow to learn under
Smith.[26] After the publication of The Theory of Moral Sentiments, Smith began to give more
attention to jurisprudence and economics in his lectures and less to his theories of morals.[27] For
example, Smith lectured that the cause of increase in national wealth is labour, rather than the
nation's quantity of gold or silver, which is the basis for mercantilism, the economic theory that
dominated Western European economic policies at the time. [26]

Franois Quesnay, one of the leaders of thePhysiocratic school of thought

In 1762, the University of Glasgow conferred on Smith the title of Doctor of Laws (LL.D.). At the
end of 1763, he obtained an offer from Charles Townshend who had been introduced to Smith
by David Hume to tutor his stepson, Henry Scott, the young Duke of Buccleuch. Smith then
resigned from his professorship to take the tutoring position. He subsequently attempted to return
the fees he had collected from his students because he resigned in the middle of the term, but
his students refused.[28]

Tutoring and travels[edit]


Smith's tutoring job entailed touring Europe with Scott, during which time he educated Scott on a
variety of subjects such as proper Polish.[28] He was paid 300 per year (plus expenses) along
with a 300 per year pension; roughly twice his former income as a teacher.[28] Smith first
travelled as a tutor to Toulouse, France, where he stayed for one and a half years.[28]According to
his own account, he found Toulouse to be somewhat boring, having written to Hume that he "had
begun to write a book to pass away the time".[28] After touring the south of France, the group
moved to Geneva, where Smith met with the philosopher Voltaire.[29]
From Geneva, the party moved to Paris. Here Smith came to know several great intellectual
leaders of the time; invariably having an effect on his future works. This list included: Benjamin
Franklin,[30] Turgot, Jean D'Alembert, Andr Morellet, Helvtius, and, notably, Franois Quesnay,
the head of the Physiocratic school.[31] So impressed with his ideas[32] Smith considered
dedicating The Wealth of Nations to him had Quesnay not died beforehand.[33] Physiocrats were
opposed to mercantilism, the dominating economic theory of the time. Illustrated in their
motto Laissez faire et laissez passer, le monde va de lui mme! (Let do and let pass, the world
goes on by itself!). They were also known to have declared that only agricultural activity
produced real wealth; merchants and industrialists (manufacturers) did not. [30] This however, did

not represent their true school of thought, but was a mere "smoke screen" manufactured to hide
their actual criticisms of the nobility and church; arguing that they made up the only real clients of
merchants.[34]
The wealth of France was virtually destroyed by Louis XIV and Louis XV in ruinous wars,[35] by
aiding the American insurgents against the British, and perhaps most destructive (in terms of
public perceptions) was what was seen as the excessive consumption of goods and services
deemed to have no economic contribution unproductive labour. Assuming that nobility and
church are essentially detractors from economic growth, the feudal system of agriculture in
France was the only sector important to maintain the wealth of the nation. Given that the English
economy of the day yielded an income distribution that stood in contrast to that which existed in
France, Smith concluded that the teachings and beliefs of Physiocrats were, "with all [their]
imperfections [perhaps], the nearest approximation to the truth that has yet been published upon
the subject of political economy".[36] The distinction between productive versus unproductive
labour the physiocratic classe steril was a predominant issue in the development and
understanding of what would become classical economic theory.

Later years[edit]
In 1766, Henry Scott's younger brother died in Paris, and Smith's tour as a tutor ended shortly
thereafter.[30] Smith returned home that year to Kirkcaldy, and he devoted much of the next ten
years to his magnum opus.[37] There he befriended Henry Moyes, a young blind man who showed
precocious aptitude. As well as teaching Moyes, Smith secured the patronage of David Hume
and Thomas Reid in the young man's education.[38] In May 1773, Smith was elected fellow of
the Royal Society of London,[39] and was elected a member of the Literary Club in 1775.[40] The
Wealth of Nations was published in 1776 and was an instant success, selling out its first edition
in only six months.[41]
In 1778, Smith was appointed to a post as commissioner of customs in Scotland and went to live
with his mother in Panmure House in Edinburgh'sCanongate.[42] Five years later, as a member of
the Philosophical Society of Edinburgh when it received its royal charter, he automatically
became one of the founding members of the Royal Society of Edinburgh,[43] and from 1787 to
1789 he occupied the honorary position of Lord Rector of the University of Glasgow.[44] He died in
the northern wing of Panmure House in Edinburgh on 17 July 1790 after a painful illness and
was buried in the Canongate Kirkyard.[45]On his death bed, Smith expressed disappointment that
he had not achieved more.[46]
Smith's literary executors were two friends from the Scottish academic world: the physicist and
chemist Joseph Black, and the pioneering geologist James Hutton.[47] Smith left behind many
notes and some unpublished material, but gave instructions to destroy anything that was not fit
for publication.[48] He mentioned an early unpublished History of Astronomy as probably suitable,
and it duly appeared in 1795, along with other material such as Essays on Philosophical
Subjects.[47]
Smith's library went by his will to David Douglas, Lord Reston (son of his cousin Colonel Robert
Douglas of Strathendry, Fife), who lived with Smith. It was eventually divided between his two
surviving children, Cecilia Margaret (Mrs. Cunningham) and David Anne (Mrs. Bannerman). On
the death of her husband, the Rev. W. B. Cunningham of Prestonpans in 1878, Mrs. Cunningham
sold some of the books. The remainder passed to her son, Professor Robert Oliver
Cunningham of Queen's College, Belfast, who presented a part to the library of Queen's College.
After his death the remaining books were sold. On the death of Mrs. Bannerman in 1879 her
portion of the library went intact to the New College (of the Free Church), Edinburgh.

Personality and beliefs[edit]


Character[edit]

James Tassie's enamel paste medallion of Smith provided the model for many engravings and portraits that
remain today.[49]

Not much is known about Smith's personal views beyond what can be deduced from his
published articles. His personal papers were destroyed after his death at his request. [48] He never
married,[50] and seems to have maintained a close relationship with his mother, with whom he
lived after his return from France and who died six years before his own death. [51]
Smith was described by several of his contemporaries and biographers as comically absentminded, with peculiar habits of speech and gait, and a smile of "inexpressible benignity". [52] He
was known to talk to himself,[46] a habit that began during his childhood when he would smile in
rapt conversation with invisible companions.[53] He also had occasional spells of imaginary illness,
[46]
and he is reported to have had books and papers placed in tall stacks in his study.[53] According
to one story, Smith took Charles Townshend on a tour of a tanning factory, and while
discussing free trade, Smith walked into a huge tanning pitfrom which he needed help to escape.
[54]
He is also said to have put bread and butter into a teapot, drunk the concoction, and declared
it to be the worst cup of tea he ever had. According to another account, Smith distractedly went
out walking in his nightgown and ended up 15 miles (24 km) outside of town, before nearby
church bells brought him back to reality.[53][54]
James Boswell who was a student of Smith's at Glasgow University, and later knew him at
the Literary Club, says that Smith thought that speaking about his ideas in conversation might
reduce the sale of his books, and so his conversation was unimpressive. According to Boswell,
he once told Sir Joshua Reynolds that 'he made it a rule when in company never to talk of what
he understood'.[55]

Portrait of Smith by John Kay, 1790

Smith, who is reported to have been an odd-looking fellow, has been described as someone who
"had a large nose, bulging eyes, a protruding lower lip, a nervous twitch, and a speech
impediment".[14] Smith is said to have acknowledged his looks at one point, saying, "I am a beau
in nothing but my books."[14] Smith rarely sat for portraits,[56] so almost all depictions of him created
during his lifetime were drawn from memory. The best-known portraits of Smith are the profile
by James Tassie and twoetchings by John Kay.[57] The line engravings produced for the covers of
19th century reprints of The Wealth of Nations were based largely on Tassie's medallion.[58]

Religious views[edit]
There has been considerable scholarly debate about the nature of Smith's religious views.
Smith's father had shown a strong interest in Christianity and belonged to the moderate wing of
the Church of Scotland.[59] The fact that Adam Smith received the Snell Exhibition suggests that
he may have gone to Oxford with the intention of pursuing a career in the Church of England.[60]
Anglo-American economist Ronald Coase has challenged the view that Smith was a deist, based
on the fact that Smith's writings never explicitly invoke God as an explanation of the harmonies of
the natural or the human worlds.[61] According to Coase, though Smith does sometimes refer to
the "Great Architect of the Universe", later scholars such as Jacob Viner have "very much
exaggerated the extent to which Adam Smith was committed to a belief in a personal God", [62] a
belief for which Coase finds little evidence in passages such as the one in the Wealth of
Nations in which Smith writes that the curiosity of mankind about the "great phenomena of
nature", such as "the generation, the life, growth and dissolution of plants and animals", has led
men to "enquire into their causes", and that "superstition first attempted to satisfy this curiosity,
by referring all those wonderful appearances to the immediate agency of the gods. Philosophy
afterwards endeavoured to account for them, from more familiar causes, or from such as
mankind were better acquainted with than the agency of the gods". [62]
Some other authors argue that Smith's social and economic philosophy is inherently theological
and that his entire model of social order is logically dependent on the notion of God's action in
nature.[63]
Smith was also a close friend and later the executor of David Hume, who was commonly
characterised in his own time as an atheist.[64] The publication in 1777 of Smith's letter to William
Strahan, in which he described Hume's courage in the face of death in spite his irreligiosity,
attracted considerable controversy.[65]

Published works[edit]
The Theory of Moral Sentiments[edit]
Main article: The Theory of Moral Sentiments
In 1759, Smith published his first work, The Theory of Moral Sentiments. He continued making
extensive revisions to the book, up until his death. [N 2] AlthoughThe Wealth of Nations is widely
regarded as Smith's most influential work, it is believed that Smith himself considered The
Theory of Moral Sentiments to be a superior work.[67]
In the work, Smith critically examines the moral thinking of his time, and suggests that
conscience arises from social relationships.[68] His goal in writing the work was to explain the
source of mankind's ability to form moral judgements, in spite of man's natural inclinations
towards self-interest. Smith proposes a theory of sympathy, in which the act of observing others
makes people aware of themselves and the morality of their own behaviour.[69]
Scholars have traditionally perceived a conflict between The Theory of Moral
Sentiments and The Wealth of Nations; the former emphasises sympathy for others, while the
latter focuses on the role of self-interest.[70] In recent years, however, some scholars[71][72][73] of
Smith's work have argued that no contradiction exists.[74] They claim that in The Theory of Moral
Sentiments, Smith develops a theory of psychology in which individuals seek the approval of the
"impartial spectator" as a result of a natural desire to have outside observers sympathise with
them. Rather than viewing The Theory of Moral Sentiments andThe Wealth of Nations as
presenting incompatible views of human nature, some Smith scholars regard the works as

emphasising different aspects of human nature that vary depending on the


situation. Ekelund and Hebert offer a differing view, observing that self-interest is present in both
works and that "in the former, sympathy is the moral faculty that holds self-interest in check,
whereas in the latter, competition is the economic faculty that restrains self-interest." [75]

The Wealth of Nations[edit]


Main article: The Wealth of Nations

Later building on the site where Smith wrote The Wealth of Nations

There is a fundamental disagreement between classical and neoclassical economists about the
central message of Smith's most influential work: An Inquiry into the Nature and Causes of the
Wealth of Nations. Neoclassical economists emphasise Smith's invisible hand,[76] a concept
mentioned in the middle of his work Book IV, Chapter II and classical economists believe that
Smith stated his programme for promoting the "wealth of nations" in the first sentences.
Smith used the term "the invisible hand" in "History of Astronomy"[77] referring to "the invisible
hand of Jupiter" and twice each time with a different meaning the term "an invisible hand":
in The Theory of Moral Sentiments[78] (1759) and inThe Wealth of Nations[79] (1776). This last
statement about "an invisible hand" has been interpreted as "the invisible hand" in numerous
ways.
As every individual, therefore, endeavours as much as he can both to employ his capital in the
support of domestic industry, and so to direct that industry that its produce may be of the greatest
value; every individual necessarily labours to render the annual revenue of the society as great
as he can. He generally, indeed, neither intends to promote the public interest, nor knows how
much he is promoting it. By preferring the support of domestic to that of foreign industry, he
intends only his own security; and by directing that industry in such a manner as its produce may
be of the greatest value, he intends only his own gain, and he is in this, as in many other cases,
led by an invisible hand to promote an end which was no part of his intention. Nor is it always the
worse for the society that it was no part of it. By pursuing his own interest he frequently promotes
that of the society more effectually than when he really intends to promote it. I have never known
much good done by those who affected to trade for the public good. It is an affectation, indeed,
not very common among merchants, and very few words need be employed in dissuading them
from it.
Those who regard that statement as Smith's central message also quote frequently Smith's
dictum:[80]
It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner,
but from their regard to their own interest. We address ourselves, not to their humanity but to
their self-love, and never talk to them of our own necessities but of their advantages.

The first page of The Wealth of Nations, 1776 London edition

Smith's statement about the benefits of "an invisible hand" is certainly meant to answer [citation
needed]
Mandeville's contention that "Private Vices ... may be turned into Public Benefits".[81] It shows
Smith's belief that when an individual pursues his self-interest, he indirectly promotes the good of
society. Self-interested competition in the free market, he argued, would tend to benefit society
as a whole by keeping prices low, while still building in an incentive for a wide variety of goods
and services. Nevertheless, he was wary of businessmen and warned of their "conspiracy
against the public or in some other contrivance to raise prices". [82] Again and again, Smith warned
of the collusive nature of business interests, which may form cabals ormonopolies, fixing the
highest price "which can be squeezed out of the buyers". [83] Smith also warned that a businessdominated political system would allow a conspiracy of businesses and industry against
consumers, with the former scheming to influence politics and legislation. Smith states that the
interest of manufacturers and merchants "...in any particular branch of trade or manufactures, is
always in some respects different from, and even opposite to, that of the public...The proposal of
any new law or regulation of commerce which comes from this order, ought always to be listened
to with great precaution, and ought never be adopted till after having been long and carefully
examined, not only with the most scrupulous, but with the most suspicious attention." [84]
The neoclassical interest in Smith's statement about "an invisible hand" originates in the
possibility to see it as a precursor ofneoclassical economics and its General
Equilibrium concept. Samuelson's "Economics" refers 6 times to Smith's "invisible hand". To
emphasise this relation, Samuelson[85] quotes Smith's "invisible hand" statement putting "general
interest" where Smith wrote "public interest". Samuelson[86] concluded: "Smith was unable to
prove the essence of his invisible-hand doctrine. Indeed, until the 1940s no one knew how to
prove, even to state properly, the kernel of truth in this proposition about perfectly competitive
market."
Very differently, classical economists see in Smith's first sentences his programme to promote
"The Wealth of Nations". Taking up the physiocratical concept of the economy as a circular
process means that to have growth the inputs of period2 must excel the inputs of period1.
Therefore, the outputs of period1 not used or usable as input of period2 are regarded as
unproductive labour as they do not contribute to growth. This is what Smith had learned in
France with Quesnay. To this French insight that unproductive labour should be pushed back to
use more labour productively, Smith added his own proposal, that productive labour should be
made even more productive by deepening the division of labour. Deepening the division of
labour means under competition lower prices and thereby extended markets. Extended markets
and increased production lead to a new step of reorganising production and inventing new ways
of producing which again lower prices, etc., etc.. Smith's central message is therefore that under
dynamic competition a growth machine secures "The Wealth of Nations". It predicted England's
evolution as the workshop of the World, underselling all its competitors. The opening sentences
of the "Wealth of Nations" summarise this policy:
The annual labour of every nation is the fund which originally supplies it with all the necessaries
and conveniences of life which it annually consumes ... . [T]his produce ... bears a greater or

smaller proportion to the number of those who are to consume it ... .[B]ut this proportion must in
every nation be regulated by two different circumstances;

first, by the skill, dexterity, and judgment with which its labour is generally applied; and,
secondly, by the proportion between the number of those who are employed in useful
labour, and that of those who are not so employed [emphasis added]. [87]

Criticism and dissent[edit]


Alfred Marshall criticised Smith's definition of economy on several points. He argued that man
should be equally important as money, services are as important as goods, and that there must
be an emphasis on human welfare, instead of just wealth. The "invisible hand" only works well
when both production and consumption operates in free markets, with small ("atomistic")
producers and consumers allowing supply and demand to fluctuate and equilibrate. In conditions
of monopoly and oligopoly, the "invisible hand" fails. Nobel Prize-winning economist Joseph E.
Stiglitz says, on the topic of one of Smith's better known ideas: "the reason that the invisible
hand often seems invisible is that it is often not there."[88]

Other works[edit]

Smith's burial place inCanongate Kirkyard

Shortly before his death, Smith had nearly all his manuscripts destroyed. In his last years, he
seemed to have been planning two major treatises, one on the theory and history of law and one
on the sciences and arts. The posthumously publishedEssays on Philosophical Subjects, a
history of astronomy down to Smith's own era, plus some thoughts on ancient
physics andmetaphysics, probably contain parts of what would have been the latter
treatise. Lectures on Jurisprudence were notes taken from Smith's early lectures, plus an early
draft of The Wealth of Nations, published as part of the 1976 Glasgow Edition of the works and
correspondence of Smith. Other works, including some published posthumously,
include Lectures on Justice, Police, Revenue, and Arms (1763) (first published in 1896);
and Essays on Philosophical Subjects (1795).[89]

Legacy[edit]
In economics and moral philosophy[edit]
The Wealth of Nations was a precursor to the modern academic discipline of economics. In this
and other works, Smith expounded how rational self-interest and competition can lead to
economic prosperity. Smith was controversial in his own day and his general approach and
writing style were often satirised by Tory writers in the moralising tradition of Hogarth and Swift,
as a discussion at the University of Winchester suggests.[90] In 2005, The Wealth of Nations was
named among the 100 Best Scottish Books of all time.[4]Former UK Prime Minister Margaret
Thatcher, it is said, used to carry a copy of the book in her handbag. [91]

In light of the arguments put forward by Smith and other economic theorists in Britain, academic
belief in mercantalism began to decline in England in the late 18th century. During the Industrial
Revolution, Britain embraced free trade and Smith's laissez-faire economics, and via the British
Empire, used its power to spread a broadly liberal economic model around the world,
characterised by open markets, and relatively barrier free domestic and international trade. [92]
George Stigler attributes to Smith "the most important substantive proposition in all of
economics". It is that, under competition, owners of resources (for example labour, land, and
capital) will use them most profitably, resulting in an equal rate of return in equilibrium for all
uses, adjusted for apparent differences arising from such factors as training, trust, hardship, and
unemployment.[93]
Paul Samuelson finds in Smith's pluralist use of supply and demand as applied to wages, rents,
profit a valid and valuable anticipation of the general equilibriummodelling of Walras a century
later. Smith's allowance for wage increases in the short and intermediate term from capital
accumulation and invention contrasted with Malthus, Ricardo, and Karl Marx in their propounding
a rigid subsistencewage theory of labour supply.[94]
On the other hand, Joseph Schumpeter dismissed Smith's contributions as unoriginal, saying
"His very limitation made for success. Had he been more brilliant, he would not have been taken
so seriously. Had he dug more deeply, had he unearthed more recondite truth, had he used more
difficult and ingenious methods, he would not have been understood. But he had no such
ambitions; in fact he disliked whatever went beyond plain common sense. He never moved
above the heads of even the dullest readers. He led them on gently, encouraging them by
trivialities and homely observations, making them feel comfortable all along." [95]
Classical economists presented competing theories of those of Smith, termed the "labour theory
of value". Later Marxian economics descending from classical economics also use Smith's labour
theories, in part. The first volume of Karl Marx's major work, Capital, was published in German in
1867. In it, Marx focused on the labour theory of value and what he considered to be the
exploitation of labour by capital.[96][97] The labour theory of value held that the value of a thing was
determined by the labour that went into its production. This contrasts with the modern contention
of neoclassical economics, that the value of a thing is determined by what one is willing to give
up to obtain the thing.

The Adam Smith Theatre inKirkcaldy

The body of theory later termed "neoclassical economics" or "marginalism" formed from about
1870 to 1910. The term "economics" was popularised by such neoclassical economists as Alfred
Marshall as a concise synonym for "economic science" and a substitute for the earlier, broader
term "political economy" used by Smith.[98][99] This corresponded to the influence on the subject of
mathematical methods used in the natural sciences.[100] Neoclassical economics
systematised supply and demand as joint determinants of price and quantity in market
equilibrium, affecting both the allocation of output and the distribution of income. It dispensed
with the labour theory of value of which Smith was most famously identified with in classical
economics, in favour of a marginal utility theory of value on the demand side and a more general
theory of costs on the supply side.[101]
The bicentennial anniversary of the publication of The Wealth of Nations was celebrated in 1976,
resulting in increased interest for The Theory of Moral Sentiments and his other works

throughout academia. After 1976, Smith was more likely to be represented as the author of
both The Wealth of Nations and The Theory of Moral Sentiments, and thereby as the founder of
a moral philosophy and the science of economics. His homo economicus or "economic man" was
also more often represented as a moral person. Additionally, economists David Levy and Sandra
Peart in "The Secret History of the Dismal Science" point to his opposition to hierarchy and
beliefs in inequality, including racial inequality, and provide additional support for those who point
to Smith's opposition to slavery, colonialism, and empire.[102] They show the caricatures of Smith
drawn by the opponents of views on hierarchy and inequality in this online article. Emphasized
also are Smith's statements of the need for high wages for the poor, and the efforts to keep
wages low. In The "Vanity of the Philosopher": From Equality to Hierarchy in Postclassical
Economics Peart and Levy also cite Smith's view that a common street porter was not
intellectually inferior to a philosopher,[103] and point to the need for greater appreciation of the
public views in discussions of science and other subjects now considered to be technical. They
also cite Smith's opposition to the often expressed view that science is superior to common
sense.[104]
Smith also explained the relationship between growth of private property and civil government:
"Men may live together in society with some tolerable degree of security, though there is no civil
magistrate to protect them from the injustice of those passions. But avarice and ambition in the
rich, in the poor the hatred of labour and the love of present ease and enjoyment, are the
passions which prompt to invade property, passions much more steady in their operation, and
much more universal in their influence. Wherever there is great property there is great inequality.
For one very rich man there must be at least five hundred poor, and the affluence of the few
supposes the indigence of the many. The affluence of the rich excites the indignation of the poor,
who are often both driven by want, and prompted by envy, to invade his possessions. It is only
under the shelter of the civil magistrate that the owner of that valuable property, which is acquired
by the labour of many years, or perhaps of many successive generations, can sleep a single
night in security. He is at all times surrounded by unknown enemies, whom, though he never
provoked, he can never appease, and from whose injustice he can be protected only by the
powerful arm of the civil magistrate continually held up to chastise it. The acquisition of valuable
and extensive property, therefore, necessarily requires the establishment of civil government.
Where there is no property, or at least none that exceeds the value of two or three days' labour,
civil government is not so necessary. Civil government supposes a certain subordination. But as
the necessity of civil government gradually grows up with the acquisition of valuable property, so
the principal causes which naturally introduce subordination gradually grow up with the growth of
that valuable property. (...) Men of inferior wealth combine to defend those of superior wealth in
the possession of their property, in order that men of superior wealth may combine to defend
them in the possession of theirs. All the inferior shepherds and herdsmen feel that the security of
their own herds and flocks depends upon the security of those of the great shepherd or
herdsman; that the maintenance of their lesser authority depends upon that of his greater
authority, and that upon their subordination to him depends his power of keeping their inferiors in
subordination to them. They constitute a sort of little nobility, who feel themselves interested to
defend the property and to support the authority of their own little sovereign in order that he may
be able to defend their property and to support their authority. Civil government, so far as it is
instituted for the security of property, is in reality instituted for the defence of the rich against the
poor, or of those who have some property against those who have none at all." (Source: The
Wealth of Nations, Book 5, Chapter 1, Part 2)

In British Imperial debates[edit]


Smith's chapter on colonies in turn would help shape British imperial debates from the midnineteenth century onward. The Wealth of Nations would become an ambiguous text regarding
the imperial question. In his chapter on colonies, Smith pondered how to solve the crisis
developing across the Atlantic among the empire's thirteen American colonies. He offered two
different proposals for easing tensions. The first proposal called for giving the colonies their
independence and, by thus parting on a friendly basis, Britain would be able to develop and
maintain a free-trade relationship with them, and possibly even an informal military alliance.
Smith's second proposal called for a theoretical imperial federation that would bring the colonies

and the metropole closer together through an imperial parliamentary system and imperial free
trade.[105]
Smith's most prominent disciple in nineteenth-century England, peace advocate Richard
Cobden, preferred the first proposal. Cobden would lead the Anti-Corn Law League in
overturning the Corn Laws in 1846, shifting England to a policy of free trade and empire "on the
cheap" for decades to come. This hands-off approach toward the British Empire would become
known as Cobdenism or the Manchester School.[106] By the turn of the century, however,
advocates of Smith's second proposal such as Joseph Shield Nicholson would become ever
more vocal in opposing Cobdenism, calling instead for imperial federation. [107]As Marc-William
Palen notes: "On the one hand, Adam Smiths late nineteenth and early twentieth-century
Cobdenite adherents used his theories to argue for gradual imperial devolution and empire on
the cheap. On the other, various proponents of imperial federation throughout the British World
sought to use Smiths theories to overturn the predominant Cobdenite hands-off imperial
approach and instead, with a firm grip, bring the empire closer than ever before." [108]Smith's ideas
thus played an important part in subsequent debates over the British Empire.

Portraits, monuments, and banknotes[edit]

A statue of Smith inEdinburgh's High Street, erected through private donations organised by the Adam
Smith Institute.

Smith has been commemorated in the UK on banknotes printed by two different banks; his
portrait has appeared since 1981 on the 50 notes issued by the Clydesdale Bank in Scotland,[109]
[110]
and in March 2007 Smith's image also appeared on the new series of 20 notes issued by
the Bank of England, making him the first Scotsman to feature on anEnglish banknote.[111]

Statue of Smith built in 18671870 at the old headquarters of the University of London, 6 Burlington
Gardens.

A large-scale memorial of Smith by Alexander Stoddart was unveiled on 4 July 2008 in


Edinburgh. It is a 10 feet (3.0 m)-tall bronze sculpture and it stands above the Royal
Mileoutside St Giles' Cathedral in Parliament Square, near the Mercat cross.[112] 20th-century
sculptor Jim Sanborn (best known for the Kryptos sculpture at the United States Central
Intelligence Agency) has created multiple pieces which feature Smith's work. At Central
Connecticut State University is Circulating Capital, a tall cylinder which features an extract
from The Wealth of Nations on the lower half, and on the upper half, some of the same text but
represented in binary code.[113] At the University of North Carolina at Charlotte, outside the Belk
College of Business Administration, is Adam Smith's Spinning Top.[114][115] Another Smith sculpture
is at Cleveland State University.[116] He also appears as the narrator in the 2013 play The Low
Road, centred on a proponent on laissez-faire economics in the late eighteenth century but
dealing obliquely with thefinancial crisis of 20072008 and the recession which followed in the
premiere production, he was portrayed by Bill Paterson.

Residence[edit]
Adam Smith resided at Panmure house from 177890. This residence has now been purchased
by the Edinburgh Business School at Heriot Watt University and fundraising has begun to restore
it.[117][118] Part of the Northern end of the original building appears to have been demolished in the
19th century to make way for an iron foundry.

As a symbol of free market economics[edit]

Adam Smith's Spinning Top, sculpture by Jim Sanborn at Cleveland State University

Smith has been celebrated by advocates of free market policies as the founder of free market
economics, a view reflected in the naming of bodies such as the Adam Smith Institute in London,
the Adam Smith Society[119] and the Australian Adam Smith Club,[120] and in terms such as the
Adam Smith necktie.[121]
Alan Greenspan argues that, while Smith did not coin the term laissez-faire, "it was left to Adam
Smith to identify the more-general set of principles that brought conceptual clarity to the seeming
chaos of market transactions". Greenspan continues that The Wealth of Nations was "one of the
great achievements in human intellectual history".[122] P. J. O'Rourke describes Smith as the
"founder of free market economics".[123]
However, other writers have argued that Smith's support for laissez-faire (which in French means
leave alone) has been overstated. Herbert Stein wrote that the people who "wear an Adam Smith
necktie" do it to "make a statement of their devotion to the idea of free markets and limited
government", and that this misrepresents Smith's ideas. Stein writes that Smith "was not pure or
doctrinaire about this idea. He viewed government intervention in the market with great
skepticism...yet he was prepared to accept or propose qualifications to that policy in the specific
cases where he judged that their net effect would be beneficial and would not undermine the
basically free character of the system. He did not wear the Adam Smith necktie." In Stein's
reading, The Wealth of Nations could justify the Food and Drug Administration, the Consumer
Product Safety Commission, mandatory employer health benefits, environmentalism, and
"discriminatory taxation to deter improper or luxurious behavior".[124]
Similarly, Vivienne Brown stated in The Economic Journal that in the 20th century United
States, Reaganomics supporters, the Wall Street Journal, and other similar sources have spread
among the general public a partial and misleading vision of Smith, portraying him as an "extreme
dogmatic defender of laissez-faire capitalism and supply-side economics".[125] In fact, The Wealth
of Nations includes the following statement on the payment of taxes:
"The subjects of every state ought to contribute towards the support of the government, as nearly
as possible, in proportion to their respective abilities; that is, in proportion to the revenue which
they respectively enjoy under the protection of the state." [126]
Some commentators have argued that Smith's works show support for a progressive, not flat,
income tax and that he specifically named taxes that he thought should be required by the state,
among them luxury goods taxes and tax on rent.[127]
Additionally, Smith outlined the proper expenses of the government in The Wealth of Nations,
Book V, Ch. I. Included in his requirements of a government is to enforce contracts and provide
justice system, grant patents and copy rights, provide public goods such as infrastructure,
provide national defence and regulate banking. It was the role of the government to provide
goods "of such a nature that the profit could never repay the expense to any individual" such as
roads, bridges, canals, and harbours. He also encouraged invention and new ideas through his

patent enforcement and support of infant industry monopolies. He supported public education
and religious institutions as providing general benefit to the society. Finally he outlined how the
government should support the dignity of the monarch or chief magistrate, such that they are
equal or above the public in fashion. He even states that monarchs should be provided for in a
greater fashion than magistrates of a republic because "we naturally expect more splendor in the
court of a king than in the mansion-house of a doge".[128] In addition, he was in favour of retaliatory
tariffs and believed that they would eventually bring down the price of goods. He even stated in
Wealth of Nations:
"The recovery of a great foreign market will generally more than compensate the transitory
inconvenience of paying dearer during a short time for some sorts of goods." [129]
Economic historians such as Jacob Viner regard Smith as a strong advocate of free markets and
limited government (what Smith called "natural liberty") but not as a dogmatic supporter
of laissez-faire.[130]
Economist Daniel Klein believes using the term "free market economics" or "free market
economist" to identify the ideas of Smith is too general and slightly misleading. Klein offers six
characteristics central to the identity of Smith's economic thought and argues that a new name is
needed to give a more accurate depiction of the "Smithian" identity.[131][132] Economist David
Ricardo set straight some of the misunderstandings about Smith's thoughts on free market. Most
people still fall victim to the thinking that Smith was a free market economist without exception,
though he was not. Ricardo pointed out that Smith was in support of helping infant industries.
Smith believed that the government should subsidise newly formed industry, but he did fear that
when the infant industry grew into adulthood it would be unwilling to surrender the government
help.[133] Smith also supported tariffs on imported goods to counteract an internal tax on the same
good. Smith also fell to pressure in supporting some tariffs in support for national defence.
[133]
Some have also claimed, Emma Rothschild among them, that Smith supported a minimum
wage.[134]
Though, Smith had written in his book The Wealth of Nations:
"The price of labour, it must be observed, cannot be ascertained very accurately anywhere,
different prices being often paid at the same place and for the same sort of labour, not only
according to the different abilities of the workmen, but according to the easiness or hardness of
the masters. Where wages are not regulated by law, all that we can pretend to determine is what
are the most usual; and experience seems to show that law can never regulate them properly,
though it has often pretended to do so." (Source: The Wealth of Nations, Book 1, Chapter 8)
Smith also noted the inequality of bargaining power:[135]
A landlord, a farmer, a master manufacturer, a merchant, though they did not employ a single
workman, could generally live a year or two upon the stocks which they have already acquired.
Many workmen could not subsist a week, few could subsist a month, and scarce any a year
without employment. In the long run the workman may be as necessary to his master as his
master is to him; but the necessity is not so immediate.

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