Max Weber on Money

Max Weber was not a major theorist concerning money, but he studied and argued with scholars who were. He also examined the history and sociology of money and banking—about which he knew the rudiments based on his extended family’s experiences in global commodity markets—because he correctly understood that the evolution of money from Babylon to his own times could explain in part the project of societal rationalization that became his major organizing concept, especially in the area of comparative civilizational analysis. His most theoretically pertinent remarks about money (and banking) appear in The Protestant Ethic (1905), Economy and Society (1921), and General Economic History (1923), the last of which was composed from lectures he delivered at the end of his life, in 1919–1920. In this chapter his analysis of money’s role is investigated vis-à-vis the “rationality-irrationality” continuum that Weber put to use in many of his substantive studies (on religion, music, politics, law, bureaucracy, and so on).