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date: 03 March 2021

Abstract and Keywords

The analysis of money was impaired by the disciplinary separation of economics and sociology following the Methodenstreit. Sociology abnegated responsibility for its study to economics, which treated it as a relatively unimportant “neutral veil” over the operation of the “real” economy. Weber worked to overcome the disciplinary balkanization, but ironically this has led to a neglect of his contributions to the analysis of money’s role in capitalism. For example, The Religion of China opens with an account of the underdeveloped monetary system and its inhibitory impact on the development of capitalism. Money is an essential element in the instrumental rationality in modern Western capitalism’s vast impersonal markets and rational capital accounting of profitability in the enterprise. Money prices which enable rational calculation can only be established when money is a “weapon in the struggle for economic existence” and not merely a “neutral” economic medium of exchange. Consequently, administered prices in command and socialist economies inhibit rationality and efficiency.

Keywords: Methodenstreit, money, economic theory, state theory, money calculation, market, rational capital accounting, capitalist banking, socialist calculation debate, China

Geoffrey Ingham

Geoffrey Ingham is life fellow, Christ’s College, Cambridge University. His main interests are in the historical sociology and political economy of money and finance, on which he has published widely in journals including The British Journal of Sociology, Acta Sociologica, Archives Européenes de Sociologie, and Cambridge Journal of Economics. His major recent books are The Nature of Money (2004) and Capitalism, with Postscript on the Financial Crisis (2011). In 2013, Jocelyn Pixley and Geoffrey Harcourt edited a Festschrift entitled Financial Crises and the Nature of Capitalist Money: Mutual Developments from the Work of Geoffrey Ingham.

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