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Relationship between Capitalism and a Logically Formal Rational Legal System Analytical Essay

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Updated: Jul 3rd, 2019

The seminal work of Max Weber has largely been used to provide and elaborate the law and its role in the development of capitalism. All rational forms of law are considered with special consideration of Weber’s input towards the understanding of the rationality of law. Weber contended that the dynamics of markets that are largely regulated by capitalism need to apply the rule of law.

The degree of calculability and legal rationality has been a pivot point in the growth of a formal and effective administration of justice. The relationship between growth of capitalism and the rule of law has been known to exist for many decades now (Hennis, 1983). The rule of law in such instances assumes a different character that is dependent on the stage of capitalism.

The form of capitalism structures established cannot work without relying on an established rule of law. The emergence of capitalism owes a great deal to law. The structure of capitalism depends on many other aspects of law. According to Weber, the said structures are put together by established legal institutions that have regulatory authority.

Weber designed his propositions by showing that legal institutions form and help in explaining the different phases of capitalism. In the wording of Weber, the relationship between capitalism and law has been used to emphasize the legal rationality (Hennis, 1983). This essay will explain and critically analyse the relation that Weber sought to draw between capitalism and a logically formal, rational legal system.

To be able to comprehend Weber’s philosophy, it is crucial to look into the economic activities that were taking place in Europe among other regions of the world. Most societies have taken law as the main governing tool. The discussion of law by Weber has taken many forms, but it is clear that his works have a lawyer, as well as a historian perspective (Milovanovic, 1989).

With capitalism being greatly associated with Europe, it consequently emerges that many legal systems in Europe are part and parcel of capitalism. It should be noted that even though the law has helped in the development of capitalism, the development has made several influences. The uniqueness of the capitalistic legal system squarely lies on the internal needs of the legal profession.

There has been massive speculation on the place of law in development of capitalism. Weber and other 19th century scholars observed that law had a major role to play in industrial civilization. They made strides in identifying the social role of the law. Since law existed before industrialization, the connection between law and modernization has been continuously probed (Levine, 1981)

Weber’s interests in the law and legal life have offered fundamental information to modern theorists. However, his work has been said, by some, to be full of suggestive conclusions and not easy to follow at all. In other words, his work has been considered hard to base thoughts on, either on social or legal perspective.

The defence against the foregoing statement is that Weber’s work has obviously been misused and misinterpreted in many occasions. Theories have been developed based on Weber’s insight in law, society and economy (Löwith, 1982).

To explain further, Weber provided a full explanation on industrial capitalism and why it arose in the West. His theories went beyond the personal understanding of the law. He introduced the foundations of how the bourgeoisie capitalism started. His works were a complete sociological and historical research that had various dimensions of societies and the respective structures.

Weber attempted to explain the role of religion, economy and law in understanding structures of given societies. His theory was mainly centred on showing how the said structures do not exist alone, but in full coordination with others (Bendix, 1977).

Weber sought to offer a comprehensive explanation on why some of the events preceding capitalism were happening in Europe and not in other parts of the world. The role of the law in the growth of capitalism could go unnoticed. Weber made many theories out of it, with full explanation of the European law.

It was Weber’s contention that the European law had several favourable features that offered a favourable ground for capitalism to thrive (Kalberg, 1980). The European law played a crucial role above the other legal systems in other jurisdiction.

This has been a guiding explanation on why capitalism originated from Europe. Weber clearly illustrated the importance of the European law features towards economic development using the general sociological theory.

Weber was quick to point out that it was not the western world alone that had legal systems. The broad understanding of the systems of different countries helped him in placing them in their distinct ways in which they shaped the society. Worth noting is the fact that he found those legal systems distinct and endeavoured to make the distinctions very clear.

His development of typologies that showed how the European law was distinct from other legal systems was highly allowed. His historical analysis of the European law aided in showing that the differences had a specific origin.

In addition, Weber used the parallel theoretical analysis that European law fitted the needs of capitalism more than other systems. His conclusions on the legal systems are drawn basing on the fact that all civilizations had a specific feature in their legal system that made capitalism possible (Feldman, 1991).

Weber’s belief in the European society dynamics and its legal society were not as a result of an economic situation. He consistently rejected the thought that capitalism interfered with the European law. He was quick to point out that the law existed before capitalism, thus it was only law that could influence capitalism and not the other way round.

Weber observed that the growth of the European legal systems has been through non economic factors. He cited the internal needs of the legal profession to be main factor that led to the advanced legal system in Europe. The economic factors in the bourgeois class seemed important, but they had no role in providing a determinative role in the particular legal systems in different parts of Europe (Lash & Whimster, 1987).

Drawing his attention to other legal systems in different civilizations and how they differed, Weber thought it was their degree of rationality. This view has been held to be somewhat misleading. The distinction between the legal systems lay not in the substantive provision, but on the end process during the application of the law.

His comparison on European law and forms of law was not geared towards providing a distinct elaboration between the resulting characteristics of the formal system. He, instead, took interest in identifying the varying traditions in the body of law.

In his China and Europe legal systems comparison, Weber observed that the classes of legal systems provided various dimension that could be put together to bring out the distinct dimensions that are worth analysis.

Over and above, Weber’s analysis by all means showed that the legal systems in other countries were highly differentiated since they provided a separate aspect of law and other political and economic activities (Ewing, 1987).

Weber’s systematic approach to law and other theories has been the sole attempt to offer clear cut distinctions. His stand on why the European law was the driving force towards capitalism is based on the following.

There are enormous features offered by Max Weber to explain the main reasons why the European legal system was a pillar of growth in capitalism in Europe. This has been done through offering several definitions.

The flow of Weber’s definition of the law is based on the boundaries that he has already established to give it a rather varied phenomenon. According to the Weberian discussion of the law, there are elements that seem to define law. They include having a coercive element. The following elements of the law are known to establish the meaning attributed by Max Weber.

Weber contended that it was the normative and legitimacy of the law that made law a tool for furthering capitalism. Rationality according to Weber was an attribute that had its place at the central part of the law (Brand, 1982).

The emphasis he placed on coercion is not conclusive. Some critics have contended that the definition of law according to Weber has both over and under inclusive elements. The fact that there is no distinction between laws backed by streets seems to presuppose an instance of no clear difference between the law and rules. The definition wrongly holds that law cannot exist without the coercive attribute.

The main critics of this form of definition are those who feel that law can exist even where there is no coercive backing. In addition, a political authority needs not be there for the law to have its full force. Weber is said to have overstressed on the coercive attribute of the law.

This was without bearing in mind the key attributes of the law, which do not require it to be coercive. In trying to connect it with the market economy, Weber observed that for capitalism to have its true functioning, it must be backed by coercive means of the law. It turns out that the coercive attribute as brought out in the definition was one of the main pillars of Weber’s definitions (Brand, 1982).

Weber further uses words such as legitimate cause to refer to the guidelines that are part of forming good conduct. Law, according to Weber, was classified in a category that was named ‘normative and legitimate orders’. The definition given to orders was based on three major premises. First, socially structured systems had normative grounds that were uniformly accepted by the members of a given social group.

Law could not be classified in three elements only. Law must be distinguishable from other forms of orders due to its empirical validity. The sole purpose of identifying purposes in the definition of the law was to have it compared with other legal systems. Law was based on the rationality, as well as coercive means (Boucock, 2000).

However, it was not all law that had the coercion, bearing in mind that the constitution carries no coercive force yet it governs all the state’s transactions. When principles of law are put together in a legal order, many people may obey it given that there is no coercive force behind it.

Weber observed that a legitimate authority was required in a society where capitalism was taking shape. In the basic understanding of capitalism, the means of production are controlled by an individual. The mode of ownership is individualistic as opposed to communal. In order to have respect to individual ownership, the laws were supposed to have strict punishments (Kronman, 1983).

Any threat on the individual’s property by a member or a section of the society was a major threat to the society. It means that the law was supposed to be felt by the society in making sure that their individual owned property was protected. The rationality principle as introduced in Weber’s definition of the law meant that the rules or the law ought to have been applied universally (Löwith, 1982).

The formulation and application of universal rules was what Weber considered to be rationality. In his closest form of understanding it, law was a tool for governing those who had property against those who did not have and had intentions of acquiring it through unlawful ways. Rules are a description that is giving a major generic category, rather than having a clear distinction between the types of the laws (Berman, 1987).

Possible dimensions on the definition of law were used to have the enforceability mechanism. The application of the coercive means to enforce law depends on the system of the existing rules. There are various variations that ought to form the condition precedent before a law has the coercive element.

There are various norms that have made it possible to have various formulations based on the norms to come up with the right mechanism of the law making process. The foundations of capitalist societies are basically designed to protect individual property. The obligation spelt out under the law is geared towards establishing an authority to make sure that the said obligations are adhered to.

The elements look sacred since they have been inherited from the law giver without modifications. To extrinsically achieve some goals such as economic growth, the law must have the unchanging full force. Protection of a political ideology is at times best understood when it is considered under economic independence.

Political protection moves hand in hand with the economic needs that warrant similar protection. The most notable attribute of the law was the existence of rules that command general applicability. These rules may be made by different organs.

There are major variations in Weber’s legal thought. The rationality of the law making held a different impact compared to law finding. Legal systems, according to Weber, were to be organized depending on how they were formed. Law in that case was either rational or irrational. A system should be formal and this is achieved by applying criteria that is intrinsic in decision making (Bennett, 2001).

The legal system must, in its founding goals, be able to settle disputes that emanate from the economic system at hand. In making sure that incorporation of capitalism practices in the legal system is supported, the law defined the rights and the corresponding obligations. It is through the defined rights that different individuals in the capitalism economies get protection.

The rights and obligations ought to be clearly defined to the best interest of the individuals. Weber’s analysis is devoid of the economic calculability that any formal body of law possesses.

The relationship between the different categories of law has shown that the law does not remain static; therefore, it is not easy to establish whether capitalism is influenced by the law (Bendix, 1977). The rules governing capitalism have not been changing, but the law has changed to incorporate different changes.

The legal norm and the structures of capitalism seem to be the main forms that determine the market economy. It is important safeguard the few people who control ‘means of production’ in capitalist economies. The evolution of the law simply means that the means of production have changed, and a set of laws is required to offer protection.

The competitiveness of the capitalism system makes it essential to have different laws that are geared towards making the competition healthy. Capitalism depends on competition, and it is upon the law makers to make the competition healthy. The aspect of enforcing laws that are designed to protect the interest of the bourgeoisie class is very common in capitalism regimes.

The political authorities constituted out of these economic regimes are based on their willingness to protect the demands of the economy. The economic and political aspects of many states are highly protected by the legal system (Bendix, 1977).

It, therefore, follows that the main capitalism societies are organized in a way that the efficacy of the law is measured according to the protection given. The protection offered to the state organs and the owners of the means of production is a critical aspect in realizing the mutual existence of the controllers of means of production and those working under the controllers (Schluchter, 1981).


Weber’s principles that provide the definition of law and the capitalism aspects have long been cited in attempting to understand the relationship between the two. It ought to be remembered that law came before capitalism, thus capitalism cannot influence the law. However, it is not easy to draw a line between the law and capitalism, and which one influences the other.

Law changes with changes in capitalism. It, therefore, follows that it is hard to determine which one influences the other. Capitalism cannot exist without a law to protect it. The economic aspect includes ownership of property by individuals, and the said ownership should be protected. Rules and their universal use under capitalism must offer sufficient protection for the society to have peace and order.

The ways in which the political ideology can continue having its effect felt is by maintaining a working legal system. Weber’s ideology on a legal system has been challenged, with various criticism levelled against it. The coercive element that he identifies in defining the law is not conclusive.

A legal system can exist without a requirement of the coercive nature of the law. Under capitalism, rules are needed to regulate rights under the law once the rights have been identified.

Reference List

Bendix, R1977, Max Weber: An intellectual portrait, University of California Press, Berkeley, CA,

Bennett, J 2001, The enchantment of modern life: Attachments, crossings, and ethics, Princeton University Press, Princeton, NJ

Berman, H 1987 ‘Some false premises of Max Weber’s sociology of law’, Washington University Law Quarterly, vol. 65, no. 4, pp. 758-70

Boucock, C 2000, In the grip of freedom: Law and modernity in Max Weber, University of Toronto Press, Toronto

Brand, A 1982, ‘Against romanticism: Max Weber and the historical school of law’, Australian Journal of Law and Society, vol. 1, no. 1, pp. 87-100.

Ewing, S 1987, ‘Formal justice and the spirit of capitalism: Max Weber’s sociology of law’, Law and Society Review, vol. 21, no. 3, pp. 488-513.

Feldman, S 1991, ‘An interpretation of Max Weber’s theory of law: Metaphysics, economics and the iron cage of constitutional law’, Law and Social Inquiry, vol. 16, no. 2, pp. 205-48.

Hennis, W 1983, ‘Max Weber’s “central question”’, Economy and Society, vol. 12, no. 2, pp. 135-80

Kalberg, S 1980, ‘Max Weber’s types of rationality: Cornerstones for the analysis of rationalization processes in history’, American Journal of Sociology, vol. 85, no. 5, pp. 1145-1179

Kronman, A 1983, Max Weber, Edward Arnold, London

Lash, S & Whimster, S 1987, Max Weber, rationality and modernity, Allen and Unwin, London

Levine, D 1981, ‘Rationality and freedom: Weber and beyond,’ Sociological Inquiry, vol. 51, no. 1, pp. 5-25

Löwith, K 1982, Max Weber and Karl Marx, George Allen and Unwin, London.

Milovanovic, D 1989, Weberian and Marxist analysis of law, Allen and Unwin, London

Schluchter, W 1981, The rise of western rationalism: Max Weber’s developmental history, University of California Press, Berkeley, CA

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