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The Internal Functioning of Capitalist Organizations

Published online by Cambridge University Press:  03 February 2011

Everett E. Hagen
Affiliation:
Massachusetts Institute of Technology

Extract

It is a commentary of some sort on the blurring and shifting of disciplinary lines that I should have been asked to talk on the psychology of capitalism, and should have accepted. Though during the past fifteen years I have had a good deal of exposure to the body of theory of social and personality psychology, I have no formal training in psychology. And I am not a professor of business management. My field of specialization is economic development and social change in the low income countries—which, I think, does make me an economic historian. If I have any individual specialization, it is on the emphasis that I insist must be given to the technical study of personality formation if we are to gain a full understanding of either economic development or social change. This interest in turn is related to the psychology of capitalism. One of the simpler things that this personal history symbolizes is that old disciplinary Lines are giving way, as scholars shift their analysis to new explanatory variables. The old lines of demarcation between sociology, anthropology, and political science are becoming obsolete, all of these disciplines are nibbling away at the domain of history, and personality theory is intruding into the domain of all four.

Type
Articles
Copyright
Copyright © The Economic History Association 1970

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References

1 Professor Mason Haire.

2 Koestler, Arthur, The Act of Creation (London: Hutchinson and Co. Ltd., 1964).Google Scholar

3 McClelland, David, Atkinson, J. W., Clark, R. A., and Lowell, E. L., The Achievement Motive (New York: Appleton-Century-Crofts, Inc., 1953).CrossRefGoogle Scholar

4 McClelland, 1961, chs. 3 and 4, present the evidence. For criticism, see Hagen, . The Economics of Development (Illinois: Richard D. Irwin, Inc., 1968), pp. 167–9.Google Scholar

5 Murray, Henry A. and associates, Explorations in Personality (New York: Oxford University Press, 1968), ch. 2–3.Google Scholar

6 McClelland, 1961, ch. 2.

7 Samuelsson, K., Religion and Economic Action (London: Wm. Heinemann, Ltd., 1961).Google Scholar

Samuelsson is quite right in stating that the “Protestant ethic” was no more a characteristic of Protestant teachings than of other religions. He quotes Catholic writings that present the “Protestant ethic” in as full blown form as do the popular religious writings of the dissenters quoted by Weber. Moreover, a complete reading (by the present writer) of Richard Baxter's Christian Directory (London, 1673; 2nd edition, 1678), the source from which more than from any other Weber draws his outline of the Protestant ethic, shows that the devil could quote Baxter for his purposes even more readily than he might quote the Bible. Baxter's book consists of a large number of sermons, letters, or other homilies of advice to the old, the young, wives, husbands, the newly wed, the anxious, those uncertain of their faith, those drawn to drink or to idleness, etc., etc. Within them one can find the quotations Weber cites, but in the rambling discourses one can also find sentences that would support almost any shading of ethic found anywhere within any Christian teaching.

Yet Samuelsson is wrong in dismissing the relationship between religious dissent and industrial innovation. A study of 72 industrial innovators in England during the period 1750–1830, selected in such a way that they are probably typical of the innovators of the Industrial Revolution, indicated that the Protestant dissenting sects provided about ten times as many of these innovators, in proportion to the total number of dissenters, as did the remainder of the English population. See Hagen, , On the Theory of Social Change: How Economic Growth Begins (Homewood, Illinois: The Dorsey Press, Inc., 1962), pp. 294309.Google Scholar Samuelsson's denial that the dissenters provided a disproportionate number of the innovators rests on his erroneous estimate that at the time about one-half of the English people were dissenters. They provided of the order of magnitude of one-half of the innovators, but a careful estimate of their number indicates that they formed only about 7 percent of the population.

8 Bennis, Warren G., “Beyond Bureaucracy,” Trans-Action, July-August, 1965, and “Post-Bureaucratic Leadership,” Trans-Action, July-August, 1969Google Scholar, has stressed and over-stressed this development.

9 Again, I have the suggestion from my colleague, Mason Haire.

10 Kerr, C., Dunlop, J. T., Harrison, F. H., and Myers, C. A., Industrialism and Industrial Man (New York: Oxford University Press, 1964), ch. 10.Google Scholar

11 So long as productivity rises rapidly, real income (including real wages) will rise rapidly, even to above their level in any other country. The rise in productivity has been due in part to the ability to borrow technical ideas from other countries, with the necessary adaptation, but Japan is an innovator, quite apart from the high degree of innovation required in adaptation. She is already the world's leader in productivity in some fields. This indicates that inability to borrow because no one is ahead of her will not necessarily stop her advance, though it may slow its rate.

12 David Peterson, a senior at M.I.T. in 1968–69, summarized evidence concerning the facts of the Japanese procedure, and made this suggestion concerning the reasons for its effectiveness, in a paper prepared for a seminar in the fall of 1968.

13 The two views are McGregor's Theory X and McGregor, Theory Y. Douglas, The.Human Side of Enterprise (New York: McGraw-Hill, 1960).Google Scholar