The Profit Ethic as Radical

The Profit Ethic as Radical

intro to consultants

The most central social problem in the modern era is the question of the proper relation between the individual and the state.

Social, political, and economic life were organized around the institutions of feudalism following the breakup of the Roman Empire. The tight local organization of feudal life provided a semblance of social order, but in return the individual accepted massive restrictions on his freedom of action.

Two forces, both associated with the decline of feudalism, led to a change in the relation of the individual to social structure. The first was the rise of the modern nation-state. Toward the end of the Middle Ages, monarchs began to assert their authority over the feudal nobles. The Reformation supported this development by diverting part of the personal allegiance of the mass of citizens from the church to the king. The second, the Renaissance from the fall of Constantinople to the end of the seventeenth century, emphasized the moral and political autonomy of the individual. The concept of the "masterless man" gained popularity as men recognized their individuality and came to value it. The conflict between personal autonomy and the authority of the state to which these forces inevitably led is still with us today.

The middle class which began to develop following the breakup of feudalism was initially under the control of the landed nobility. It entered into an alliance with the kings, who desired to crush the independence and autonomous powers of their dukes and counts. Thus the rise of the middle class was a by-product of the rise of absolute monarchy. As the kings of England and France rose above the other nobles, the middle class gained its freedom from the nobles but became servants of the king. Modern capitalism developed in England under royal control during the sixteenth and seventeenth centuries. Businessmen had more freedom than in the thirteenth-century town, but they had to operate in an economy which was strictly regulated by the royal government. "Far from leaving the economy to its own working, the royal governments tried to extend over the whole country a system of control in many ways similar to that of the medieval city.

This was mercantilism, the most influential economic policy and doctrine of the seventeenth and eighteenth centuries. The goal of mercantilism was to make the state as independent, self-sufficient, and powerful as possible. Mercantilism was never a unified policy or doctrine. Rather it was a shifting combination of tendencies directed at a common aim-the increase of national power. The core of mercantilism was the strengthening ' of the state in material resources. Thus mercantilism was the economic side of nationalism. Schmoller hit the mark when he said the essence of mercantilism was "state-making." By this he meant the creation of an economic community out of the political community:

The essence of the system lies not in some doctrine of money, or of the balance of trade; not in tariff barriers, protection duties, or navigation laws; but in something far greater:-namely, in the total transformation of society and its organization, as well as of the state and its institutions, in the replacing of a local and territorial economic policy by that of the national state.


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