Entrepreneurs and Uncertainty: Max Weber and the Sociology of Economic Action
Stephen D. Parsons
Review of Political Economy, 2020, vol. 32, issue 2, 149-162
In Economy and Society, Max Weber develops a sociological analysis of economic action, drawing upon ideas developed in the Austrian School of Economics. Despite this Austrian influence, Weber is quite clear his sociological analysis does not constitute an exercise in economic theory. Weber’s account of entrepreneurial action makes it possible to appreciate the distinctness of his sociological analysis of economic action. Weber argues that entrepreneurs make production decisions under conditions of uncertainty, where the goals of action are subject to choice and where consumer wants can be formed through entrepreneurial action. In developing his account of entrepreneurial decision-making, Weber offers an account of economic action that is distinct from the account of economic action dominant in mainstream economics and Austrian economic theory. For Weber, entrepreneurial goals are imagined, and reason does not determine actions but assesses likely consequences of different possibilities for action. A monetary economy allows this assessment to proceed in a more rational manner. This argument is significant for his criticisms of centrally planned economies.
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