Religious theory of entrepreneurship

What is Weber's theory of entrepreneurship?

Max Weber was a German sociologist writing in the early 1900s who theorized that religious beliefs are a key determinant of entrepreneurial development. He argued that entrepreneurial energies are driven by beliefs about causes and consequences. In particular, he emphasized how religions encourage investment in economic growth and development (and compound interest). A religious belief in saving for the future was key, he believed, to the capitalistic spirit.

Weber distinguished between religions that encourage capitalism from those that do not. In particular, Weber noted that Hinduism, Buddhism and Islam may not be conducive to entrepreneurship. Hinduism and Buddhism purportedly have a focus on the present moment and tend to shun materialism, making them problematic to the pursuit of entrepreneurial goals. He suggested that Islam’s focus on the rewards of the afterlife make material accumulation problematic. 
 
By contrast, he argued that the protestant work ethic prevalent in Northern Europe at the time was highly compatible with entrepreneurial development. For example, among Quakers, cultural frugality and savings were hallmarks of the good life, and as a means of gaining the power to do God’s work through enterprise. 

Weber’s theory is not widely accepted by sociologists, who argue that it was used as a tool to justify colonial rule in India. One of the propositions implied by the theory was that pre-capitalist labour should not be offered higher wages with the expectation that they will work more because these folks' religion guide them to work less and enjoy more leisure as a response. 
 
The theory also dismisses the variety of sub-traditions within major religions that come along with different views on material views. It ignores the local innovations of religious workers. The usefulness of the theory is also challenged by the numerous counter-examples that are out there. The phenomenon of emerging market multinationals seems to put the main tenets of the theory in dispute.
 
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