Max Weber and Georg Simmel on Money

This is something Max Weber said about money:

The market economy as such is the most impersonal relationship of practical life into which humans can enter with one another. . . . The reason for the impersonality of the market is its matter-of-factness, its orientation toward the commodity and only that. Where the market is allowed to follow its own autonomous tendencies, its participants do not look toward the persons of each other but only toward the commodity; there are no obligations of brotherliness or reverence and none of those spontaneous human relations that are sustained by personal unions. They all would just obstruct the free development of the bare market relationship, and its specific interests serve, in their turn, to weaken the sentiments on which these obstructions rest.

Max Weber. Economy and Society, vol 2. p. 636

In other words, economic transactions, in theory, are supposed to exclude personal sentiments. The communication medium of the economy is money, and all other media, including love, are excluded. A merchant should not offer a family member or friend a different price for a commodity. This also means that traits such as race, ethnicity, and gender should be excluded from the economy. In the 1950s, merchants in the American south learned that if they wanted to survive economically they had to sell to African American customers the same as whites–and at the same prices.

Here is a passage from Georg Simmel:

On Individuality and Social Forms.

This why a parent should never pay a child to do a chore. Payment essentially negates the personal relationship. No one would ever pay a spouse or intimate partner for performing some task. When money is given to a loved one it should be given freely. Also, on birthdays or other holidays, actual material gifts, rather than money, should be given to loved ones.

Weber and Simmel both say that monetary exchange cancels any expectation of a future relationship–the social interaction is ephemeral; however, there are number of exceptions to this rule. When a product comes with a warranty, a relationship (or obligation on the part of the seller) continues. We don’t just buy a new car and drive away from the dealership without forming a contractual tie. In this case, it’s not true that “when one pays with money one is completely quits.” 


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