Max Weber

from Max Weber, The Theory of Social and Economic Organization, translated by A M Henderson and Talcott Parsons, 1947, The Free Press and the Falcon's Bring Press

 

Many of the especially notable uniformities in the course of social action are not determined by orientation to any sort of norm which is held to be valid, nor do they rest on custom, but entirely on the fact that the corresponding type of social action is in the nature of the case best adapted to the normal interests of the actors as they themselves are aware of them. This is above all true of economic action, for example, by the uniformities of price determination in a 'free' market, but is by no means confined to such cases. The dealers in a market thus treat their own actions as means for obtaining the satisfaction of the ends defined by what they realise to be their own typical economic interests, and similarly treat as conditions the corresponding typical expectations as the prospective behavior of others. The more strictly rational their action is, the more will they tend to react similarly to the same situation. In this way there arise similarities, uniformities, and continuities in their attitudes and actions which are often far more stable than they would be if action oriented to a system of norms and duties which were considered binding on the members of a group. This phenomenon the fact that orientation to the situation in terms of the pure self-interest of the individual and of the others to whom he is related can bring about results which are very similar to those which an authoritarian agency, very often in vain, has attempted to obtain by coercion - has aroused a lively interest, especially in economic affairs. Observation of this has, in fact, been one of the important sources of economics as a science. But it is true in all other spheres of action as well. This type, with its clarity of self-consciousness and freedom from subjective scruples, is the polar antithesis of every sort of unthinking acquiescence in customary ways, as well as, on the other hand, of devotion to norms consciously accepted as absolute values. One of the most important aspects of the process of 'rationalization' of action is the substitution for the unthinking acceptance of action custom, of deliberate adaptation to situations in terms of self-interests. To be sure, this process by no means exhausts the concept of rationalization of action. For in addition this can proceed in a variety of other directions; positively in that of a conscious rationalization of ultimate values; or negatively, at the expense not only of custom, but of emotional values; and, finally, in favour of a morally skeptical type of rationality, at the expense of any belief in absolute values. ... (Weber, 1947; 122, 123)

A social relationship will be referred to as 'conflict' in so far as action within it is oriented intentionally to carrying out the actor's own will against the resistance of the other party or parties. The term 'peaceful' conflict will be applied to cases in which actual physical violence is not employed. A peaceful conflict is 'competition' in so far as it consists in a formally peaceful attempt to attain control over opportunities and advantages which are also desired by others. A competitive process is 'regulated' competition to the extent that its ends and means are oriented to an order. The struggle, often latent, which takes place between human individuals or types of social status, for advantages and for survival, but without a meaningful mutual orientation in terms of conflict, will be called ,selection'. In so far as it is a matter of the relative opportunities of individuals during their own lifetime, it is 'social selection'; in so far as it concerns differential chances for the survival of inherited characteristics, 'biological selection.' (Weber, 1947; 132, 133)

All typical struggles and modes of competition which take place on aL large scale will lead, in the long run, despite the decisive importance in many individual cases of accidental factors and luck, to a selection of those who have in the higher degree, on the average, possessed the personal qualities important to success. What qualities are important depends on the conditions in which the conflict or competition takes place. ... Among the decisive conditions, it must not be forgotten, belong the systems of order, to which the behaviour of the parties is oriented, whether traditionally, as a matter of rationally disinterested loyalty, or of expediency. Each type of order influences opportunities in the process of social selection differently. (Weber, 1947; 133, 134)

A social relationship will be called 'communal' if and so far as the orientation of social action - whether in the individual case, on the average, or in the pure type - is based on a subjective feeling of the parties, whether effectual or traditional, that they belong together. A social relationship will, on the other hand, be called 'associative' if and in so far as the orientation of social action within it rests on a rationally motivated basis of rational judgement be it absolute values or reasons of expediency. ...
The purest cases of associative relationships are: (a) rational free market exchange, which constitutes a compromise of opposed by complementary interests; (b) the pure voluntary association based on self-interest... (c) the voluntary association of individuals motivated by an adherence to a set of common absolute values... (Weber, 1947; 136)

The communal type of relationship is, according to the usual interpretation of its subjective meaning, the most radical antithesis of conflict. This should not, however, be allowed to obscure the fact that coercion of all sorts is a very common thing in even the most intimate of such communal relationships if one party is weaker in character than the other. Furthermore, a process of the selection of types leading to differences in opportunity and survival, goes on within these relationships just the same as anywhere else. Associative relationships, on the other hand, very often consist only in compromises between rival interests .... Hence, outside the area of compromise, the conflict of interests, with its attendant competition for supremacy, remains unchanged. (Weber, 1947; 137, 138)

The principal motives for closure of a relationship are: (a) the maintenance of quality, which is often combined with the interest in prestige and the consequent opportunities to enjoy honour, and even profit. ... (b) orientation to the scarcity of advantages in their bearing on consumption needs. Examples are monopolies of consumption, the most developed form of which is a self-subsistent village community; (c) orientation to the scarcity of opportunities for acquisition. ... (Weber, 1947; 143)

The order which governs a social relationship by tradition or by virtue of its legal establishment, may determine that certain types of action of some of the parties to the relationship will have consequences which affect the others. It may be that all are held responsible for the action of any one. In that case they will be spoken of as 'solidary' members. Or, on the other hand, the action of certain members, the 'representatives', may be binding upon the others. ... (Weber, 1947; 143)

The term 'formal rationality of economic action' will be used to designate the extent of quantitative calculation or accounting which is technically possible and which is actually applied. The 'substantive rationality', on the other hand, is the degree in which a given group of persons, no matter how it is delimited, is or could be adequately provided with goods by means of an economically oriented course of social action. This course of action will be interpreted in terms of a given set of ultimate values no matter what they may be. ...
A system of economic activity will be called 'formally' rational according to the degree in which the provision for needs. which is essential to every rational economy, is capable of being expressed in numerical, calculable terms, and is so expressed. ...
On the other hand, the concept of substantive rationality is full of difficulties. It conveys only one element common to all the possible empirical situations; namely, that it is not sufficient to consider only the purely formal fact that calculations are being made on grounds of expediency by the methods which are, among those available, technically the most nearly adequate. In addition, it is necessary to take account of the fact that economic activity is oriented to ultimate ends of some kind, whether they be ethical, political, utilitarian, hedonistic, the attainment of social distinction, of social equality, or of anything else. Substantive rationality cannot be measured in terms of formal calculation alone, but also involves a relation to the absolute values or- to the content of the particular given ends to which it is oriented. ... (Weber, 1947; 184, 185)

There is a form of monetary accounting which is peculiar to ration-Al economic profit-making; namely, 'capital accounting'. Capital accounting is the valuation and verification of opportunities for profit and of the success of profit-making activity. It involves the valuation of the total assets of the enterprise, whether these consist in goods in kind or in money, at the beginning of a period of activity; and the comparison of this with a. similar valuation of the assets still present or newly acquired, at the end of the process. ... A profit-making 'enterprise' is a system of action capable of autonomous orientation to capital accounting. ... (Weber, 1947; 191, 192)

As distinguished from the calculation appropriate to a budgetary unit, the capital accounting and calculation of the market entrepreneur, are oriented not to marginal utility, but to profitability. ... (Weber, 1947; 193)

... In particular, rational money accounting presupposes the existence of effective prices and not merely of fictitious prices conventionally employed for technical accounting purposes. These, in turn, presuppose money which functions as an effective circulating medium of exchange and in demand as such, and not merely as a technical accounting unit. ... Production is, to be sure, in formal terms a rational process of want satisfaction. But it does not respond to actual wants unless their possessors are in a position to make them effective by sufficient purchasing power on the market. (Weber, 1947; 194, 195)

It is thus clear that the formal rationality of money calculation is dependent on certain quite specific substantive conditions. Those which are of a particular sociological importance for present purposes are the following: (1) Market competition of economic units which are at least relatively autonomous. Money prices are the product of conflicts of interest and compromises; they thus result from systems of power relationships. Money, even as a unit of account, is essentially significant as a means of quantitative expression of estimated opportunities and risks met in the pursuit of competitive advantages; (2) money accounting attains the highest degree of rationality as a means of orientation of economic action by calculation when it takes the form of capital accounting. This implies the substantive condition of far-reaching market freedom in the sense both of the absence of monopolistic limitations which are imposed or are economically irrational, and of those which are voluntary and economically rational through orientation to the securing of market advantages. ... Capital accounting is further dependent on the social conditions of a disciplined organization and the appropriation of the means of production. This implies the existence of a system of imperatively coordinated relationships; (3) it is not wants as such, but effective demand for utilities, which regulated the production of goods by profit-making enterprises oriented to capital accounting. What is to be produced is thus determined by the structure of marginal utilities in the income group which has both the inclination and the resources to purchase a given utility. This will depend on the distribution of wealth in a particular society. Where complete market freedom is given. the highest degree of formal rationality in capital accounting is absolutely indifferent to all the substantive considerations involved. But i is precisely

enterprise, whether these consist in goods in kind or in money, at the beginning of a period of activity; and the comparison of this with a similar valuation of the assets still present or newly acquired, at the end of the process. ... A profit-making 'enterprise' is a system of action capable of autonomous orientation to capital accounting. ... (Weber, 1947; 191, 192)

As distinguished from the calculation appropriate to a budgetary unit, the capital accounting and calculation of the market entrepreneur, are oriented not to marginal utility, but to profitability. ... (Weber, 1947; 193)

... In particular, rational money accounting presupposes the existence of effective prices and not merely of fictitious prices conventionally employed for technical accounting purposes. These, in turn, presuppose money which functions as an effective circulating medium of exchange and in demand as such, and not merely as a technical accounting unit. ... Production is, to be sure, in formal terms rational process of want satisfaction. But it does not respond to actual wants unless their possessors are in a position to make them effective by sufficient purchasing power on the market. (Weber, 1947; 194, 195)

It is thus clear that the formal rationality of money calculation is dependent on certain quite specific substantive conditions. Those which are of a. particular sociological importance for present purposes are the following: (1) Market competition of economic units which are at least relatively autonomous. Money prices are the product of conflicts of interest and compromises; they thus result from systems of power relationships. (Italics mine)… Money, even as a unit of account, is essentially significant as a means of quantitative expression of estimated opportunities and risks met in the pursuit of competitive Advantages (2) money accounting attains the highest degree of rationality as a means of orientation of economic action by calculation when it takes the form of capital accounting. This implies the substantive condition of far-reaching market freedom in the sense both of the absence of monopolistic limitations which are imposed or are economically irrational, and of those which are voluntary and economically rational through orientation to the securing of market advantages. ... Capital accounting is further dependent on the social conditions of a. disciplined organization and the appropriation of the means of production. This implies the existence of a system of imperatively coordinated relationships; (3) it is not wants as such, but effective demand for utilities, which regulated the production of goods by profit-making enterprises oriented to capital accounting What is to be produced is thus determined by the structure of marginal utilities in the income group which has both the inclination and the resources to purchase a given utility. This will depend on the distribution of wealth in the particular society. (Italics mine) Where complete market freedom is given, the highest degree of formal rationality in capital accounting is absolutely indifferent to all the substantive considerations involved. But it is precisely the existence of these substantive factors underlying monetary calculations which determine a fundamental limitation on its rationality. (Italics mine)... (Weber, 1947; 211, 212)

... When, in a planned economy, the prospect of individual income is used as a means of stimulating self-interest, the type and direction of the action thus rewarded is heteronomously determined. It is possible for the same thing to be true of a market economy, though in a formally voluntary way. This is particularly true where the unequal distribution of wealth, and particularly capital goods, forces the low-income group to comply with the authority of others in order to obtain any return at all for the utilities they can offer in the market. It may be they are subjected to the authority of a wealthy householder or to that of the owners of capital interested in maximizing the profit from it, or of their agents. In a purely capitalistic organization of production, this is the fate of the entire working class. (Weber, 1947; 213)

From a technical point of view, the division of labour may take the following forms: in the first place, it may vary according to modes of differentiation and combination of work services as such: (1) They may vary according to the type of functions undertaken by the same person. He may combine managerial functions with those of carrying out specifications; or his work may be specialized in terms of one or the other. (Weber, 1947; 213)

The case where there is little division of labour because of the low technical level is typical of primitive household economies. ... (Weber, 1947; 225)

(2) The differentiation and combination of different functions may further vary according to the modes in which the services of a plurality of persons are combined to achieve a coordinated result. There are two main possibilities: First, the .accumulation' of functions; that is the employment of a number of persons all performing the same function to achieve a result. This may be organized in such a way that the functions are coordinated by technically independent of each other, are thus parallel ; or they may be or organized on a technical basis in relation to a single common purpose. (Weber, 1947; 226)

The division of labour varies also, from a technical point of view, in terms of the extent and nature of combinations with the non-human means of production. (Weber, 1947; 227)

… 'Tools' are those aids to labour, the design of which is adapted to the physiological and psychological conditions of manual labour. 'Apparatus' is something which is 'tended' by the worker. 'Machines' are mechanized apparatus. (Weber, 1947; 227, 228)

From the social point of view, types of the division of labour may be classified in the following way: In the first place, there is the question of the ways in which qualitatively different, especially complementary functions, are divided between more or less autocephalous and autonomous economic units, which may further be distinguished economically according to whether they are budgetary units or profit-making enterprises. There are two polar possibilities:
(1) A 'unitary' economy where the specialization of functions is wholly internal, completely heterocephalous and heteronomous and carried out on a purely technical basis. The same would be true of the co-ordination of function. A unity economy may, from an economic point of view, be either a budgetary unit or a profit-making enterprise.
On the largest possible scale a communistic organization of a national economy would be a unitary budgetary economy. On the smallest scale an example is the primitive family unit .... (2) the differentiation of functions may, on the other hand, exist as between autocephalous economic units. (a) It may consist in the specialization or specification of functions between units which are heteronomous, but are autocephalous, which are thus oriented to an order established by agreement, or imposed. The order, in turn, may be substantively oriented in a variety of ways. Its main concern may be to provide for the needs of a superior economic unit, which may be the budgetary unit of a lord, an oikos, or a profit-making enterprise controlled by a political body. The order may, on the other hand, be concerned with providing for the needs of the members of some organized group. From an economic point of view, this may be accomplished by the organization of subsidiary budgetary units, or of profit-making enterprises. ... (b) The other main type is the specialization of autocephalous and autonomous units in a market economy, which are oriented on the one hand substantively only to their own self-interests, formally only to the order of a corporate group, such as the laissez-faire state, which enforces only formal, rather than substantive rules. (Weber, 1947; 228, 229)

The expropriation of workers in general from possession of the means of production depends on the following principal economic factors: (a) The fact that, other things being equal, it is generally possible to achieve a higher level of technical efficiency if the management has extensive control over the selection and the modes of use of workers, as compared with the situation created by the appropriation of jobs or the existence of rights to participate in management. These latter conditions produce technically, as well as economically, irrational obstacles to efficiency. ...; (b) in a market economy a management which is not hampered by any established rights of the workers, and which enjoys unrestricted control over the goods and equipment which underlie its borrowings, is in a superior credit position. ...; (c) from a historical point of view, the expropriation of labour has developed since the sixteenth century in an economy characterized by a progressive development of the market system, both extensively and intensively, by the sheer technical superiority and actual indispensability of a type of autocratic management oriented to the particular market situations, and by the structure of power relationships in the society. ... (Weber, 1947; 246, 247)

... The upshot of all these considerations is that the maximum of formal rationality in capital accounting is possible only where the workers are subjected to the authority of business management. This is a further specific element of substantive irrationality (Italics mine) (He means that the maximum of formal rationality in his specific sense can be attained only in a structure which is in conflict with certain important values or ideas of welfare. -Eds.) in the modern economic order; (e) finally, free labour and the complete appropriation of the means of production create the most favourable conditions for discipline. (Weber, 1947; 248)

The expropriation of all the workers from the means of production may have the following effects in practice: (1) That management is in the hands of the administrative staff of a. corporate group. This would be true very particularly of any rationally organized socialistic economy. ...; (2) that the managerial functions are, by virtue of their appropriation of the means of production, exercised by the owners or by persons they appoint. The appropriation of control over the persons exercising managerial authority by the interests of ownership may have the following consequences: (a) Management by one or more entrepreneurs who are at the same time owners-- the immediate appropriation of managerial functions. This situation, however, does not exclude the possibility that a wide degree of control over the policies of management may rest in hands outside the organization, by virtue of their powers over credit or financing ... ; (b) the separation of managerial functions from appropriated ownership, especially through limitations of the functions of owners to the appointment of management and to the free appropriation of shares of the profits .... The separation of ownership and management is formally rational in the sense that ... it permits the selection for managerial posts of the persons best qualified from the standpoint of profitability. ... (Weber, 1947; 248, 249)

The structure of occupational differentiation and that of opportunities for income and profit are closely related. This will be discussed in relation to the problems of social stratification.
1. The unfree organization of occupations exist in cases where there is compulsory assignment of functions within the organization of a royal estate, a state, a feudal manor, or a commune on the basis of liturgies or of the oikos type of structure. The free type of distribution arises from the successful offer of occupational services on the labour market or successful application for free 'positions'.
2. ... the specification of functions was typical of the organization of the handicrafts in the Middle Ages; specialization is characteristic of the modern form of rational organization. Occupational distribution in a market economy consists to a large extent of technically irrational specification of functions, rather than of rational specification of functions, because it is oriented to the market situation and hence to the interest of purchasers and consumers. ...
3. Cases of autocephalous occupational specialization are the independent 'business' of an artisan, a physician, a lawyer, or an artist. The factory worker and the government official, on the other hand, occupy heterocephalous occupational positions... (Weber, 1947; 250, 251)

There are the following stages in the development toward capitalism: (a) Effectual monopolization of money capital by entrepreneurs who have used it as a means to make advances to labour. Connected with this is the assumption of powers of management of the process of production by virtue of the extension of credit and of control of the product, in spite of the fact that appropriation of the means of production has continued formally in the hands of the workers, as in the handicrafts and mining; (b) appropriation of the right of marketing products on the basis of previous monopolization of knowledge of the market and hence of market opportunities and monopolization of money capital. ...; (c) the subjective disciplining of workers who stood in a dependent relationship in the putting-out system, and the supply of raw materials and apparatus by the entrepreneur. ...; (d) the development of workshops without a rational specialization of labour in the process of production, by means of the appropriation by the entrepreneur of all the non-human means of production. ...; (e) the final step in the transition to capitalistic organization of production is the mechanization of the productive process and of transportation and its orientation to capital accounting. All the non-human means of production become fixed or working capital; all the workers become 'hands'. As a result of the transformation of enterprises into associations of security owners, even the management itself becomes expropriated and assumes the formal status of an official. Even the owner becomes effectively an agent for, or unofficial representative of, the suppliers of credit, the banks. (Weber, 1947; 258,259)

'Imperative co-ordination' was defined above as the probability that certain specific commands (or all commands) from a given source will be obeyed by a given group of persons. It thus does not include every mode of exercising 'power' or 'influence' over other persons. The motives of obedience to commands in this sense can rest on considerations varying over a wide range from case to case; all the 4ay from simple habituation to the most purely rational calculation of advantage. A criterion of every true relation of imperative control, however, is a certain minimum of voluntary submission; thus an interest (based on ulterior motives or genuine acceptance) in obedience. (Weber, 1947; 324)

... But these factors, custom and personal advantage, purely effectual or ideal motives of solidarity, do not, even taken together, form a sufficiently reliable basis for a system of imperative co-ordination. In addition there is normally a further element, the belief in legitimacy. (Weber, 1947; 325)

There are three pure types of legitimate authority. The validity of their claims to legitimacy may be based on: 1. Rational grounds-- resting on a belief in the 'legality' of patterns of normative rules and the right of those elevated to authority under such rules to issue commands (legal authority). 2. Traditional grounds-- resting on an established belief in the sanctity of immemorial traditions and the legitimacy of the status of those exercising authority under them (traditional authority) ; or finally, 3. Charismatic grounds-- resting on devotion to the specific and exceptional sanctity, heroism or exemplary character of an individual person, and of the normative patterns or order revealed or ordained by him (charismatic authority). (Weber, 1947; 328)

The following may thus be said to be the fundamental categories of rational legal authority: - (1) A continuous organization of official functions bound by rules. (2) A specified sphere of competence. This involves (a) a sphere of obligations to perform functions which has been marked off as part of a systematic division of labour. (b) The provision of the incumbent with the necessary authority to carry out these functions. (c) That the necessary means of compulsion are clearly defined and their use is subjective to definite conditions. A unit exercising authority which is organized in this way will be called an 'administrative organ'. (Weber, 1947; 330) (3) The organization of offices follows the principle of hierarchy; that is, each lower office is under the control and supervision of a higher one. ... (4) The rules which regulate the conduct of an office may be technical rules or norms. In both cases, if their application is to be fully rational, specialized training is necessary. ... (5) In the rational type it is a matter of principle that the members of the administrative staff should be completely separated from ownership of the means of production or administration. ...(Weber, 1947; 331) (6) In the rational type case, there is also a complete absence of appropriation of his official position by the incumbent. ... (7) Administrative acts, decisions, and rules are formulated and recorded in writing, even in cases where oral discussion is the rule or is even mandatory. ... (8) Legal authority can be exercised in a wide variety of different forms .... (Weber, 1947; 332)

The purest type of exercise of legal authority is that which employs a bureaucratic administrative staff. Only the supreme chief of the organization occupies his position of authority by virtue of appropriation, of election, or of having been designated for the succession. But even his authority consist in a sphere of legal 'competence. ... (Weber, 1947; 333)

Experience tends universally to show that the purely bureaucratic type of administrative organization-- that is, the monocratic variety of bureaucracy-- is, from a purely technical point of view, capable of attaining the highest degree of efficiency and is in this sense formally the most rational known means of carrying out imperative control over human beings. It is superior to any other form in precision, in stability, in the stringency of its discipline, and in its reliability. It thus makes possible a particularly high degree of calculability of results for the heads of the organization and +or those acting in relation to it. It is finally superior both in intensive efficiency and in the scope of its operations, and is formally capable of application to all kinds of administrative tasks. (Weber, 1947; 337)

The primary source of the superiority of bureaucratic administration lies in the role of technical knowledge which, through the development of modern technology and business methods in the production of goods, has become completely indispensable.
(Weber, 1947; 337)

Though by no means alone, the capitalistic system has undeniably played a major role in the development of bureaucracy. Indeed, without it capitalistic production could not continue and any rational type of socialism would have simply to take it over and increase its importance. Its development, largely under capitalistic auspices, has created an urgent need for stable, strict, intensive, and calculable administration. It is this need which gives bureaucracy a crucial role in our society as the central element in any kind of large-scale administration. Only by reversion in every field-- political, religious, economic, etc. -- to small-scale organization would it be possible to any considerable extent to escape its influence. ... Conversely, capitalism is the most rational economic basis for bureaucratic administration and enables it to develop in the most rational form.

Bureaucratic administration means fundamentally the exercise of control on the basis of knowledge. This is the feature of it which makes it specifically rational. This consists on the one hand in technical knowledge which, by itself, is sufficient to ensure it a position of extraordinary power. But in addition to this, bureaucratic organizations, or the holders of power who make use of them, have the tendency to increase their power still further by the knowledge growing out of experience in the service. For they acquire through the conduct of office a special knowledge of facts and have available a store of documentary material peculiar to themselves. ... (Weber, 1947; 339)

Bureaucracy is superior in knowledge, including both technical knowledge and knowledge of the concrete fact within its own sphere of interest, which is usually confined to the interests of a private business-- a capitalistic enterprise. The capitalistic entrepreneur is, in our society, the only type who has been able to maintain at least relative immunity from subjection to the control of rational bureaucratic knowledge. All the rest of the population have tended to be organized in large scale corporate groups which are inevitably subject to bureaucratic control. ... (Weber, 1947; 339)

The following are the principal more general social consequences of bureaucratic control: - (1) The tendency to 'levelling' in the interest of broadest possible basis of recruitment in terms of technical competence. (2) The tendency to plutocracy growing out of the interest in the greatest possible length of technical training. To-day this often lasts up to the age of thirty. (3) The dominance of a spirit of formalistic impersonality, 'Sine ira et studio', without hatred or passion, and hence without affection or enthusiasm. The dominant norms are concepts of straightforward duty without regard to personal considerations. ... (Weber, 1947; 340)

The most primitive types of traditional authority are the cases where a. personal administrative staff of the chief is absent. These are 'gerontocracy' and "patriarchalism'.
The term 'gerontocracy' is applied to a situation where so far as imperative control is exercised in the group at all it is in the hands of 'elders'-- which originally was understood literally as the eldest in actual years, who are the most familiar with the sacred traditions of a group. This is common in groups which are not primarily of an economic or kinship character. 'Patriarchalism' is the situation where, within a. group, which is usually organized on both an economic and a kinship basis, as a household, authority is exercised by a particular individual who is designated by a definite rule of inheritance. It is not uncommon for gerontacracy and patriarchalism to be found side by side. The decisive characteristic of both is the conception which is held by those subject to the authority of either type that this authority, though its exercise is a private prerogative of the person or persons involved, is in +act pre-eminently an authority on behalf of the group as a whole. It must, therefore, be exercised in the interest of the members and is thus not freely appropriated by the incumbent. In order that this shall be maintained, it is crucial that in both these cases there is a complete absence of an administrative staff over-which the individual in authority has personal control. he is hence still to --a large extent dependent on the willingness of the group members to respect his authority, since he has no machinery to enforce it. Those subject to authority are hence still members of the group and not "subjects'. But their membership exists by tradition and not by virtue of legislation or a. deliberate act of adherence. (Weber, 194-fl; 353)

With the development of a purely personal administrative staff, especially a military force under the control of the chief, traditional authority tends to develop into 'patrimonialism'. Where absolute authority is maximized, it may be called 'Sultanism'.
The members are now treated as 'subjects'. An authority of the chief which was previously treated principally as exercised on behalf of the members, now becomes his personal authority, which he appropriates in the same way as he would any ordinary object of possession.

Von Below is quite right in emphasizing strongly that it was especially the appropriation of judicial authority which was made the basis of special treatment and a source of priviledged class status.
Where traditional authority is decentralized through the appropriation of governing powers by priviledged social groups, this may become a formal case of the separation of powers where organized groups of the members of such a priviledged class participate in political or administrative decisions by a process of compromise with their chief.
The subjects of such compromises may be rules or concrete administrative decisions or measures regulating the administrative process. The members of such groups may possibly exercise imperative control on their own authority and by means of their own administrative staff. (Weber, 1?47- 353)

The primary effect of traditional authority on modes of economic activity is usually in a very general way to strengthen traditional attitudes. ... (Weber, 1?47; 354)

Beyond this, the consequences for the economic order are in the first instance a function of the mode in which the group exercising imperative authority is financed. ...
An oikos maintained by the chief where needs are met on a liturgical basis wholly or primarily in kind in the form of contributions of goods and compulsory services. In this case, economic relationships tend to be strictly bound to tradition. The development of markets is obstructed, the use of money is primarily oriented to consumption, and the development of capitalism is impossible.
Provision by the services of socially priviledged groups has very similar effects. Though not necessarily to the same extent, the development of markets is also limited in this case by the fact that ownership exists in kind, is preempted on a nonmonetary basis, and purchasing power is correspondingly reduced. Furthermore, the productive capacity of individual economic units is to a large extent preempted +or the needs of the governing group.
Finally, it is possible for patrimonialism to be organized on aL monopolistic basis of meeting its needs, partly by profitmaking enterprise, partly by fees, and partly by taxes. In this case, the development of markets is, according to the type of monopolies involved, more or less seriously limited by irrational factors. (Weber, 1?47; 354, 355)

Positively priviledged property classes typically live from property income. This may be derived from property rights in human beings, as with slaveowners, in land, in mining property, in fixed equipment such as plant and apparatus, in ships. and as creditors in loan relationships. ... Finally they may live on income from securities.
Class interests which are negatively priviledged with respect to property belong typically to one of the following types: (a) They are themselves objects of ownership, that is they are unfree. (b) They are 'outcasts' that is 'proletarians' in the sense meant in Antiquity. (c) They are debtor classes and, (d) the 'poor'.
In between stand the 'middle' classes. This term includes groups who have all sorts of property, or of marketable abilities through training, who are in a position to draw their support from these sources. Some of them may be 'acquisition' classes. Entrepreneurs are in this category by virtue of essentially positive privileges; proletarians, by virtue of negative privileges. ... (Weber, 1947; 425)

Organized activity of class groups is favoured by the following circumstances: (a) the possibility of concentrating on opponents where the immediate conflict of interests is vital. Thus workers organize against management and not against security holders who are the ones who really draw income without working. Similarly peasants are not apt to organize against landlords. (b) The existence of a class status which is typically similar for large masses of people. (c) The technical possibility of being easily brought together. ... (d) Leadership directed to readily understandable goals. Such goals are very generally imposed or at least are interpreted by persons, such as intelligentsia, who do not belong to the class in question. (Weber, 1947; 427, 428)