Compare and contrast Marx's and Weber's critiques of markets

1. INTRODUCTIONThe modern market models that dominated economic theory have focused on the market as a more formal model of economic order examining major perspectives within economic theory (Slater & Tonkiss, 2001). One of the major assumptions of these models is the idea that both market outcomes and social order arise from the rational decisions of individuals seeking to maximise their interests. Such models emphasise markets as an arrangement whereby buyers and sellers are able to come into contact with each other to trade commodities and resources for money (Hardwick P., Langmead J., Bahadur H.. 1999, p. 6). While buyers and sellers have competing self-interests, a whole series of transactions establishes an equilibrium which aligns these competing interests. In turn, this leads to a harmonisation of conflicting interests through market mechanisms, competition and information.

However, the assumptions of the modern economic and social models concerning market order and individual self-interests have been subject to contest by theorists of classical tradition. Criticisms have revolved around the extent to which a stable social order might be found on market exchange and on the rational actions of private individuals alone (Slater & Tonkiss, 2001). Without any doubt, Karl Marx and Max Weber have been two of the major social theorists of the classical sociology who challenged the modern markets by arguing against the very formalism of modern economic approaches.

Both Marx’s and Weber’s theories have presented a well-established critique of modern markets while supporting an ethical or social notion of individualism. While Marx treats markets as a sphere of irrationality, Weber’s critique of markets is based on one narrow form of rationality, the instrumental rationality which, according to Weber, dominated all aspects of modern social and economic life (Slater & Tonkiss, 2001; 73). Nevertheless, both Marx and Weber agree that the individual who...