Evaluating The Relation Between Birth Of Neoclassical Economics and Acceptance of Liberal Capitalism as a Legitamate Economic System

Abstract

Economic sociology develops communication between two disciplines by acting as a bridge between economics and sociology. Max Weber wrote the best works of old economic sociology and became the founder of the subdiscipline. According to Max Weber, capitalism and mainstream economic thought emerged from the Protestant culture. For Max Weber, the perfectly competitive market model of mainstream economic thought is the ideal type of capitalism. Weber, as a synthesiser, has succeeded in placing the Neoclassical economic model on a historical, cultural and institutional basis. So he managed to reconcile two conflicting schools, the Neoclassical school, which represents mainstream economic thought, and the rival German Historical school. Thus, he made the best works of economic sociology, which is a bridge between economics and sociology. Germany has managed to become the leader of social democracy in Continental Europe with export-oriented industrialization model. Today, Germany adopts the Third Way policies by staying away from the Neoliberal policies. In this study, evolution of the views about money and trade, the emergence of Neoclassical economic thought and the acceptance of liberal capitalism as a legitimate system are shortly explained.