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Iron Cage
Max Weber came up with the idea of the 'iron cage.'His theory expressed the fear that an over-rationalized society would produce alienation and thus enclose humans in an iron cage of rational thought which would limit their ability to have and use free will. Instead, the theory expounded, what humans think is their own free will encourage them to make pseudo choices between one form of rationalized enterprise or another. Although most credit this theory to Max Weber, there is some dispute as to who actually came up with the term. Some say that Weber came up with the idea and, others say Talcott Parsons came up with the name(Baehr,2001).

The Spirit of Capitalism and Bureaucracy
Modern industrial capitalism is dependent upon formal rationality. In Weber’s version of the modern capitalist society, the satisfaction of the individuals' needs rests mainly on net worth and material goods.

In the development of modern capitalism, economic enterprises transform into large-scale organizations. This requires a more sophisticated system of administration. Everything within capitalism is then transformed into coordinated, governing bodies. Weber found this to be an advantage of bureaucracy. These organizations are made into a hierarchy with written rules of conduct and high efficiency (Robinson, 2004).

In the ideal type bureaucracy, every employee is trained in his work field only and plays a small but important role in the managerial operations. The administration cannot live without him, as it would complicate the efficiency of the whole bureaucratic apparatus. The employee cannot do without the entire bureaucratic system either as he only has a fraction of the knowledge necessary to survive in this type of society.

In order to maintain the highest degree of rationality and order, the bureau strictly separates itself from the official’s home life. The more developed the capitalist enterprise, the greater the separation between official and his/her private activities. Furthermore, his/her domestic duties are more and more neglected becoming less important. In the course of its development this rational economy devalues human individualism. Sentiments, values or judgments are not taken into account because they cause a loss of efficiency. As bureaucracy develops formal rationality dominates. Fully developed modern capitalism requires formally rational institutions and behavior. Religion and any other traditional inclinations are slowly eliminated and ruled out by the rationally planned course of everyday life.

The spread of formal rationality through bureaucracy into all societal spheres trapped man in an inescapable mechanism. If he wants to survive in the capitalist system, he must follow the bureaucratic rules and in most cases offer his free labor on the market.

Rationality does not allow anything mystical and spiritual. Every aspect of life must be examined scientifically and empirically. Once analyzed it becomes subject to bureaucratic rules and regulations. Science is necessary for the development of new technologies and, therefore play a major role in society. For Weber this intellectualization of the world causes disenchantment. The intended goal is to have no questions left to ask, and have all problems empirically solved. The elimination of value rationality in modern society led Weber to a the thought of the 'iron cage.' He quoted Baxter in saying that the care for external goods should only lie on the shoulders of the "saint like a light cloak, which can be thrown aside at any moment." But capitalism has created its own destiny and thus Weber continues saying that “fate decreed that the cloak should become an iron cage." (Weber, 1905 from Lemert, 2004. p103)

Rationality brought modern capitalism upon us. It also causes this mechanic and inhuman environment. The economy is forced to comply with the technical and economic conditions of machine production. The bureaucratic system is hard to destroy once it is set up properly and the bureaucrat cannot break out because his partial education does not suffice for the mastering of his own business administration.

Weber detects the reason in the governing rational bureaucratic apparatus, which rules by rational laws stripped from the individual’s norms and values. The governing body makes the decisions of when and how to act without taking any individuality into consideration (Weber, 1905).

Contemporary Applications
The issues raised in Weber's thorough analysis of modern capitalism are more relevant than ever. Democracy and freedom of speech give the impression that the individual’s opinions and values are heard. In reality, however, the governmental administration stands in the way. The actions in our everyday life are defined by fiscal policy rather than personal wants and values. Capitalist societies are based on a bureaucratic framework, which can be seen as the “iron cage” described by Weber. The individual has the opportunity to move freely within this construction, but his life is limited. (Kalberg 2002)

Critiques
According to Stephen Kalberg, the iron cage theory, however, fails to actually reveal Weber's view of the twentieth century. First, rather than a reality, or even a short termed scenario, the iron cage constituted to Weber a nightmare vision that might be on our horizon. The subjunctive case, qualifying expressions and multiple preconditions are almost always attached to his usage of this phrase. Weber almost seemed to welcome the modern world. He enjoyed the freedoms and rights it bestowed upon individuals and the very notion of the autonomous individual. He scorned the past as well as the naive romanticism of his colleagues. He argued that democracy would be possible only where strong parliaments existed, which he saw as a training ground for the political leaders of the 'plebiscitary leadership democracy' he advocated. His view on modern industrial and urban societies is more differentiated than the metaphor of the iron cage suggests.(Kalberg 2002) In "Max Weber Goes Global", Michael Novak argues that Max Weber's iron cage of capitalism can be avoided through Catholic ideology. He says that Calvinism allowed the northern European nations to succeed economically by instilling an idea that they must increase their material goods and their way of life. Novak argues that Weber is largely correct in identifying a connection between economic success and the religious and moral qualities of economic agents. Weber saw the capitalism can almost enslave the people within it, into this ‘iron cage’ of endless labor. Novak does not find this a problem of capitalism itself, but a problem of the Protestant Ethic. Their views of being born of an absolutely sovereign God led to a capitalism of constant duty. Novak argues that a more Catholic contribution to capitalism would end this iron cage. (Lee, Novak, 2005)

Resources
Baehr, Peter. "The 'Iron Cage' and the 'Shell as Hard as Steel': Parsons, Weber, and the Stahlhartes Gehause Metaphor in The Protestant Ethic and the Spirit of Capitalism." History and Theory 40 (May 2001), 153-169. Wesleyan University, 2001.

Coser, Lewis A. (1977) "Masters of Sociological Thought: Ideas in Historical and Social Context (2nd Edition)", from the website: http://www.soc.cmu.ac.th/~chaiwat/Sociologists/Weber/WEBERW8.HTML

Lee, Kevin P., and Michael Novak. "Weber's iron cage.(Correspondence)(Letter to the Editor)." First Things: A Monthly Journal of Religion and Public Life 155 (August-Sept 2005): 5(1).

Kalberg, Stephen. 2002. "The Modern World as a Monolithic Iron Cage? Utilizing Max Weber to Define Internal Dynamics of the American Political Culture Today."

Robinson, Scott E. "Punctuated equilibrium, bureaucratization, and budgetary changes in schools." Policy Studies Journal 32.1 (Feb 2004): p25(15).

Weber, Max. "Protestant Ethic and the Spirit of Capitalism." 1968. from Lemert, Charles. "Social Theory: The Multicultural and Classic Readings, (Third Edition)". 2004.

Elwell, Frank W. "Verstehen: Max Weber's Home Page 'A site for undergraduates' Rogers State University. 1996. http://www.faculty.rsu.edu/~felwell/Theorists/Weber/Whome.htm