The Protestant ethic is a theory developed by German sociologist Max Weber in his articles titled The Protestant Ethic and the Spirit of Capitalism. Weber incorporated statistics and the concept of the ideal type in his theories. With these tools, he sought to explain generalized phenomena with historically-based rational explanations. Therefore, Weber began his study of capitalism and the Protestant ethic by questioning why there was a strong correlation between geographically Protestant areas and industry and capitalism. Essentially, Weber was attempting to determine why capitalism flourished in some places, specifically the West, while not in others, like the Far East. He used the correlation of Protestant areas and capitalism as his starting point. By historically situating his argument, Weber was able to base his theories on the differences between modern capitalism and older forms of capitalism and between Protestantism and the denominations that preceeded it.

One theoretical explanation for this correlation was that both modern capitalism and Protestantism were the result of a larger effort to reject traditional values. According to this view, Protestantism was simply a backlash against the authority of the Catholic church over the lives of its followers. Weber rejected this idea, contesting that Calvinism and Protestantism were actually much more invasive and controlling in the lives of their followers than Catholicism, albeit in a less blatant manner. According to Weber, while members of the Protestant church no longer had to deal with the rituals of the Catholic church, their beliefs extended into all aspects of their lives, offering no venue for release from their religious obligations. This transition shifted the focus of religious people from an afterlife in heaven to their lives on earth.

Max Weber begins his studies by probing a relationship between two ideal types, in order to achieve analysis about certain phenomena. One such sociological experiment was conducted comparing the ideal types of Capitalism and the Protestant Ethic.

To understand why he chose to analyze the relationship between Capitalism and Protestantism, it is necessary to first understand the Protestant Ethic and the spirit of capitalism itself. The spirit of capitalism according to Weber is about valuing labor above all else. Labor and the monetary gains that come from it is the sacred end. The best is the one most devoted to labor. Furthermore the spirit of capitalism involves acquisition and profit; from one's labor there must come profit (by any means) and the acquisition of as much as possible, even if that means laboring incessantly.

The Protestant Ethic correlates to the spirit of capitalism in that both function on the denial of pleasure. With the spirit of capitalism, simple pleasures took a back seat to work and the saving of money in order to accumulate the most profit. With the Protestant Ethic, pleasures were denied for the sake of carrying out one's "calling", for the slight chance of salvation. Furthermore, both the spirit of capitalism and the Protestant Ethic alienate individuals from society. For the same reasons pleasure is denied (working as much as possible to make as much money as possible and carrying out calling) so too do these phenomena alienate individuals from society. Also, the Protestant Ethic imparts a great deal of fear into people. One never knows if the are predestined to hell or heaven, therefore, they can only attempt what seems to be their calling. This fear of eternal damnation results in a great deal of "self-policing". The protestant ethic focuses on the individual see (Cult of the Individual), therefore people are not discussing their calling with others, due to the focus on the individual and the fear of social stigmatization. All successes and failures are internalized and create an immense inner struggle, worrying over their eternal fate, as well as, an unprecedented fear of loneliness. Pleasures are repressed for the end result of profit and salvation.

The general principle of the Protestant ethic is based on predestination, the Calvinist idea that God has pre-seleceted who will be sent to heaven when they die and who will be sent to hell. Alongside predestination, Protestantism contends that the universe is created not for the happiness of human beings but for the happiness of God and that God's motives are undiscernable to humans. By these principles, no man can achieve his own salvation by his works on earth. However, if a man has failed to do good work on earth, it would indicate that he was not one of the chosen. Protestants lived with the idea of a calling: that the work done in one's lifetime must reflect Godliness and productivity. If someone failed to produce, it signaled that he or she was not chosen by God and was destined for hell. Therefore, material production became an ethical obligation.

The second major element to the Prtoestant ethic is asceticism, the denial of pleasure and relaxation. People were not supposed to accumulate wealth for enjoyment, but simply as a sign that they were not damned. The pressure to labor continuously in the name of God, uncertainty about salvation, and being prohibitted from voicing questions about that uncertainty combined to create what Weber described as "unprecedented inner lonliness" for Calvinists and Protestants. The psychological aftermath from this type of ascetic philosophy and traditional capitalism which was centered on aquiring sufficient means for subsistance combined to create the modern breed of capitalism that is centered on accumulation.