Re: [OPE-L] SV: [OPE-L] what is irrational in the functioning of capitalism?

From: Nicola Taylor (nmtayl@YAHOO.COM.AU)
Date: Tue Nov 28 2006 - 20:34:45 EST

DOGAN wrote:
> What is your response to what you describe? Is it
> really as value neutral  as
> you describe or there are some normative aspects in
> this, which we can use to
>  evaluate whether it is really rational how these
> entrepreuners accumulate
> their  individual capitals? As a reply to this
> question Adam Smith does not look
> at  what is necessary from an individual
> entrepreneur's point of view. Rather
> he  prefers to look at it from general interets of
> sicety's point of view:
> satisfaction of the needs of people and progress.

Dogan you are right that Adam Smith begins with the
question of what is socially desirable; however, he
rapidly concludes that the pursuit of individual
interest leads *naturalistically* to a socially
beneficial outcome so long as *social* institutions
don't interfer with the invisible hand of the market.
In conjuring up an invisible hand as a social metaphor
for the associative mechanism in a disasssociated
community Smith effectively errects a protective wall
around the concept of self-interest.  Post-Smith
economists no longer weighed individual interest
against other social ends.  What is rational for
individuals is also, miraculously, taken to be
rational for societies. Indeed, the so-called
value-neutrality of mainstream economic theory depends
upon the assumption.

Unfortunately, to challenge the value-neutrality of
self-interest economics from Smith to the present is
not enough because, as Jerry rightly points out,
modern neoclassical and new classical theories have
their own critiques of irrationality inbuilt.  Any
theory of imperfect competition (into which my Nike
example fits perfectly), or divergence from
equilibrium solutions, is by definition a theory of

Imo, Marx's enduring contribution lies in his
alternative conception of the logic of capital driven
by the value form (money) and, as a result of the
existence of this *social* form, capital's unique
relation to wage labour.  There is nothing 'ethical'
in this alternative conception of capitalist logic as
Marx's investigation concerns what CJ Arthur has
called the 'spring' or motive force behind capital's
reproduction (and not it's social desirability, or
otherwise).  In explicating contradictions in the
development of capital's logic Marx's goes far beyond
any critique of individualist rationalism, imo.  But I
will have to leave it there.


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