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

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Sun Nov 19 2006 - 10:05:22 EST


Just briefly, I find the question of the irrationality of capitalism is
difficult to evaluate, since notions of rationality differ widely and change
over time, and differ among different social classes and population groups.
It is often linked to notions of

- what is reasonable/unreasonable, or
- what is morally justifiable/unjustifiable, or
- what satisfies human needs/interests/fails to satisfy them, or
- functionality/dysfunctionality, or
- predictability/unpredictability.

The rationality of behaviour is however usually stated in terms of a
means-ends relationship of some kind. Thus, if the means do not lead to the
end, the means are irrational, and if the behaviour is not oriented to a
clear (conscious) means-ends relationship, it is irrational. But

- the ends (goals) can also be be judged irrational, in relation to other
means-ends relationships, and
- much human behaviour simply is not rational, insofar as it does not refer
to any explicit means-ends relationship.

Elmar Altvater and Ernest Mandel talked about capitalist society as
"combining partial rationality and overall irrationality". The idea here is
that behaviour which makes perfect sense at the micro-level (it is
reasonable and rational) has macro-level effects which are irrational and
harmful, and conversely macro-policies which seem rational have
micro-effects which are irrational. This is closely related to the notion of
unintended consequences, i.e. that the final or aggregate effect of actions
may be different or opposite to what is intended. The underlying idea here
is that a rational society would be a society in which individual interests
and societal/communal interests would be compatible or harmonious, rather
than conflict, i.e. that societal irrationality is in good part caused by
its structure, the way it is organised.

For a simple example, during a boom, it is rational for private investors to
invest in increasing output. But the aggregate outcome may be overinvestment
in relation to sales, creating a result which disadvantages all investors.

The topic is also explored in game theory, often implying that what is
"rational" is what is in the "self-interest" of an actor. In that case, all
action which is not in the self-interest of an actor, is irrational action.
But this assumption may be questionable, insofar as it makes unwarranted
assumptions about what is in an actor's interest, and because it reduces all
apparently non-self-interested behaviour either to de facto self-interested
behaviour, or else to irrational behaviour. In that case, we may end up with
a lot of tautological truths which are not very informative.

If I am not mistaken, the concept of a "rational society" was made popular
by the technocracy movement in the 1920s and 1930s, which created the idea
that society can be planned and engineered such that the results benefit
all. This idea also strongly influenced Stalinist and Maoist modernisation.
However there was often little evidence of any dialectical understanding of
the relation between individual and social interests. Social interests were
enforced simply by the barrel of a gun.

In post-modernist thought, what is rational becomes dependent on one's
subjective point of view, and thus the challenge becomes to understand what
is rational from the point of view of the Other, acknowledging Difference -
in that case, many different rationalities exist pluralistically side by
side, and it is not possible to define one as objectively more rational than
the other. This introduces a strong epistemic relativism, basically due to
the absence of a shared or consensus view about what is rational.

A social consensus (about rationality or anything else) is strongly
influenced by the capacity of all individuals to make gains, and improve
their lot, in proportionate amounts. In that case, there is less conflict of
interests, and less of a sense that achieving one's goals is at the expense
of others; there is more room for altruism. If however this situation no
longer applies, it is impossible to maintain a broad consensus. Hence the
importance of ideology in persuading people that what is in the common
interest is also in their individual interest, and vice versa what is in
their individual interest is in the common interest.

Marx once remarked that if the appearance and essence of things directly
coincided, there would be no need for science. Likewise we can say there
would be no need for moral inquiry or legal systems, if individual and
communal interests always directly coincided. Moral inquiry and legal
systems exist precisely because of conflicts, real or potential, between
individual and communal interests/needs, and they mediate those conflicts.

In modern bourgeois society, there is no longer much of a sense that we can
collectively make a better society for the good of all. At best we can
contain or limit social problems. The discussion about social rationality
then focuses mainly on the environment external to subjectivities, for
example global warming, and on the limits of what is tolerable. But this is
basically a regression of social thought, which involves uncertainty about
what kinds of social organisation can harmonize individual and social
interests, and how they can be brought about. All that is left is ideologies
of managerialism.


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