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

From: Dogan Goecmen (Dogangoecmen@AOL.COM)
Date: Wed Nov 29 2006 - 12:14:36 EST

Hi Jurriaan

If we  suppose capitalist business produces outputs only in order to sell
them  profitably, and no other reason, this does not necessarily mean that it
is  ipso facto irrational, because very clear means-ends relationships  are
involved. It means only that the commercial rationality governing  capitalist
business is limited to producing outputs for profitable  sale.
This an old question. What is the end of production? Smith arguing against
mercantilists says if money is wanted it can be subsituted. But if material for
 production is wanted the production will stop and people will starve. The
reason  why I am refering to this is that there is a general and a particular
aim of  production. The general aim is to satisfy human needs. In capitalist
society  however as classical political economists pointed out the aim of
production is  to produce value in exchange rather than value in use. It is still
this  contradiction we are dealing with how to bring the general aim of
production  into harmony with the particular aim of production in capitalism.

In my earlier email I was trying to say that even if we accept the very
logic of capitalist production, it is irrational because it fails to meet its  own
end since it does not sell the goods produced. It destroys them in thousands
and thousands of tons. Is this not irrational even on the basis of
rationality  of capitalist production?

The argument about world hunger can and has been inverted also,  by the
defenders of capitalism: if we had more capitalism, there would be  no
hunger. In this case, the hunger exists because of obstacles to  market
trade, and if those were removed, there would be no hunger; the  perceived
irrationality here consists in the fact that obstructions to  capitalism are
I find these arguments of mainstream economist disgusting because how much
capitalism do we still need to see it does not work as it promises. Half of the
 world population is literally speaking lives on collecting rubbish.

Throughout the 20th century, millions have died from hunger  every year, but
it is not altogether clear to me that you can blame that  simply on
capitalism. But regardless of one's point of view on this, it is  evident
that capitalism flourished, despite these millions dying from  hunger.
Flourished? Where? The problem is that the resistance has been weak and

In reality, when Marxists decry capitalism as an irrational  system, what
they are doing most often is that they make a moral argument  about what
human priorities should be (a hierarchy of values), except that  they often
do not make this explicit, and assume their case is  self-evident. But it may
not be self-evident at all.
The issue about the irrationality of capitalism is not a Marxist decry. It
is already explored in the works of Adam Smith and David Ricordo. Marxists just
 continue this line of thought on the basis of a new analysis. Putting aside
Capital Marx and Engels refer to the irrationality of capitalism in Communist
 Manifesto. There they say that capitalism must permanently destroy to
survive.  One of the means of destruction is war: build and destroy, build and
destroy.  This is the game of capitalism.
In Marxist terms if there is an hierarchy of needs then between material
needs as the basis of human life and intellectual needs. Apart from that Marxism
does not want prescribe any maxim on what should be seen as primary ad
secondary  needs. On the contrary, contemporary Marxists criticise liberal theories
because  they still differentiate between basic needs and derivative needs.

Another frequent supposition in the talk about the  irrationality of
capitalism is that rationality is by definition a "good"  thing. Capitalism
according to Marxists is a "bad" thing, and, therefore,  it must be

But rationality is not necessarily a "good"  thing at all. Rational thought
and action may be applied for good or for  evil. A given means-ends
relationship can be judged quite rational, even  although we object to the
means and/or the ends on other grounds. I would  think this is precisely one
of the root causes of the postmodern condition,  i.e. the lack of
substantive, consensual and objective criteria about what  is rational or
The concept of rationality Iam refering to is developed in the philosophy  of
classical German philosophy and it is about harmonious relationship between
general and particular. Marx and Engels applied this philosophical principle
to  social theory. Their maxim in Communist Manifesto express that very nicely:
the  satisfaction of the needs of one should be the need of all. The kind of
rationality I am talking about expressed in this maxim. You seem to refer to
also Heideggerian and Weberian concepts. Husserl and Plessner have already in
 the 1930s disqualified these kind of calculative thinking as irrational.

When I sit here typing a mail, it is a rational activity. But  someone might
argue it is irrational, because I could better spend my time  on other
things. This is a value judgement which may be more or less  informed by
knowledge about my life. I could justify my activity  rationally, but that
justification might not be accepted by somebody else,  operating with a
different means-ends relationship and  value-hierarchy.
Adam Smith says if we judge whether others actions are rational or
irrational we have to put ourselves in the situation of others and judge from  there
whether they act rationally according to their situation. Smith says in  fact
everybody has an inner judge who would tell him/her what is right and what  is
wrong if he/she listened to this inner judge (conscience). Suppose I  have a
little baby crying because he/she is hungry and I ignore this and  continue
typing my email. What would you say if you put yourself into my  situation. So I
mean if we include Smith's concept of situation into our  considerations it is
not as difficult as you seem to assume.

Warm regards


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