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'Constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainity and agitation distinquish the bourgeois epoch from all earlier ones ... All that is solid melts into air, all that is holy is profaned.' Marx

the rationality of economic rationalism « Previous | |Next »
June 27, 2006

I 've always wondered why neo-liberal economists--economic rationalists--talk in terms of their rationality and the irrationality of their opponents. I understood that rationality is a category at the heart of both economics --- economists postulate that people behave rationally. As I understand it the tendency in economics is to see rationality as a logical rather than a psychological principle: ie the idea that economics is about the logic of means and ends rather than about the psychology of utility. Given a framework of means and ends, the agent's behaviour reflects the solution to a logical problem of allocation, and it was an easy step to associate this logical problem with the mathematical problem of optimization.

Yet the appeal to rationality struck me as a form of economic fundamentalism and dogmatism because the economic rationalists assumed that you could be rationaliy you approached society just like them. In public debates they came across as ideologues posing as social scientists.

Then it dawned on me. This way of talking has its roots in Hayek and the anti-historicist Austrian school of economics, for all their attempts to underscore the originality of the social sciences and their difference from the natural sciences.Their modernism consisted of assuming that there was only one right way to study society and that was the way of methodological individualism. Other ways to study society --eg., Marxism and collective approaches -- were both wrong and threatened to subvert the whole Western rationalist tradition. Consequently, Marxism was defined as both unscientific and anti-rational. There was only one viable form of modernity and that was a liberal society. Since economics was based on universal principles, the historicist view that history rebuts the universal principles of economics, needed to be critiqued.

Don't we need the category relations between worker and boss to make the social world around us intelligible in terms of human action?

Hayek in his Counter-revolution of Science contended that the function of social science, and by implication economics, is to explain how conscious, purposeful human action can generate unintended consequences through social interaction.The emphasis here is on the unintended consequences of individual human decisions. To explain phenomena that are not the unintended consequences of human decision making is outside the scope of the social sciences in general and economics in particular. That excludes economic, social and power relations by definition.

| Posted by Gary Sauer-Thompson at 7:53 PM | | Comments (4)
Comments

Comments

Don't we need the category relations between worker and boss to make the social world around us intelligible in terms of human action?


I suppose that is valid from the perspective of a middle class Australian who experiences the role of boss and clerk as you've described. You've demonstrated the infallibilty of democracy and capitalism in its economic effect.
the intelligible human action is any action which can be recalled to conciousness after experience has been put into the memory.

No, we don't need catergory relations between worker and boss to make the social (and particularly labor oriented)world around us intelligible in terms of human action. When one contemplates the nature of the human body and it's participation in reality, the realization that perhaps our lives as men could be improved on may form. Improved on a great deal, by investing effort in our offspring collectively and shareing our resources equitably.

Lions1
how about the family: don't we need individuals + relations (between parent and child and husband and wife) to make family life intelligible.

I'll answer that. To make life intelligible, which is to say, to grasp the nature of life, the relationships which generate family (man and women, parent and child, etc...) are not required necessarily any further than the generation of a child. Once a child has been generated life is intelligible by virtue of the development of human reason during growth. However, would you not agree that the nature of a society can be clearly seen in the rearing of children? And a society, as well as a family, that invests a great deal in their offspring begin at the right point in there reforms? And by investment in a child I mean intellectual, spiritual, and material, not simply material. A society is as healthy as its most dysfunctional family (I would say dysfunction in a family can be gauged by the emotional, intellectual, and spiritual distress of its adolescent)

Lions1
we are not talking about the nature of life. We are talking about socail life.Social life consists of relationships--in a family parent child---as well as individuals.

A 'dysfunctional family' implies a systems apprach--seeing the family as a whole (a functioning unity) and not just as a bunch of individuals in loose association.