Thursday, 14 August 2014

Schumpeter: Capitalism as Permanent Crisis

 It is the intrinsic instability of capitalism (cf. Schumpeter’s article by the same title in Economic Journal [1928]) due to the presence of the social conflict expressed by the profit motive in a competitive market society that neither Classical nor Neo-classical economic theories with their “Law of Value” (whether based on Labor Value or on Marginal Utility) could explain theoretically: – the latter because it postulated axiomatically that the economy must be in equilibrium unless it is disturbed or displaced away from it by the presence of political interference through State regulation occasioned by ethical, religious or cultural opposition to individual self-interest; and the former because it also assumed that there can be such a thing as economic equilibrium provided that all exchanges correctly reflect the quantity of labor objectively embodied in the goods exchanged, and that therefore “dis-equilibrium” can be attributed solely to the “anarchy” of individual self-interest, particularly by inter-capitalist competition and rivalry occasioned by private property and the corresponding “theft of labour time”, due to the absence of political interference through State regulation (cf. M. Dobb, Political Economy and Capitalism, chpts.1 to 3).

In other words, for Neoclassical equilibrium theory it is political interference with the possessive individualism of the market mechanism that causes disequilibria and crises, whereas for Classical and Marxian political economy it is precisely the lack of such interference with possessive individualism that causes crises through the “anarchy” of the market mechanism. Classical and Marxian political economy therefore, to the extent that it too relied on “the market” to fix values or “socially necessary labour time”, reduced political conflict to the anarchy of possessive individualism – something that contradicts the Marxian notion of “class interests”, for how can capitalists in competition with one another ever form a political class?! And if they can, then how can Marx theorise that “the market mechanism” fixes the value of labour power below the value realized by capitalists? (We will discuss this objection moved by Bohm-Bawerk and Schumpeter against Marx’s theory of surplus value in the next section.) And in any case, other than the “mis-appropriation” of value by capitalists from workers and the fortuitous dis-connection between production and consumption due to the “anarchy” of competition, other than this inequality of distribution, there is nothing - nothing systemic - in Classical and Marxian political economy that is intrinsically wrong with capitalism, to induce the observable regular crises of the economic system.


It is legitimate therefore to conclude that for both Neoclassical and Classical Political Economy “crises” are only “mal-functions” of what is an inherently “techno-scientific” economic system – capitalism: – a system that is indeed so “scientific” as to coincide with the concept of “economics” tout court – because for bourgeois economic theory capitalism and economic science are one and the same thing! (This negative notion of crisis is in M.Cacciari, “La Transformacion del Estado”.) For both Classical and Neoclassical Political Economy the central problem of economic theory is the avoidance of crises, the removal of “obstacles” to the healthy or optimal operation of what is seen as a techno-scientifically determinable economic system. For these theories, the economic system deals either with “relations” (exchange in equilibrium theory) or with “quantities” (labour values in Classical political economy) that are capable of “scientific” measurement and “technical” manipulation, and it will succumb to crises only if “the market mechanism” fails to operate properly (Neoclassical equilibrium) or if the “product” is not distributed in proportion to labour values (Classical equilibrium). The only problem with capitalism, then, is that of economic co-ordination: for the Neoclassics, this is assured by the correct information signaled to all economic agents through the market mechanism by virtue of the “atomicity” and self-interest of market participants, whereas for the Classics this is done by eliminating from the process of distribution precisely the atomicity and self-interest of the Neoclassics which cause the “anarchy of the market” and the “unequal distribution of income” (crises of overproduction or underconsumption).


As we have seen in the preceding sections, Schumpeter concedes the ultimate inadequacy of the Statik analysis of the capitalist economy proffered by both Classical and Neoclassical Political Economy – which he himself had hitherto embraced wholeheartedly – to explain the “nature of the forces” that characterize capitalism for the very simple reason that capitalism is “endogenously” and “intrinsically” an economic system that is incompatible with any notion of “equilibrium”, whether static or dynamic, and is instead one whose differentia specifica consists precisely in the process of “creative destruction” (schopferische Zerstorung), that is, of “development-through-crisis”. Crisis therefore is not an anomaly to be eschewed, it is not an aberration to be corrected, it is not a temporary setback waiting to be remedied: crisis is the very essence of capitalism; capitalism is permanent crisis.




The essential characteristic of capitalism, to develop or grow through the “incessant mutation” of the economy – this trans-crescence makes both Neoclassical and Classical Theory wholly irrelevant to the understanding of how and why this economy has developed into its present state. At best, Neoclassical and Classical economic theories can “describe” positivistically and functionally the operation of the capitalist economy; they can pinpoint and formalize mathematically certain patterns and regularities in its behaviour (Jevons); but they cannot even begin to “understand” its development or evolution (Marshall’s aim) or indeed its “co-ordination” (Hayek’s objective). This fact reduces Neoclassical and Classical theories to mere “heuristic” or didactic or illustrative devices, descriptive synchronic and essentialist accounts of the separate aspects of the capitalist economy – its “skeleton” or function - that can never explain its diachronic evolution – its “flesh-and-blood” or metabolism (cf. BC, pp60ff).



Here in Schumpeter we find a very different rationale from that adopted in the natural sciences in which the sole apparent aim is to photograph reality, “to find the truth” about the world, “to discover the laws of nature and of society”. We also find a different rationale from the Lockean liberal vision of civil society in which the economy is a simple continuation of the jusnaturalist individual possessivism of the state of nature. Although, as we are about to see, Schumpeter’s aim is to unify economics and politics by associating different “economic agents” to different types of income, Schumpeter could no more believe in “natural rights” as the rationale of income distribution in capitalist society than he could lay faith in Walras’s axiomatic determinism or in Marx’s historical materialism.



Our main thesis here is that the most plausible and radical interpretion of Schumpeter’s notion of Entwicklung is that it seeks to theorize capitalism as an economic system founded on “incessant crisis” or “permanent innovation” (cf. Trotszky’s “permanent revolution”), in the sense that now capitalism is seen as an economic system that, far from seeking equilibrium, far from being founded on a Law of Value that validates the homologation and equivalence of Political and Economic, continually generates or “constantly recreates” crises.


The opening up of new markets…and organizational development…illustrate the same process of industrial mutation – if I may use that biological term – that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has to live in. (CS&D, p.83)

Cf. Marx’s Manifesto:

The bourgeoisie cannot exist without constantly revolutionizing the instruments of production, and
thereby the relations of production, and with them the whole relations of society.


Schumpeter’s theory of Entwicklung acknowledges – indeed it is founded on the assumption – that capitalism is a social system that must constantly recreate social and economic antagonism and crises because its entire rationale is the creation and containment of conflict in the expanded reproduction of society. The notion of Value, of an economy based on essence or substance or static Being, is now replaced by a ceaseless Becoming, a constant trans-formation, mutation, meta-morphosis or, more controversially, “evolution”.


The essential point to grasp is that in dealing with capitalism we are dealing with an evolutionary process. It may seem strange that anyone can fail to see so obvious a fact which moreover was long ago emphasized by Karl Marx. Yet that fragmentary analysis which yields the bulk of our propositions about the functioning of modern capitalism persistently neglects it. Let us restate the point and see how it bears upon our problem.

Capitalism, then, is by nature a form or method of economic change and not only never is but never can be stationary. (p.83?)



But this is evolution in the sense of development-through-crisis: in this “evolution”, the antagonistic foundations of capitalism do not change, only the “form” of capitalism changes, not its conflictual content, not its antagonism, not its being a state of “crisis”. This is the “renunciation” (Entsagung) of Schumpeter’s negatives Denken: unlike the theoreticians of the dialectic – Hegel and Marx -, Schumpeter’s notion of “incessant revolution” does not contain the supersession or resolution of the social antagonism that “constantly recreates” capitalist crisis.


If you like, Schumpeter’s “creative destruction”, like Nietzsche’s similar concept in Zarathustra, preserves only the mechanical shell of Hegel’s dialectic – the “becoming” or “movement” – but not its “rationalist-idealist” foundation: cf. Gadamer’s quotation from Hegel:

"The reason why dialectic first seizes upon motion as its object lies in the fact that true dialectic is itself this motion; or, put another way, motion is the dialectic of all that is" (Logic, XIII, 313). (Hegel’s Dialectic, p.13.)



Unlike what both Walras (who was a “Socialist”!) and Marx believed, and in the footsteps of Nietzsche and Weber, Schumpeter is saying that in society there are no “laws”, no “truths”, no “inevitability” or “necessity” outside of the tendencies contained in the axiomatic postulates, the schemata, to which we reduce reality according to the goals to which we must adhere or comply. Quite obviously, the “we” here stands for “the bourgeoisie”, the only social agency in capitalist society with the power to enforce the validity (Latin valor, literally, power, strength) of its axiomatic principles. But there is no necessary connection between the schemata and the tendencies and then the ultimate outcome of social action. For Schumpeter, science is “a box of tools” – a pure “instrument” that must be “handled” or “utilized” by specific historical economic agents – the Wirthschafts-subjekte.



Thus, we find in Schumpeter a different “rationale” from both the Walrasian and the Marxian. In Marx just as much as in Walras, the solution to the political antagonism of capitalist society is already implicit in the definition of the problem! Just as Walras’s mathematical axioms lead inexorably to a general equilibrium that, whilst reducing its “economic agents” to mere mechanical “inert bodies”, at one and the same time maximizes their utility or welfare, so in Marx’s critique of political economy the antagonism of capitalists and workers is resolved and reconciled in the heaven of communism in which the surplus value unjustly appropriated by the capitalist is returned to its rightful owners, the associated producers! Both in Walras and Marx antagonism is indeed at the heart of the theory – but then the theory contains a “rationalist”, that is to say, a teleological or millenarian or eschatological or prophetic component (cf. the opening chapter of CS&D, “Marx the Prophet”) that pre-determines or pre-destines, and indeed vitiates, its conclusions: the scientific-materialist determination and calculability of Value implies even in Marx the scientifically quantifiable determination of human social organization – a political economy.


To put this in Euclidean axiomatic parlance, whereas in Walras the axiomatic definitions preserve their intrinsically antinomic and aporetic character, in Marx it is as if the axiomatic definition of “point” already contained the existence of a “line” – because Marx’s definition of political antagonism points dialectically to its supersession (Aufhebung) or reconciliation (Versohnung). (Cf. K. Lowith, Max Weber and Karl Marx. Note also the excellent identification by Bobbio in his final remarks on Lukacs [in Da Hobbes a Marx] of the eschatological Hegelian bent in Marx’s Paris Manuscripts – in line with Lowith’s treatment. But whereas Bobbio rightly stops at the Manuscripts, Lowith quite wrongly implies that this eschatological and teleological bent is a vital thread running along all of Marx’s work, including the Grundrisse.)


For Schumpeter instead this “reconciliation” or “convergence” or “harmony” (homonoia) of human interests, of the “point” of self-interest and the “line” of inter esse – this Neoclassical axiology and Classical teleology - is simply impossible so that the point – the Statik - must remain logically irreconcilable with, and separate and distinct from, the line – the Dynamik. That is why there are no dialectics in Schumpeter! There is no dialectical resolution of the Statik in the Dynamik: the latter does not supersede or abolish the former: indeed, for Schumpeter the two are avowedly and irresolubly contradictory! To be sure, Schumpeter allows for the theoretical dependence of instability or disequilibrium in capitalism on the real implementation of competitive equilibrium – the Dynamik is produced by the “social friction” or conflict that the Statik of “pure competition” dialectically implies. But for Schumpeter there is no dialectic in this process because there is no “supersession” and “reconciliation” of the conflict between the Statik and the Dynamik.


The Dynamik represents the inevitability of the social conflict implicit in the Statik between entrepreneurs and capitalists, leaders and bureaucrats, the energetic type against the hedonistic type: it is the specific institutional framework of political antagonism in capitalist society. But there is no “resolution” of this political antagonism in Schumpeter’s own version of the negatives Denken! For Schumpeter, the line is the ec-sistence of the point – its extrinsic-ation from the ideal realm of hypothesis or anatomical “skeletal structure” to the manifestation of its tendency in the real world of politico-institutional convention or “metabolic flesh-and-blood superstructure”. The Statik is the schema of the Dynamik; without the Statik the Dynamik could not be a “technique” that gives expression to the conflict contained in the Statik. The freezing of the Dynamik would entail the abolition of the Statik, its collapse or self-dissolution into mere stasis, stagnation, paralysis.

Apology (but not "Pro Vita Sua"!)

Apologies to friends for being "off line" for nearly a week, courtesy of a Google stuff-up! Next post will be on "Schumpeter: Capitalism as Permanent Crisis"

Friday, 8 August 2014

The Crisis of Economic Theory and Science and Technology (Edited Version, from Schumpeterbuch)

This is a slightly edited version of yesterday's posting. The aim here is to analyze closely the meaning of the concept of "crisis" as applied, first, in both bourgeois and socialist-Marxist economic theory, and second as applied to the very notion of "science" (economic and otherwise) as an entity separate from those social relations of metabolic production that, as we argue implicitly here, are in reality the very foundation of techno-scientific practice - incorrectly called "science and technology". In the next contribution we shall see how Schumpeter implicitly criticised these notions of "crisis" and effectively exposed their political and theoretical "powerlessness" in explaining and comprehending the reality of capitalist industry and society.

The notion of Neoclassical equilibrium is founded on the determination of Subjective or Relative Value by means of a Euclidean-Galilean view of the cosmos or “laws of mechanics” in which “inanimate bodies” with no dimensions relate to one another in a purely geometric and mechanical fashion that is deducible from axioms established arbitrarily and independently of these bodies. (The “truth” of Euclidean geometry was confuted by the development of non-Euclidean geometries in the nineteenth century.) The political theoretician of this mechanical State based on atomic individualism and mutual fear is Thomas Hobbes. The notion of Classical equilibrium instead is founded on the determination of Objective or Absolute Value by means of a Galilean-Newtonian astronomical cosmology based on absolute dimensions of space and time and whose entities have a mass that exercises a gravitational force on one another. (An early critic of Newton’s cosmology as metaphor was Adam Smith himself in The History of Astronomy. Mach and Einstein, from very different standpoints, will later demolish the Newtonian worldview.) The theoretician of this freely consensual liberal parliamentary State based on “individual labor” is John Locke (and later Benjamin Constant). (See our comparison of Hobbes’s and Locke’s political theory with Schumpeter’s notion of Entwicklung in a later section.)


For both Neoclassical and Classical political economy, it is the market mechanism that determines the “objectivity” of Value as the essence or subject-matter of Economics by combining the laws of mechanics that regulate economic exchange with the cosmology of Value that provides the telos of the economic system: the market mechanism is the deus absconditus, the Hidden God whose “invisible hand” reconciles the individual with civil society and civil society with the State in the pursuit of the common-wealth. But this essentialism is doomed to self-dissolution (Selbst-aufhebung) unless it can be shown that the State and the market mechanism whose functioning it guarantees actually represent and embody the Values of their members. Indeed, it is the application of scientific critique to these Values that precipitates the crisis of Western Christian-bourgeois society and its worldview. (On the advent of philosophical critique as a harbinger of social crisis, see R. Koselleck, Critique and Crisis. On the notion of “Christian-bourgeois society”, see K. Lowith, From Hegel to Nietzsche.) 

For an economic science to be possible, there must be either a scientific method of exchange – a science of choice or of exchange, catallactics - that exhausts the field of economic activity entirely, as for the Neoclassics; or else, as for the Classics, there must be an Objective Value (necessary labour time) that reduces economics to a mere struggle over the distribution of the Value but not over its pro-duction. (We shall discuss this point separately in our review of Marx’s Zur Kritik.) Both economic theories, Classical and Neoclassical, remove the metabolic element - what is produced and how it is produced - from economic theory by absolutizing the Law of Value: it is the presumed equi-valence of exchange that makes this metabolism of human beings with their physical environment (Umwelt) superfluous and reduces social life to the empty formalism of exchange of subjective utilities or of objective material values.


Of course, the stripping of all historical productive interaction between human beings in the context of the social production of their needs is absolutely essential to the bourgeois-capitalist organization of social production: - because the very foundation of capitalism is precisely the separation (Trennung) of human living labour from any other social, institutional and historical bonds and physiological needs that actual and potential workers may have and that interfere with the reduction of social labour to wage labour, to naked labour power, that is, to separate individual labours that are fictitiously “measured” as a mere quantity and remunerated in terms of their “marginal product” which is in turn determined by “the market”.


It is because of this political imperative that bourgeois economic theory must eliminate from the sphere of “economic analysis” all matters – values, customs, institutions, human solidarity – that may interfere with the imposition of the wage relation. Bourgeois economic theory, Classical and Neoclassical, must do away with the sphere of production for the simple reason that, as part of its political effort to strip human living activity of all its social bonds, “economics” can then be presented as a “neutral science”, one in which the only possible “facts” that can interfere adversely with its “laws” are “political”, and these can affect only the “distribution of goods”, not “the making of pro-ducts”.

To the degree that a scientific Economics is possible, then, there is also a rational Politics that is capable of protecting it either from “political interference” or else from the “anarchy” of the market. Thus, if we accept that material welfare – Value – is the most important objective for any society, it follows that the central aim of “the Political” – that is, of both State and civil society – is to guarantee the untrammeled operation of “the Economy” – meaning, of course, the capitalist economy. This homologation of the Political and the Economy is the true meaning of bourgeois “Political Economy”. It is this homologation of the Political with the Economy made possible by the “scientificity” of the market mechanism – by its being perceived, precisely, as a “mechanism”, as Technique - that guarantees the “neutrality” of the liberal State in its protection of laissez faire and of the “liberties” of the public sphere. (For a critical discussion of the “neutralization” of the Political, see the homonymous appendix to C. Schmitt’s The Concept of the Political.)

The process of production, therefore, is seen as “technology”, as an ob-ject – that is, as a “neutral scientific process” that is “external” or “exogenous” to economic “science” - rather than as a pro-duct, as the very embodiment of political antagonism over the production and satisfaction of human needs. At a broader level, the capitalistic domination of living labour by means of dead labour (productive materials, machinery and produced goods) is reified as “science and technology” in such a manner that (a) they are mistaken for “objects” or “tools” when in fact they are mere extensions of human activities, they are “techniques”; and (b) they are seen as the result of “scientific and technological” – that is to say, “politically neutral” - research and development or “discovery” independently of capitalist domination over living activity!


As a result, “science and technology” are seen not as specific capitalist strategies that contain antagonism but rather as “autonomous” and “separate” – indeed, “scientific and technical”! – entities that are in themselves “politically neutral”! Yet just as there is no such thing as “science” or “technology” but only human productive activities mediated by tools, so there is and there can be no “neutrality” in the tools employed by humans for their activities! “Science and technology” are not neutral because they are always activities in which human beings engage with a purpose in mind, even when that purpose is “multiple”: hence, tools are not distinguishable from human activities because they are extensions of the human body! (Cf. H. Arendt’s Prologue to The Human Condition in which the automobile is seen as an “extension” of or appurtenance to the human body.) It is not the case that a tool can be used for good or for bad purposes - because the tool and the purpose cannot ever be distinguished – they are part of the one human “activity”; they go “hand-in-hand”, as it were!


The political danger in the hypostatization of “science and technology” lies in the epochal transformation of their socio-political role from the Renaissance, when societies were still emerging from feudalism and Absolutist rule, to the Industrial Revolution when the capitalist bourgeoisie had finally erected its liberal nation-State regimes and begun to subsume the entire reproduction of human societies under the rule of capitalist production. Effectively, capital has succeeded in presenting both the State – the Political – and civil society – the Economy – as “techno-scientific mechanisms” that are politically neutral – securing thereby the apparent depoliticization of capitalist production.


This danger was first exposed with exceptional acuity by Carl Schmitt (in the related essay cited above) by confuting the neutrality of “technology” from two opposing sides, as the respective quotations below evince. From the side of “technology” intended as “tools”, as objects, Schmitt rightly points out in the first quotation that tools are “tools” to the extent that they are util-ized by human beings: but in that case they can never be “neutral” for the exact reason that human actions, by definition, cannot be “neutral” and are always “motivated” instead. In the second quotation, which approaches the reified concept of “technology” (and “science”) from the side of human motives, Schmitt shows that these motives are never obliterated or neutralized by the “tools”, even when human agents believe that they are simply applying a “neutral technology”!

Technology appeared to be a domain of peace, understanding, and reconciliation. The otherwise inexplicable link between pacifist and technical belief is explained by this turn toward neutralization which the European mind took in the seventeenth century and which, as if by fate, has been pursued into the twentieth century. But the neutrality of technology is something other than the neutrality of all former domains. Technology is always only an instrument and weapon; precisely because it serves all, it is not neutral. No single decision can be derived from the immanence of technology, least of all for neutrality. Every type of culture, every people and religion, every war and peace can use technology as a weapon. Given that instruments and weapons become ever more useful, the probability of their being used becomes that much greater. Technical progress need not be either metaphysical or moral and not particularly economic to be progress. If humanitarian-moral progress is still expected by many today from the [92] perfection of technology, it is because technology is magically linked to morality on the somewhat naive assumption that the splendid array of contemporary technology will be used only as intended, i.e., sociologically, and that they themselves will control these frightful weapons and wield this monstrous power. But technology itself remains culturally blind. Consequently, no conclusions which usually can be drawn from the central domains of spiritual life can be derived from pure technology as nothing but technology - neither a concept of cultural progress, nor a type of clerc or spiritual leader, nor a specific political system. (Schmitt, CoP, pp.91-2)
 [94] The spirit of technicity, which has led to the mass belief in an anti-religious activism, is still spirit; perhaps an evil and demonic spirit, but not one which can be dismissed as mechanistic and attributed to technology. It is perhaps something gruesome, but not itself technical and mechanical. It is the belief in an activistic metaphysics - the belief in unlimited power and the domination of man over nature, even over human nature; the belief in the unlimited "receding of natural boundaries," in the unlimited possibilities for change and prosperity. Such a belief can be called fantastic and satanic, but not simply dead, spiritless, or mechanized soullessness.

Again, taken jointly, Schmitt’s objections to the reification of “science and technology” as a thing, show clearly that in reality they are nothing more than human pro-ductive activity or praxis. Yet, although Schmitt’s approach quite correctly leaves this reified concept of “science and technology” with no “separate existence”, with no “neutrality” whatsoever, and therefore correctly stresses its relation to human action and interests, still he refers to “technology” as if such a thing really existed independently of human action.  Of course, the validity of Schmitt’s critique becomes pellucid once we replace the reified phrase “science and technology” with its true equivalent of “techniques” because – as the term itself obviously implies – a “technique” is an actual human activity or skill whereas “science and technology” are quite easily mistaken for and hypostatized as the “methodology” and “tools” (the laboratories, the institutions, the objects, the machines, the equipment, the instruments) that constitute their social embodiment. (This last insight is in Heidegger’s essay on Aristotle’s Physis cited above. This crucial fallacy of treating “science and technology” as “independent realities” – as objects, really - can be found even in the most insightful reviews of the social role of “science and technology” such as Habermas’s review of Marcuse [“Science and Technology as ‘Ideology’” in Toward A Rational Society, which we shall review later] or Arendt’s notion of “human action” in The Human Condition.)


The final part of Schmitt’s second quotation above is a mordant and trenchant riposte to the various late-romantic ideologies denouncing the “reification” and “dis-enchantment” that capitalist “rationalization” imposes on living labour which is now seen as reducing human interests to the mere materialistic pursuit of “prosperity” or “economic value” (whether as utility or as labour-value) or “profits” or “consumerism” – with the consequent loss of “meaning” and of “totality” in this “science and technology” which no longer seek “reason” or “freedom” but serve only to chain humanity to the Promethean wheel of production for its own sake, profit for its own sake, quantity against quality, having against being – the Weberian and Lukacsian Rationalisierung. The locus classicus of this critique of “the crisis of European sciences” is to be found in Husserl’s famous address with the same title:

The exclusiveness with which [6] the total world-view of modern man, in the second half of the nineteenth century, let itself be determined by the positive sciences and be blinded by the "prosperity"2 they produced, meant an indifferent turning-away from the questions which are decisive for a genuine humanity.3 Merely fact-minded sciences make merely fact-minded people. The change in public evaluation was unavoidable, especially after the war, and we know that it has gradually become a feeling of hostility among the younger generation. In our vital need—so we are told—this science has nothing to say to us. It excludes in principle precisely the questions which man, given over in our unhappy times to the most portentous upheavals, finds the most burning: questions of the meaning or meaninglessness of the whole of this human existence. (E. Husserl’s The Crisis of European Sciences, pp.5-6).

This pining for the loss of “totality” [Totalitat] (a central concept in Lukacs) and the consequent alienation of human beings from their living activity (Marx) through the fragmentation and reification of social reality (Lukacs, Heidegger) or “dis-enchantment” (Weber’s Entzauberung) engendered by the instrumental and positivist abuse of “science and technology” is a constant theme running through all social theory – bourgeois, socialist and Marxist - from the middle of the nineteenth century to the present day. Despite the obvious pertinence of many of the critical analyses of Technik and the Rationalisierung central to the German phenomenological tradition from Nietzsche to Weber and Heidegger (which includes figures such as Husserl, Arendt, Lukacs and the Frankfurt School), their incisiveness stops right at the point at which human conflict and the techno-scientific practices that it pro-duces – the Rationalisierung - are misconstrued as ontological or epistemological or ontogenetic categories that are quite independent of social relations of production, and therefore as ineluctable or immutable categories of human activity. Indeed, once more, they are foisted upon us as the evil by-products of “science and technology”(!), which reintroduces by the back door the very reification and hypostasis that the critique of “science and technology” was meant to expose!


Some Marxist intellectuals have criticised these notions as a rear-guard attempt by the German workers’ movement to preserve the “artisanal” work practices of skilled workers (die Gelernte) against the massification of labour introduced by Taylorist and Fordist industrial processes (cf. M. Cacciari, Pensiero Negativo e Razionalizzazione and the studies by G. Marramao on the German workers’ movement.)


All the critics of “the technocratic society” (even down to our days - Jacques Ellul, Alvin Toffler, or Theodore Roszak) and “one-dimensional man” (Marcuse) forget that the ideological use of this reified concept - “science and technology” -, far from actually embodying the political antagonism of the society of capital, and farther still from being able to disguise it, and much farther still from being able to resolve it (!), is instead the actual direct product and manifestation of this antagonism - and not a mere “ideology” (Marcuse) or a “necessary illusion” (Lukacs), or an “objective appearance” (Marx) -, an antagonism that increasingly calls into question the sustainability of the capitalist economic system based on domination over living activity, and indeed also poses ever-growing systemic risks to the very survival of “the society” on which capitalist social relations of production must be founded. Thus, far from hiding or disguising or “reifying” it, these techno-scientific practices actually embody and reveal – they exhibit - the utter incompatibility of human needs with the capitalist command of living labour based on the wage relation.


Habermas, in S&T as “Ideology”, whilst agreeing with Marcuse that perhaps a New Science and New Technology can come to view humanity as “the Other”, rather than humans regarding “nature” as “the Other” (a pious suggestion at best), concedes the possibility of human pacification, yet insists on this notion of “Science and Technology” and goes along with Arnold Gehlen’s wild generalizations about the “universality” of “technological progress” (from mechanical functions involving limbs to cerebral functions)! Once again, Habermas and Gehlen conveniently forget that human “mechanical” functions are indeed as “intellectual” or “cerebral” as any other functions, as Gramsci amply and ably showed in the Prison Notebooks (sections on “Intellectuals”). The reason for this misapprehension is that Habermas falls into the same old habit of seeking to draw an invalid dichotomy between “labour” (mechanical activity) and “interaction” (symbolic communication) – a pathetic humanist and late-romantic distinction that we have criticized in our “Habermas’s Meta-Critique of Marx” and in our critical review of Alfred Sohn-Rethel’s Intellectual and Manual Labor (both on Apart from this, Habermas validly challenges Marx’s facile distinction between “forces” and “relations” of production as well as Marcuse’s even more questionable reduction of “Science and Technology” – an abstraction – to “ideology”, contra Weber, which only tends to reaffirm Weber’s hypostatization of “rationality” as synonymous with capitalism whether in reality or as “ideology”.


A further hypostasis is pointed out by Heidegger, “On the Content and Essence of ‘Physis’ in Aristotle”, in Pathmarks, at p.211. Heidegger insists repeatedly on the absurdity of the attempt in Western civilisation to define physis, the coming-into-being of our surrounding world (Um-welt), as techne, a pre-conceived human project [see especially p.197], and revives instead the notion of “pro-duction” as metabole [especially at p.221]. His vice, as always in these matters, is to identify this fallacious praxis philosophisch, as if it were merely an ontological confusion rather than the historical product of existing political antagonism over the satisfaction and creation of human needs. Heidegger centres this notion of physis and metabole on the contingency or being-toward-death of human Dasein [being there], on its “thrown-ness” or “freedom-unto-death”, and therefore on its mortality. Perhaps the best, albeit abstruse, critique of this “ontologism” is in T. Adorno, Negative Dialectics, esp. Part One on “The Ontological Need”, and the shorter Lectures on Negative Dialectics, esp. Lecture 2, pp.13ff. See also A.Gramsci, Il Materialismo Storico, cited by Bobbio in Gramsci for a critique of the undialectical notion of “evolution” in social theory. Much preferable and more uplifting is Hannah Arendt’s reinterpretation– in The Human Condition - of physis and metabole as “birth” (genesis) and therefore as the inescapable condition of human beings to initiate action as political beings – as beings whose very “being alive” is “to be alive among other human beings” (inter homines esse – whence the notion of “human inter-est”).



There are two types or moments or aspects of “crisis” that need to be confronted therefore: the first is the notion of crisis as a dys-function of what is interpreted as an otherwise “efficient machine” such as the capitalist economy operating in accordance with the dictates of “economic science”. And the other crisis is that affecting the very “science and technology”, the techno-scientific practice and its theorization that are applied to regulate this fictitious “market mechanism” that ensures the efficient operation of the capitalist economy – the only “scientific” economy imaginable. This second crisis concerns both the “scientificity” of “economic science” – its political “neutrality” – and also the content and the object of this “science”, that is to say, its decreeing that the “Value” of economic activity is “scientifically quantifiable and determinable” without the interference of democratically participatory decision-making processes that determine the “goals” or “values” of social productive metabolism.


In our next section we will show how Schumpeter completely revolutionised our interpretation and practical application of both these invalid notions of crisis in the process of laying down a practical manifesto for the deployment of capitalist rationalisation as a project of domination over living labour.