Commentary on Political Economy

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. 

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