Apologies to all friends for the long delay in writing. These are some more of my notes on "Equilibrium and Social Reality" with a preface meant as a reply to the valuable comment by "Dan" to our last post. Note that "The Philosophy of the Flesh" can be found either on this blog or on scribd.com. Cheers.
The question of the unity of theory and practice and that
of the status of concepts or of our construction of social reality (what
bourgeois academics understand as 'the sociology of knowledge') are really one
and the same. Our understanding of how social reality is constructed is the
most fundamental first step to our transformation of that reality. This is not
a matter for science in the sense of an objective theory of social reality.
There is no possibility of encountering the 'false consciousness' of scientistic Marxism. The interpretation
and transformation of social reality is and must be a participatory democratic
process, one that involves the interests of all members of human society. For
as we have sought to demonstrate throughout our work, not only is there no
social science independently of human needs, but there can be no science at all
- because even what ẃe call 'physical'
science is indeed not at all an 'objective' view of the world but it is instead
precisely what 'view' or 'theory' imply, that is, a historically specific
'stance' toward human reality. All science represents a partial crystallised
interpretation of human needs and action: all science is effectively praxis; every theory is a strategy.
Marx's Eleventh Thesis on Feuerbach therefore is incorrect to the degree that
all philosophical interpretations of the world in reality were strategies for changing
it. What differed before Marx – and to this extent his thesis is correct - is
that philosophers were not necessarily or overtly conscious of effectively
transforming the world through their theories rather than just interpreting it.
This active side of theory - that is,
theory seen as praxis - really only starts with the Italian Renaissance and
runs from Cusanus, Machiavelli and Vico to Nietzsche and Marx.
The temptation of every theoretician is to freeze and
crystallise reality, to render it 'objective' and thus to reify it, to turn it into an immutable 'thing in itself'
impervious to human action. This is what we must avoid. But again we must avoid
it not for the sake of an abstract principle to preserve the 'openness' of
theory against 'closed' schemata - because then we must still specify in what
sense a theory is ‘open’ as opposed to 'closed'. Once again, the difference
between a 'closed' and an 'open' theory cannot be formal, because then we would reify the 'openness' of the 'open'
theory, reducing it thus to a 'crystallised' abstraction. This is the crucial
flaw in Lukacs’s own attempt to historicise social reality through the concept
of “class consciousness” or rather “conscious being” (Bewusst-Sein).
The openness of a theory depends on the degree or
extent - never an absolute one - to which it invokes the decision-making
activity of human beings. Only decisions that preserve the volitional element
of decision-making can be said to be 'open' or free. On the contrary, decisions
that seek to hide or negate the volitional element of human action necessarily
have the effect of reifying human reality. In this context, the bourgeois
philosophy par excellence,
Protestantism, is founded ultimately on the notion of predestination - from
Luther through Hobbes to Schopenhauer. For the bourgeoisie, success (the
accumulation of capital) is its own justification and goal.
Throughout our studies we have sought to expose the
manifold strategies employed by the capitalist bourgeoisie to present social
reality as a crystallised, objectively-given and therefore reified and
immutable ‘thing’ whereby the established order is certified as a scientific
necessity or destiny. To avoid and eschew this fate, we have sought to outline,
especially in our The Philosophy of the
Flesh, a theory of social reality and action that is immanentistic in that it avoids the twin errors of idealism and
materialism, both of which end up in the inescapable transcendentalism of
Western metaphysics. As we saw in the previous section on “Apories”, “the union
of opposites” theorised by Cusanus early in the Renaissance is not a reality:
rather, it describes the process whereby aporetic concepts inevitably end up
positing their “op-posites”, resulting thereby in what Lukacs (referring to
Kant) called “the antinomies of bourgeois thought” (see the central essay on
“Reification” in History and Class
Consciousness).
One such process of reification that we have sought to
expose concerns the concept of equilibrium that is central to all bourgeois
economics.
Relation
of “equilibrium” to “reality” – content of the presumed “theory”.
Debreu says that “there is no intellectual
life in equilibrium” (Loasby ‘E&E’).
Thus, equilibrium analysis, with its
“sphere of exchange” and “simultaneous equi-valence” becomes a tautological
“closed system” where the “axiomatic assumptions” contain the solution to the
“mathematical relations between the entities postulated”.
Hayek’s own attempt to historicise or
processualise equilibrium mistakes capitalist (market) institutions for
“objective”/reified practices of human groups from which “laws” or at least a
“spontaneous order” can be “distilled”:-
This paper traces
out the development of Hayek’s focus on the epistemic foundations of the
complex co-ordination in an advanced
market economy and shows that his critique of classical and market socialism
led to a refined, subtle approach to understanding spontaneous order.
Furthermore, it is precisely Hayek’s focus on the role of institutions in creating the conditions
for the utilization and transference of
knowledge through the price system that continues to shape the progressive
research programs in economic science and public policy analysis that is his
legacy, ((Boettke et al, “Context of Context”, Abstract, my emphases).
The main “law” for Hayek of course is that
“the price mechanism or system” is the only one consistent with “methodological
individualism” which posits “metaphysical” notions such as “utility” and “market”,
“competition” and “prices”, in such a fashion that they can be “ordered” into a
“game” whose “rules” seem then to be “scientific” but in fact are only logical
and self-referential – they constitute a “closed system” that is internally consistent but does not explain the reality that lies outside of
its axiomatic (self-referential)
assumptions! This is the fate of “human nature” theories that turn
historical realities into eternal immutable (‘metaphysical’) “truths” (in fact,
axiomatic identities or “tautologies”) devoid
of all practical content – which is what reveals them as apories and
antinomies.
[1] “Since equilibrium is a relationship
between actions, and since the actions of one person must necessarily take
place successively in time, it is obvious that the passage of time is essential
to give the concept of equilibrium any meaning.
This deserves mention, since many economists appear to have been unable
to find a place for time in equilibrium analysis and consequently have
suggested that equilibrium must be conceived as timeless” (Hayek 1937).
[For Alchian &Demsetz in ‘Property Right
Paradigm’, the way out is the Hayek-Schump one, ‘to processualise’ the central
questions of economic theory.]
The same sentiments are endorsed by Coase
in his review of “the New Institutional Economics”:
“This disregard
for what happens concretely in the real world is strengthened by the way
economists think of their subject. In my youth, a very popular definition of
economics was that provided by Lionel Robbins ( 1935 p. 15 ) in his book An Essay on the Nature and Significance of
Economic Science: "Economics is the science which studies human
behaviour as a relationship between ends and scarce means that have alternative
uses." It is the study of human behavior as a relationship. These days
economists are more likely to refer to their subject as "the science of
human choice" or they talk about "an economic approach." This is
not a recent development. John Maynard Keynes said that the "Theory of
Economics ... is a method rather than a doctrine, an apparatus of the mind, a
technique of thinking, which helps the possessor to draw correct
conclusions" (introduction in H. D. Henderson, 1922 p. v). Joan Robinson (1933
p. 1 ) says in the introduction to her book The Economics of Imperfect
Competition that it "is presented to the analytical economist as a box of
tools." What this comes down to is
that economists think of themselves as having a box of tools but no subject
matter. It reminds me of two lines from a modern poet (I forget the poem
and the poet but the lines are indeed memorable): I
see the bridle and the bit all right. But where's the bloody horse? I have
expressed the same thought by saying that we
study the circulation of the blood without a body.” (my emphases)
The reference to “the circulation of the
blood without a body” is a clear endorsement of Schumpeter’s
Kreislauf/Entwicklung distinction in the ‘Theory’ and of the dog’s
anatomy/evolution in Business Cycles.
And yet, for reasons we will outline later, the theoretical analysis of “the
NIE” is closer to Hayek’s than to Schumpeter’s because it does not challenge
the validity of equilibrium analysis at all, it simply shifts the analysis of
price co-ordination from the “simultaneous/synchronic equations” of Walrasian
equilibrium analysis to the “spontaneous order” of Hayek’s long-run
equilibrium. By contrast, Schump’s ‘Theory’ certainly did challenge equilibrium
analysis, despite his avowals of faith in its “heuristic” value, not just for
Hayek’s reasons and for its a-historical ‘Statik’ approach, and not only for
its “metaphysical” belief in “utility” (and its presumed “maximization”) as the
“substance” of exchange and market prices.
Because above all, the most original
feature that sets Schumpeter apart from all other economic thinkers of the last
century is his notion of the “dis-continuity” or “dis-equivalence” (not to be
confused with ‘dis-equilibrium’!) that clearly brings back into play
prepotently the power relationships and antagonism intrinsic to the capitalist
economy and therewith its necessarily critical
instability and cyclicality. This aspect – entirely neglected by the
“institutional epigones” - will be explored and developed in the chapter on
Schumpeter. Similarly, the Nietzschean premises of Schumpeter’s and Weber’s
theories have been totally and culpably ignored by the myrmidons of the NIE for
reasons that coincide, as we shall see, with the most pressing
political-hegemonic needs of social capital, whether intentionally or no.
Schumpeter’s formidable intuition of the
fundamental ir-reconcilability of the concept of “equilibrium” as belonging to
“the sphere of exchange and equi-valence”, his vision of the Krisis (the rupture, the antagonism
intrinsic to capitalist social relations of production) has been ‘flattened’
into the notion of ‘dis-equilibrium’ that still exists within the uni-verse of
“exchange” and therefore of “equilibrium” and is interpreted by the
‘institutionalist evolutionary epigones’ as “the continuous adaptation and
development and innovation” of the capitalist economy.
In other words, according to the epigones,
the capitalist economy is never in “equilibrium” because it is intrinsically
“developing” and “innovative” and therefore “growing” and “evolving” – hence,
the “body” that Coase was looking for! Ecce
homo! But this inter-pretation of Schumpeter grossly mis-construes his
meaning because by ‘Entwicklung’ and
‘Innovation’ he meant something much more radical and fundamental than “growth”
or “development” or “evolution”: he meant to encompass the profoundly
“political” and “antagonistic” and “conflictual” essence of capitalism, - one
that is in a different dimension from and ir-reducible to the sphere of
exchange and neoclassical equilibrium.
Coase’s animadversions echo those of the
German Historical School which, not by chance, has been invoked by Williamson
as among the ‘precursors’ of “the New Institutional Economics”. Indeed, we may
describe the NIE as a go-between, tempering the extremes of the
“historical-institutional” approach to political economy of the GHS and the American Institutional
School , on one side, and the
formalistic-mathematical ambitions of the neoclassical tradition (equilibrium
analysis and Austrian
School ) on the other.
[Note “economic sociology” efforts from Hodgson and Swedberg.]
Boettke et al agree (‘Context’) with regard
to Hayek:
“As Hayek’s technical work in economics
evolved, he became increasingly aware of both the power of, and the limitations
of equilibrium theorizing. At first it
was the absence of time within the equilibrium construct that caused problems
for Hayek’s theorizing on intertemporal
co-ordination of plans within a capital structure.[1] In studying the derivation in value of the
various inputs with relation to the value of the output produced, Hayek became
aware of the dangers equilibrium theorizing poses by distorting the essential
economic problem that the equilibrium propositions were supposed to enlighten. Hayek was acutely aware, on the other hand,
of how the heterodox traditions, of the German historical school and the
American institutional school, led to an atheoretical orientation of fact
collection. Somewhere between arid formalism and descriptive fact collection was
the appropriate domain of theoretical social science.” (pp8-9)
Boettke clearly fails to see that there
is no “somewhere between” because both approaches
suffer from incurable ‘reifications’ that also make them irreconcilable: the
‘theory’ and the ‘fact collection’ move in qualitatively different dimensions
because the ‘theory’ reifies the ‘facts’ and the ‘fact collection’ can be ‘theorised’
only to the degree that its ‘facts’ are reified or “reduced/traduced” to formal
categories. (See our discussion of Long’s “fallacy of misplaced concreteness”
whereby he confuses the content of “language games” [such as the regular
behaviour of market exchange] with the abstract logico-mathematical rules of
the game. In seeking to reconcile “the Pure Logic of Choice” with its real
referential content, Mises and Long forget the “inexorability” of the rules
[!]) which obliterates the “choice” that is the essence of the “action axiom”!
Mises “reads” ex post the validity of his a priori theory into behaviour
consistent with it. And see also our similar critique of Lawson’s
‘theoretical/ontic/ distinction in sections 4 and 5 below.)
Hayek instead seeks to validate the theory
empirically ex ante by attributing “regularities” to the behaviour of human
market ‘agents’ [homines agentes] that have an “observable tendency to
equilibrium” [or co-ordination]. But in his case also, the reaching of
“equilibrium” introduces the “equi-valent exchange” that eliminates the
rationale for exchange! Once “equilibrium co-ordination” is achieved, the
economy simply stagnates and lapses into Misesian “non-action”.
This is the irreconcilable conflict that
only a “histoire raisonnee” in the manner of Marx and as described by
Schumpeter (initially opposed to it as “unscientific”, in the ‘Theorie’ and in
‘HEA’, but finally more condescending in ‘BC’ and ‘CD&S’) can seek to
overcome.
It is Hayek’s ambiguity and the subsequent mis-conceptions that it engendered that
is carried over into the NIE and gives rise to Williamson’s “fallacy of
composition”, whereby he pretends “to distil” economic theoretical relations from historical “institutional”
analysis through a “compositive” or “descriptive”, block-by-block method.
[Quote Williamson, ‘The NIE’.] We know that this was the bane of the GHS –
because no amount of “descriptive” studies, no matter how ‘detailed’, will ever amount to a theory of economic activity/reality. In this regard, of course, the
critique of the GHS by the Austrian School (from Menger to Bohm-Bawerk and
Mises) was entirely right. A proper economic theory must not fall into the
“mathematical formalism” of general equilibrium or the “logical formalism” of
‘praxeology’, but must avoid also the ‘descriptive’, ‘pictorial’,
‘data-collecting’ empiricism of historiography or, indeed, of management and
business studies. No amount of “historical, factual or ‘institutional’” evidence will ever yield a ‘theory’ – which is an abstract rule that connects the evidence
in a causal relation.
This “irreconcilability” (“never the twain
shall meet”) of ‘theory’ and ‘history’ is a recurrent problem, an Ariadne’s
thread, in our entire critique of equilibrium analysis that will lead us out of
the labyrinth of bourgeois reification. Because “the sphere of exchange” is a
“sphere of equi-valence”, “a final state of rest” or of “non-action” (Mises) or
a “Kreislauf” and a “Statik” (Schumpeter), not only does it
defeat every attempt to introduce “time” in it [cf. Boettke et al.’s futile
attempt to postulate an ‘ex ante’ and ‘ex post’ equilibrium], but a fortiori it
is also impervious to any effort to locate “causality” in the notion of
“equilibrium” and “co-ordination”.
Western
thought, from metaphysics to science, must end, must "close", must
"com-plete", "satis-fy", "ful-fil",
"ex-haust" itself with the conceptualisation of totality, of the "Ab-solute". The Ab-solute is what is
not "conditioned" by anything else, what is causa sui (its own
cause), both in the sphere of logico-mathematics and science (Leibiniz's intuitus
originarius that does not admit of "predicates" and therefore is
entirely "self-evident") and in the sphere of human praxis (Kant's
"autonomous" Practical Reason guided by the Will, which is the union
of the posse [I can] with the nosse [I know] in the velle [I
will]). The Will is the ultimate ex-pression of "freedom" - it is
"the freedom of freedom", "the power of the freedom of the
Subject that "knows itself". Of course, whatever is
"self-evident" does not allow of ex-planation in that the definiens
is in the definiendum and vice versa. The Ab-solute is therefore
"ab-solved" from the "need" to explain itself - just as the
prince is "ab-solved" (a legibus solutus) from the laws because he is
"above" the law.
The
error that the Classical and Marxian Economics committed was to presume that
its "subject-matter" (its sub-iectum),
its "quidditas" is
actually a Sub-stance, a homogeneous qualitas occulta - and it
presumes as much because it starts from the phenomenology of capitalist social
relations of production which are "co-ordinated and measured" by money.
Every classical economist from Smith to Marx started from the fact that
every "thing" that is exchanged in the market has a "price"
and that therefore all "things" on the market must have a homogeneous
"Value" - and that this "Value" must be the "subject-matter"
of a "science of Economics"! This essentialism is precisely what
distinguishes Classical from Neo-classical economic theory, as we are about to
illustrate through Weber and Schumpeter.
Weber’s
central failure was not that he mistook “scientificity” for “science”, for its
corresponding “practical conduct” – which mostly he did not! Weber’s failure
was rather that his insistence on “categorizing” his “scientific pursuit” with
the introduction of the “ideal types” distracted him from the fundamental
question of how the Rationalisierung is
possible! This failure led him to
reify, to hypostatize the historical object
of his studies into the “scientific categories or forms” or "the ideal
types" that he presumed to adopt for that study – ignoring thereby
Nietzsche’s famous warning against “systematizers”! Essentially, Weber mis-interpreted(!) Nietzsche’s Umwertung (trans-valuation of all values) to mean that “all values are
interpretations of reality”, and that
therefore it is possible for the “scientific observer” of a given historical
reality to select a hermeneutic code
of interpretation (the ideal types) linking rationally
the means available to its “actors” with the “pro-jected ends” that they may
envisage. Yet, as Nietzsche would have promptly reminded Weber, this framework
of analysis (Entwurf), this “phenomenalism
and relativism” starts from the pre-supposition
that such a “rational code” of interpretation is both possible and applicable –
which Nietzsche would vehemently deny on the ground that it is the very possibility and applicability of this “rational code” itself to a given historical reality – its effectuality - that needs to be interpreted and explained as the mathesis universalis (Leibniz), as the rationalization of the world that is
based on human needs, on the “system
of needs and wants”! In Nietzsche’s own words,
“It is our needs that interpret the world; our instincts and
their impulses for and against,” (Aphorism
481, Wille zur Macht).
Weber’s
Neo-Kantian hypostatization not only of his sociology but above all of “the
scientific fields of knowledge” to which he sought to apply it – from
economics, to law, to music – is induced fatefully from this inability to com-prehend Nietzsche’s Umwertung, his thoroughgoing De-struktion (Heidegger) of Western
metaphysics and science and the related critique of Western Kultur and Zivilisation. It should come as no surprise, then, that it remains
suspended, as we noted earlier, between the Dezisionismus
of “charisma” derived from the individualist relativism and the Neo-Kantian
formalism of the “ideal types” necessitated
by Weber’s need to ground this
hermeneutic relativism on logico-mathematical
– hence, “rational and systematic”, “scientific” - bases. What Weber fails
to com-prehend above all else is precisely the historical character of “the metaphysical foundations of
logico-mathematical rationality” whose political
origins Nietzsche had made all but evident.
A brilliant illustration of these
points is provided by Norberto Bobbio who, in reviewing Kelsen’s attack on
Weber’s theory of the State and sociology of law in ‘Max Weber e Hans Kelsen’
(p.72), concedes that Weber’s Neo-Kantian or Simmelian ‘formalism’ enticed him
to his detriment into the Kelsenian ‘Norms’, but that at the same time Weber’s
“positivism” was premised on the fact that capitalism represents a
historically specific intensification of this ‘positivization’of the juridical
norm, in line with its exasperation of the Rationalisierung (p.77) –
which is theoretically a far more consistent and Nietzschean position for Weber
to take. Commenting on Kelsen’s
requirement that ‘co-action’ be added to the definition of ‘legal norm’ (the
famous Grundnorm) so as to equiparate the concepts of ‘Right’
with ‘Law’ and therefore also with that of ‘State’, Bobbio goes on to
reason (at p.71) that Weber’s notion of ‘apparatus’ (bureaucracy) must be
added to Kelsen’s ‘co-action’ for this equiparation of Right, Law and State to
have any historical effectuality! Bobbio then comes uncannily close
(at p.76) to the central thesis of this study on the meaning of Rationalisierung,
which we have enucleated in our Nietzschebuch (and will illustrate
more incisively in Parts Two and Three of our study on Weber). In a nutshell,
Bobbio perceives without actually comprehending that the notion of Right
or Law or the State requires the existence of appropriate
"institutions" that "en-force" these abstract concepts. The
question that needs to be answered is how political enforcement can
"crystallize" or "congeal" into abstract concepts and how
abstract concepts "dis-solve" themselves into political institutions.
This is what Nietzsche attempted and others including Marx did not.
Separately, by discussing Kelsen’s claim
that his jurisprudence is intended to apply both to capitalist and to
socialist States, Bobbio helps us highlight the link that we are about to
trace in the following sections, dealing with the claim on the part of Neoclassical
Theory to apply equally to both capitalist and socialist ‘economies’,
between Neo-Kantism and Neoclassical Economics!
It cannot be doubted seriously
that Marx was aware of the impossibility of reducing objectively, physically, heterogeneous labor to a homogeneous substance. Indeed, Marx
counted this, the discovery of the Doppelcharakter
of the “commodity” labor power (its being at once living labor that “valorizes”
capital and “labor power” that is exchanged on the market), as perhaps his greatest
achievement. It is just as certain, as Colletti has noted, that for Marx value
was a “social hieroglyph” that, like God or the soul, has no material existence
and yet is “objective” in that it conditions and guides human action. But, and
here is the crux, this theory of value is inconsistent with the notion of
market competition. One of two things:- either
“market competition” is regarded by Marx as an autonomous and spontaneous
sphere of activity not enforced
politically by one class against another, in which case it is an aporetic concept because “competition”
invariably ends up “destroying competition” (!); or else “market competition” is a sphere of activity that is “politically enforced”, in which
case, eo ipso, there can be no competition as a reality a se stante (that can stand on its own).
Yet Marx worked precisely on the grim assumption of the Law of Value, that
capitalist society reproduces itself through the operation of the
self-regulating market, especially its “pessimistic” feature – competition (the
dira necessitas). Consequently, he
had to persevere with his inconsistent theoretical framework because to have
done otherwise, to have accepted that value is an entirely political category and that the capitalist economy is operated by
concrete and identifiable social
institutions would have meant for him to be lowered once again into “the
kingdom of shadows”, into the shadowy world of the Political which he despised
and spurned because he identified it mistakenly with the public sphere of liberalism
founded on the “optimistic” features of the market (commutative and
distributive justice).
(Of course, Marx falls into this
“scientistic trap” in Das Kapital,
but generally not in the Grundrisse
which are therefore much to be preferred as the exposition of Marx’s overall
theory of capitalism. Incredibly, in “Natural Law and Revolution”, now in Theory and Practice, Habermas argues
that it was Marx’s finding of “the theft
of labor time” in the “pure exchange” categories of bourgeois law that “discredit[ed]
so enduringly for Marxism both the idea of legality and the intention of
Natural Law as such that ever since the link between Natural Law and revolution
has been dissolved”! Habermas, who is almost entirely innocent of economic theoretical training, cannot see that indeed
it is that “side” of Marx’s theory and of Socialism that believes in the fable
of “the theft of labor time” that then must necessarily believe, vi rerum [by
force of things!], in the “legitimacy” of legal categories – first among them,
the belief that the worker owns “the fruits of his labour”, whereas in reality
no such “ownership” is traceable or indeed evident. This misconception draws
Habermas’s analysis back into the orbit
of Arendt’s “liberalist and jusnaturalist” rendition of the historical reality
of “revolutions”! Habermas manages therewith to undo the valid critique of
Arendt’s On Revolution that he had
expounded in his essay Die Geschichte von
den zwei Revolutionen. See also discussion of these themes in Part Three of
our Weberbuch.)
We
should note further how the German Historical School and other early opponents
of Neoclassical Theory objected to it on the ground that “utility” is a
“homogeneous” entity whereas in fact the “motivations” behind “economic action”
are quite evidently “heterogeneous” (see Schumpeter’s account of this in the
last chapter of his Economic Doctrines).One
of the constant objections to capitalist enterprise is precisely this – that it
“reduces” all aspects of human social interaction to the “homogeneous” pursuit
of “profit”. Clearly, what these ‘critics’ fail to do is to confront the
central question that we are addressing here – that is, how such a reduction of
the heterogeneity of human activity to “homogeneous” and “rationally calculable
enterprise” or “profit” is at all possible! Here again Weber makes the colossal
Neo-Kantian mistake of assuming that there is a specific “form” of human “knowledge”
or “action” that is singularly “economic” – just as he conceded to Kelsen that
there is a specific dimension of human social activity that is “legal”! Weber
simply mistakes what are mere and highly contingent “institutions” of human
groupings – the “economy” and “value”, the “law”, “the State” and “power” – for
hypostatic and ineluctable “forms” of human knowledge that a social scientist
or “observer” can analyze in their epistemological specificity and “autonomy”
from other “disciplines”! The fact that a great mind such as Weber’s never even
posed itself the question as to how and why “utility” could be adduced as the
“ectoplasm”, the “metaphysical quidditas”
that could constitute the “subject-matter”
of the Economics bears witness to the ability of the social production of “exchange
value” and its politically-enforced transmutation into money, then money
capital, and then profit, to mystify human social relations – as Marx took
pains to emphasize.
Western
thought, from metaphysics to science, must end, must "close", must
"com-plete", "satis-fy", "ful-fil",
"ex-haust" itself with the conceptualisation of totality, of the "Ab-solute". The Ab-solute is what is
not "conditioned" by anything else, what is causa sui (its own
cause), both in the sphere of logico-mathematics and science (Leibiniz's intuitus
originarius that does not admit of "predicates" and therefore is
entirely "self-evident") and in the sphere of human praxis (Kant's
"autonomous" Practical Reason guided by the Will, which is the union
of the posse [I can] with the nosse [I know] in the velle [I
will]). The Will is the ultimate ex-pression of "freedom" - it is
"the freedom of freedom", "the power of the freedom of the
Subject that "knows itself". Of course, whatever is
"self-evident" does not allow of ex-planation in that the definiens
is in the definiendum and vice versa. The Ab-solute is therefore
"ab-solved" from the "need" to explain itself - just as the
prince is "ab-solved" (a legibus solutus) from the laws because he is
"above" the law.
The
error that the Classical and Marxian Economics committed was to presume that
their "subject-matter" (its sub-iectum),
its "quidditas" is
actually a Sub-stance, a homogeneous qualitas occulta - and it
presumes as much because it starts from the phenomenology of capitalist social
relations of production which are "co-ordinated and measured" by money.
Every classical economist from Smith to Marx started from the fact that
every "thing" that is exchanged in the market has a "price"
and that therefore all "things" on the market must have a homogeneous
"Value" - and that this "Value" must be the "subject-matter"
of a "science of Economics"! This essentialism is precisely what
distinguishes Classical from Neo-classical economic theory, as we are about to
illustrate through Weber and Schumpeter.
Weber’s
central failure was not that he mistook “scientificity” for “science”, for its
corresponding “practical conduct” – which mostly he did not! Weber’s failure
was rather that his insistence on “categorizing” his “scientific pursuit” with
the introduction of the “ideal types” distracted him from the fundamental
question of how the Rationalisierung is
possible! This failure led him to
reify, to hypostatize the historical object
of his studies into the “scientific categories or forms” or "the ideal
types" that he presumed to adopt for that study – ignoring thereby
Nietzsche’s famous warning against “systematizers”! Essentially, Weber mis-interpreted(!) Nietzsche’s Umwertung (trans-valuation of all values) to mean that “all values are
interpretations of reality”, and that
therefore it is possible for the “scientific observer” of a given historical
reality to select a hermeneutic code
of interpretation (the ideal types) linking rationally
the means available to its “actors” with the “pro-jected ends” that they may
envisage. Yet, as Nietzsche would have promptly reminded Weber, this framework
of analysis (Entwurf), this “phenomenalism
and relativism” starts from the pre-supposition
that such a “rational code” of interpretation is both possible and applicable –
which Nietzsche would vehemently deny on the ground that it is the very possibility and applicability of this “rational code” itself to a given historical reality – its effectuality - that needs to be interpreted and explained as the mathesis universalis (Leibniz), as the rationalization of the world that is
based on human needs, on the “system
of needs and wants”! In Nietzsche’s own words,
“It is our needs that interpret the world; our instincts and
their impulses for and against,” (Aphorism
481, Wille zur Macht).
Weber’s
Neo-Kantian hypostatization not only of his sociology but above all of “the
scientific fields of knowledge” to which he sought to apply it – from
economics, to law, to music – is induced fatefully from this inability to com-prehend Nietzsche’s Umwertung, his thoroughgoing De-struktion (Heidegger) of Western
metaphysics and science and the related critique of Western Kultur and Zivilisation. It should come as no surprise, then, that it remains
suspended, as we noted earlier, between the Dezisionismus
of “charisma” derived from the individualist relativism and the Neo-Kantian
formalism of the “ideal types” necessitated
by Weber’s need to ground this
hermeneutic relativism on logico-mathematical
– hence, “rational and systematic”, “scientific” - bases. What Weber fails
to com-prehend above all else is precisely the historical character of “the metaphysical foundations of
logico-mathematical rationality” whose political
origins Nietzsche had made all but evident.
A brilliant illustration of these
points is provided by Norberto Bobbio who, in reviewing Kelsen’s attack on
Weber’s theory of the State and sociology of law in ‘Max Weber e Hans Kelsen’
(p.72), concedes that Weber’s Neo-Kantian or Simmelian ‘formalism’ enticed him
to his detriment into the Kelsenian ‘Norms’, but that at the same time Weber’s
“positivism” was premised on the fact that capitalism represents a
historically specific intensification of this ‘positivization’of the juridical
norm, in line with its exasperation of the Rationalisierung (p.77) –
which is theoretically a far more consistent and Nietzschean position for Weber
to take. Commenting on Kelsen’s
requirement that ‘co-action’ be added to the definition of ‘legal norm’ (the
famous Grundnorm) so as to equiparate the concepts of ‘Right’
with ‘Law’ and therefore also with that of ‘State’, Bobbio goes on to
reason (at p.71) that Weber’s notion of ‘apparatus’ (bureaucracy) must be
added to Kelsen’s ‘co-action’ for this equiparation of Right, Law and State to
have any historical effectuality! Bobbio then comes uncannily close
(at p.76) to the central thesis of this study on the meaning of Rationalisierung,
which we have enucleated in our Nietzschebuch (and will illustrate
more incisively in Parts Two and Three of our study on Weber). In a nutshell,
Bobbio perceives without actually comprehending that the notion of Right
or Law or the State requires the existence of appropriate
"institutions" that "en-force" these abstract concepts. The
question that needs to be answered is how political enforcement can
"crystallize" or "congeal" into abstract concepts and how
abstract concepts "dis-solve" themselves into political institutions.
This is what Nietzsche attempted and others including Marx did not.
Separately, by discussing Kelsen’s claim
that his jurisprudence is intended to apply both to capitalist and to
socialist States, Bobbio helps us highlight the link that we are about to
trace in the following sections, dealing with the claim on the part of Neoclassical
Theory to apply equally to both capitalist and socialist ‘economies’,
between Neo-Kantism and Neoclassical Economics!
It cannot be doubted seriously
that Marx was aware of the impossibility of reducing objectively, physically, heterogeneous labor to a homogeneous substance. Indeed, Marx
counted this, the discovery of the Doppelcharakter
of the “commodity” labor power (its being at once living labor that “valorizes”
capital and “labor power” that is exchanged on the market), as perhaps his greatest
achievement. It is just as certain, as Colletti has noted, that for Marx value
was a “social hieroglyph” that, like God or the soul, has no material existence
and yet is “objective” in that it conditions and guides human action. But, and
here is the crux, this theory of value is inconsistent with the notion of
market competition. One of two things:- either
“market competition” is regarded by Marx as an autonomous and spontaneous
sphere of activity not enforced
politically by one class against another, in which case it is an aporetic concept because “competition”
invariably ends up “destroying competition” (!); or else “market competition” is a sphere of activity that is “politically enforced”, in which
case, eo ipso, there can be no competition as a reality a se stante (that can stand on its own).
Yet Marx worked precisely on the grim assumption of the Law of Value, that
capitalist society reproduces itself through the operation of the
self-regulating market, especially its “pessimistic” feature – competition (the
dira necessitas). Consequently, he
had to persevere with his inconsistent theoretical framework because to have
done otherwise, to have accepted that value is an entirely political category and that the capitalist economy is operated by
concrete and identifiable social
institutions would have meant for him to be lowered once again into “the
kingdom of shadows”, into the shadowy world of the Political which he despised
and spurned because he identified it mistakenly with the public sphere of liberalism
founded on the “optimistic” features of the market (commutative and
distributive justice).
(Of course, Marx falls into this
“scientistic trap” in Das Kapital,
but generally not in the Grundrisse
which are therefore much to be preferred as the exposition of Marx’s overall
theory of capitalism. Incredibly, in “Natural Law and Revolution”, now in Theory and Practice, Habermas argues
that it was Marx’s finding of “the theft
of labor time” in the “pure exchange” categories of bourgeois law that “discredit[ed]
so enduringly for Marxism both the idea of legality and the intention of
Natural Law as such that ever since the link between Natural Law and revolution
has been dissolved”! Habermas, who is almost entirely innocent of economic theoretical training, cannot see that indeed
it is that “side” of Marx’s theory and of Socialism that believes in the fable
of “the theft of labor time” that then must necessarily believe, vi rerum [by
force of things!], in the “legitimacy” of legal categories – first among them,
the belief that the worker owns “the fruits of his labour”, whereas in reality
no such “ownership” is traceable or indeed evident. This misconception draws
Habermas’s analysis back into the orbit
of Arendt’s “liberalist and jusnaturalist” rendition of the historical reality
of “revolutions”! Habermas manages therewith to undo the valid critique of
Arendt’s On Revolution that he had
expounded in his essay Die Geschichte von
den zwei Revolutionen. See also discussion of these themes in Part Three of
our Weberbuch.)
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