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Thank you.

I've been meaning to do this, but have gotten tied up at my mother's house.   I've been busy transforming the jungle yard left by the previous owner into something more mundane and safe for her to spend time in.

Now that TGeraghty has laid this out so well, I guess I can try to write about applying Polanyi.

The first thing I would say is to look at the concept of embeddedness.

I prefer the terminology of Weber. Weber distinguishes between formal and susbstantive rationality.

Formal Rationality

 A type of decision making which is subject to calculation that goes into an action to increase its chance of success. Its decisive feature is that it eliminates an oritenation to values because they are non-technical. Rationality is formal when problems are solved by the application of technical criteria.

Substantive Rationality

 A type of decision making which is subject to values and an appeal to ethical norms. Substantive rationality does not take into account the nature of outcomes.

Neo-liberals are market fundamentalists, they deny the existence of substantive rationality, and enthrone formal rationality as the one truth.  They essentially say that everything can be reduced to the use of the money unit of account as shorthand for the maximization of utility in society.  So long as we increase the total social wealth, we make things "better."  The basic idea is that wealth can be viewed objectively (or in Weber's terms formally), and stripped of it substantive context.

At this heart of this is the belief that all social organizations including the state are composed of atomized individuals acting rationally to maximize their utility.  Their utility is determined by their preferences, their valuation of something's worth.  Now  what's the origin of preferences?

Are individuals free to choose their preferences, or are they in large part determined by the social context in which an individual exists?  

Now is the sum of the aggregation of individual interests sufficient to explain the existence of preferences in society, or is it that social preferences as a whole are greater than the sum of their parts?

Is there really any way to seperate the formal valuation of utility from its social context?  Or is it that the formal valuation of utility is subject to substantive antecedents.  So that before we can understand the economic value of a religous icon or the like we must understand the social context in which it exists.

I, think fairly transparently, believe the latter.  The formal logic of the market, that sees the world in terms of utils is embedded within the context of substantive social logic.

Neo-liberalism seeks to destroy the substantive context  in which economic life exists.  And in doing so, it undermines the conditions that permit its existence.

Consider the example of the Chinese toothpaste. The manufacturer of Chinese toothpaste, seeking to maximize their utility (and make greater profits) uses poisonous diethelyne glycol instead of the proper additive when making their products.  If we enthrone the logic of the market, the exultation of the money unit of account, so that the additional value created for the market is held paramount, this makes perfect sense.  

Now while the deaths created by one manufacturer cheating by doing this may not be enough to shrink the market for toothpaste (and murder their customer base), if everyone does it there will either be a massive number of deaths, or the market for toothpaste will disappear.  Most likely, some combination of the two will prevail.

Even more likely the excess of the market in seeking to disembed the formal logic of the market from the antecedent social and human contexts in which it exists will provoke a public outrage that subjects all toothpaste to regulation that prohibits the use of the chemical in question and establishes strong criminal penalties for breaking this law.  Law as a measure of substantive rationality constrains the formal rationality of the market.

For me the area that I find myself most drawn to as a dissertation research project is the intersection between substantive understandings of political equality in a democracy, and the formal mechanism of the labor market that create inequality.  It seems natural to me that if the market is socially embedded, it most be subject to the same democratic understandings that exist in the practice of democratic power in society.  That's the abstract theoretical understanding.  I'm interested in the practicalites of economic democracy.  The labor union is the foremost institution in this area, and that's where I see myself doing my work.

I'm still trying to decide 1)if I will pursue a PhD, and 2) whether that PhD will come in Political Science,  Political Economy (much smaller number of programs there) or Industrial and labor relations.  I'm interested in the social aspect so economic programs don't interest me that much.  

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Wed Jul 4th, 2007 at 02:00:58 PM EST
Great stuff, MfM

 They essentially say that everything can be reduced to   the use of the money unit of account as shorthand for the maximization of utility in society.  So long as we increase the total social wealth, we make things "better."  The basic idea is that wealth can be viewed objectively (or in Weber's terms formally), and stripped of its substantive context.

It is the "objectification" of both the Money "unit of account" and Property that is at the heart of our problems, I think.

Money and Property in reality are Relationships, not Objects.

Unfortunately we are accustomed to using "deficit-based" Bank-created IOU's/ "Claims over Value" as our Money - which are indeed Objects.

A pile of such "Money as Debt" is not actually "Wealth" but a claim over "Wealth".

Wealth cannot be stripped of its substantive context any more than "Value" can be defined.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Wed Jul 4th, 2007 at 02:41:33 PM EST
[ Parent ]
Are individuals free to choose their preferences, or are they in large part determined by the social context in which an individual exists?

If the culture is large enough, such as those anyone likely to be reading this comment lives within, there are differences from which an individual selects.  Even if the selection, through sloth, is to stay within the sub-group norms in which that individual was raised, was encultured.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Wed Jul 4th, 2007 at 07:42:06 PM EST
[ Parent ]

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