The dominion of means over ends. Modern bank credit and Max Weber’s irrational rationalization
The institutions which grant credit today can be considered to be an example of what Max Weber describes as the typical rationalization of modern age. Such a rationalization would bring a lack of reflection on what should be the ultimate significance of certain technical means, which are confused wi...
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Editura ASE Bucuresti
2017
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oai:doaj.org-article:c7535b064b354f40969d57c21085e9ee2021-12-02T06:18:07ZThe dominion of means over ends. Modern bank credit and Max Weber’s irrational rationalization1843-22981844-8208https://doaj.org/article/c7535b064b354f40969d57c21085e9ee2017-05-01T00:00:00Z https://jpe.ro/pdf.php?id=7789 https://doaj.org/toc/1843-2298https://doaj.org/toc/1844-8208The institutions which grant credit today can be considered to be an example of what Max Weber describes as the typical rationalization of modern age. Such a rationalization would bring a lack of reflection on what should be the ultimate significance of certain technical means, which are confused with a value-in-itself of a social context. The paper highlight the fact that the function of credit consistent with individuals’ ‘ultimate ends’ seems to be that of a temporal coordination between the ‘bargaining wills’ of different individuals who aim at obtaining the highest benefit by means of the utility of their products and the products of their peers. But the current epoch has favored the elevation of historically determined features of credit-issuing to ultimate ends. Referring, among other sources, to a report by the Bank of England and to studies by Neo-Keynesian authors such as Stiglitz, this essay establishes that the consequence of the current private structure of credit-issuing is that the ultimate end of credit does not coincide with maximization and economic reciprocity but with the assessment of a risk which is distinctly private. Also, since in this structure Central Bank acts as the bank of all commercial banks, credit granting can be read as being in function of the availability – within a circumscribed economic web – of a specific credit ‘raw material’ which has a price: central bank’s liquidity. This situation puts a deep philosophical problem into the limelight, since any ‘existential’ preferability of the current model of credit issuing can only be explained as an alienation.Domenico CorteseEditura ASE BucurestiarticleMax Weberrationalizationfinancial systemcreditmoney creationEconomics as a scienceHB71-74DEENFRJournal of Philosophical Economics, Vol X, Iss 2, Pp 65-101 (2017) |
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DE EN FR |
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Max Weber rationalization financial system credit money creation Economics as a science HB71-74 |
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Max Weber rationalization financial system credit money creation Economics as a science HB71-74 Domenico Cortese The dominion of means over ends. Modern bank credit and Max Weber’s irrational rationalization |
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The institutions which grant credit today can be considered to be an example of what Max Weber describes as the typical rationalization of modern age. Such a rationalization would bring a lack of reflection on what should be the ultimate significance of certain technical means, which are confused with a value-in-itself of a social context. The paper highlight the fact that the function of credit consistent with individuals’ ‘ultimate ends’ seems to be that of a temporal coordination between the ‘bargaining wills’ of different individuals who aim at obtaining the highest benefit by means of the utility of their products and the products of their peers. But the current epoch has favored the elevation of historically determined features of credit-issuing to ultimate ends. Referring, among other sources, to a report by the Bank of England and to studies by Neo-Keynesian authors such as Stiglitz, this essay establishes that the consequence of the current private structure of credit-issuing is that the ultimate end of credit does not coincide with maximization and economic reciprocity but with the assessment of a risk which is distinctly private. Also, since in this structure Central Bank acts as the bank of all commercial banks, credit granting can be read as being in function of the availability – within a circumscribed economic web – of a specific credit ‘raw material’ which has a price: central bank’s liquidity. This situation puts a deep philosophical problem into the limelight, since any ‘existential’ preferability of the current model of credit issuing can only be explained as an alienation. |
| format |
article |
| author |
Domenico Cortese |
| author_facet |
Domenico Cortese |
| author_sort |
Domenico Cortese |
| title |
The dominion of means over ends. Modern bank credit and Max Weber’s irrational rationalization |
| title_short |
The dominion of means over ends. Modern bank credit and Max Weber’s irrational rationalization |
| title_full |
The dominion of means over ends. Modern bank credit and Max Weber’s irrational rationalization |
| title_fullStr |
The dominion of means over ends. Modern bank credit and Max Weber’s irrational rationalization |
| title_full_unstemmed |
The dominion of means over ends. Modern bank credit and Max Weber’s irrational rationalization |
| title_sort |
dominion of means over ends. modern bank credit and max weber’s irrational rationalization |
| publisher |
Editura ASE Bucuresti |
| publishDate |
2017 |
| url |
https://doaj.org/article/c7535b064b354f40969d57c21085e9ee |
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AT domenicocortese thedominionofmeansoverendsmodernbankcreditandmaxwebersirrationalrationalization AT domenicocortese dominionofmeansoverendsmodernbankcreditandmaxwebersirrationalrationalization |
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