Max Weber and the Problems of Value Free Social Science - Research Paper Example

Using different newspaper articles on the recession and its origins in the credit crunch assess how Weber’s explanation of value judgments and evidence might help us understand the different views. Introduction A recession occurs when two consecutive quarters of a year register negative Gross Domestic Product (GDP) growth. As a result the economy would shrink in real terms thus leading to depressed prices and a slowdown in economic activity. A credit crunch, on the other hand occurs when the availability of credit, irrespective of the prevalent interest rate, is limited through banks’ lending policy. Commercial banks might impose restrictions on lending to both business and individuals thus leading to a credit crunch or squeeze. Max Weber’s explanations to value judgments are based on his theoretical Wertbeziehung (value relation) thesis which seeks to integrate value judgments into socio-economic and cultural dimensions of life. This integration goes further than this by denying the argument that “social sciences can be methodologically insulated” from any extraneously determined scientific value processes (Ciaffa, 1998). Empirical evidence in social sciences can be influenced by extrascientific value components though the extent to which such influences work in determining value judgments cannot be known for certain. Any effort to analyze these two separate areas of knowledge and subsequently establish a fusion between the two is a very difficult task though. Weber’s own analysis of the fusion is basically dependent on some highly abstruse assumptions that border on practical value judgments (Werturteil) as well. In the absence of a clearer view on the transcendentalist parameters of distinction between the two there is very little raison d’être to posit different argumentative postures, one against the other, to impute value judgments to purely scientific reasoning processes. Analysis “Rising unemployment and tight credit mean recent gains in consumer spending, the biggest part of the economy, will probably not be sustained. Stocks dropped as a report by Bank of America Corp. raised concern Americans will keep falling behind on loan payments” (Willis, April 2009, www.bloomberg.com). The above extract refers to both “rising unemployment and tight credit” and is from an article on recession in America (updated to 21st April). The article discusses how Americans would fall behind in their loan repayment obligations to banks. Thus it’s not difficult to see where recession originates. Its origin is in tight money supply measures adopted by governments and faithfully followed by commercial banks and other financial institutions. Now it’s obvious that some value judgments have played a role in this decision of banks and other financial institutions to tighten the rules on lending policy. Tight credit measures are adopted by banks in response to unfolding economic scenarios that might range from recessions to severe depressions. The conceptual dimension of such a crisis depends on the degree of understanding that the individual has acquired about it through formal learning and informal education (Held, 1980). Assuming that the individual has the necessary clarity and in-depth vision to realize how its various implications impact on the day-to-day living and purchase decisions of the society at large then there is an equally weighty compulsion to consider how far value judgments have influenced such decisions on the part of the government, banks and finally consumers. Conceptualization is a process of perceiving the truth or reality in the manner that the individual deems to be fit enough for the purpose of continuous evaluation of circumstances as presented in social, economic and cultural contexts. In the above article Willis identifies a variety of economic issues that have come to the surface as and when decisions were made. In the same article the Chairman and Chief Executive Officer Kenneth D. Lewis of the Charlotte, A North Carolina bank made reference to deteriorating credit quality. Weber’s perspectives on extrascientific influences in social sciences and related empirical analysis have invariably eluded the larger issue of transcendentalism. From theoretical value judgments to practical ones there is a process of transformation which involves both a dynamic characteristic and a value-based logical premise. Judgmental reasoning processes do not necessarily go with logical coherence; neither do they seek to justify a priori reasoning as a precondition for such argumentative postures. Weber’s analysis based on theoretical Wertbeziehung barely goes beyond the purely theoretical aspectual perimeter and thus obviously stops short of meeting the coterminous Werturteil. The economic science as such does not encourage analysts to come to conclusions that have been influenced by value judgments (Gerth and Mills, 1958). In other words normative economics is just there in the theoretical domain for the study by those who are interested in it. Practically it’s the positive economic science that is studied and applied in all contexts. For instance the argument that both governments and banks ought to adopt a liberal credit policy in order to solve the problem of recession is a normative economic statement. There is also a very contingent reasoning effort to establish certainties about cognitive thought processes on the part of the individual so that outcomes would have the same value judgments as those initial statements. In the analytical framework of value incommensurability between theoretical value relevance and practical value judgment there is very little authentic coterminous correlation. However Oakes (2003) for instance places emphasis on value relevancies for value judgments which cannot be construed as true in the social sciences in which conflicts are less likely unless interpreted as “conflicting paradigms”. Thus the probability constructs associated with value relevancies are constantly exposed to logicality-based disputes. Value judgments occur in ethics where relevancies have little or no force to register with acceptance. However that such outcomes whether predetermined or not, have a degree of coterminousness is an inevitable proposition. “DEPRIVE a person of oxygen and he will turn blue, collapse and eventually die. Deprive economies of credit and a similar process kicks in” (The Economist, 9th Oct. 2008). There is a highly controversial relationship between this type of normative value judgment and the subsequent opposite statement which would run something as “inject as much credit as possible into the economy in order to revive it”. Economists argue that value judgments have no place in economics because practically such statements have no relevance to the actual economic problems and their theoretical basis. Scientific relevance is thus the core issue in the whole argument on whether such value judgments have a place in determining practical outcomes or not. Oakes adopts a particularly different approach to incompatible value relevancies in his analysis of value judgments though he does not exclusively premise on ethical value judgmental processes involved in normative economics. His reference to Johannes as a prototypical value construct in aesthetic consistency is partially identical to the concept of “Utopia” in economics. On the other hand Weber’s approach signifies irrelevancies as inherently confluent dimensions that fail to concede the existence of discrete domains for theoretical value judgments and practical value judgments. In Utopia, the imaginary land, milk and honey flow in abundance so that the Utopians have no economic problems to solve. In such a context value judgments have no relevance at all because economic abundance justifies all manner of behavior irrespective of its ethical dimension. Recessionary periods are followed by upturns or recovery periods and sometimes even economic booms take place. Such outcomes are predictably scientific in nature and have a logical a priori to a posteriori background. Weber’s approach to reasoned value judgments as premised on value-free teaching has no relevance in a modern context where every social science and its theoretical underpinnings have been determined in a way that value judgments would have little or no relevance in influencing the outcomes. Recessions are predictably the results of a tight credit policy but nevertheless there is no evil intention behind such policy decisions of banks not to lend money on easy terms. In other words there is no illogical compulsion on the part of the decision maker to have a fixe idée about what he would do in order to achieve a desired outcome. Contingency planning in monetary boards of central banks and commercial banks to face an impending recession is nothing new though such planning is not essentially premised on reasoned value judgments as Weber would have in order to preempt a demonically fixe idée in the heart of the policy maker (Runciman, 1978). Weber does not necessarily base his arguments on ideological persuasions of the subject though his argument of the politically biased individual as an already political man “homines politici”, is determined by an emphasis on theoretical value judgments. From the viewpoint of a social science Economics does not tolerate the view that individual students’ political persuasions have to be “corrected” before they begin to understand what a recession is. Neither does it encourage individuals to start learning only when they are sufficiently versed in the principles of value judgments. Value judgments have no place in Economics. Scientific reasoning requires individuals to apply a priori principles of arguments to understand how a certain process would work towards its logical conclusion. For example a recession, defined as a period of two consecutive quarters of a year with negative GDP growth, is the consequence of a number of policy directives and decisions of banks and governments. By extension even the international community is involved in it. However which policy directive or decision or combination thereof is responsible for it is unknown. As pointed out above sciences do not have conflicts within them; neither do they have paradigm shifts. Thus recession as attributed to a credit crunch would not be reversed overnight by adopting the opposite policy. For example by adopting a liberal credit policy a recession cannot be turned into a recovery. In economics the ceteris paribus principle operates in such a manner to preempt all other possibilities and probabilities (Tuener, 2008). Ceteris paribus means ‘other variables remaining constant’. Therefore the reversal of a tight credit policy measure would work only if other variables remain constant. This argument shows that banks’ policy of not lending money on easy terms would not solely be a sufficient condition for a recession to take effect. It will be a sufficient condition only if other things remain constant. For instance government economic policies such as monetary/fiscal and national minimum wage would also have an impact on outcomes related to the credit crunch. In this context value judgments have no place whatsoever. Scientific investigation and analysis require scientific reasoning that is not influenced by value judgments. Positive economics is based on a set of positive economic principles such as when there is a credit crunch there will be a recession. But nevertheless this is just one of the conditions. For example in the articles cited above there are references to a host of other conditions such as the subprime mortgage bust and unemployment. These are actually the outcomes related to recession. But nevertheless banks’ lending policy is influenced by a number of factors such as the central banks’ restrictions on lending as the last resort and mandatory requirements on deposits kept with commercial banks. “Mortgage lending in the UK fell to its lowest level for more than three and a half years during September, the Council of Mortgage Lenders said. A total of £17.7bn ($30.9bn) was advanced during the month, 10% less than during August and 42% below the level for September last year” (BBC News, 20th Oct. 2008, www.bbc.org). The above article invariably lends support to the argument that a credit crunch would lead to a fall in the amount of mortgage lending by banks. The subprime mortgage crisis in the US and the partial crisis in the UK are all due to such a credit squeeze. But nevertheless how far does it lend to the Weber’s concept of “value free science” depends on the fact value free science is not an authentic value dynamic but a notional concept of free thinking. Methodologists including Weber did not perceive science as a system of values or principles that needs to be tested with reference to its logical basis (Hughes, Sharrock, and Martin, 2003). Weber’s acknowledgment of the existence of a plurality of conflicting values within the political context was neither logically premised nor intentionally replete with a culture of clashes. It was just recognition of the diversity of attributes of a singularly valued system. Viewed against this backdrop, the economist is no more than an individual caught up in his own value judgments. The converse ideological construct that the economist is a scientist with an independent view of the universe of economics subject to a set of positive principles, is not taken for granted under Weber’s perception of value judgments. This conceptualization is perhaps at the heart of the neo-religious thought that leans on the philosophy of valuation as the principal ethical norm in the unique effort of finding truth (Horkheimer, 1931, www.marxists.org). Both sophistry and surrealism could have been put to better use by value judgmentalists to knead the seamless integration process to its logical conclusion though. Social transformation would inevitably entail a parallel shift in developments elsewhere while its causality factor would invite a host of social changes at every level of the transformation process. Both endogenous and exogenous variables play a decisive role in this process and in turn are determined by attitudes towards change. Social catalysts that bring about such change are exclusively influenced by economic forces that evolve into value paradigms of their own strength but without shifts within the science itself. In this context Weber’s subsequent theory of rational conflict ingrained in his practical science of politics is an appropriate methodological explanation to an otherwise difficult-to-elaborate situational conflict. Thus his conception of a value free science was now increasingly being replaced by a more objective qualitatively paradigmatized approach to science and its logical premises (Kalberg, 2005). Weber’s theory of economic social action takes into account not only the individual consumer’s/producer’s intention to satisfy utility or earn big profits respectively but also the behavioral tendencies of others in the society (Swedberg, 2000). Thus his economic sociology or Wirtschaftssoziologie goes one step further than the original value judgments. However this aspect of his writings does not come under the remit of this analytical essay. Weber’s metaphorical references to economic social action presuppose the existence of a set of sociological categories. These categories are attributed to economic social action that takes place in the larger context of individuals’ interaction. While many of his thoughts were expressed on the subject with a degree of divergence from the then prevalent mood in the society, his economic sociology was enunciated with a view to offering an alternative explanation to the motives behind productive action. Recessions were not heard of during his times and there was no compulsion on the part of writers to delve deep into the intricacies of dynamic economic variables. Yet the current relevance of Weber’s value judgments to economic recessions is determined by the fact that they are caused by credit crunches. The latter phenomenon though is not a value judgment related one Weber’s own emphasis on value judgments can be interpreted as a potential influence on banks’ decisions to curtail credit to their customers. If demand for and supply of credit in the commercial banking sector of the economy were factored into the equation the outcomes would be more scientifically decisive. Despite this scientific determination process value judgments were sought to be incorporated into the decision making efforts of individuals by methodologists. Weber’s value judgments have sought to ignore the efficacy of credit related decisions of banks to such an extent that they attribute a singularly convergent value parameter to all human action irrespective of the underlying scientific complexity and diversity (Nixon, 2008). The noetic dimension of scientific reasoning in social sciences such as economics assumes a very complex causal correlation between logically predicated thought and subsequent rational action. However in economics the rational behavior of the consumer is taken for granted. In other words even in the absence of rational behavior on the part of the consumer, there is no gainsaying the fact that every consumer tries to maximize their utility. The same principle applies to the seller’s efforts to maximize profits. Thus banks’ decisions to curtail credit to their customers do not constitute an irrational action. In fact they are in conformity with the predictable observed behavior of the average economic agent. Weber’s pluralist conceptualization of conflicting values indeed extends the argumentative principles beyond the political realm to the realm of economics though its own scope and applicatory significance have little or no relevance in judging casual correlations in such scientifically determined objective contexts as credit crunches and recessions. Conclusion Economics is a social science which seeks to articulate valid principles on human behavior concerning rational decisions. Its objective depth is determined by the extent of its own ability to predict with a degree of accuracy the observable economic phenomena such as recessions and inflationary pressures. On the other hand Weber’s value judgments as articulated in his theoretical value relation thesis are abstruse in essence thus defying any scientific basis for their convergence into predictable and observable correlations as those occurring in Economics. While there is an effort on the part of Weber to integrate purely theoretical value judgments into practical propositions, the fusion has not been carried out with conviction (Turner, 2008). Economic recessions are caused by credit crunches in the economy and credit crunches in turn are caused by tight credit policies adopted by banks in response to unfolding economic scenarios. Therefore it’s clear that in banks’ decisions to curtail credit to their customers there is some scientific or/and logical basis. Weber’s value judgments, when are purely determined by theoretical perceptions, have very little or no relevance to the logical cum scientific basis underlying the economic phenomena like recessions. Even if a realistic fusion between theoretical perceptions and practical judgments occurs at some level, there is no guarantee that transcendentalist forces would stick together to produce a degree of constancy in economic variables to bring about predictable value judgment based outcomes. Finally, Weber’s value judgments are attributed to a value free science which exists in the realm of politics and significantly assumes its own dimensional growth process. In this backdrop the individual is assumed to be “uninfluenced”. Therefore it’s imperative that value judgments play a pivotal role in transforming the individual because what is ingrained in him is not valid in the value judgment context. REFERENCES 1. Ciaffa, J.A. 1998, Max Weber and the Problems of Value-free Social Science: A Critical Examination of the Werturteilsstreit, Bucknell University Press, Pennsylvania. 2. Gerth, H. H. and Mills, C. W. 1958, From Max Weber: Essays in Sociology, Oxford University Press, New York.. 3. Giddens, A. 1973, Capitalism and Modern Social Theory: An Analysis of the Writings of Marx, Durkheim and Max Weber, Cambridge University Press, Cambridge. 4. Held, D. 1980, Introduction to Critical Theory: Horkheimer to Habermas, University of California Press, California. 5. Horkheimer, M. 1931, The Present Situation of Social Philosophy and the Tasks of an Institute for Social Research, from, www.marxists.org 6. Hughes, J., Sharrock, W., and Martin, P.2003, Understanding Classical Sociology: Marx, Weber, Durkheim,2nd Edition, Sage Publications Ltd, London. 7. Kalberg, S. (Ed.), 2005, Max Weber: Readings And Commentary On Modernity (Modernity and Society), Blackwell Publishing Ltd, Massachusetts. 8. Nixon, S. 2008, The Credit Crunch: How Safe is Your Money, Pocket Issue Limited, Gloucestershire. 9. Oakes, G. 2003, Max Weber on Value Rationality and Value Spheres, Journal of Classical Sociology, Vol.3 (1), pp.27-45. 10. Objectivity of Social Science and Social Policy Max Weber Preface, 2008, from, www.molsci.org 11. Runciman, W.G. (Ed.), 1978, Max Weber: Selections in Translation, Cambridge University Press, New York. 12. Swedberg, R. 2000. Max Weber and the Idea of Economic Sociology, Princeton University Press, New Jersey. 13. The Economist, 2008, At best, the world economy is on the brink of recession, from, www.economist.com. 14. Turner, S.(Ed.), 2008, The Cambridge Companion to Weber (Cambridge Companions to Philosophy), Cambridge University Press, New York. 15. Tuener, G. 2008, The Credit Crunch: Housing Bubbles, Globalisation and the Worldwide Economic Crisis, Pluto Press, London. . 16. UK Economy Already in Recession, 20th October, 2008, from www.bbc.org 17. Willis, B. 2009, US Economy: Leading Index Shows Extended Recession, from www.bloomberg.com . Read More