EconPapers    
Economics at your fingertips  
 

The dominion of means over ends. Modern bank credit and Max Weber’s irrational rationalization

Domenico Cortese ()
Additional contact information
Domenico Cortese: University of Dundee

The Journal of Philosophical Economics, 2017, vol. 10, issue 2, 65-101

Abstract: 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.

Keywords: Max Weber; rationalization; financial system; credit; money creation (search for similar items in EconPapers)
JEL-codes: E5 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
https://jpe.ro/pdf.php?id=7789 (application/pdf)
https://jpe.ro/?id=revista&p=446 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bus:jphile:v:10:y:2017:i:2:n:3

Access Statistics for this article

The Journal of Philosophical Economics is currently edited by Valentin Cojanu

More articles in The Journal of Philosophical Economics from Bucharest Academy of Economic Studies, The Journal of Philosophical Economics Contact information at EDIRC.
Series data maintained by Valentin Cojanu ().

 
Page updated 2018-02-09
Handle: RePEc:bus:jphile:v:10:y:2017:i:2:n:3