Calculation in Kind and Substantive Rationality: Neurath, Weber, Kapp

Far from having become a dusty museum piece the socialist calculation debate continues to afford a focus for explorations of the conceptual foundations for challenges to orthodox political economy. Here Otto Neurath’s radical stance in the socialist calculation debate will be considered in the light of the criticism it received from Max Weber. It will be argued, first, that while what he called “calculation in kind” fails the demands of what Weber called the “formal” rationality of economic action in conditions of complex industrial societies, it is indispensable for assessing potential and actual outcomes in terms of what Weber called “substantive rationality.” It will then be argued that, while Neurath’s proposals for marketless socialism fell by the wayside, the point of implicit agreement between Neurath and Weber was recognized by K. William Kapp and made a central element of his ecological economics.