the role of tool's social value principle

The Role of Tool's Social Value PrincipleAuthor(s): Wendell GordonSource: Journal of Economic Issues, Vol. 24, No. 3 (Sep., 1990), pp. 879-886Published by: Association for Evolutionary EconomicsStable URL: http://www.jstor.org/stable/4226318 .

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J JOURNAL OF ECONOMIC ISSUES Vol. XXIV No. 3 September 1990

Notes and Communications

The Role of Tool's Social Value Principle

What should the basic characteristics of institutionalism be consid- ered to include? It is the allegation of this note that they should include (1) explanation of the process by which knowledge is accumulated, (2) explanation as to how interaction between technology and institutions works out, and (3) the role of the instrumental criterion (does it work?) in judging the effectiveness of techniques or instruments and the appropriateness of value judgments (from the viewpoint of whoever is making the judgment and by comparison with alternatives).

But a social value principle, criterion ofjudgment, or value referent, which states a simple basic concept or two for use in judging instruments, ends, and values, is not a basic characteristic. In fact the as- sumption of such a definitive characteristic violates the flexible, self-correcting value judgment concept of instrumentalism, the proposition that changing conditions may change criteria of choice.

There is good reason for a major effort at clarification of the essence of institutionalism. This is desirable if institutionalism is to make head- way in taking advantage of the prevailing cynicism as to the usefulness of present-day orthodox economics.

Among the general run of economists the dominating conception is of a so-called free market system, independent of government regula- tion, which is supposed to work automatically in the best interest of the general welfare. And the practitioners of this approach are using as analytical tools ever-more sophisticated and esoteric mathematical and econometric tools, with distressingly unuseful results.

Increasingly, thoughtful mainstream economists are concerned about this situation. Up to now this concern has chiefly been expressed by an increasing tendency to use analysis that involves probably one deviation from the pure competition assumptions (perhaps uncer- tainty, or some restrictive business practice such as price discrimina-

879



880 Notes and Communications

tion, or restriction on the movement of some factor of production). But the analysis is likely to occur in a setting that continues to make the other standard assumptions. And the results fail to confront the basic difficulty, which is with the approach as a whole.

Many thoughtful economists (who are playing these games with mathematics and statistics and who are making most of the standard free-market assumptions) would welcome an alternative approach if it seemed plausible. But they are not attracted to institutionalism because of the widely held impression that institutionalists are prone to the making of cavalier value judgments.

To counteract this communication problem, it is desirable somehow to "get through" to the economics profession with an explanation as to what institutionalism is actually all about, an explanation that assures the profession that institutionalists are not carefree proliferators of value judgments. But, what is institutionalism all about?

Attempting to clarify this issue is the occasion for important recent work by Allan G. Gruchy, The Reconstruction of Economics, 1987; Marc R. Tool, Essays in Social Value Theory, 1986; and William M. Dugger, Radical Institutionalism, 1989.

What is the role of value judgments in institutionalism? One way to look at the situation, a la John Dewey, is that they are made in two types of situations: in judging means and in judging ends-as a package. The matter here is put as a means-ends-means-ends continuum.' The individual may make value judgments about ends of all sorts, those judgments not coming out of a black box but being a result of the individual's biological heredity and social background (institutionalized behavior norms). The judgment may be made that unemployment is undesirable, or that a higher salary is desirable, or that "I do not like Joe." These are what Dewey calls ends-in-view.2 But ends-in-view do not involve an effort to identify principles of permanent validity that should guide all decision-making. The concept of ends-in-view involves identifying immediate problems, forming judgments about best solutions to such immediate problems, and finding the best means or tools or instruments for working toward that particular end-in-view.

Then, after the effort has been completed the results are surveyed. Was the end-in-view really as satisfactory as it was hoped it would be? Were the tools really the most satisfactory that might have been used? The appropriateness of both means and ends is reconsidered. New value judgments are made, new ends-in-view are identified, and new means, tools, or instruments may be used in working toward realization of the new ends-in-view. And on and on things go in a process that has



Notes and Communications 881

no end knowable to us. No effort to identify definitive, general purpose social values, criteria of judgment, or value referents is made, no effort to specify what the desirable end result of the whole process will be. A single, brief principle that can orient the process is not part of the scheme of things.

However, in this setting, it may be useful to try to identify a set of value judgments that seem, at a given time and place, to embody what is desirable (from the view-point of some given individual or even from the viewpoint of society as a whole). Such a list might include the continuity of human life and the non-invidious recreation of community. It might equally well include compassion, tolerance, and generosity. Or, perhaps, more specifically it might include a decent minimum standard of living for all (to the extent that the economy is physically capable of producing same), getting along pleasantly with others, the possibility of constructive self-expression for all, and personal security from op- pression, violence, disease, war, and other such undesirable conditions, insofar as that is possible. But the identity, nature, and role of the mat- ters in this list are subject to continuing change. And the list is designed for purposes of immediate usefulness and perspective, and it is not designed to serve as a continuing, long-run value referent or criterion of judgment.

An important consideration at present among institutionalists is clarification of the role of Tool's social value principle as a core concept in identifying the meaning of institutionalism. The concept runs to the effect that: "We now affirm that that direction is forward which provides for the continuity of human life and the noninvidious re-creation of community through the instrumental use of knowledge."3 Tool iden- tifies this social value principle as a value referent and criterion ofjudgment. But, more specifically, what does this imply?

Sometimes, it seems to this writer that Tool is offering the social value principle as a definitive or eternal verity or truth. At other times it seems that, in deference to the instrumental logic, he is offering the desirability of the continuity of human life and the noninvidious re- creation of community as provisional value judgments that are subject to reappraisal. For example, he writes:

This briefly sketched social value principle, the continuity of human life and the noninvidious re-creation of community through the instrumental use of knowledge, is, of course, provisional and tentative. It is advanced as a normative guide that is neither ethically relative nor ethically absolute. Yet it does appear to meet the tests of relevance and applicability noted above."4




Tool writes at length in defense of the principle and it has been widely endorsed by other institutionalists. Dugger writes that: "Marc Tool has shown that instrumentalism, the philosophical foundation of institutional economics, yields a criterion of social value of far more usefulness to a democratic society than any other criterion."5 Whether or not the logic of instrumentalism proves the validity of Tool's social value principle, it seems that many institutionalists consider it a defining characteristic of their approach. (One may observe that what instrumentalism does is to explain where value judgments come from; but it does not validate them.)

Given the pervasive influence of Tool's social value principle among institutionalists, it is worth discussing the evidence or the logic in sup- port of the principle in the form in which it is being repeatedly stated.

One element in the social value principle is the concept "that that direction is forward which provides for the continuity of human life."6 But by what logic does instrumental agrument establish the validity of this proposition? Tool writes: "'Continuity' in the value premise is grounded in this fact and asserts the obvious as an 'ought'-that the continuance of human life is a precondition for the pursuit of all earthly concerns including the creation and use of all social and value theory."7 But is anything more being said here than that for us to exist and have concerns we have to exist and have concerns? The "obvious" has been asserted.

Of more substance is the value judgment that it is desirable for me to exist. Is there something inherently valuable about my existence? I may well believe so. But need anyone else believe so? Some people, at least some of the time, doubt the desirability of their own existence. The counter argument might be offered to the effect that I must be worth something to society because, if I try to commit suicide, society will go to great lengths to try to prevent me-even if it is planning to execute me the next day.

Or, perhaps, when one speaks of the desirability of the continuity of human life, one is speaking of human life in general, not me in particular. But again there are those nagging questions? Is the value of human life inherent? "I think, therefore I am" may or may not be good logic, but it does not establish that a thinking "I" has value, merely that a thinking "I" "is." What of the possibility that someone or something makes the value judgment that human life is desirable? But others, including alligators and snakes and even some people are not so sure? Or some, like the Nazis, believe that a substantial chunk of the human race can be done without to advantage? The question as to the desirability of human life would seem to carry an implicit judgment as to how




many. Do we necessarily even want more people cluttering up the place, a lot of them being social charges, or morons, or obnoxious by some criterion or other?

The question as to the desirability of human life may not have such an obvious answer as we tend to believe at first thought.

Another element in Tool's social value principle is an attitude on in- vidiousness. "That direction is forward which provides for ... the noninvidious re-creation of community."8 A society where an elite succeeds in creating a climate in which the bulk of the population exists in a state of frustrated envy with respect to their more prestigious brethren may not be a very pleasant society in which to live, at least so far as the most part of the population is concerned-especially if the elite have the KKK (plus the local police and courts) available to see to it that the bulk of the population does not get out of hand. And the hand of the elite is strengthened by the fact that the society in fact is not a two-class society (a la the Marxists) but involves "a pecking or- der," and a substantial proportion of the population, while being lorded over by some, can lord it over others.

Is it objectionably invidious behavior to propagate the idea that it would have been better if such and such an idiot had never been born. A dictionary defines an idiot as "a feebleminded person having a men- tal age not exceedinig three years and requiring complete custodial care."

Granted this is not a pretty picture. But to what extent does it justify making noninvidiousness alone such an important part of the social value principle?

Maybe there are even circumstances in which a little healthy envy turns out to have been a pretty good thing. A small child may be encouraged to be envious of the talent of a great artist, pianist, or painter, and this sentiment may cause the child, who might otherwise have gone through life in some routine job, to become a great artist.

But beyond this consideration, if one had the task of selecting an attitude to insert in the social value principle in the spot now occupied by noninvidiousness, might one not select some other attitude as equally or more praiseworthy: compassion, tolerance, or generosity. How would one use instrumental logic to prove that noninvidiousness is a more basic desirable consideration than compassion, tolerance, or generosity.

How does the social value principle serve when asked to play a role in evaluating some particular suggested public policy? Tool cites var- ious examples of possible policies he finds satisfactory because they meet the criteria of the social value principle-democracy for one, or




less inequality in the distribution of income for another. But does the desirability of these policies stand or fall according to whether the social value principle endorses them? Or does the social value principle stand or fall according to whether it endorses these policies, which may be thought to be desirable on other grounds.

What of the possible policy recommendation of a job guarantee? I I believe that I can honestly say that so far as my personal rationalization of this policy recommendation is concerned, the question as to whether it is consistent with "the continuity of human life and the noninvidious re-creation of commmunity" has never crossed my mind. Consider- ations including compassion and the recognition that, for a variety of other reasons, unemployment has been a major problem did cross my mind. I suppose that the job guarantee policy also meets the criteria of the social value principle, but that really does not seem to be a major consideration.

Individual institutionalists have every right to argue for this or that value judgment. So do other people. And in the opinion (value judgment) of this writer, it reflects credit on someone that she or he is will- ing to devote time and effort to what he or she considers a worthwhile cause. That is better than sitting around in a state of euphoria talking about it, or in a dumb or self-centered stupor.

Dewey does have something to say about a concept that seems closely related to the social value principle, but he takes a somewhat ambiguous position. In one place he seems to reject the concept: "As long as actual events were supposed to be judged by comparison with some absolute end-value as a standard and norm no sure progress was made."10

But then Dewey also says that such a proposition may have some general usefulness: "Generalized ideas of ends and values undoubtedly exist."'l There follows in Dewey a substantial discussion of the nature of the usefulness of such general and continuing concepts for general perspective purposes. But he seems to deny the usefulness of trying to establish unchanging, definitive criteria for making judgments in particular cases. Institutionalists are encouraged to puzzle over these pages in Dewey and form their own judgments as to what the "founder" of instrumentalism was actually trying to say. It is not completely clear to this writer, who perhaps should also confess to not being entirely sure as to whether Dewey, himself, late in life (1939) in the Theory of Val- uation, believed he had set out a definitive theory of valuation.'2

Given the state of technical knowledge in a specific area, which state of knowledge may remain substantially unchanged for considerable periods of time, it is handy to have a lot of rules or norms that more




or less automatically say things like: Do not use asbestos in constructing quarters where people will live and work. Or, physicians should find out what patients are allergic to before they prescribe medicine. Or, in preparing class schedules for students in universities it is desirable to have most classes start and stop at the same time. Or, norms providing everyone shall drive on the right (or the left) side of the road are desirable.

But such concessions to the desirability of rules in connection with immediate problem type situations, I believe, should not becloud the contention that value judgments are subject to change and that that characterization should not be obscured by an effort to establish value referents or criteria of judgment of the general type involved in the social value principle.

One might think that a criterion ofjudgment of the social value principle type could identify whether welfare capitalism, or democratic socialism, or some other system is the desirable form of social and economic organization. Yet, as James Dietz points out in Dugger's Radical Institutionalism, a quite like-minded group of well-intentioned institutionalists seems not to be in agreement on this major distinction.13

The criteria ofjudgment applied in dealing with a problem are going to be whatever the individual, or the race, or the institution making the decision chooses to apply in a given situation at a given time and place. And those criteria that are actually applied, are going to reflect evolving technology, institutionalized behavior norms, the biology of the deci- sionmakers, and the availability of appropriate resources. (Some form of the profit motive will very likely even be in there somewhere under the institutionalized behavior norm rubric.) The relevant institutionalized behavior norms may include belief in the desirability of the continuity of human life and in the desirability of noninvidiousness in people's attitudes, or they may include a lot of other considerations. And all these attitudes and conditions are in a state of flux. This is the way things are. And life is more fun that way.

The concept of a social value principle, which represents an effort to state the definitive, desirable characteristics of society in a nutshell, runs counter to the instrumental concept involving continuing reappraisal of the worthwhileness of both tools and goals, means and ends.

And beside that, we do not know what the universe is all about any- way. Let us continue to be inquiring and skeptical and interested in trying to improve things.

Wendell Gordon The author is Professor Emeritus of Economics, The University of Texas at Austin.




Notes

1. John Dewey, Theory of Valuation (Chicago: University of Chicago Press, 1939), pp. 13, 23, 40.

2. Ibid., pp. 40-50 and esp., pp. 44, 46, 48. 3. Marc R.Tool, The Discretionary Economy: A Normative Theory ofPolitical

Economy (Santa Monica, Calif.: Goodyear, 1979), p. 293. 4. Marc R. Tool, Essays in Social Value Theory (Armonk, N.Y.: M. E.

Sharpe, 1986), p. 1 1. 5. William M. Dugger, ed., Radical Institutionalism: Contemporary Voices

(Westport, Conn.: Greenwood Press, 1989), p. 117. 6. Tool, The Discretionary Economy, pp. 293-4; Essays, pp. 57-8. 7. Ibid., p. 293. 8. Ibid. 9. Wendell Gordon and John Adams, Economics as Social Science (River-

dale, Md.: Riverdale, 1989), pp. 232-33. 10. Dewey, p. 48. 11. Ibid. pp. 44-45. 12. Ibid., pp. 51-66. 13. James L. Dietz, "Radicals and Institutionalists: Holes, Wholes, and Future

Directions," in Dugger, Radical Institutionalism, p. 54.

The Cambridge Keynesians and the "Bastard Keynesians9: A Comment on Economists and

Their Understanding of the Inflationary Aspects of Keynesian Policy

For many years now, Keynesians in the United States have suffered the public calumny of failing to understand that continuous achieve- ment of full or nearly full employment brought with it inflationary pres- sures. Journalists do not care for such fine distinctions as the American Keynesian argument that there are worse things than inflation- unemployment, for example.

Nothing has been more damaging to the image of Keynesians than the charge that they failed to predict inflation, and the fact that there is little truth in the charge proves to be no defense.

Joan Robinson, for one, thought there was substance to the charge in the case of those she called the "bastard Keynesians." But first, let us establish her right to speak on the issue.

In 1935, during the period when John Maynard Keynes' General



the role of tool's social value principle

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