Economic Philosophy

The Economic System as the First Subsystem

In the reflection-logical ordering of societal subsystems, the economic system occupies the first, basal level. It is based on instrumental rationality and the unreflected intentionality of social reflection, in which the counterpart (other people or nature) is primarily regarded as a means for need satisfaction or goal attainment. Its primary function is adaptation to the material environment through production, distribution, and consumption of goods.

• Reflection level: 1 (Instrumentality)
• Medium: Money
• Dominant action type: Instrumental and object-related action
• Dominant values: Efficiency, utility, profit, material prosperity

Reflection-Logical Analysis of Economic Basic Concepts

Reflexive philosophy enables a new, more differentiated perspective on economic basic concepts that goes beyond purely material or utility-based definitions:

• Labour: Not seen merely as the production of goods but as a specific form of social object-reference (action type 1.3), embedded in the division of labour and social evaluation. The separation of mental and manual labour is criticised as artificial, since every labour integrates both aspects. Labour is the formation of objects into socially relevant value items.
• Commodity: An object whose use value (utility) becomes exchange value through social reflection processes (evaluation, comparison, normalisation) and exchangeability. Trade in commodities (action type 1.4) is the medial level of object-related action, in which objects receive an explicit social validity.
• Money: Emerges as a universal medium of exchange and standard of value from the necessity of making exchange values comparable and multilaterally tradeable (action type 1.4.4). It is the specific medium of the economic system, decoupling and abstracting interactions from personal relationships and concrete goods. Heinrichs criticises the fiction of “working money” (interest as payment for lending) and the detachment of money from material equivalents.
• Capital: Arises when money itself becomes a commodity and no longer primarily serves exchange but the accumulation of more money (Marx: M-C-M’ instead of C-M-C). This leads to the autonomous dynamics of financial markets and the dominance of the return logic over need satisfaction.
• Value: Understood relationally. Use value → interest value (subjective/social preferences) → exchange value (socially normalised relation) → monetary value form stages of increasing social abstraction and reflection.

Critique of Economisation

A central concern of Heinrichs is the critique of the economisation of society, i.e., the tendency for the logic (means-end rationality, efficiency, profit maximisation) and medium (money) of the economic system to penetrate other societal subsystems (politics, culture, ethics) and dominate or deform them.

• Politics: Dependence on economic interests, lobbying, financing of elections, “capitalisation of democracy”. Political decisions are taken under economic constraints.
• Culture: Commercialisation of education (as job training), art (as commodity), media (as advertising vehicles) — the “culture industry”.
• Values/Ethics: Reduction of ethical questions to cost-benefit calculations; reification of human relationships and social values; dominance of having-orientation.
• Nature: Degraded to a mere object of exploitation (raw material supplier, production factor).

This dominance of the first subsystem contradicts the principle of integration through differentiation and leads to an unbalanced, crisis-prone societal development, since the higher reflection levels (politics, culture, ethics) can no longer fulfil their framework-setting function.

The Role of the Economy in Value-Level Democracy

In value-level democracy, the economic system is clearly classified as the first, basal subsystem that is to serve the others:

• The economic chamber regulates economic processes according to criteria of appropriateness and need satisfaction while observing social and ecological standards.
• It is, however, framed and controlled by the political chamber (legal framework), the cultural chamber (education, values, research), and the fundamental values chamber (ethical principles, questions of meaning).
• The goal is a serving economy (“social market economy” in the literal sense) that creates material foundations without dominating society and its higher values. The structural power of capital is to be broken and subjected to democratic control.

Economic Ethics as a Structural Question

A purely appeal-based ethics for companies or consumers is insufficient, according to Heinrichs. What is needed is a structural social ethics that shapes the institutional framework conditions of the economy (e.g., property order, monetary system, corporate constitution, taxation) so that ethical and common-good-oriented action is enabled and promoted. This is primarily the task of the political, cultural, and fundamental values chambers in value-level democracy.

The economic philosophy of the reflexive theory thus analyses economic phenomena not in isolation but in their connection with consciousness, action, and the overall structure of society. It provides a critical perspective on current economic trends and establishes the necessity of a value-based embedding and democratic shaping of the economy.

Further Reading

All mentioned works are available from Reflexivity Press.

• Leap from the Vicious Circle — Johannes Heinrichs