formal rationality

formal rationality
As defined by Max Weber in his account of the market and economic action, this refers to the extent of impersonal quantitative calculation (that is, risk assessment) which is possible and applied in provisioning for needs. Money is the best means for ensuring such calculability within a particular institutional order. The concept is best understood in contradistinction to (as well as in the context of) ‘substantive rationality’, which involves provisioning according to some ultimate values, be they status, egalitarian, social justice, or indeed any infinite variety of value-scales by which to judge the outcome of economic action. Given certain substantive conditions-such as legal formalism, bureaucratic administration, free labour, and a system of property rights-formal rationality refers to the calculability of means and procedures, sub-stantive rationality to the value of ends or outcomes. The two are in constant tension, in so far as social action is oriented to ends, beliefs, and value commitment.

Dictionary of sociology. 2013.

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