Abstract

Recent theoretical developments in economic theory have attempted to relax the assumption that human behavior is guided by “tight calculation” of profit-maximization. Harvey Liebenstein's notion of X-efficiency is a particularly important development in this regard. This article argues, however, that X-efficiency theory does not go far enough in relaxing the assumptions of economic theory. The understanding of human behavior requires a recognition of variability in the ends or goals of action as well as variability in the means which are utilized in the pursuit of these diverse ends. Max Weber's concepts of formal rationality and substantive rationality recognize this variability in the ends toward which action is oriented as well as the intrusion of habit or routine in the “calculatedness” of social and economic action. C. Wright Mills' ideal of craftship is used to represent a type of substantive rationality which contrasts with the formal rationality of calculation toward profit-maximization. The case is made that craftship is a particularly significant substantive rationality in American agriculture. It is argued that, among family farmers, other values, such as autonomy in one's work, often constitute alternative ends toward which action may be directed. Such ends may, in fact, conflict with the goal of profit-maximization. It is concluded that agricultural policy analysis and prescription which fails to consider the significant role of substantive rationalities, such as craftship, are likely to reproduce and enhance the conditions from which the present crisis in agriculture has developed