THE MEANING OF RATIONALIZATION: AN ANALYSIS OF THE LITERATURE.

The article discusses the definition of rationalization in scientific and quasi-scientific economic literature in Germany in the 1930s. Germanic in origin, the word rationalization arose as an expression to cover the process of rationing production in the over-expanded heavy industries at the beginning of the reconstruction following the inflation. Careful examination of the relevant literature will show that while there is a measure of agreement over the content of rationalization as an industrial program, particularly in its more purely technological features, there is considerable difference of opinion both as to the scope of the movement and as to emphasis. The most commonly entertained conception of rationalization identifies it directly with all those efforts and programs within and between separate industrial and business undertakings which make for the elimination of waste in the general sense understood by the American Engineering Council in its report on Waste in Industry, published in 1926. Rationalization is sometimes associated primarily with coordination and integration within particular industries, usually looking toward the establishment of a complete or partial monopoly, but sometimes merely toward the establishment of price-fixing policies.