This statement should be taken for its face value. It reveals that capitalism is no longer about production of material goods (which can be produced more effectively under different arrangements.) It is a religion forced down everyone's throats by a handful of its high priests - a latter days Counter-Reformation if you will. Its goal is to maintain the "sacred" institutions that are not only outdated but detrimental to human progress - just as Mr. Whitehead divulged.
I understand that materialism and systemic approach are the signatures of the left view of economy and society - but that analysis cannot explain the most fundamental yet unnoticed paradox of modern capitalism - why in the era of unprecedented levels of material production and plenty the fundamental drive is to improve efficiency and cut spending, which are measures of dealing with scarcity? In other words, capitalists can live more than one luxurious life off the wealth they already accumulated, yet they drive hard to accumulate even more. By their own economic theory - the marginal utility of this extra push is diminishing if not nil.
So it seems that the assumption of utilitarianism i.e. belief that capitalism is about production of material goods does not do a very good job explaining capitalist behavior, which begs the question "what is the underlying principle of modern capitalism?" I suggest that it is religious faith - or more specifically - the maintenance of the institutional structure of organized religion and protecting this structure from rational and utilitarian challenges. From that point of view, neo-liberalism is in fact a modern version of Counter-Reformation whose main purpose was not the "maximization of religious utility" e.g. sending the greatest number of people to heaven, which was the church's stated mission, but to protect Catholic institutions from Protestant challenges even if these efforts produced religious disutility (i.e. condemning more and more people and sending them to hell instead of heaven.)
Contrary to its detractors, Counter-Reformation was not a form of irrational obscurantism and philistinism, but rather an alternative form of rationality, utilitarianism, and aesthetics that countered the rationality, utilitarianism and aesthetics espoused by the Reformation. Both Catholics and Protestants believed in the same god and shared the same eschatological goals (guiding people to what they believed was a better future.) The bone of contention was not the religious fundamentals, so to speak, but the institutional division of religious labor i.e. whose institutions can better serve those fundamentals. To win this contest, the Catholic Church could not merely continue the production of religious services as it did in the past (i.e. administering baptisms and confessions, officiate weddings, and selling indulgences.) It had to create a new level of activity that can be described as meta-religious services, whose main purpose was the legitimation of its basic religious services and the institutional order that produced them. To this end, the Counter-Reformation created a whole network of outstanding educational institutions (cf. the Jesuit or Ursuline schools) whose purpose was to provide learning infused with the "spirit of Catholicism" i.e. a system of thought that justified and legitimated Catholic institutions. To this day, Catholic schools provide excellent education that acts like a Trojan horse for smuggling legitimation of Catholic institutions into the secular sphere of sciences, politics, and
arts.
Neo-liberalism functions in pretty much the same way. Its main purpose is not the production of economic "fundamentals" i.e. the production of material goods and surplus distribution, as the same goals are pursued by its competitors, the Keynesians, and the socialists. Its main purpose is the production of meta-economic activities whose main purpose is to legitimate the institutional division of labor espoused by neo-liberalism: the sanctity of private property rights, the infallibility of free markets, the belief in the superiority of the business enterprise over public institutions, and the hierarchical distribution of wealth, which have been repeatedly challenged. To this end, neo-liberals, like their Jesuit predecessors, created a network of educational institutions and think tanks whose main goal is the production of these meta-economic services that fuse rationality with the "spirit of capitalism." That explains the existence of seemingly useless and idiotic papers like the NBER "contribution" to the study of religious saints posted by Doug to this list, or equally useless and idiotic papers by eminent scholars attempting to explain every imaginable social behavior by neo-liberal economic theories. These efforts seem useless and idiotic only if taken and their base level - i.e. serving ordinary scientific goals of describing or explaining some segment of economic activity. But they make perfect sense if they are taken at the meta-economic level whose main goal is the inculcation of public discourse with the ideas legitimating the neo-liberal discourse.
This seems quite obvious when applied to pseudo-sciences like economics, business management or political 'science' and other organic intellectuals of capital whose output has little scientific utility in the conventional sense (i.e. predicting, discovering, and explaining novel facts.) Their main purpose is manufacturing legitimacy for the use of managerial and business classed (cf. A. Huczynski, _Management Gurus_, Routledge, 1993).
However, I would extend this argument even further - to the neo-liberal institutional framework - especially the financial capital. An important, and I would go as far as saying dominant, function of these institutions is meta-economic - that is the maintenance and legitimation of the neo-liberal institutional order itself. This is, of course, not to say that these institutions do not perform base-level economic functions, just like the Catholic Church still performs the base-level religious functions (baptisms, weddings, confessions etc. - sans selling indulgences, perhaps.) What it means to say is that in the era of challenges to the neo-liberal order, these institutions acquired new meta-economic functions whose importance is far more critical to neo-liberalism than their performance of base-level functions.
In other words, everyone can flip and sell burgers, but not everybody can put golden arches around them. Every official (including a boat captain in the state of MD) can officiate marriages, but not everyone can do it in a manner approved by the Catholic Church. Not every food is kosher - only that which a rabbi declares as such. Likewise, everyone can produce and distribute stuff, but not everyone can do it in a manner that is sanctioned by the neo-liberal creed. The efforts required to obtain the blessing of the golden arches, a priest, or a rabbi may be unnecessary if not wasteful from an economic point of view, and those required to obtain the neo-liberal sanction are plain disastrous to entire national economies. But the production of economic utility is not the goal here - the goal is the maintenance and legitimation of certain institutional frameworks.
Institutions are not mere means of organizing social and economic life.
They are also dispensaries of myths and ceremonies (Meyer & Rowan, Institutionalized Organizations: Formal Structure as Myth and Ceremony, AJS, 1977, 83(2):340-363) that perpetuate their own maintenance and reproduction, regardless of their economic utility, if any. In my rarely read book "Civil Society and the Professions in Eastern Europe" http://books.google.com/books?id=-UcT6EIFG6wC&printsec=frontcover&dq=Civil+Society+and+the+Professions+in+Eastern+Europe&source=bl&ots=dVftXIq0ex&sig=3U68vrGzO7TXGwlrFk2KLN8yIfE&hl=en&ei=zU9VTZDtFIX7lwfa4cCqBw&sa=X&oi=book_result&ct=result&resnum=1&ved=0CBYQ6AEwAA#v=onepage&q&f=false (a more succinct version available in a journal article available here https://www.box.net/shared/kta42o4not) I show how Eastern European professional service providers use certain organizational forms to legitimate the services they produce, their own professional status, or both. The question of effectiveness (let alone efficiency) of these services or institutional forms of their delivery is not their primary consideration (although it is a consideration.) Their primary consideration is the legitimation of a certain institutional order of delivery of these services, independent of the state and shielding their providers from competition. I would extend this argument to key neo-liberal institutions, especially the financial sector, although at this time I do not have the empirical material at hand to support this claim.
In sum, modern capitalism is not about economics as commonly believed, but about faith in neo-liberal dogmas and maintenance of neo-liberal institutions.
Wojtek