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are several aspects to modern economics which might help clarify this seeming anomaly: as noted earlier, the freedom celebrated by mainstream economics is confined to the decisionmaking of asocial and ahistorical individuals. There is no systematic inquiry into their socialization, into how their preference functions are formed. The focus is upon the worker’s free choice of an employer. In addition, work is typically depicted as yielding disutility and therefore an activity which only a bribe might bring forth. There is little focus on work as an outlet for selfexpression and creativity as well as a source of community and solidarity with others. Of course, the depiction of work as unpleasant mirrors the nature of many, if not most, jobs in industrial society. However, the theory does not attempt to clarify why, given our abundance, such work continues to exist, other than to suggest that there is a trade-off between enjoyable work and income, and that free-willed workers must therefore choose the latter.

A third reason why workplace democracy receives so little attention is traceable to the positivist limitation of scope. The question of workplace democracy is one of institutional change; and, as noted earlier, mainstream economics’ adherence to positivistic canons of correct scientific procedure results in a reluctance to give theoretical treatment to institutional change. The problem is that institutions are founded on values, and economists fear that to take on such issues is to stray from science. Ironically, the positivist doctrine— which economists believe will protect them from ideology— serves itself as an ideology which blinds them both to the ideological thrust of their own theoretical stance and the need to be ever critical of their own personal preconceptions.

TOWARD A CRITICAL ECONOMIC SCIENCE

To be capable of fully providing public enlightenment, economics would need to abandon its naïve confidence that positivist canons of science can shield the discipline from ideological distortions. It would need to struggle more consciously toward identifying ideology, as well as checking its own vulnerability to serving as ideology. The problem of ideology is, of course, central to Habermas’ project. He conceives of his task in much the same manner as did Marx and the earlier Frankfurt school—to set forth the fundaments of critical social theory.27 Critical social theory would be one capable of selfreflection. It would be capable of the self-examination which promises a more effective rooting out of ideological distortions. By aiding humanity in moving beyond imprisonment in ideology, it would assist humans in assuming mastery of their own destinies.

All social theory serves to legitimate social conditions and action. This socialworld legitimation is per se neither good nor bad. It is unavoidable. It is the process through which humans give meaning and guidance to their existence.28 The task of critical social thought is to make this legitimation transparent, to enable us to better understand whether that which is legitimated furthers or impedes human well-being. In pre-modern society, religion served as the

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predominant over-arching meaning, or legitimation system. In modern times, as Joan Robinson has colourfully put it, economics has essentially replaced religion, and the legitimation task has become that of justifying ‘the ways of Mammon to man’.

A critical economic science would strive to demystify or dereify socioeconomic institutions to reveal the extent to which, as human products, they are capable of being transformed to improve the human condition. A selfreflective economic science would not only strive to understand itself in terms of its legitimation function, but it would also share this understanding with the public it serves in the struggle for free self-determination. It would aspire, as Richard Bernstein has put it, ‘to bring the subjects themselves to full selfconsciousness of the contradictions implicit in their material existence, to penetrate the ideological mystifications and forms of false consciousness that distort the meaning of existing social conditions’ (Bernstein 1976, p. 182).

Mainstream economics, in its positivistic and instrumental orientation, pretends to be principally concerned with discovering regularities and correlations within the economic order which might permit greater prediction and control of economic phenomena. However, its uncritical stance, combined with its pretence of ethical neutrality, has precluded attempts to dif ferentiate those regularities and correlations representing invariant forms of social life from those which merely ‘express ideologically frozen relations of dependence that can in principle be transformed’ (Habermas 1971, p. 310). Regularities which represent the ideological imprisonment of humans make predictions of social phenomena more likely. Indeed, the more firmly ideology is entrenched, the greater will be predictive power. Such predictions can become powerful instruments for control and manipulation of society by the state or private centres of concentrated power.

To become a more critical social science in a Habermasian sense, economics would have to embrace a hermeneutical dimension. Others have also argued for the crucial importance of a hermeneutical or interpretive dimension for social theory. But what stands out as unique within Habermas’s formulation is his insistence that this interpretive dimension must be supplemented by a critical or self-reflective dimension. The task is not merely to understand meaning and intentionality, but to do so critically. The goal is not merely to understand, but to do so in a manner which enables us to recognize and transcend ideology.29

From a Habermasian perspective, a critical economic science would need to be continually aware of both the manner in which it socially evolved and the social functions which it serves. Both dimensions are hermeneutical or interpretive. In seeking an understanding of its own self-formation, economics would probe for the dialectical relationship between the evolution of modern society and modern economic thought. It would need to understand why certain meanings were given to certain economic phenomena as opposed to others. It would need to ask such questions as: By accepting ends or values as externally given, does economics stabilize relations of power by providing them with legitimacy? Why was there

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such a radical and total shift from what Marx termed a ‘sphere of production’ perspective to a ‘sphere of circulation’ perspective in the latter part of the nineteenth century, even though it meant a restriction of scope for the discipline? Why does contemporary economics view individual behaviour in an asocial and ahistorical manner? Why it is that the discipline is preoccupied with a form of formalism which seems to promise so little fruit? Why, in spite of so much evidence to the contrary, does it continue to view the state as a neutral constable of the peace?

In a horizontal dimension, a critical economic science would seek to understand its own social functioning, the manner in which its own categories and conceptual relationships influence the self-understanding of the public it serves. It would recognize the distinction between control and manipulation of the material world and the social world. It would see that whereas providing guidance for the former is part of its liberating potential, to provide either guidance or legitimation for the manipulation and control of the social world is to constrain, if not reduce, human freedom. It would seek to understand economic actors, not merely as mechanical selfinterested hedonists, but as social beings who behave with intentions and meanings.30

From a Habermasian perspective, then, an ideal economic science would need to embrace two dimensions that currently are accorded no significant role within the mainstream of the discipline. These dimensions are the hermeneutical or interpretative and the critical. Without these two crucial components for social theory, economics is unnecessarily handicapped from aiding humans in their struggle for liberation, not just from material privation, but also from social strife and domination.

NOTES

1Understandably, this has generated an enormous body of critical books and articles on Habermas’s project. For the interested reader, the most comprehensive of these remains McCarthy, 1978.

2Benjamin Ward has suggested that, since Keynes, economics has undergone a ‘formalist revolution’ in which ‘the proof has replaced the argument’ (Ward 1972, p. 41). Piero V.Mini (1974), by contrast, argues that this formalism, what he terms ‘the logic of Cartesianism’, has plagued economics since its modern beginnings. Robert Kuttner reports that Nobel Laureate Wassily Leontief has become so distressed with the profession’s increasing ‘preoccupation with imaginary, hypothetical, rather than with observable reality’, that he has ceased publishing in economics journals (Kuttner 1985, p. 78).

3In his earlier work, Habermas conceived of existential human needs as leading to knowledge-constitutive human interests (i.e., general human interests which would serve to guide the search and generation of knowledge). Although Habermas has not fully abandoned this knowledge-interest theory perspective (see Dews 1986, pp. 152, 197), it no longer plays a central role within his more recent work. Instead, the

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focus has shifted to an examination of the nature of knowledge in the presuppositions of communication.

4In differentiating his categories from those of Marx, Habermas draws on Max Weber’s distinction between purposive-rational action and value-rational action. Weber’s distinction, as will be seen below, is evident in Habermas’s characterization of different forms of rationality.

5‘If we assume that the human species maintains itself through the socially coordinated activities of its members and that this coordination is established through communication—and in certain spheres of life, through communication aimed at reaching agreement—then the reproduction of the species also requires satisfying the conditions of a rationality inherent in communicative action’ (Habermas 1984, p. 397).

6It should be noted that Habermas recognizes the need for a hermeneutical procedure in the natural sciences as well:

The natural sciences also have to deal with hermeneutic problems on the theoretical, but especially on the metatheoretical level; however, they do not have first to gain access to their object domain through hermeneutic means. The difference between the observer’s access to a physically measurable object domain from the third-person perspective, on the one hand, and access to a symbolically prestructured object domain in the performative attitude of a participant in communication, on the other hand, has consequences not only for research technique; they reach deeply into the logic of investigation in the objectivating and meaning-understanding sciences.

(Habermas 1982, p. 274)

7For Habermas, the life-world is ‘the horizon within which communicative actions are “always already” moving…we can think of the lifeworld as represented by a culturally transmitted and linguistically organized stock of interpretative patterns…. [It] is given to the experiencing subject as unquestionable’ (Habermas 1987, pp. 119, 124, 130).

8Habermas believes that Marx tended to see labour, or the struggle with nature, as necessitating just such a unique set of social institutions, of determining interaction. That is, according to Habermas’s interpretation, Marx often slipped toward reducing interaction to labour alone, to locating the self-formation of the human species as traceable to labour ‘in the last instance’.

9For an extensive treatment of the centrality of this communicative process within economic science, see McCloskey (1985).

10This instrumentalism, as well as the positivist criteria of theory validation, were most strikingly represented by the explosive rise in the importance of econometrics.

11This essay is the most frequently cited statement of the appropriate methodology for scientific economics. It often appears in the introductory sections of college course syllabuses and is probably the only methodological essay with which most economists are familiar.

12For an exposition as well as defence of Friedman’s instrumentalism, see Boland (1979).

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13 In the sociological language which Habermas employs, economics would complement its ‘systems’ perspective within which the behaviour of social actors is viewed in a mechanical manner, with a ‘life-world’ perspective within which importance is given to the meanings and intentions which social actors give to their existence. Habermas insists that these perspectives presuppose each other and that their synthesis is essential if social theory is to realize its full liberating potential.

14 As is the case within the Marxist tradition, Habermas believes internal contradictions threaten capitalism with crises which portend post-capitalist society. However, whereas Marxists have typically located the source of crises within the socio-economic domain, Habermas finds it within the socio-cultural. The contradictions have less to do with labour than with legitimation. For example, since the advent of Keynesian economics, the state has become more overtly involved in ensuring the profitability of private production. Yet this socialization of the conditions of production runs counter to the market logic of just desserts, or of the legitimacy of the private appropriation of surplus value. See, especially, Habermas 1975.

15‘Marx, to be sure, viewed the problem of making history with will and consciousness as one of the practical mastery of previously ungoverned processes of social development. Others, however, have understood it as a technical problem. They want to bring society under control in the same way as nature by reconstructing it according to the pattern of self-regulated systems of purposive-rational action and adaptive behavior. This intention is to be found not only among technocrats of capitalist planning but also among those of bureaucratic socialism’ (Habermas 1970a, pp. 116–17). Although Habermas considers himself a Marxist, he shows no preference for state socialism over capitalism: ‘I am unable to persuade myself that, from the standpoint of social evolution, state socialism is any more “mature” or “progressive” than state capitalism’ (Habermas in Dews, p. 41).

16Habermas believes that this has been carried to the point where ‘[t]he dependence of the professional on the politician appears to have reversed itself’ (Habermas 1970a, p. 63).

17Habermas states the issues more forcefully: ‘The solution of technical problems is not dependent on public discussion. Rather, public discussions could render problematic the framework within which the tasks of government action present themselves as technical ones. Therefore the new politics of state interventionism requires a depoliticization of the mass of the population. To the extent that practical questions are eliminated, the public realm also loses its political function’ (Habermas 1970a, pp. 103–4).

18A number of economists on both the right and the left have come to see the modern business cycle as more a political phenomenon than the consequence of more traditional economic forces as elaborated by Marx or Keynes. See, for instance: Nordhaus (1975); Paldam (1981); Heilbroner (1985); Boddy and Crotty (1974).

19The Keynesian attempt to define a specific minimum of unemployment which can be expected even at ‘full employment’ provides another example. This minimum is derived analytically ceteris paribus, again assuming no institutional change. Because the general thrust of Keynesian economics is to ignore the potential for those institutional changes which might enable a further reduction in the so-called minimum unemployment rate, the public is inclined to believe that such reductions are not scientifically possible.

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20‘We shall understand “democracy” to mean the institutionally secured forms of general and public communication that deal with the practical question of how men can and want to live under the objective conditions of their ever-expanding power of control’ (Habermas 1970a, p. 57).

21Habermas calls ‘the research program aimed at reconstructing the universal validity basis of speech’ universal pragmatics (Habermas 1979, p. 5). The sciences within this research programme address competencies which are universal within the human species, such as the ability to understand and speak languages. The most widely known examples of work within this domain are those of Noam Chomsky and Jean Piaget.

22Even Adam Smith recognized that where the employers and employees are at odds, the freedom of the latter is severely constricted: ‘A landlord, a farmer, a master workman, could generally live a year or two upon the stocks which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year without employment’ (Smith 1937, p. 66).

23Those who defend the market order against this Veblenian or Galbraithian charge typically do so by arguing that competition for contracts, even where communication is intentionally distorted, not only educates the individual to new possibilities, but inculcates a more critical potential for discounting false claims. Whatever the merits of this defence it remains largely a phenomenon between individual private actors pursuing their own narrow self-interest. It does not appear to fit Habermas’s ideal of individuals deliberating their own public wellbeing through free and open discourse.

24Surprisingly, Habermas has not set forth a well-developed theory of human behaviour. Perhaps yet more surprising is that his critics have not taken much note of this. One exception, Agnes Heller, notes that ‘Habermasian man has… no body, no feelings; the “structure of personality” is identified with cognition, language and interaction.’ Consequently, ‘[t]he question of whether, and, if so, how, distortion of communication is motivated cannot be answered by Habermas; nor can he answer the question of what would motivate us to get rid of the distortion. The assumption that consensus can be achieved in a process of enlightenment is in fact no answer: the will to achieve consensus is the problem in question’ (Heller 1982, pp. 22, 25).

25On this score Habermas has stated that ‘social theory would be overstepping its competence…if it undertook to project desirable forms of life into the future, instead of criticizing existing forms of life’ (Habermas in Dews 1986, p. 171). However, it could be argued that Habermas misses an important dimension in just how it is that social thought might abet society in enlightenment as to the nature of the good and just social order. By setting forth ‘desirable forms of life’ which are argued to be realizable, social theorists provide the public with alternative models which can be discussed within the public forum. Indeed, it is part of the legacy of positivism that social theorists feel constrained from discussing such models at all.

26Yet Habermas does not apparently view a movement toward workplace democracy as an effective and attractive response to the ‘crumbling of the welfare state compromise’: ‘I wonder…if we should not preserve part of today’s complexity within the economic system, limiting the discursive formation of the collective will precisely to the decisive and central structures of political power: that is, apart from the labour process as such, to the few but continuously made fundamental decisions which will determine the overall structure of social production and, naturally, of