14

The hermeneutical view of freedom

Implications of Gadamerian understanding for economic policy

Tom G.Palmer

Ludwig Wittgenstein (1968, p. 69) has remarked that philosophy ‘leaves everything as it is’. The implication of this view is that philosophy does not change the world. This theme is also present, in a somewhat different way, in Hans-Georg Gadamer’s view of his own philosophical hermeneutics. As Gadamer writes in Truth and Method:

The hermeneutics developed here is not…a methodology of the human sciences, but an attempt to understand what the human sciences truly are, beyond their methodological self-consciousness, and what connects them with the totality of our experience of the world…it is not my intention to make prescriptions for the sciences or the conduct of life, but to try to correct false thinking about what they are.

(Gadamer 1982, p. xii)

While Gadamer has indeed deepened our understanding of the event that understanding is, his claims may have been in some ways too modest (cf. Hekman 1986, pp. 139–59).1 To understand what we do when we experience is inevitably to say something about the conduct of life, and to lay the ground for criticism of science and of life. It will be my claim that Gadamer offers us some very important hints for the proper conduct of economic science, and for the proper conduct of economic life.

As other contributors have explored the implications of a hermeneutical approach for economic science, I will offer only a few comments on the significance for economics of hermeneutic philosophy; the rest of this essay will address itself to some implications of this approach for economic policy.

WE LIVE IN A WORLD OF SIGNIFICANCE

It is a mainstay of modernist thought that one of the main problems of philosophical thinking is to show how things ‘out there’ are mirrored ‘in here’, i.e. how is it that the Cartesian dualities of ‘thinking substance’ and ‘extended substance’ can interact, or how the former can know the latter. A corollary of this question is the question of how the things ‘out there’, apprehended as they

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are by means of the senses, can have non-perceptual characteristics like ‘utility’, ‘meaning’, ‘desirability’, ‘goodness’, and so forth. This seems such an obvious way of thinking about these problems that we often overlook the fact that this is a very recent way of looking at the world, and would not be at all obvious to a thinker like Aristotle, for example.

One of the major motivations of the philosopher Edmund Husserl was to overcome such dichotomies, to show that the chasm between subject and object was not necessary, and that the two could properly be understood only within an overarching unity. To ask the typical question of how subjects and objects can be related not only entails degrading the subject to the status of an object—just one more thing among others—it also rests on questionable but unjustified philosophical assumptions. In contrast, Husserl’s phenomenological (or descriptive) philosophy seeks to describe the phenomena just as they present themselves, without importing philosophical preconceptions about what they have to be. His project was to present a scientific philosophy, one that was true to the phenomena in all their richness, and not merely another ‘nothing but’ philosophy—according to which there are ‘nothing but’ impressions (David Hume), justice is ‘nothing but’ the greatest satisfaction of the greatest number (John Stuart Mill), and so forth.

Heidegger takes up Husserl’s task in Being and Time, albeit in more dramatic and often more obscure language. Rather than attempting to show how inert objects can acquire significance, Heidegger shows, through his temporal analytic of everydayness, that they are already significant; merely to speak of objects is already to be in a relationship with them (see Heidegger 1962, especially pp. 95– 107). We do not have to ‘get to’ objects, for we are already at home among them, and the task of the philosopher is to describe where we already are, and not to figure out how to get there.

The parallels with subjectivist schools of thought in economics should be clear. The world of the economic actor is a world of significance. The job of the economist, then, must be to explicate the phenomena of the social world in terms of the meaning structures at work,2 and not merely to search for correlations among ‘data’ against which one tests theories pulled from philosophical hats. (This is not to say that such searches—or such tests of theories against observations—are pointless, but that they must ultimately be placed within plausible and meaningful accounts of human conduct.) The very worldliness of the world is a structure of significance, and can best be understood in such terms.3

THE ‘IS’ WITHIN THE ‘OUGHT’

Are we left, however, with a merely descriptive science—one which can help us understand what is, but has nothing to say about what should be? Since Hume’s philosophical interpreters have drawn the is/ought dichotomy (or, more precisely, chasm) out of the philosopher’s writings, economists and other social scientists have been vexed by the problem of whether and what they can say

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about what should be. The allegedly scientific approach of the Pareto criterion has come under a great deal of criticism in recent years, and rightly so (see Cowen, this volume, Ch. 13). Not only does it lead to often repugnant conclusions, but it rests on assumptions that are highly suspect. Can philosophical hermeneutics offer an answer to this conundrum for the social scientist who wishes to participate in the community in a more important way than merely offering predictions about the likely outcomes of this or that policy? The latter approach has been clearly formulated by one of the profession’s leading members, Milton Friedman: The economist’s value judgements doubtless influence the subjects he works on and perhaps also at times the conclusions he reaches…[but] this does not alter the fundamental point that, in principle, there are no value judgements in economics’ (Friedman 1967, p. 86; cf. Stubblebine 1975, pp. 11–22).4

I would like to approach this problem and offer an alternative to Friedman’s position, but in a somewhat roundabout fashion. I will begin by explicating Gadamer’s phenomenological description of what goes on in a conversation, and then draw implications for our understanding (as social scientists) of the market process, and for our evaluation of the moral status of various economic arrangements and of the institutions on which they rest. Gadamer is interested in conversation primarily because of the model it provides for the confrontation with a text; I will put it to use in a somewhat different context.5

First, however, it will be appropriate to consider the question—raised by the neo-Marxist Jürgen Habermas—of whether Gadamer offers us any criteria for social critique at all. Gadamer has gone to great lengths in his Truth and Method to argue that tradition, prejudice, language, and habit can be sources of truth, as well as of error. Does Gadamer offer any principle of criticism by which we can distinguish between true and false prejudices, the liberating and the enslaving? Just as the question can be asked of F.A. Hayek’s evolutionary understanding of markets and morality (see Gray 1980, especially pp. 119–37), Habermas asks whether Gadamer has done more than merely offer a conservative defence of the status quo.6 Much of my present essay can be interpreted as an implicit critique of the Habermasian enterprise, which proceeds—like this essay—from the discourse to ethics, but rests on a latent objectivism, a misunderstanding of economic processes, and an exaggerated elitism.7

In seeking for such a critical principle in Gadamer, Habermas overlooks Gadamer’s insistence that, in overcoming the ‘prejudice against prejudices’ (a theme also found in Hayek’s later work on social institutions), Gadamer stresses that authority (including that of tradition) rests ultimately on ‘recognition and knowledge…and hence on an act of reason itself’ (Gadamer 1982, p. 248).8 Authority and reason are not polar opposites, but complementary elements of the same human rationality.

Not only are authority and reason already allied under the banner of rationality, but the authority of tradition is ineluctable. Man cannot escape living through one tradition or another—traditions which live through their incessant, creative

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and free appropriation by the men and women who live within them. Man’s finitude rests in the inability to raise himself to the status of absolute consciousness—or consciousness without presuppositions (in the Hegelian sense).

Consistent with his stress on the role of reason in tradition and on the finitude of human existence, Gadamer shows that the appropriate way to treat a text is not to attempt to recreate the intention or meaning that was, one might say, ‘in the author’s head’ but to try to learn from or listen to the text. The point is not to recreate the mental contents of an author, but to understand what the author has to say to us about a topic of common concern. If one reads Aristotle on politics merely to find out what Aristotle thought, one does a disservice to Aristotle; one should read Aristotle’s Politics to learn about politics, to open oneself to a dialogue with the author and the text about a topic of common concern, and not simply to say, ‘Such was Aristotle’s view’ and then return the volume to the shelf. Gadamer uses as his model of how to approach a text (in a way, a ‘dead’ thing) the way in which we approach a living interlocutor.

In approaching a tradition, Gadamer tells us, we should realize that tradition: ‘is language, i.e., it expresses itself like a “Thou”. A “Thou” is not an object, but stands in a relationship with us…tradition is a genuine partner in communication, with which we have fellowship as does the “I” with a “Thou”’ (Gadamer 1982, p. 321).9 Gadamer models the confrontation between reader and text on the dialogical model of a conversation, with the reciprocal recognition appropriate to it:

In human relationships the important thing is, as we have seen, to experience the ‘Thou’ truly as a ‘Thou’, i.e., not to overlook his claim and to listen to what he has to say to us. To this end, openness is necessary. But this openness exists ultimately not only for the person to whom one listens, but rather anyone who listens is fundamentally open. Without this kind of openness to one another there is no genuine human relationship. Belonging together always means being able to listen to one another. When two people understand each other, this does not mean that one person ‘understands’ the other in the sense of surveying him. Similarly, to hear and obey someone does not mean simply that we do blindly what the other desires. We call such a person a slave.

(Gadamer 1982, p. 324)

Thus (as Habermas is also known for arguing), the model of conversation provides a norm for social intercourse. It is persuasion—not coercion, domination and manipulation—which characterizes the proper relationship of one human life to another.10 What can we glean from this for the understanding of economic life and the guidance of economic policy?11