JURGEN HABERMAS AND HIS

ANALYSIS OF CAPITALISM

Submitted by: Submitted to:

Aditi Deshpande Dr. Ayan Hazra

Semester II, Section A Assistant Professor

Roll no: 10 (Faculty of Sociology)

Hidayatullah National Law University

Upwara Post, Abhanpur, New Raipur – 493661 (C.G.)
 Declaration by Student

I, Aditi Deshpande, hereby declare that, this project entitled, ‘Jurgen Habermas and His
Analysis of Capitalism’ submitted to Hidayatullah National Law University (Raipur), is
record of an original work done by me under the guidance of Dr. Ayan Hazra, faculty
member, Hidayatullah National Law University (Raipur) and that no part of this work has
been plagiarized.

Signature
Aditi Deshpande
Semester II, Section A

I
 Certificate by Faculty

This is to hereby affirm that this project has been made under my guidance as a faculty of
Sociology and that it is a genuine and original work of the student, Aditi Deshpande. The
sources from which information has been taken for the sake of this project, has been duly
acknowledged in the citations.

Signature
Dr. Ayan Hazra

I
 Acknowledgements

I feel highly elated to work on the topic ‘Jurgen Habermas and His Analysis of
Capitalism.’

No creation in this world is a sole effort, nor is this work of mine. The practical realization of
this project has obligated the assistance of many persons. First of all I want to thank my
faculty teacher Dr. Ayan Hazra sir for his invaluable guidance. It would have not been
possible for me to frame this project of mine without his support and explanation.

I would like to thank my family and friends without whose encouragement, this project
would not have been a reality.

I take this opportunity to also thank Hidayatullah National Law University and the Vice
Chancellor for providing me with extensive database resources in the library and via internet.

Aditi Deshpande

Semester II
Roll number: 10
Section A

I
 Table of Content

Declaration by Student I
Certificate by faculty II
Acknowledgements III
Introduction 1
Review of Literature 3
Objectives and Research Questions 4
Liberal Capitalism and the Hope of Modernity 5
Legitimisation Crisis 8
Conclusion 13
Major Findings of the Study 14
References 15

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 Chapter One

Introduction
Jurgen Habermas was born on June 18, 1929 in a small town named Dusseldrof, Germany.
His teen years were spent during the period when Germany was under Nazi control.
Undoubtedly, this was one of the factors that lead to Habermas’s drive for freedom and
democracy.

His educational background is primarily in political philosophy, but he is also adept at

subjects like German literature, history and psychology. After teaching philosophy in several
different Universities, Habermas finally accepted the position of Director of the Max Planck
Institute for the Study of the Scientific-Technical World, in Starnberg, where he began to
formalise his Theory of Communicative Action. He was elected a Foreign Honorary Member
of the American Academy of Arts and Sciences in 1984.1

Habermas then returned to his chair at Frankfurt and the directorship of the Institute for
Social Research. In 1986, he received the Gottfried Wilhelm Leibniz Prize which is the
highest honour awarded in German research. He also holds the position of ‘Permanent
Visiting Professor’ at North-western University in Illinois, and ‘Theodor Heuss Professor’
at The New School, New York.

Jurgen Habermas currently ranks as one of the most influential philosophers in the world.
Bridging continental and Anglo-American traditions of thought, his extensive written work
addresses topics stretching from social-political theory to aesthetics, epistemology and
language. His ideas have significantly influenced not only philosophy but also political-legal
thought, developmental psychology and theology. Moreover, he has figured prominently in
Germany as a public intellectual, commenting on controversial issues of the day. However, if
one looks back over his corpus of work, one can discern two broad lines of enduring interest,
one having to do with the political domain, the other with issues of rationality,
communication, and knowledge.2

1
American Academy of Arts and Sciences, Book of Members, 1780–2010: Chapter H.
2
Martin Heidegger, on the publication of lectures from the year 1935, Graduate Faculty Philosophy Journal 6,
no.2: 155–180 [German, 1953]

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 Chapter Two

Review of Literature
There are several literary sources that I had to refer to in order to facilitate the successful
completion of this project. They are as follows:

I. John F. Sitton, Sociological Forum, Vol.13, No. 1 (Mar., 1998), pp. 61-83:
This research paper pointed out several flaws in Habermas's primary theoretical project
related to capitalism. This paper helped me gain the knowledge that was required to highlight
the flaws and criticisms related to his theory. It is alleged in this paper that Habermas's
diminishes the necessary organizational forms of the economic subsystem, produces
inconsistencies in regard to action orientations and subsystem dynamics, and encourages a
misleading restrictive notion of the loci of contemporary social conflict.

II. Jurgen Habermas, The Lure of Technology (2016):

To begin with, its chapters never discuss the nature of the economic interests and conflicts
underlying the contemporary politics of Europe and European integration – suggesting, as
though this was still the social-democratic 1980s or the Third Way 1990s, that a future
European democracy enshrined in a European constitution will as a matter of course come
with a primacy of European politics over European and, indeed, global capitalism. This new
book by Habermas himself, provided me with a new perspective on how his theory is viable
even when applied to the recent-most financial crises, that is, the breakdown of the European
machinery.

III. Kenneth Allan, Contemporary Social and Sociological Theory: Visualising Social
Worlds (2010):

Written in a conversational style that conveys the author's enthusiasm for theory, this updated
edition of Kenneth Allan's acclaimed text appeals to the reader to consider the "theoretical you,"
as an individual in 21st-century society. This book introduces students to an array of social
theories, each presented from the perspectives of these well-known theorists including Jurgen
Habermas. Thus, along with real life examples, this textbook helped me understand the theory
better and helped me write most of the third and fourth chapter.

IV. Renate Holub, Antonio Jurgen: Beyond Marxism and Postmodernism (2005):

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This book provides the first detailed account of Jurgen's work in the context of current critical
and socio-cultural debates. Renate Holub argues that Jurgen was ahead of his time in offering
a theory of art, politics and cultural production. Jurgen's achievement is discussed particularly
in relation to the Frankfurt School, to Brecht's theoretical writings and to thinkers in the
phenomenological tradition especially Merleau-Ponty. She argues for Jurgen's continuing
relevance at a time of retreat from Marxist positions on the postmodern left.
Jurgen is distinguished by its range of philosophical grasp, its depth of specialized historical
scholarship, and its keen sense of Jurgen's position as a crucial figure in the politics of
contemporary cultural theory. This book helped me in writing the conclusion.

V. Habermas, Jürgen, A Kind of Settlement of Damages On Apologetic Tendencies In

German History Writing, pp. 34–44 (1993):

This book is another work by Jurgen Habermas which is an intellectual masterpiece that talks
about the economy today. Upon reading this book, I gained the knowledge that was required to
order the points in the main body of my research paper. This book was translated from German,
like many of his works before.

VI. Raymond Plant, European Journal of Political Research, Volume 10, Jurgen Habermas
and the Idea of Legitimisation Crisis (1982):

This paper explores one aspect of the recent work of Jurgen Habermas on Legitimation Crisis. It
focuses attention on Habermas’s claim that the pre-capitalist moral values on which capitalism
has hitherto relied have become progressively displaced by the growth of the capitalist economy.
This has produced central problems for the state management of the economy, in the absence of
an established internalized set of values which could act both as restraints upon economic
demands and as reinforcements to an ethic of work. This research paper helped me immensely in
framing my fourth chapter and the following conclusion.

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Objectives and Research Questions

1. To discuss the theory of Jurgen Habermas in relation to liberal capitalism

2. To peruse his theory regarding organised capitalism

3. To study the impact of this change in form of capitalism in the form of the
legitimisation crisis

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 Chapter Three

Liberal Capitalism and the Hope of Modernity:

Drawing from Marx and Weber, Habermas argues that there have been phases of capitalism,
liberal capitalism and organised capitalism. Each phase was defined by the changing
relationship between capitalism and the State. In liberal capitalism the State has little
involvement with the economy. Thus, in this case it can be said that capitalism functions
without restraint on the part of the State. Liberal capitalism occurred for the first time during
the beginning phases of capitalism and the Nation-State. Capitalism and the Nation-State
came into existence as part of sweeping changes that redefined Western Europe and
eventually, the world as a whole.

Though they began earlier, these changes coalesced in the seventeenth and eighteenth
centuries. From this time, the primary form of government in Europe was feudalism, which
was brought to Europe by the Normans in 1066. Feudalism is based on land tenure and
personal relationship. These relationships, and thus, the land, were organised around the
incumbent monarchy at the time with a clear social division between royalty and peasants.
Thus, it can be stated that in that age, one’s personal relations and obligations were
paramount. The everyday person was keenly aware of his or her obligations to the lord of the
land. Hence originated the word, landlord. This was kind of a familial relationship and
fidelity was its chief goal. People under feudalism were subjects of the monarchy, not
citizens.

Capitalism came about, out of an institutional feel that included Protestantism and the
industrial revolution. The nation state was needed to provide the necessary uniform money
system and strong legal codes concerning and connecting private property. The protestant
reformation created a culture which strongly centred on individualism and the work ethic and
the industrial revolution gave to capitalism the level of exploitation that it needed.

Habermas argues that together, the nation state and capitalism de-politicised class relations,
proposed equality based on market competition and contributed strongly to the emergence of
the public sphere. The term ‘class’ first came into the English language in the 17th century.

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At that time, it had reference mainly to education; our use of classic and class came into
existence between 1770 and 1840, a time period that corresponds to the industrial revolution
as well as the French and American political revolutions.

Almost everything about society changed during this time, particularly the ideas of individual
rights and accountability and the primacy of the economic system. The modern word ‘class,’
carries with it the idea that individual’s possession is a product of the social system and that
social possession is made rather than inherited. What was changing consciousness was not
only increased individual mobility which could be largely contained within the older terms,
but the new sense of a society or a particular social system which actually created social
division including new kinds of division.

Thus, class is no longer a political issue, but rather an economic one- Class relations are no
longer seen in terms of personal relations and family connections but rather as the result of
free market competition. Under capitalism and the civil liberties bought in by the nation state,
all members of the society are seen as equal citizens and economic competitors. Any
differences amongst members in society are thus believed to come from economic
competition and market forces rather than birthright and personal relationships. Clearly,
liberal capitalism brought momentous changes to the life-world. It became a world defined
by Democratic freedoms and responsibilities.

Social relationships were no longer familial, but rather legal and rational. The chief goal for
this person in this lifeworld was full of democratic participation. According to Habermas, the
mechanism for this full participation is the public sphere.

The combination of the ideals of enlightenment, the transformation of government from

feudalism to nation-state democracy and the rise of capitalism, created something that never
before existed- the public sphere. The public sphere is a space for democratic public debate.

Under feudalism, subjects could obviously complain about the monarchy and their way of
life and no doubt they did, but grumbling about a situation over which they had no control is
vastly different than debating political points over which one is expected to exercise control.
Around the same time, America and Europe were having citizenship rights and such liberties
for the first time. The ideals of the Enlightenment indicated that this citizenry would be
informed and completely engaged in the democratic process and the public sphere is the
place where the strong democracy could take place.

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Habermas sees the public sphere as existing between a set of cultural institutions and
practices on the one hand and State power on the other. The function of the public sphere is
to mediate the concerns of the private citizens and State interests. There are two principles of
this public sphere: Access to unlimited information and equal participation. The public
sphere thus consists of cultural organisations such as journals and newspapers that distribute
information to the public; it contains both political and commercial organisations where
public discussion can take place such as public assemblies, coffee shops, pubs, political clubs
and so forth. The goal of the public sphere is pragmatic consensus.

Thus, during liberal capitalism, the relationship between State and capitalism can be best
characterised as laissez faire. The assumption underlying this policy was that the individual
will contribute more successfully to the good of the whole if left on his or her own
aspirations. The place of government should be as far away from capitalism as possible. In
this way of thinking, capitalism represents the mechanism of equality- the place where the
best are defined through successful competition rather than by family ties. During liberal
capitalism, then it was felt that the marketplace of capitalism had to be completely free from
any interference so that the most successful could rise to the top. In this sense, faith in the
invisible hand of market dynamics corresponded to the evolutionist belief in survival of the
fittest and natural selection.

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 Chapter Four

Legitimisation Crisis:

The tendency for the modern capitalist state to develop a legitimation deficit is, in
Habermas’s view, the fundamental problem for such societies and the most obvious threat to
their survival. The concept of legitimation is therefore central for Habermas and he means by
it that there are good arguments for a political order’s claim to be considered right and just, a
political order’s worthiness to be recognized.

It should be noted that this central crisis in the capitalist state is not primarily economic but
rather political or even cultural, concerning as it does the problems caused by the continuing
and growing attempts on the part of liberal capitalist states to steer the economy. The problem
posed by legitimation crisis is how the growing intervention of the state in economic activity
can be rendered legitimate to those who are affected by the authority of the state in this
sphere. The central question is: are there normative resources in society on which the state
can draw to justify and sustain the degree of intervention required to avoid some of the
dysfunctional effects of the economic market while at the same time securing the conditions
necessary for the market to operate?

If the state attempts to steer the economy, what effect is this likely to have on the work
motivations of citizens? Can the economy be steered effectively without provoking a
motivational crisis, that is without undermining incentives to work and produce which are
necessary to maintain the system?

Habermas sees these problems as being identified first of all in the work of Hegel,
particularly in his account of how civil society is ‘lost to particularity’ and ‘lost to morality’
but comes under the governance of the universal in the state. How can the state in its
regulative activities in the market appear other than external, imposed and arbitrary to
economic actors in the system of needs? What resources are there within privately orientated
market activity to legitimize the universal role of the state? It can be argued that the difficulty
posed by Habermas has come into prominence in recent years because of the failure of the
liberal state to maintain rising living standards for all. Under Conservative and Social

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Democratic governments the economic position of all sectors of the population has been
improved without severe ideological conflict because economic growth has enabled the better
off to maintain their living standards in absolute terms even during periods of redistribution.

It is at this point that we make contact with the detail of Habermas’s thesis, because in his
view, problems of this sort have become exacerbated by the very success of capitalist
development. Capitalism has built up expectations about consumption, and these have
increased pressures on governments to steer the economy to produce more goods. The non-
provision of goods to meet expectations becomes a dysfunctional feature of the market which
it has become a task of government to correct.

In earlier stages of capitalist development, in Habermas’s view, the operation of the capitalist
market rested upon a range of internalized restraints upon demand and consumption which
the very success of capitalism has destroyed. He argues in both his works, Theory and
Practice (1974) and Legitimation Crisis (1976) that capitalism ‘depended upon a cultural
tradition which formerly had regulated conduct and which till now, could be presupposed as a
tacit boundary condition of the political system’. A

mong the cultural factors which Habermas regards as crucial to the underpinning of
capitalism are: civil privatism, familial and vocational privatism, the religion-based
achievement ethic of the middle class, the fatalism of the lower classes, the Protestant ethic
and renunciation of immediate gratification. All of these factors made for both economic and
political restraint and industrial stability. In addition, they provided a range of resources in
terms of which individuals defined their attitudes, and thus gave them a sense of their own
identity.

These factors constitute the cultural boundary conditions of capitalist society, but
paradoxically capitalism cannot itself reproduce these features but its success destroys them,
with the result that capitalist societies come to ‘feed parasitically upon the remains of a
tradition’ which capitalism itself has depleted:

Bourgeois culture as a whole has never been able to reproduce itself from itself. It was
always dependent upon motivationally effective supplementation by traditional world views.
(Habermas, 1976)

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Capitalist society requires a shared set of cultural attitudes as boundary conditions without
which it will be unstable and in the absence of which government will be unable to find the
resources to legitimate its steering activity. Paradoxically, capitalist society undermines the
range of attitudes which are necessary for its own effective functioning. This has
consequences for individuals and society: individuals lose a sense of moral identity with the
collapse of these cultural attitudes and at the same time this loss of identity and a sense of
meaning has its effect on social integration. Social integration presupposes shared meaning;
the cultural attitudes which secure an integration within capitalism are being lost. These
assumptions are crucial for Habermas’s argument and we need to look at them in some detail.

Habermas discusses the cultural role of several specific attitudes. The arguments here are
listed in summary form:

1. Restraint: The internalization of religious attitudes encouraged restraint in the early

periods of capitalist development, and certainly some of the early defenders of liberal
capitalist society saw self-interest and its pursuit to be hedged around with all sorts of
social and religious restraints. In some respects this brings up the disputed
relationship between Adam Smith’s Wealth of Nations and his Theory of Moral
Sentiments, in which Smith clearly argues that the pursuit of self-interest is subject to
internalized constraints derived from morals, religion, custom and education.

The extent to which these have been stripped away by the very action of capitalism
makes any appeal to restraint by government very difficult for it to justify. With the
removal of inner restraints on demand and consumption, the economic system will
become very unstable and at the political level is going to produce severe problems of
co-ordination in seeking to meet the conflicting demands made upon it (for a view of
this from a different perspective see Brittan, 1978).

2. Achievement and Fatalism: In Habermas’s view these two attitudes have been central
to the establishment and maintenance of the liberal capitalist economic and political
system, and both sets of attitudes have been sustained by religious beliefs. 346
Achievement and the belief that the market rewards effort have been central to
maintaining the incentive motivation of the system, whereas fatalism was necessary to
secure a docile and stable workforce.

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 These attitudes were grounded in religion and mediated in child-rearing and family
life in ways which Habermas regards as class-specific ways: The repressive authority
of conscience and an individual achievement orientation among the bourgeoisie and
to external super ego structures and conventional work morality among the lower
classes. Here we see the dual nature of these attitudes: they secure relationships to an
economic system, and they generate a sense of personal identity and identity among
individuals. Identity and legitimation go together in Habermas's mind.

3. The Work Ethic: Again the same argument is put to work here. The Protestant Ethic
gives individuals a sense of dignity and value in their work and at the same time
produces integration with and provides work motives for the prevailing economic
system. However, as the designation 'Protestant Ethic' implies, it is Habermas's view
that this kind of work orientation is sustained by religious belief and that this belief
system has been eroded and the work motivations secured by them cannot be
renewed. Again the thesis is that bourgeois culture is unable to reproduce itself from
itself. It has always been dependent upon motivationally effective supplementation by
traditional world views.

4. Civil Privatization: The orientation to private norms is characteristic of capitalist

society. Citizens are encouraged to look for fulfilment in private pursuits, particularly,
in Habermas's view, in the area of career, leisure and consumption. Along with this
privatization has gone a general decline in political activity. Although capitalist
societies usually embody at a political level formal democratic rights. the net effect of
this, allowing political participation only at period elections and not through active
participation in the public realm, elicits mass loyalty but avoids mass involvement.

Any further politicization of the public realm would bring into the open the
contradictions between the various demands the political system seeks to meet - the
most basic of which according to Habermas is between socialized production and the
appropriation and use of surplus value. Civil privatism again allows for a sense of
personal worth - giving one dignity in terms of private pursuits and family life - and it
sustains the economic system just because of its restriction on political demands.
From the point of view of classical political thought and of Marxism. however. this
sense of dignity is illusory because it is based upon an attenuated conception of

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human powers. Again, civil privatism is sustained by the range of cultural attitudes
which have been mentioned, and with the erosion of these and the attenuated view of
the nature of man associated with them, we are likely to see greater demands for
participation and self-determination which are likely to provoke more severe
problems in the administration of the politicized economy. Indeed the debate with
Luhmann is precisely on this issue.

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 Conclusion

The project of Habermas is aimed toward those he is closest to – radical critique of

subjectivist reason and enlightenment illusions – whereas it is better focused on those who
embrace the a priori ‘autonomous rational man’; rational choice economics. Communicative
reason tackles both sides of the sword. The deconstructivist and the positivist are but two
ends of a broad spectrum. The social sciences require an ability to recognise the immanence
of concepts such as truth and falsity, right and wrong, democratic and oligarchic but to
simultaneously make transcendent claims and judgements about which are truthful. To
critique ideology is to critique the underlying assumptions and truth claims of the ‘rational
man’.

Both Marx and neoclassical economics make this error in their totalising reductions. The
point is not to return to labour or the market but to examine the social consensus governing
the relationship between lifeworld and system and ask why? To ask what is the social
currency in circulation? Do we agree this is the way we want to organise our society? All of
this I agree with but it does not mean that one can avoid the central logic of purposive action
in the economic and political domain. The rationalisation of each may result in a process of
economic democracy or a bargained compromise called ‘social partnership’. But, the
successive rounds of liberalisation in labour relations have meant that these too operate
according to market exchange. The same applies to finance and industry. The outcome is a
very different society from which ‘the theory of communicative action’ was born, both in
Germany and Europe. Habermas cannot account for this institutional change because he
considers communicative and purposive action (communicative and instrumental reasoning)
as ontologically separate. But, communicative action is impotent if it is not purposive.
Recognising this does not mean the democratic project of modernity is a will to power but a
constant battle between the irreconcilable tension between democracy and capitalism.

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 Major Findings of the Study
 That once people were set free from feudalistic bonds of monarchical government,
they would stand and fall individually, based on their own efforts
 That in an ideal world, democracy would produce equal competitors on an even
playing field which would lead to a sort of an invisible hand effect.
 That capitalism is connected intrinsically to the legitimisation crisis, which arises
along with modernity and fall of older ‘values.’
 That a certain degree of vested State interest and State control is required in order to
make the form of capitalism shift from liberal capitalism to organised capitalism
which is necessary for the sustenance of capitalism.
 With the shift in types of capitalism, a crisis that arises would become a crisis for the
State rather than just for the economy (as it was under liberal capitalism)

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 References

 Gregg Daniel Miller, Mimesis and Reason: Habermas's Political Philosophy, SUNY
Press, 2011.
 Raymond Geuss, The Idea of a Critical Theory, Cambridge University Press, 1981.
 Jürgen Habermas: a philosophical—political profile by Marvin Rintala, Perspectives on
Political Science, (2002).
 J.G. Finlayson, Habermas: A Very Short Introduction, Oxford University Press, 2004.
 Martin Matuštík, Jürgen Habermas (2001).
 Jane Braaten, Habermas's Critical Theory of Society, State University of New York Press,
1991.
 Postnational identity: critical theory and existential philosophy in Habermas, Kierkegaard,
and Havel by Martin Matuštík (1993).
 Thomas McCarthy, The Critical Theory of Jürgen Habermas, MIT Press (1978).
 Edgar, Andrew, The Philosophy of Habermas, Мontreal, McGill-Queen's UP (2005).
 Adams, Nicholas, Habermas & Theology, Cambridge, Cambridge University Press (2006).