Hayek versus Habermas

Jurgen Habermas is one of the most influential political philosophers of the last fifty years. Though he has now, thankfully, abandoned the neo-Marxism of his early career, his theory of ‘communicative ethics’ and ‘deliberative democracy’ lurks behind the claim that social institutions should be ‘democratised’ and that market relations based on consumer and producer ‘exit’ should be replaced by those emphasising collective ‘voice’ and ‘citizenship’. According to Habermas, we should judge institutions not on their capacity to respond to the preferences that people currently happen to have but on their ability to challenge these preferences and to facilitate a process of ethical learning. Decisions based on democratic voice are to be favoured because unlike markets, majoritarian systems require people to justify their values in a context of public argumentation. The fact that people have to argue in public and to convince a majority about the virtue of their preferences is precisely what leads unjustifiable and prejudiced beliefs to be weeded from the public realm and the subsequent allocation of resources. Moreover, voice-based procedures are held to be more egalitarian and ‘inclusive’ because they are less reliant on ‘money power’, emphasising the ‘power of the better argument’ over ability to pay.

Influential though Habermas has been, his case for deliberative democracy is undermined by its complete failure to address a point that Hayek made on numerous occasions. Though formal argumentation that takes place in democratic forums is one way in which people can learn from each other, it is by no means the most important. Far more significant is the capacity to observe the lived experience of other individuals and groups. Much of what we need to learn cannot be ‘put into words’ – it is ‘tacit knowledge’, which can only be communicated by observing the practical results of what other people do and imitating successful role models even when the ‘reasons’ for this success cannot be articulated verbally. For such knowledge to be transmitted it is imperative that there is a wide range of ‘experiments in living’ – whether in the production or consumption of goods – on which people can draw. The spread of knowledge in markets, the arts and science does not typically proceed via collective deliberation, but advances best when individuals and groups have a ‘private sphere’ that secures the freedom to experiment with projects that do not conform to majority opinions. Then, incrementally, through a process of emulation the prevailing wisdom may change over time. It is not sufficient for people to be able to talk about their ideas. Rather, they must have scope to act on those ideas – and this requires ‘property rights’, not ‘speech rights’. To restrict private property and the right of exit in favour of collective decisions is to reduce the total number of decisions made and hence limits the range of practical, lived experience from which we may all learn.

Neither is deliberative democracy likely to have the egalitarian effects that Habermas claims. On the contrary, procedures that rely on the statement of explicit reasons systematically exclude those individuals who are less able to engage in the articulate persuasion of majorities but who may still possess valuable knowledge embodied in the exercise of entrepreneurship, a practical skill or adherence to a particular ethical code. In markets and other exit based procedures such as competitive federalism, rich and poor, articulate and inarticulate, can act on the basis of relatively easy comparisons between prices, qualities of goods and lifestyles across competing products and jurisdictions. Voice-based institutions, by contrast, give special privilege to those skilled in the use of articulate persuasion alone. The latter point provides perhaps the best explanation for Habermas’s enduring appeal with academics and other professional talkers.

* I set out these arguments at much greater length in chapter three of my ‘Robust Political Economy’ and in related journal articles the most recent of which, ‘Democracy and the Deliberative Conceit’ was published in Critical Review (2010), Vol. 22, Nos.2-3.

14 thoughts on “Hayek versus Habermas

  1. Well-put. Habermas’ disdain for money would have driven Francisco D’Ancona (and his creator) nuts. It’s the fundamentally flawed view that money does not represent anything and its distribution has nothing to do with ability or intelligence, but it is rather a meaningless unit of account distributed randomly as are other natural resources, and therefore those who possess it and make use of it to their advantage are evil. It is the chronic error of this view to divorce money from its meaning and source of value. Money is the means by which those who wish to deal honestly with each other are able to. Its objective exchange value is based on individual subjective exchange values, which reflect the value of goods that can be acquired with it, and conversely, that can be exchanged for it. It is the simplification of honest bartering. The trickery of collectivists had been to cause people to forget the origin of money and instead regard it as a magical source of wealth that is hoarded by the rich and can be created at will by the government.

    1. I should properly cite Ludwig Von Mises’ Theory of Money and Credit for every fact about money stated above.

  2. A very interesting article; I can’t wait to start on that copy of Robust Political Economy sitting on my shelf at home.

    In addition to Rudy’s comment, one of the best expressions I ever read on the social value of money was by Hayek, I think in the Constitution of Liberty, where he describes it as perhaps the single most important human discovery (rather than invention) regarding freedom because it enables people to trade with people they do not know, and effectively exchange their services directly with people who do not want their services.

    It therefore allows people an almost infinite choice of possible ends rather than being constrained by the circumstances of their immediate community or by their social status.

  3. Thanks to you both for the comments. And Alan, thanks for buying the book. There is so much ammunition that Hayek provides to use against the Habermasians it is hard to know where to start. I love his discussion in the Constitution of Liberty about the importance of people of ‘independent means’ to act as trail-blazers for new values and ideas, which contradict the prevailing majority view. It is no accident that market-oriented societies are those have done most to promote toleration of ethnic, sexual minorities etc. in a way that few collectivist regimes ever have. Mark.

    1. Yes, a very good argument, I believe he used the abolition of slavery to illustrate the point?

      People just do not understand the implications of the kind of socialist ideas they unthinkingly accept because they take so much for granted. A similar movement in a political system that did not recognise private property rights would ultimately hinge on permission being granted by a superior, who in turn would ultimately need permission from his superior.

  4. The big flaw, to me is the underlying assumption that the most ethical argument will prevail among the majority, a tenuous proposition at best. Also, there can be multiple conflicting and contradicting ethical solutions, which one to choose? The beauty of markets is they allow multiple solutions without overt coercion.

    This is a rather amusing youtube on the tyranny of democratic rule:

    “Of all tyrannies a tyranny sincerely exercised for the good of its victim may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated, but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.” — C.S.Lewis

  5. This is a very powerful critique of Habermas. What he also seemingly fails to recognise is that deliberative power is no more ‘fairly’ distributed than money power anyway. Certain groups and individuals will always be able to have more influence. As well as the above critiques, of course, Habermas’ ideas are still open to the knowledge/public choice critique even if those who peddle these ideas have little awarenesss of their existence.
    I can never decide whether Habermas is sincere or whether his thought is simply jealousy or emnity towards wealth/capitalism etc disguised by some clever jargon. Unfortunately, Habermans’ thought dominates a vast swathe of academia, rather in the way that neoclassical and neo-Keynesian ideas dominate in most economics faculties.
    I’m some way into Mark Pennington’s book and would heartily recommend it as a synthesis of the arguments for classical liberalism and a rebuttal of the common critiques of it. What is most striking to me is how often ‘classical liberalism’ – as a group of ideas – is so often misinterpreted (perhaps that is the fault of its proponents to some degree?). It’s rare to find a political economy approach and I think this in particular makes the book stand out.
    Mark – I wonder how you’d respond to a criticism like this by Jesus Huerta de Soto, someone with whom we’d both have much sympathy in general?http://mises.org/daily/3791/Classical-Liberalism-versus-Anarchocapitalism
    Personally, I find the anarchocapitalist line rather difficult even if it has some logical rigour. From a practical perspective, if convincing people of classical liberalism is going to be hard, convincing them that anarchism is better is going to be even harder. More substantially, I think he’s guilty of a teleological view of history (classical liberalism has never worked so therefore it can never work – by the same token anarchism has never worked either!). I think there’s a certain streak of – gasp – Marxist type thinking here, lots of talk about the withering away of the state and so forth sounded horribly familiar to me. But anyway, I wondered if this position in general is something you’d be interested in exploring, because the anarchist/anarchocapitalist stance does constitute another challenge to the classical liberal perspective and the Mises school seem quite serious about it?

  6. Whig,

    I agree that anarchism is a tough sell these days. The state is a bad habit to break. I take issue with your statement that “anarchism has never worked either.” One can only make this statement if one ignores all of human history prior to the creation of the modern nation state two hundred fifty years ago. With few exceptions, most humans, most of the time in most of the world have existed in anarchic collectives until very recently. Living under the thumb of a nation state is the exception in human history not the rule.

  7. Many thanks Whig for the post and the very generous comment on the book as well. On anarchism, if you read behind the lines of the book there is a somewhat anarchist message to it – I focus very much on interjurisdictional competition to deal with most collective/public good issues of any consequence. The reason I don’t explicitly call this anarchism is because it involves states or state-like entities in competition with each other. Even under ‘anarchy’ – I think that ‘state-like’ hierarchies will arise – so I think whether we call this ‘anarchy’ to some extent comes down to semantics. I do think anarchy is possible – the International Law of Commerce comes pretty close to it.

    Jardinero – I agree. On thi there is a good new book out by James C Scott – as with his earlier ‘Seeing Like a State’, it is very libertarian, he just can’t bring himself to say it because for some reason he want to cling to a ‘radical’ (i.e. leftist) past.

  8. Jardinero – I find it hard to reconcile the idea of ‘anarchism’ with the idea of the pre-modern governmental form. Are you seriously trying to convince me that, say, England in c1200 existed in a state of ‘anarchy’ or as an ‘anarchic collective’? That seems to contradict the obvious hierarchy, law and government which existed, regardless of whether there was less or more state. Or what about, say, Greece under Alexander the Great – was that also an ‘anarchic collective’? Ancient Rome? Persia? Ming China? I think not! Actually, in the period of recorded history, anarchy seems rather rare, especially anarchy combined with an sort of successful civilisation.
    Even a tribal chiefdom system or a petty princedom cannot accurately be described as in a state of anarchy. Of course, it rather depends on how one defines these things. My comment that anarchy has never worked wasn’t too be taken as a critical assessment of anarchism as a whole – I was criticising de Soto’s use of history.
    I’d also point out that the period of mankind’s greatest material wealth (the last 250 years) also seems to coincide with the existence of states providing relatively secure property rights. This would suggest we need to be rather more cautious about the kind of historical assertions you’re making. It might be nice to live in a cave in an anarchistic collective, but if that’s the choice, count me out!
    One can still be a classical liberal and hold the view that a limited state is necessary – indeed, what I was trying to suggest originally was whether the existence of some form of a limited state is inherent in classical liberalism and whether the anarchist position is actually fundamentally different. It’s my view that classical liberalism with a limited state is preferable to an anarchistic position contra to de Soto or some of the more extreme Mises school. I think this point is rather more important than a semantic one (I’d also point out that semantics are actually significant, but still) if classical liberalism is going to be criticised from a more libertarian position as well as a less libertarian position. Of course, if we were any where near having a minimal state this might prove a major issue – but theoretically I think it is very significant.

  9. Dear Whig,

    I should have defined my terms. I define anarchy as the absence of the state. The state is that single entity, whether living or legal, which enjoys a monopoly on the use of force. Anarchy, does not preclude order, rules, customs, alliances or the absence of consequences. It means that individuals can vote themselves out with their feet. A modern state does not allow you to opt out.

    When you say “It might be nice to live in a cave in an anarchistic collective, but if that’s the choice, count me out!” You could count yourself out in anarchy but you cannot in a modern state. In a modern state if you are told to live in a cave like everyone else and you say “count me out”, you will eventually lose whatever freedom the state allows you and if you continue to resist, your life.

    Of the fifteen billion humans who have lived on earth throughout history, most of them lived in the state of anarchy I describe. Human history did not begin with the code of Hammurabi, the Egyptions or the Roman Empire.
    I understand that not everyone agrees with that definition or the historical record that way. I carefully phrased my statement to include “with few exceptions.” You enumerated several of the exceptions. I could name more.

    I agree on the importance of property rights. But property rights are a natural right – old school, or a negative right – new school. This means they arise naturally from your personal ability to possess and defend them; by wit or by force. The state did not create property rights. Property rights pre-date the existence of any state. While states can enforce property rights, they also circumscribe property rights more than any property owner would willfully allow, absent the threat of force.

  10. i have just read the politcal order of a free people the third volume of law legislation and libert written by Friedrich Hayek. I must say it was really well written. Hayek provides a loads of relevant argument to the discussion of real liberty and sound democracy. that said i was wondering where can i buy your book? this article was very well written and i am eager to read more about the subject. Preben Motland

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