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.