Critical Theory, Democracy, and the Challenge of Neo-Liberalism

Front matter

BRIAN CATERINO AND PHILLIP HANSEN

Critical Theory, Democracy, and the Challenge of Neoliberalism

BRIAN CATERINO AND PHILLIP HANSEN

Contents

Acknowledgments vii

1 Macpherson, Habermas, and the Demands of Democratic Theory 18

2 Reason, Truth, and Power: The Challenges of Contemporary Critical Theory 52

Introduction

Contemporary democratic theory represents a paradox. While academic analysis is a robust enterprise, democratic practice in Western society is increasingly fragile and under siege. There is little shortage of opinion on democratic designs, but very few designs on institutions. To be sure, much has been written about how democracy relates to globalization and the nation-state, to immigration and multiculturalism, to human rights and international and cosmopolitan notions and institutions of justice. Yet contemporary states that claim to be or are considered to be thriving democracies present a far less rosy picture.

This picture is at odds with currently dominant accounts of democracy, which have been powerfully shaped by a triumphant liberalism, in particular its neoliberal form. This development is the culmination of a dynamic that began after the Second World War. Neoliberals like Friedrich Hayek, as well as chastened liberals like Karl Popper and Isaiah Berlin, feared that the values of Western society had come under attack and indeed had been subordinated to “collectivist,” socialist commitments. They rejected the social democratic version of liberalism — that of John Dewey stands out here — and reformulated a version of the classical liberal conception of the possessive individual, one who is a maximizer of goods. This line of thought, carried forward and further developed by contemporary neoliberalism, is sceptical of the idea of a general will or a participatory democracy.

Yet these neoliberal models are not simply a recasting of the classical Hobbesian or Lockean perspectives. Combined with theories of social choice, they posit models of social action that have an affinity with a large-scale market economy in which the rationality of consumers is identified with a concatenation of choices. This methodological individualism has a weak link to the moral individualism of classical liberalism and its notion of limited sovereignty. While contemporary neoliberalism calls for the deregulation of economic relationships and the marketization of spheres of society previously regulated normatively, it paradoxically rests on the surveillance and control of individual behaviour designed to ensure that this behaviour conforms to market standards. Neoliberal regimes value fealty to the market over commitment to traditional democratic norms.

The rejection of more radical accounts of democratic possibilities is not restricted to neoliberals of whatever theoretical orientation. The idea of a democracy dedicated to the overthrow of hierarchical power relations throughout the width and breadth of society, and to the subjection of social forces to conscious regulation, has withered. Most theories reject the notion that there is any alternative to a moderate revision of existing institutions. Concerns about social and economic structure are safely consigned to the domain of distributive justice, where the tensions and problems they generate can be successfully addressed and managed. There is little fundamental engagement with the constraints, structural conditions, and historical possibilities associated with contemporary capitalism. In other words, there is little evidence of critical political economy in the outlook and theoretical assumptions of much current thinking about democracy. (And a good deal of what political economy does find its way into this theory is decidedly neoclassical and microeconomic, with an emphasis on individual maximization and rational choice; this is the case even for theories harbouring a critical intent.)

One important basis for this restrictive view can be traced to “third way” conceptions of politics in contemporary democracies. Although primarily associated with Tony Blair and Bill Clinton during their days in office as, respectively, prime minister of the United Kingdom and president of the United States, and hence most prominent during the late 1990s and early 2000s, third way accounts of political possibilities continue to provide an important subtext to contemporary public life in leading liberal democratic polities. According to Anthony Giddens, a key adviser to Blair and an important architect of the position, the third way model lays out a revised social democratic alternative to both free market capitalism and state socialism — but without the “statist” commitments of classical postwar social democracy. The third way rejects market fundamentalism but also dismisses state socialism as an implausible option in the face of the supposedly unchallengeable superiority of markets as coordinators of economic activity. Third way assumptions undergird a limited set of possibilities based on an incremental approach to social justice and inequality.

To be sure, proponents of the third way profess commitment to social cohesion and community. However, they typically call for neoliberal rather than Keynesian economic policies to achieve their goals. This has led in practice to deregulation and marketization that is incompatible with the reduction of inequality. In the United States during the Clinton administration, pursuit of the neoliberal agenda brought forth policies of welfare reform, prison expansion, bank deregulation, and (later) school privatization, often in the name of personal responsibility. Subsequent administrations, both Democrat and Republican, have not deviated significantly from this approach.

Even those who do not follow the third way have been subtly influenced by the post- Keynesian change in the political and economic climate. For many citizens, the question of what a good life means has decidedly narrowed and the barriers to achieving it have become more imposing. It is now more or less taken for granted that there are significant and intractable limits to socio-economic equality. There has been a noticeable move away from classically socialist and social democratic understandings of economic power and the perceived need to at the very least strongly regulate capitalist market relations. This is the case, we believe, even with accounts of democracy that openly profess critical and even radical aims — that make the critique of social and political conditions their centrepiece.

One currently significant constellation of critically oriented theories and approaches has sought to replace or at least significantly deemphasize the traditional focus of radical democratic thought on economic class questions and relations by putting front and centre issues of cultural diversity and openness. As important as these issues may be — in no small measure because they were often underplayed in classical socialist thought and practice — the focus on them has tended either to bypass the socio-economic changes of the current neoliberal phase of capitalism or to decouple them from broader questions of social equality. While such theories provide powerful reasons to include more groups and citizens in the discourse of society and to expand the range of concerns that must be addressed with respect to the meaning of equality and appropriate normative expectations, this “cultural” turn in social and democratic theory has been accompanied by an implicit acceptance that the vast majority of the population need to lower their expectations for a good life. Economic insecurity, decreasing social mobility, ecological crisis, and the offloading of social risks onto less well-off individuals have together meant that most people now find it impossible to envision a future that is significantly better than the present. Only recently have such links between social movements for equality and the political-economic situation been re-examined.

Another avowedly critical and radical perspective on political and democratic theory rose to prominence primarily in the wake of the new left of the 1960s and the radical political mobilization and contestation, in Europe and elsewhere, that characterized this era. In various guises it remains influential today. This approach, which draws upon currents of post-structuralism, emphasizes agonistic theories of politics. Theories of this type provide a largely metaphysical or ontological account of politics. Politics is ontologically constituted by conflict. Agonistic theories of the political and especially theories of democracy tend to associate agreement with subject-centred reason. Ontological unity supposedly establishes finality. From this point of view, agreement equals certainty and eliminates the possibility of political contestation. Thus, agreement is consigned to a realm of quasi-scientific understanding that immunizes society against conflict. From this standpoint, theorists of democratic “agonism” argue that power is omnipresent and formative for all types of thought and action. The ontological powers of agreement are thus merely ideological in their operation. In suppressing conflict, they conceal and sustain domination.

In our view, while each of these perspectives raises important questions for critical and radical democratic theory, they miss or insufficiently stress elements that we see as vital for a critical analysis of the present and its challenges. We contend that in response to those theories that stress diversity and the role of social identities — that is, that assume a cultural perspective — a critical and robust democratic theory must revisit and revive the focus on economic class relations of power centred on capitalist market relations and institutions. Such a theory must stress the need to challenge the currently limited — and limiting — sense of what is possible in relation to the basic structures and processes of economic life. That is, it must restore a critical political economy as a key element in the critical appraisal of existing conditions.

With respect to post-structuralist, “agonistic” accounts, we think their position is likewise too narrow. If the problem with culturalist theories is that they tend to focus too strongly on relations of recognition at the expense of redistribution, the problem with agonistic accounts is that they tend to assimilate agreement in all cases to enforced unity or conformity and to celebrate contestation and conflict per se as truly political and transgressive. We call instead for a practical everyday understanding in which truth or rightness is never final and certainty is never fixed. Everyday understanding always needs to be renewed. It lacks the ontological characteristics that agonistic theorists attribute to reason. Political action is not a matter of opposing fixed certainties that block understanding and thereby clearing the way for action; rather, it is a practical matter of acting in concert to create conditions that will facilitate deliberation on matters of public concern. Viewed in this way, the workings of power are not omnipresent but exist when processes of understanding are shaped by forms of domination and oppression that limit the ability of participants to act in concert.

Thus, our view is also different from that of thinkers like Jane Mansbridge, who believe that agreement and conflict are not fated always to be at odds, but who nonetheless think that deliberation requires the incorporation of self-interest if enforced conformity of the sort that troubles agonistic thinkers is to be avoided. They look to situations in which deliberation is incomplete or disagreement is intractable. They posit that in such cases, recognizing the centrality of self-interest is a way of incorporating plurality and diversity into deliberation. This argument views the discourse theory of Jürgen Habermas, for example, as based on a conception of the unified common good that suggests a strong notion of social unity and is hence inadequate as a basis for deliberative practices. However, in our view a theory that takes up the consensual element in the work of critical theorists such as Habermas does not require an excessive emphasis on achieved consensus or similar tropes.

In the face of contemporary democratic theory and its challenges, we propose a different alternative: a recovery of a developmental account of individual agency and democracy that can provide the basis for a more critical democratic theory than is typically on offer these days. To be sure, as our brief account of current conceptions of critical and radical democratic thought indicates, many theorists today are committed to enhanced democratization beyond dominant representative forms and bodies. A wide range of theorists — we've already briefly noted the work of Jane Mansbridge — emphasize the need for deliberative mechanisms that would permit and encourage citizens to mutually engage with one another in multiple forums in order to reach just and equitable social decisions. Such thinking obviously must find a place in a critical democratic theory.

However, a developmental account of the sort we propose represents an attempt to go beyond the range of concerns exhibited by most theorists of deliberative democracy. Our understanding of a critical developmental model assumes that actors do more than decide or deliberate; in deciding or deliberating they produce themselves as deciders or deliberators by responding to and shaping the conditions and structures within which they necessarily act. They produce themselves as agents of a certain kind: they provide a rational and hence normative content that can be “read” off the decisions taken and the institutions objectified. This content defines them, their relations to one another, and their ties to their common practices. Our argument here requires, as noted above, that we look to the ways of making sense that are embedded in everyday life. These activities involve processes of mutual recognition and mutual accountability through which individuals constitute the meaning of everyday life. While a theory of democracy clearly requires more than this, it has to begin with the standpoint of the participants who act together to create a social world.

To be sure, all theories of democracy, ours included, must contend with the relation between theory and practice (and “realist” accounts are not exempt, even if their categories and concepts tend to mask this element). They need to convey at least some sense of their own conditions of possibility. That there is a gap between the claims and commitments of democratic theory and the realities of (allegedly) democratic practice is itself nothing new. Democracy itself has always been an idea and a value as much as it has been a set of institutions and practices. At least since the emergence of democracy as a universal value and the consequent spread of at least nominally democratic institutions, democratic theories themselves have tended to divide along empirical and normative lines. But the problem that provides the starting point for our analysis is not simply the gulf between democratic theory and democratic practice. Rather, it involves how democratic theories, whether seen as empirical or normative, whether culturalist or agonistic, have been shaped in terms of their conceptual commitments and structures by existing reality. It involves how these theories, in turn, and whatever the intentions of their architects, have justified the prevailing social and political arrangements, even if frequently critical of specific features of them.

The contemporary situation invites comparisons with the Cold War era. The dominant “realist” theories of democracy of that period, liberal and pluralist in their core assumptions, harboured a commitment to the mainstream tenets of empirical social science. They were hostile to “classical” theories of democracy with their supposedly unrealistic views about active citizenship and participation, to say nothing of the supposedly “totalitarian” theories of democracy propounded by Marxists and communists.

On the surface, the current picture seems considerably different. This difference is reflected in those dominant contemporary accounts of democracy and its possibilities that we have attempted briefly to identify and appraise. Unlike the general thrust of Cold War democratic theory, the “realism” of contemporary theory is avowedly normative and at least in principle linked to more positive conceptions of active citizenship. The fear of “excessive” popular engagement threatening political stability — a central element of the Cold War theoretical consensus — is for the most part absent (although this fear has to some extent resurfaced in current concerns about the global rise of “populism”).

Yet at the same time, the Cold War fear of popular eruption that would undermine liberal values and political institutions reflected the sense that, however feared or despised, socialism and/or communism was a serious option. The normative “space” available for theories that justified existing democratic values and institutions was limited. Because there is no current realistic alternative to capitalism, dominant theories of democracy can and do range more freely on normative grounds. But this has the ironic consequence of affirming the status quo even more strongly than was the case during the Cold War. Implicitly embedded in the Cold War outlook was a sense of history and a fear for the future of liberal democratic institutions in the face of a plausible, if disagreeable, option. In the wake of the ravages of depression and war, the survival of capitalism, and thus of liberal democracy itself, seemed anything but guaranteed.

Of course, a significant body of contemporary theoretical work has taken shape against the backdrop provided by the collapse of “really existing socialism” and its claim to have ushered in a “people’s” democracy, one more authentic than the “bourgeois” form that characterized advanced capitalist states. Inasmuch as this view of democracy was inherently tied to the demand for economic democracy and not just political democracy, its demise is inextricably linked to that disavowal, already noted, of socialism, or at least extensive regulation of capitalist market forces, as a plausible (albeit much less defensible) social option.

No doubt, reservations about classical Marxist political theory and practice are well taken. Along with deliberative models of democracy and of democratic will formation, recent forms of “republican” thinking — with which to be sure our own efforts possess considerable affinity — have been particularly helpful in reminding us of the autonomy of politics in relation to other social forces and practices and hence the significance of political institutions, law, and citizenship more generally.

In this study, however, we call into question what we believe to be the unduly limited focus of much current democratic theory. As noted above, a democratic theory capable of illuminating the descriptive and normative dimensions of democracy and their connections to each other requires a critical political economy. A critical political economy is needed in order to provide a comprehensive picture of the current situation; it is also necessary because if political theory or philosophy is to have a meaningful role in fostering the development of appropriate conceptual tools for understanding and appraising contemporary social and political developments, it must both identify deeply embedded alternative possibilities, good and bad, for the development of contemporary societies and be prepared to argue that profound human ills and misery would ensue should certain possibilities be blocked, or others realized.

Thus, our commitment to a developmental account of democracy. To be sure, this requires that we address current critical accounts of democracy, including those that stress the power of and need for deliberation. However, as noted, we believe that dominant forms of deliberative democracy are excessively narrow. We wish to counter this narrowing of deliberative approaches, which typically view deliberation as a supplement to and justification for existing liberal democracy, and instead connect deliberation to radical and participatory forms of democratic theory. Such forms, we argue, should highlight the significance of accountability as a core feature of a robust democratic practice. Accountability — specifically, mutual accountability — is a basic feature of social life. This accountability involves not just deliberation as an adjunct to formal political institutions. It also requires the extension of participation as far as possible to all forms of social life in which power is generated and exercised. This expanded participation must be the larger goal of any application of deliberative democracy in society.

Our approach suggests the continuing significance of the critical theory of the Frankfurt School for an account and appraisal of democratic realities and possibilities. Contemporary critical theory in the tradition of the original Frankfurt School is paradoxical from our point of view. It has focused on advanced capitalism, and while it has offered important insights into this social form, it has not provided a similarly detailed account of neoliberalism. And while it still contains the seeds for a radical and participatory account of democracy and has devoted considerable attention to questions of universal justice and cosmopolitan and/ or multicultural citizenship, current critical theory has not always been faithful to its heritage of radical democracy. Universal justice requires this commitment to radical and participatory democracy on a concrete level, not just as a philosophical commitment. We also believe in a universalist program, but such a program would have to be built from the bottom up, from practical solidarity rather than from philosophical insight.

We certainly agree that questions of justice and cosmopolitanism must form a significant component of any critical theory of democracy. However, emphasis on these issues has come at the expense of more detailed analysis of the pathologies of neoliberalism and thus the barriers to the achievement of cosmopolitan identities in a capitalist society. Nor does the ideal of cosmopolitan citizenship in itself serve as a basis for a robust emancipatory theory. Thus, the approaches of recent critical theory seem incomplete. They lack analysis of the intensification of inequality and exploitation under neoliberalism and how these might affect a critical democratic theory. In short, they seem to have de-emphasized the diagnostic dimension of critical theory in favour of a normative reconstruction of current democratic practices and institutions. However, such a reconstructive approach is not clearly connected to conditions under which the norms so generated could be brought into existence. We think that this is a requirement for a critical theory of democracy.

The need for an analysis of neoliberalism and its pathologies would seem to be essential for critical theories. It would be dogmatic, however, to see the terms of this analysis as a choice of either/or: either the politics of recognition or an old-fashioned economic determinism. While we accept a good deal of the neo-Marxist — and, more recently, post-Marxist — challenges to Marx’s thought, it remains true that economic conflicts play an important role in social theory and that economic power is a crucial factor shaping social and cultural life. The dominance of neoliberalism is generating social pathologies that are significantly undermining current “realistic” claims about existing democratic practices, to say nothing of the viability of those normative possibilities and requirements identified by contemporary theories that claim to embrace a critical stance. We think that capitalism, especially in its latest form, continues to be a barrier to the achievement of a robust democracy worthy of the name. We cannot formulate a critical theory of democracy without some analysis of the barriers to democracy in its current constellation. This proposition undergirds the approach to democracy that we pursue in this work.

In the first chapter we put forward the idea that a critical theory of democracy enriched by a synthesis of the perspectives of Jiirgen Habermas and C.B. Macpherson can become the starting point for such a project. Each of these thinkers provides an approach to a critical theory of democracy that incorporates the claims of both self-determination and self-realization, claims that could provide the basis for a critical democratic theory that meets the challenges of neoliberalism. We reject the assumption that potential reforms are constrained by the demise of Soviet-style socialism and must be limited to slight modifications of the liberal capitalist model. We suggest that Macpherson’s notion of the net transfer of powers, whereby owners of capital can by virtue of their command of private property in the means of life and labour extract benefit from those they employ, still has value as an approach to the workings of domination.

The second chapter is an attempt to reformulate the terms of critical theory in a post-Marxist environment. In essays such as “On the Problem of Truth,” “The Latest Attack on Metaphysics,” and “Traditional and Critical Theory,” Max Horkheimer, a founder of the original Frankfurt School and a key architect of “first generation” critical theory, sought to clarify the meaning and significance of a critical theory — historical, materialist, and dialectical — in contrast to then dominant positivist and pragmatic currents of thought. Positivism identified truth with value-free, timeless, and pure categories and concepts that successfully captured the objects of inquiry via the generation of testable hypotheses justified both by experience and by the exercise of a deductive logic seen as the science of the necessary structure of human thought. Pragmatism identified truth with what was useful in achieving desired effects within the given constellation of social and natural forces and possibilities. Horkheimer challenged the claims to truth of both approaches, however faithful they might have been to current possibilities as defined by the existing relations of power and domination. He wanted to demonstrate that the claims to reason, realism, and truth made by these theories made sense only in the context of a historical setting characterized by social pathologies that had been generated by the intensifying contradictory developments of the capitalist form of social organization. These developments threatened to undo the real gains in freedom, justice, and the fulfilment of human needs that the emergence of bourgeois society had brought about. The contradiction between the promise of a modern era of enlightenment on the one hand, and the reality of the prospect of a descent into a new barbarism on the other, needed to be taken up by a critical theory not bound by the current demands of “realism.” In other words, reality and truth did not coincide: the whole was simultaneously “really existing” and “false.” Horkheimer believed that only a critical theory, one that owed a good deal to Marx, could successfully grasp the contradiction between the existing and the true. It assumed that the propositions of a critical theory that could not be immediately justified by the existing state of affairs could nonetheless lay a claim to truth precisely because they sought to identify the necessary conditions for the realization of lives of freedom, reason, and happiness for all that had always served as the benchmarks for human thought and practice, including positivism and pragmatism. The power and claims of the given need not be and must not be the last word.

Critical theory today faces a similar set of challenges. It too must confront currently dominant theoretical and philosophical perspectives that are inheritors of the positivist and pragmatist positions that Horkheimer identified and criticized. Our approach in this chapter recalls Horkheimer’s position and commitments while attempting to move beyond the limitations of his original position. In retrieving the “spirit” of critical theory, we reconsider the diagnostic and emancipatory dimensions of a critical theory that challenges the permanence and inevitability of the given constellation of social forces, while at the same time avoiding the temptations of metaphysics. As Horkheimer attempted to do, we emphasize participant’s understanding as the basis for a critical analysis of society.

In our approach we take up a version of interpretive social theory that employs the insights of hermeneutics, contemporary interpretive sociology, and elements of Habermas’s communicative theory in order to grasp more precisely the reflective and critical elements of everyday understanding. In doing so, we hope to challenge the widespread assumption that the understanding of the theorist or analyst is anchored in a position that transcends that of the participant. We attempt, in other words, to reformulate a notion of emancipation that avoids the pitfalls of earlier formulations. If we succeed, we think we can offer critical insights into other contemporary approaches that either deny or limit emancipation.

We also therefore use this analysis to rethink ideas about power and domination. We try to situate our position in relation to the variety of debates over power that have emerged in recent decades, from the issue of non-decisions — that is, the capacity of dominant interests to ensure that questions of wealth and power are marginalized if not excluded altogether from the public realm - to feminist and post-structuralist perspectives. We attempt to reframe the terms of these discussions so that we might incorporate their concerns into our conception of the participant’s perspective. Of course, the shadow of Michel Foucault towers over most contemporary discussions of power. In our discussion we provide an extensive critical evaluation of his contribution.

With this account as a backdrop, in the third chapter we offer an analysis of neoliberalism and its pathologies. As we noted earlier, while neoliberalism may appear to represent a return to classical liberal principles and a libertarian social philosophy, this perception is not entirely accurate. On the one hand, many neoliberals combine an economic philosophy of deregulation with a social conservatism that is in some respects illiberal; this goes back to Hayek’s combination of conservative traditionalism and a free market economy. Neoliberalism requires a dismantling of the public sphere and employs highly concentrated forms of power to establish more traditionalist social norms and ideas. The neoconservative movement, and much of the social support for neoliberalism, rests on a defensive reaction to the challenges and demands of modern sociality. On the other hand, neoliberal political economy requires more than simply a return to a nightwatchman state. It rejects Keynesian economic policies while at the same time requiring large-scale corporate control over not just the means of production but also the means of reproduction and communication. This control is far less indirect. In this respect it is much closer to what Sheldon Wolin had in mind with his notion of inverted totalitarianism than it is to libertarianism.

One limitation of “first generation” critical theory was that it paid little attention to democratic theory, much less to a critical theory of democracy. Critical theorists saw liberalism largely in a negative light, believing that it was inextricably linked to capitalism. They were thus unable to recognize the possibilities for an enriched political and social life that liberal democracy promised, even if it failed by and large to live up to these promises. Jiirgen Habermas, the key “second generation” critical theorist, has addressed this lacuna, as had C.B. Macpherson, who was writing more contemporaneously with the first generation. Like Macpherson, Habermas does not reject liberalism out of hand but has sought to integrate liberal rights into a critical theory of democracy. Nonetheless, the developmental requirements of a critical theory of democracy indicate that the realization of democracy is not compatible with the workings of capitalism and must create tensions. We explore why Habermas’s theory has not followed up on the insights his work has produced and explore some recent alternatives in critical theory, particularly as laid out by Axel Honneth.

In the fourth chapter we pursue the implications of our critique of Habermas by suggesting revisions to his account, and that of critical theory as a whole, by developing a treatment of key issues for a critical theory of democracy that builds upon the themes of deliberation, self-interest, and solidarity. More specifically, we examine the unique way in which critical theory can combine justice with solidarity. Because of its intersubjective foundation, the theory of communicative action combines individuality with sociability — that is, it allows for people’s capacity to form and be formed by society — without at the same time embracing a notion of society as a unified body or as possessing a common ethos. Communicative action links mutual understanding as a binding force with solidarity. We argue that it provides an antidote to the anti-solidaristic tendencies of neoliberal political theory and rational choice approaches. This communicative approach must, however, be distinguished from individualist liberal and even radical theories, which seek to rehabilitate self-interest against what they see as an overly strong notion of agreement. As we noted earlier, a third tendency opposes an agonistic conception of society to consensus-based theory. However, agonistic theories miss the consensual character of social action as an intersubjective web of relations that form the background condition of individual action; as a result, they cannot account for the binding force of social action through both mutual understanding and care.