From Knight to Habermas: Discursive Ethics and Political Economy

This paper discusses the role of Jurgen Habermas' theory of discursive ethics in the history of normative political economy. Given his background, Habermas himself is seldom perceived as a figure relevant for the evolution of political economy. The purpose of our paper is to show that his work represents an articulate extension of Frank Knight's call for a liberal order which would not be purely instrumental to maximisation of some aggregate measure of welfare but which would take into account individuals as moral persons. We proceed by finding parallels between Habermasian discursive ethics and Rawlsian contractarianism. We compare them at three different margins, which would have been relevant for Frank Knight. First, we are interested in how they fare in terms of respect of personhood. Second, we investigate the character of the agreement - if any - between the individuals who are to be guided by these ethical systems. Finally, we attempt to identify the origin of normative statements in each of these theories. In the light of these considerations, Habermas' approach appears to be close to Knight's ideals. Knightian political economy and discursive ethics lead to unconditional respect of personhood, they invoke consensus over values and it have their origin in the language-based constraints.