Making sense of critical theory's economic gap

This paper responds to the call in social philosophy to retheorize or reconceptualize the economy. For at least 40 years, social philosophy has displaced “the economy” as the site of social theory and normative argument. Today, philosophers are trying to work their way back into a critique of political economy, given the increasing centrality of political-economic processes to what scholars are referring to as a “polycrisis” in contemporary political experience (Tooze, 2018). I argue that a central obstacle to reviving this form of social criticism is that a range of philosophers and social theorists remain committed to a Weberian view of how the economy fits into social life that perpetuates this displacement effect. My position will be counterintuitive to many, as it is common to think that it is Marx's influence on critical theory, not Weber's, that does so by narrowing one's scope of concern. By contrast, I claim that reconstructing Marxian structuralism is what is needed, but on pragmatist rather than functionalist grounds.

The steps in my argument are as follows: First, I focus on what is known as critical theory, descending from the Frankfurt School, to show that this tradition has always had a problem regarding how it conceptualizes the economy, how it incorporates that conception into social theory, and, therefore, how it evaluates it. In brief, “the economy” as such is a conceptual and normative weak point. It is not, nor has it been, straightforwardly the central object of social analysis. This lineage inherits from Max Weber the idea of instrumental reason to its detriment, which is what—counterintuitively—displaces the economy from view. Second, I depict Weber's view of the economy as a fork in the road for social theory to illuminate an alternative, and I argue that what is known as the “pragmatist turn” in social philosophy is a promising, yet insufficient way of realizing this alternative. Finally, I propose a view that I call structuralist pragmatism to bring classical Marxian insights into a pragmatist framework.

I will begin with some explanation for my starting point since social philosophy has come under increasing pressure to justify its methodology with respect to what lineages of thought it does or does not bring to bear on a theoretical problem. As I am writing about the economy, one may want to know why I begin with the usual suspects in German critical theory rather than more subterranean strands of thinking within or outside Europe. Indeed, I imagine that, say, neither analytical Marxist nor decolonial thinkers would prefer to rehash the Frankfurt School's theoretical influence. Nonetheless, my reason is agenda-setting: There is a way of conceptualizing and evaluating the economy that emerged from this tradition that shapes a terrain of inquiry and how theorists try to intervene on it. In brief, I want to explain why and how the concept of instrumental reason displaces political-economic thinking by keeping the economy, as such, out of one's direct line of vision. My argument affects social philosophers beyond the Frankfurt School, as their distinctive critique of the capitalist system is a standard bearer for how philosophers relate to political economy or to the Marxian tradition in social thought. If one were to see that their approach eclipses the economy, rather than engages it, then one may challenge important assumptions about what political economy is about.

In one way, what I have to say about the economy mirrors an argument made by Perry Anderson (1976) in Considerations on Western Marxism when he describes how “the progressive relinquishment of economic or political structures as the central concerns of theory was accompanied by a basic shift in the whole center of gravity of European Marxism toward philosophy” (p. 49). Anderson is describing the movement of Marxism away from political parties and workers’ organizations into universities, specifically into the province of chairs of philosophy who were separated from the early political Marxian tradition by class, generation, and primary interlocutors, the latter of which became bourgeois thought and culture rather than socialist thought and culture. According to Anderson, this trajectory was the result of a “long divorce” of Marxism from socialist thought and popular revolution, which shaped the theoretical form of what become Western Marxism in primarily Italy, France, and Germany. It thereafter became obsessed with method and pre-Marxian philosophical influences (p. 55).

Reading this passage may come as a surprise to many, as it came as a surprise to me, because it is saying that Western Marxism eschewed traditional themes of economy, state, and revolution upon its inception into philosophy. Philosophers in Western Europe, let alone Anglophone philosophers, do not tend to defend classical Marxism in a straightforward way, and the important philosophical texts tend to be tracts attacking the economic reductionism or determinism of an earlier generation of political militants who taught outside of universities, in party schools, and wrote their theoretical interventions for that audience. One interpretation of this observation is to say that the game was rigged because philosophers took the militants to task on a terrain on which the latter clearly had a disadvantage, being either dead, defeated, or lacking in philosophy doctorates. One cannot beat a philosopher in a philosopher's game. Ethnographically, this interpretation may make sense. But it also presents a philosophical challenge.

Philosophy can be a remarkable act of inhabiting different worlds of thought. So, what makes the world of labor or of the working class, however one defines it, so difficult to inhabit? My thinking is that what is needed is a philosophical account of the economic gap. Indeed, another interpretation of Anderson's genealogy is conceptual rather than ethnographical. It implies that the economic reductionism of which social philosophers are so often told to beware was never a part of the philosophical adaptation of Marxism, since the economy was undertheorized from the start. Thus, the question it raises is: Why beware of economic reductionism when there are no reductionists of great influence or repute in the room? I have argued elsewhere it is a reductive view of the economy on the part of the accuser that makes the accused look as though they are at fault (Cicerchia, 2021). I now want to explain where the gap came from and why the problem of economic reductionism may be one that philosophers create for themselves. The Frankfurt School is both a genealogical and conceptual turning point to whom I now turn.

In the Dialectic of Enlightenment, Max Horkheimer and Theodor Adorno present a bleak picture of a world that has been flipped inside out, reason that has betrayed its masters, and an uncritical public who is manipulated to make the general into the particular and the particular into the general. Capitalist firms “now impress the same stamp on everything,” directing tastes and preferences to their benefit (Adorno & Horkheimer, 1997, p. 120). Economic production has subsumed and become cultural production, which means that individual subjectivity has been taken over by instrumental reason. The concept of “instrumental reason,” or reasoning that subordinates all thought to the means to achieve some end without debate about whether the end is good, is the central feature of this form of reason. Its dominance within and against social life provides a key concept with which to describe and evaluate capitalist development. In a word, instrumental reason, blind as it is to the normative status of the ends that it seeks, turns human reason toward inhuman ends.

Adorno and Horkheimer surmise that there is a straight line running through the production of industry to the production of subjectivity. The culture industry, as Adorno and Horkheimer call it, “has molded men as a type unfailingly reproduced in every product. All the agents of this process, from the producer to the women's clubs, take good care that the simple reproduction of this mental state is not nuanced or extended in any way” (p. 127). Individuals become, according to the later Adorno, “‘degenerate manifestations’ of the bourgeoisie,” whose culture is the social norm (Adorno, 2020, pp. 121–122). People are under the control of the things that they create, and the ongoing economic growth and dramatic increases in labor productivity that were characteristic of the mid-20th century capitalist development are expanding this control in an unprecedented way. What is at stake are the critical capacities of the masses, or practical reason itself, that is being taken over by a mode of production that rationalizes the destruction it creates as efficient and progressive.

Capitalism is rationalizing the world in the wrong way, turning the Enlightenment inside out. The Enlightenment professed the values of equality, liberty, and fraternity, but capitalism created a base, degraded form of subjective equality among people whose fraternal associations are limited to what, how, and from whom they buy commodities. Capitalism has sacrificed the Enlightenment's promise of liberty on a deceptive alter of its Golden Age, which turned liberty into domination. This form of domination is especially pernicious because it does not seem like domination. Individuals feel like they are free, and yet they are bought off by their consumer aspirations to become a certain type of individual, unaware that all they achieve is the “dreary harmony of general and particular” (Adorno & Horkheimer, 1997, p. 155). The form of human rationality that emerged from this process was geared toward instrumental ends, not human ones, so it became like a machine. Its apex was the war machine of fascism and in its concentration camps lay the inversion of the French Revolution.

What I want to focus on is that Adorno and Horkheimer reformulate Max Weber's notion of formal rationality. Formal rationality involves the purposeful calculation of the most efficient means and procedures to realize certain goals. It has a close historical and practical relationship with capitalist development; what Weber calls technical rationality is formal rationality as it is used for economic calculation, that is, determining the cost effectiveness of economic inputs in a competitive market. For Weber, technical rationality in this context is distinct from ethical kinds. It is what separates the “economy” and “society.” Weber argues that the Middle Ages had no distinction between formal rationality in economic calculation and other, more substantive, or ethical kinds Weber (Gerth & Mills, 1958, pp. 220–221, 298–299, 331). Thus, precapitalist societies did not have to distinguish the economy from society. Formal rationality, and therefore technical rationality, is distinctly modern and capitalist.

It is their normative status that is controversial to critical theorists. Weber thought it imperative to keep formal/technical rationality at arm's length from other kinds of reason. He argues that “Formal and substantive rationality, no matter by what standard the latter is measured, are always in principle separate things, no matter that in many (and under certain artificial assumptions even in all) cases they may coincide empirically” (Weber, 2013, p. 108). Weber is laser focused on the rationalization of modern society and he worries that this process may become antisocial, penetrating too deeply into noneconomic terrain, like the family (Weber, 2013, pp. 374–384). More strongly, Weber argues that the antisociality of the economy could prevent personality formation. Having a personality requires engaging with questions of absolute value, so individuals must be able to give meaning to instrumental routines. Formal and technical rationalities cannot have free reign because leading a meaningful life requires preserving some values in their unscientific, nonformal state (Wolin, 1981, pp. 414–416). Otherwise, society could become a “mechanized ossification, embellished with a sort of rigidly compelled sense of self-importance” (Weber, 2011, p. 178).

In Dialectic of Enlightenment, Weber's worst nightmare arrives. Instrumental reason has overtaken the masses. Adorno and Horkheimer (1997) claim that postwar capitalism developed in such a way that the masses, especially the working class, were incorporated into the system, which made most people incapable of mass resistance (p. 41). In their view, what had been definitively refuted is Georg Lukács' (1971) thesis in History and Class Consciousness that the working classes were in a unique position to present a challenge to the historical development of this sort of reason, or what he calls the process of reification wherein the commodity form stamps itself in every part of human consciousness, fragmenting the social totality into so many parts such that the individual can no longer see the whole. For this reason, I leave Lukács here. Later critical theory did not revive his thesis, nor does it return to the classical Marxism that influenced him. In my view, the balance between the influence of Weber and Marx on the Frankfurt School shifts toward Weber.

There were two primary responses to this pessimistic political conclusion. The first accepted that the Weberian nightmare was here to stay, but either sought ways to challenge its hold on society from the margins of economic life or sought to refuse it completely in thought. These are the strategies of Marcuse and Adorno, respectively. The second response is to not accept the Weberian nightmare as a social fact and to say that the economy has not, or need not, colonize society. This is Habermas’ strategy. I argue that it is the Weberian (and not the Marxian) inheritance that both responses share, both being more preoccupied with the theme of societal rationalization, which is a result of economic developments, rather than with the economy itself. This focus on rationalization's effects rather than on what the economy is, how it works, or the normative structure of political-economic experience, is what I call the logic of externalities wherein the primary vantage point of the philosopher is evaluating one's impression of the social effects of economic activity as measured against something that is external to it, or at least sideways of it.

In One-Dimensional Man, Marcuse looks to the margins. He sees potential for revolutionary political subjectivity in the “new social movements,” like civil rights, the student-led movement against the Vietnam War, and women's liberations. The basis for the marginal approach is that “The most advanced areas of industrial society exhibit throughout these two features: a trend toward consummation of technological rationality, and intensive efforts to contain this trend within the established institutions” (Marcuse, 1964, p. 17). This “politics of containment,” as he calls it, is contradictory and winds up sublating the latter to the former, making the welfare state, for instance, a historical “freak.” What is needed is to challenge the center from the margins where, “underneath the conservative popular base is the substratum of outcasts and outsiders” (p. 256). The outsiders are less corrupted by instrumental reason and still hold promise, like “those parts of the working class [in Europe] that have not yet fallen prey to the process of integration” (Marcuse, 1970, p. 73, insertion mine). Marcuse knows that instrumental rationality produces certain historically determinate needs and that a liberated society would operate on a different basis, with a different rationality, that produces emancipatory needs. But he does not think that such a change can happen in the system, only by a challenge from outside of it. Integration into capitalist production is death to one's emancipatory potential.

Where Marcuse's more optimistic and Adorno's more pessimistic perspective meet is that they both see the intelligentsia as potentially more radical than the working class. Though Adorno's strategy is less engagement than refusal, both he and Marcuse begin to focus on the importance of developing an aesthetic ethos that negates the entire bourgeois world of morality and culture that culminates in a transformation of the form of life itself (Marcuse, 1969, p. 25). Adorno (2013) likewise implies in Aesthetic Theory that intellectuals are the group with the aesthetic acumen to negate Enlightenment rationality through critique because they have access to different modes of ineffable, artistic expression and thought. Though Adorno's politics—if any—are hidden more deeply behind ontological and metaphysical considerations, there is no doubt that he becomes preoccupied with the outside of the system, or even the world as such beyond what thought can think as possibility. Philosophical thought is a prism through which one can refuse what is and refract what is not, like catching light through a prism (Adorno, 2007, p. 57). At a greater or lesser level of abstraction, the logic of externalities is the modal means of reasoning about the economy as a system, as a problem, and as a source of conflict.

Habermas shifts the theoretical terrain in a significant way, setting the stage for all late-20th century developments in critical theory, by claiming that societal rationalization has several effects outside of the economy that engender many more means of political engagement than Adorno and Marcuse thought. In brief, Weber's nightmare did not arrive, and it is unlikely to arrive given the increasing complexity and differentiation of modern social life. Habermas (1987) is particularly emphatic about the differentiation between the state apparatus and the economy, emphasizing the success of social reform programs, the welfare state, and their subsequent pacification of class conflict (pp. 343–350). The punchline of Habermas’ argument is that the economy, and instrumental reason with it, can be adequately mediated by social welfare law, which prevents it from having a totalizing pull on society and permits society to develop dynamics of conflict and resistance of its own (pp. 367–373). Effectively, Habermas performs a great rescuing act for practical reason over and against instrumental reason by conceptually decoupling system from social integration, or economy from society. For Habermas, there is a distinct activity of practical reason—communicative action—that cannot be subsumed by instrumental rationality.

For Habermas, Adorno, Horkheimer, and Marcuse followed Marx too closely. Habermas interprets Marx to think that capitalist system integration and its characteristic forms of social integration were the same process. System integration is the means through which the capitalist mode of production consolidates itself. Marx did not see the intrinsic value of subsystems, like the media, the state, civil society, or the family to moral development. Habermas argued that if one wants to understand the logic of the diversity of social conflicts in late capitalist societies, then one must give the economy a more circumscribed analytical role. One may interpret this move as accommodating itself to liberal democracy as it exists in bourgeois states, thus forsaking the Marxian inheritance of critical theory. Or one may interpret it as insufficiently breaking with that inheritance by retaining the notion of strategic or instrumental rationality in the first place. In the latter case, one could say that the economy is always an institution that is embedded within specific cultures, which is the point of view adopted by economic sociology or the varieties of capitalism perspective in political economy (Hall & Soskice, 2001, pp. 1–68; Polanyi, 2001; Portes, 2010). In either case, Albrecht Wellmer (2014) is correct to observe that, “Emancipatory processes, as Habermas conceives of them, cannot question the internal logic of the economy” (p. 713). The question, then, is how they can be tamed from the outside. In Habermas’ hands, the logic of externalities transforms itself from conceptual construct to political strategy. And this, I take it, is the crux of what erupts as criticism from Habermas’ left (Giddens, 1982).

What I am suggesting, however, is that there is no strong break between Habermas and the earlier generation. It is misleading to say that, because the Frankfurt School gave instrumental reason a wider berth in their analysis that, they engaged more with the economy as a source of political conflict and transformation. To the contrary, the logic of externalities is the bedrock of the critique of instrumental reason, which is why in the end the only analytical strategies available to those who pursued this critique were those of theoretical refusal or marginalization. It is for this reason that I am skeptical of attempts to revive the original project of the Frankfurt School as having been misunderstood in its relationship to the study of political economy. For instance, one could argue that Adorno's radical refusal of the capitalist totality rejects any distinction between economy and society, which entails an analysis of capitalist subjectivity as more akin to Marx's dramatis personae in Capital than the rationalized subjectivity that Weber feared (Bonefeld, 2016; O'Kane, 2021). But I am not sure how this interpretation could work to dispel my main objection, which is that it is the subjective effects of rationalization that take center stage and that one must contend with to find political agency, not issues that are internal to the economy in a meaningful way. It is still Weber, not Marx, who is fashioning the conceptual frame.

“The logic of externalities” is a play on economic words. In neoclassical economics, externalities are either positive or negative costs to production that are unpredictable in the medium to long term or simply unaccounted for in the short term. By “externality,” I mean something more conceptual and, I think, methodological, but my use of the word is related to its neoclassical cousin. In this section, I argue that Weber's politics matter to the whole idea of technical/formal rationality. This idea is one that Weber deploys in a debate over socialism, wherein he makes an interesting alliance with neoclassical thought to press a point that is both conceptual and political. How Weber's politics matter is that he sets a theoretical course from which, as seen in the previous section, it has not been easy to turn. This section juxtaposes Weber's agenda with a socialist one of his time as a way of bringing Weber's politics to life. The aim is not vindicating the socialist perspective, but to set the stage for my further analysis of moves within critical theory to make a course correction through the pragmatic turn.

The “socialist calculation debate” is well-known by economic historians but less familiar to philosophers. It has two and potentially three iterations, first in the inter-war years, then in the 1990s, and may be undergoing a revival now. Its leading question is whether socialism is possible and, if so, in what form. I find it helpful to imagine the first iteration as part of the pre-history of the Frankfurt School because many of its protagonists were so-called positivists. Though the former would later reject the latter on methodological grounds, they nonetheless adopted a conceptual schema that Weber uses to weigh in on one side. I focus on the debate between Neurath and Ludwig von Mises. Mises’ seminal refutation of socialist economics in Economic Calculation in the Socialist Commonwealth in 1920 is a response to Neurath's 1919 report to the Munich workers’ council, “Economic Plan and Calculation in Kind,” so I take it to be instructive for grasping this moment (Dobb, 1933; Hayek, 1947; Lange & Taylor, 1938; Mises, 1990; Neurath, 1973; Polanyi, 2016; Schumpeter, 2003). Neurath and Mises disagree about a foreground and a background question: first, they disagree about whether socialist planning can work. Second, they disagree about what the economy is. My interest is in this second question.

Neurath argued that it is possible for a centrally planned economy to not only optimize human beings’ rational capacities for deliberation but also to create emotional harmony among them. For Neurath, the economy is not an empirically or normatively distinct terrain of human activity. It is, therefore, not a separate “sphere” in contrast to other spheres like the family, the state, or civil society, nor does it manifest a distinct type of rationality. For Mises, the economy is distinct both empirically and normatively. Economic rationality is something different entirely than other types in other spheres of life, and importantly, it must be that way for the economy to be rational at all. Weber intervenes to side with Mises. In a direct criticism of Neurath, Weber again distinguishes between “technical” and “ethical” matters (Weber, 2013, pp. 100–113; O'Neill, 1996, p. 437; see footnote 27). The latter distinction is political. In an endnote to a chapter titled “Calculations in Kind” in Economy and Society, Weber puts it bluntly that “The problems of accounting in kind have been raised in particularly penetrating form by Dr. Otto Neurath in his numerous works apropos of the tendencies to ‘socialization’ in recent years” and then that “the distinction between ‘socialism’ and ‘social reform,’ if there is any such, should be made in these terms” (Weber, 2013, pp. 104–105). It is the political nature of the distinction between technical and ethical considerations that I find important.

According to Mises, it is not possible for individuals to calculate social costs in the absence of socially significant cardinal numbers—prices—attached that are rooted in the minds of individuals and yet transcend each. Prices must be obtained through the medium of money, which creates a value equivalence among the alternatives. Further, market competition in the context of private property ownership is the social precondition of the price mechanism. It is what brings an economy into existence; only market competition can send price signals to producers about what inputs to use, in what quantity, and how to arrange them. Even if a central planning board could estimate the quantity of desired consumer goods that producers should produce, one would inevitably be “groping the dark” to produce similar estimates of capital goods used in the production process (Mises, 1990, p. 23). There is always an infinite number of substitutions that one can make into any complex production process, and a planned economy would have no internal pressures to make one decision over another, no rhyme or reason for managing conflicts of interest. What is needed is a universal equivalent of exchange to calculate economic value. He writes, “The human mind cannot orient itself properly among the bewildering mass of intermediate products without such aid” (p. 16).

Definitionally speaking, Mises defines an economy as rational responses to price mechanisms. Only a capitalist firm that is engaging in market competition can respond to price signals because it is internally unified by its ownership structure and singularly motivated by profit as a result of that structure. Mises claims that “Without economic calculation there can be no economy. Hence in a socialist state wherein the pursuit of economic calculation is impossible there can be—in our sense of the term—no economy whatsoever…Socialism is the abolition of rational economy” (p. 18, see also p. 23). Thus, Mises claims that socialism is not only inefficient but irrational and impossible. He points out that, whereas capitalist firms are price takers, a central planning board would carry the burden of being a price-setter. This burden is one that a central planning board cannot bear since there is no rational way to do it. If Mises is right, then what is startling about his conclusion is that planned economies are by definition irrational and, therefore, not economies at all. Mises defines “the economic” as the ability to make values commensurable through a single unit of measurement so as to calculate inputs and outputs in this technically rational way.

It is hard to overstate how different Neurath's view is from Mises’. Neurath responds to Mises by arguing that, at its most abstract, the economy is a complex of judgments about human values regarding how they want to live their lives together. His critical point is that there is no self-evident empirical way of creating a common measure of values. Put differently, there are no prima facie empirical grounds for defining the economy in a way that abstracts from the values that human beings do in fact hold. When one discusses “economics,” one is talking about how human societies ought to reflect their values in practice, so Mises’ move to normatively bracket economic value from other kinds is illegitimate due to its circularity. Neurath thought that using money as the universal equivalent of human value in capitalist commodity exchange is a fake-out or a value-ridden bait and switch behind the back of practical reason. Money under capitalism stands in for a different type of judgement that precedes its use, which is that values are ultimately commensurable and that what an economy should do is make them commensurable through the market mechanism.

Neurath's prescriptive point is that what an economy should be is a way of elevating humanity's capacities for making political and ethical judgments in their great diversity, together. A lucid plan can take all of our peculiarities into account because it will put practical reasoning to a different use by calculating value in kind, rather than based on one single metric that makes all forms of value equivalent through the single medium of money. Neurath writes that “socialism is full of human warmth” and that the economic efficiency of socialism “can satisfy the longing of a loving heart desiring to reach out beyond the individual” (Neurath, 1973, p. 406). He claims that the fruits of socialism are “to allow the men and women of today to develop emotionally and intellectually, to cultivate a deeply felt solidarity” (p. 407). Socialism is a planned structure in which many individuals collaborate, which is not so difficult as its adversaries imagine. In fact, the activity of planning itself generates solidarity, which “is a community-forming force from within” (p. 454). Neurath both rejects the idea that the diversity of human value is in fact outside of the economy and that it is desirable to live in a society that reinforces the moral illusion that it is so. Therefore, in a sense, Neurath agrees with Mises that there is no such thing as “the economy.”

Weber turns the question what is rational in a political direction. He agrees with Mises that calculations in kind are impossible, citing Mises directly (Weber, 2013, p. 107). For Weber, the conditions for technical rationality and therefore rational economic calculation emerge under capitalism specifically, which he defines as market struggle, market freedom, and effective demand for utilities Weber (Gerth & Mills, 1958, pp. 181–183; Wright, 2002). He thinks that when these substantive conditions are met, “What is to be produced is thus determined, given the distribution of wealth, by the structure of marginal utilities in the income group which has both the inclination and the resources to purchase a given utility” (Weber, 2013, p. 108). Accepting the terms on which Mises defines what an economy is, Weber goes on to bracket technical rationality off from questions regarding absolute values in the Neurathian sense. And the upshot of this distinction is for Weber to put the role that the labor movement plays in modern society within a certain normative frame.

Weber thinks that the labor movement is an antisocial political force. He perceives that it exemplifies formal and technical rationalities. Thus, though labor was an obvious protagonist in the fight for social reforms in the post-Bismack era, Weber was warmer to the latter's state-driven reform despite opposition to its illiberal antisocialist laws. A reform program could be carried out by a political elite with a sense of responsibility, guaranteeing both welfare and stability (Klein, 2020, pp. 70–72). It is not a blanket rejection of social welfare or even democracy that is at issue, but who should usher them into the modern era. The normative motivation here is that Weber thinks it is important to maintain the practical separation between the economy and society. Otherwise, individuals would not be able to bring meaning to the instrumental routines of everyday economic life and those would become ends in themselves. Like the critical theorists after him, Weber was convinced that such meaning could not and should not come from within the economy.

In brief, Weber thought too much democracy in the economy would destroy society. Though I do not wish to burden the later critical theorists with Weber's politics, their normative concerns are more or less the same and I would advance the argument that this presents a problem for new attempts within critical theory to develop a critique of political economy. The Frankfurt School's radical critique of instrumental reason and the anti-capitalist political conclusions at which they arrived as a result resonate closely with Weber's fears about the labor movement. They, too, accused labor of being in bed with instrumental reason and having an antisocial influence due to being incorporated into the anti-aesthetic, anti-erotic, and anti-critical culture industry. Despite Weber being a liberal, there is a kin-like argument structure to both sides. Given a shared conceptual lineage, this claim should not be so controversial. What is more controversial is the implication that from the start this framework was not too friendly to mass democratic politics.

Conceptually, Weber presents an analytical fork in the road. The Frankfurt School walks down the path that he set forth. They reiterate the Weberian conceptual apparatus, with Habermas later doubling down. But there is also a political difference lying at the heart of the conceptual matter. Critical theory's opposition to “positivism” has obscured that the socialist side of the debate was arguing for a different normative horizon, which was tied directly to a different conceptualization of what the economy is. Indeed, Neurath's vision of the socialist future is rather different from that of either the social reformers, an undynamic state bureaucracy, or radical refusal. Instead, he envisions economic planning to be politically pluralistic because it reflects genuine value pluralism among the planners. It is for this reason that under socialism “the kind-hearted person can to some extent feel at home” (p. 454). No doubt, he concedes, there will still be sorrow and sadness, with just as many difficult people as under capitalism, but they will fit into a different matrix of value. Planning is not a definite way of thinking and thus of homogenizing human values within the socialist state, but of fostering loving inclinations toward tolerance.

Perhaps Neurath is overly optimistic about planning and the sort of political labor that would be required of people to satisfy these conditions. Nonetheless, what one can learn from his perspective is that the problem of modern rationalization need not be the anchor for a deep criticism of capitalist culture. There are other reasons for such a critique. For instance, with Adorno and Horkheimer, against Weber and Habermas, Neurath argues that capitalist societies cannot take value pluralism in politics seriously because market competition is a destructive practical force. All who cannot persevere through it will perish, will be employed far below their capacities, and will be seen as good-for-nothing. Although in a capitalist society the kind person will always stand “condemned to play a role outside the life of society, as a private matter so to speak,” in a socialist society, they will be invited to the inside (p. 454, emphasis mine). Neurath anchors capitalist individualism in a concrete practice that needs to change, not in a type of rationality. In doing so, Neurath saw the limits of the logic of externalities: It depoliticizes what should be a primary subject of normative concern by placing both the philosopher and the worker on its outside.

In recent decades, critical theorists have made attempts to supersede the logic of externalities by taking a turn toward pragmatism. There is an ongoing attempt to retheorize the economy as a practice, which then opens the analytical door to a new theory of socialism as a form of radical democracy. I find this approach promising but insufficient, tending to avoid classical Marxian problems rather than resolve them in a new and democratic direction. Unfortunately, a tradition that has always been at some remove from questions of political economy is not in a good position to reconceptualize the economy without recovering some classical themes. This section describes the pragmatic turn and how it proposes to theorize the economy, then indicates how I think pragmatism's tools can develop those themes. In brief, I propose structuralist pragmatism.

I return to Habermas before moving on to discuss the broader pragmatist influence on how critical theory has set itself up to revive the critique of political economy. Habermas ushers pragmatism into the critical tradition by developing a theory of communicative action, emphasizing its difference from strategic action and the instrumental reasoning that goes along with it, which aims at mutual understanding. For Habermas, there is a route that agents take from experiencing problems to deliberating about them through discourse with others to action and back again (Bernstein, 2010, p. 184). It is being faced with practical uncertainties that compels us to question things that we had previously found unproblematic, which we then try to articulate. Discourse is inevitably a shared endeavor by subjects making justifications and revising them based on the resistances put up by a world that they share. Though Habermas moved away from theorizing capitalism as this pragmatic turn took place, becoming much more interested in the epistemic conditions for democracy, it is consistent with his earlier critiques of the Frankfurt School. The latter thought that instrumental reason fundamentally mystifies social relations and distorts human communication, but Habermas insists that one can correct this problem through steering mechanisms like the state and civil society, keeping instrumental reason in its place.

Several critics of Habermas have criticized this compartmentalizing move. Indeed, some take pragmatism as the point of departure for breaking down the Weberian distinctions in his social theory. Rahel Jaeggi (2017), for instance, argues that Habermas’ legacy in the realm of political economy has had the adverse effect of, “Whenever critical theory deals with the economic formation of capitalist societies, it thinks in the metaphor of politically or democratically taming the tiger that is capitalism…[T]his makes it not only impossible, but also unnecessary, to rethink the economy itself, and, as it were, to grasp it widely” (p. 162). Jaeggi cites Horkheimer (1972) when he argues against economism, which she interprets not as being too preoccupied with the economy but as thinking about it too narrowly (p. 249). She argues that there is a black box problem in which the theoretical apparatus eschews critique of “actual economic practices that are specific to capitalist societies” (p. 161). The pragmatist proposes to reconceptualize the economy as a realm of practices, which means that labor, markets, and property are all socially constituted activities that assume definite sociocultural forms under a contested but regular normative interpretation. Importantly, economic practices “have proved to rely on and be connected with a whole set of ‘neighboring’ practices, a nexus of practices of a broader (noneconomic) concern” (Jaeggi, 2017, p. 172). Both the “economic” and the “non-economic” inform and rely on one another and in some cases are mutually dependent.

What motivates the pragmatist interpretation of the economy is overcoming the logic of externalities by viewing economic facts “in light of their pragmatic role in problem-solving,” thereby affirming that there is “continuity between theoretical and practical reason” (Bernstein, 2010, p. 199). The facts of the social world confront human agents as so many problems that they must solve. Problematization exists in every human practice with differences in degree concerning how self-reflective people are when they do it. Everyday actions, cultivated argumentation, as well as critical theory itself, are social practices (Bernstein, 2010, p. 188; Celikates, 2018). If human activity in the economy is a realm of practices, then there is no troubling loss of critical capacity for agents within it as the Frankfurt School and Habermas seemed to think. There are just different degrees to which critical capacities are realized in adverse circumstances (Celikates, 2018, p. 126). People are always capable of understanding their situation, but circumstances may obstruct them from developing or exercising critical capacities in a way that translates into either legitimate or effective justifications for social, political, or economic alternatives to the practices as they currently are (p. 127). From a pragmatist point of view, what critical theorists should do is theoretically reconstruct these conditions to enable self-reflection (p. 135).

There are more or less materialist ways of interpreting pragmatism. Axel Honneth represents an idealist variant, whereas Jaeggi wants to “preserve the materialist moment” in understanding what social practices are. Honneth sees the logic of externalities clearly, but his way of getting out of it is to turn to, as Nancy Fraser once said, to moral psychology and a theory of normative development that supervenes upon institutional development. For Honneth, social conflict emerges from subjective experiences of disrespect and indignity. It is fundamentally a process of reinterpreting dominant norms to make them more inclusive, including their institutional expressions (Honneth, 1995, 2017a, p. 917). Economic demands are motivated in the same way as all others. People feel that they are not getting their due because society does not recognize their contribution (Fraser & Honneth, 2003; Honneth, 2007, pp. 80–95). Honneth also interprets the ideal of socialism as being a moral ideal of equal citizenship rather than a way of resolving the labor question. He writes that “Today, therefore, socialism is largely a cause of citizens, not wage-workers—as much as the latter's needs are what will need to be fought for in the future” (Honneth, 2017b, p. 99). This perspective makes sense if one thinks that normative reconfiguration and inclusion is primarily what economic conflict is about.

Jaeggi (2018), by contrast, thinks that normative reflexivity is a second-order response to first-order problems in the world and that there is an imminent connection between them by way of problem-solving through certain practices that both enable and constrain political agents (pp. 221–223). I prefer this alternative, as it resonates more with the collective action problems that ordinary people face in their economic lives. There is indeed a good deal of normative reconfiguration and inclusion that a successful labor movement needs to do to cohere itself as a social force and to press its claims to the public. But such a capacious idea of what norms are and what they can do risks becoming credulous about what makes some sources of conflict deep or seemingly intractable. In other words, it risks becoming too optimistic about the reform capacity of institutions and structures and therefore not critical enough of those structures. A social desire for normative inclusion may in some respects outrun the institutional forms in which it lives, leaving political agents at a loss for how to analyze the ways in which those forms constrain them. Feminism strikes me as one clear example. Gender norms have changed dramatically in the past 50 years, but in most places these changes have not resulted in universal prenatal care, childcare, or equal amounts of parental leave—or any at all.

But even materialist pragmatism has yet to address the substance of a structuralist objection. If part of the motivation for reconceptualizing the economy is to make sense of overlapping social crises in the present period, then having a wide conception of the economy is only addressing one dimension of the analytical problem. “Wideness” poses a worthy challenge to the logic of externalities as far as it insists on breaking down arbitrary distinctions between practical reason and so-called instrumental reason. A new terrain for social theory and analysis opens where one may ask how people relate to both micro- and macroeconomic constraints, strategically and normatively. The world of the working classes is no longer one of reified capitalist subjectivity of political importance only because it impedes the emancipatory goals of intellectuals or of those who are not-yet-incorporated into its mass culture. Indeed, what seems distinctive about the emerging post-neoliberal era is that there is no mass politics in which one can intervene to contest the terms that capital sets for solving social problems, nor is there one single cultural space. I take it that this context somehow contributes to our sense of being-in-crisis. Opening the black box as a nexus of practices may go some way to learning something new about social development since the mid-century situation that the The Dialectic of Enlightenment represents.

On the other hand, wideness can be disorienting. It risks making the analytical task of redefining things an end without gaining an understanding of capitalism's system logic. By system logic, I mean how political agents are positioned toward one another and how that positioning creates a political opportunity structure. For instance, widening one's sense of the economic to include a practice like the caregiving traditionally done by women does little but suggest its social undervaluation; that is, so long as this redefined activity is not integrated into an understanding of the extent and limits of its commodification. Once one looks at care work like a special commodity in whole or in part, then one has already wound one's way into the second part of Capital, Volume I, where Marx invites one to interrogate the preconditions for labor to appear to us in the way that it does, descending thereafter into an inquiry into capitalism's laws of motion. The structuralist objection is simply: So, what? What do practices tell us about the regularities of the social world such that we can better understand where to politically intervene?

The pragmatic turn in critical theory is like a halfway house in between the Weberian origins of the Frankfurt School and historical materialism. It sees the limits of the former but refuses the invitation to revisit the themes of classical Marxism, like capitalism's laws of motion, the state, class conflict, and imperialism. This refusal is unsurprising, since, as Anderson pointed out, these themes were never really in their orbit. Moreover, the post-structuralist turn in social theory makes such themes seem inaccessible. In other words, it is not just narrowness that is at issue. The logic of externalities also depoliticizes macroeconomic processes, like competition, accumulation, monetary policy, trade imbalances, migration, demographics, and so on. It makes them appear as something to be contained by social theory or redefined as another kind of problem by philosophers rather than challenged as political problems through collective action. This perpetual going-sideways of macroeconomic processes is a problem for both social theory and philosophy so long as neither can evaluate how and why such processes appear to us in the way that they do.

And so critical theory circles back into the structuralist's orbit. That there appears to be a polycrisis at all is the result of what one presupposes as normal about the social practices that make up the economy. This normalcy is a kind of regulative idea of how the economy is supposed to function—whether a nexus of practices is working as it “should.” And how ought one to characterize such a nexus? Surely as a structure or system-logic. No one understands this structuralist point better than Nancy Fraser. She builds her theory of capitalism around the idea that it perpetually falls into crisis and that what distorts our understanding of the system is that we do not see crisis-tendencies as part of its constitutive logic (Fraser, 2022; Fraser & Jaeggi, 2018). In a capitalist system, crises are business as usual. Fraser builds into the concept of capitalism an explanation for why crises appear as exceptional or abnormal when they are not. For Fraser, it is that the capitalist economy is but a front-story whose back-story is hidden from view. The front-story is the economy, which depends on several preconditions that remain in the background and that make its “normal” functioning possible, but that also recurrently destabilizes the system as it undergoes epochal change. These are social reproduction, the polity, and nature. What happens in that capitalism expropriates capacities from each area—caring, administrative, and environmental resources—to stabilize itself, but the economy winds up destabilizing each by rapaciously taking without giving back; so, the economy free rides on non-economic background conditions.

It is not hard to identify the functionalist reasoning behind this characterization of capitalism's system-logic. Functionalism is the causal model saying that a social cause can be explained in terms of its effects (Cohen, 1978). The trouble with it is its circularity, as it question begs the matter of causality altogether by presupposing the effects that one seeks to explain. In the orthodox Marxist theory of history, technological development leads to changes in the relations of production, which presupposes the existence of the social relationships that the theory seeks to explain. In this case, one presupposes that the economy needs a certain kind of stability in its background conditions to show that the system's instability results from some kind of disruption of those preconditions. I will not dwell on this point, but it remains an issue that the only way to reinstate some kind of system-logic is by widening the scope of economic processes in this way. What I find more important for the purpose of this essay is to point out that functionalist reasoning is inevitable in a model that reproduces the logic of externalities and then needs to find a way to fit the economy together with what is external to it. It is not the practices internal to the economy that matter most in such a view. Rather, what matters most is how such practices are positioned toward their external boundaries. In another way, then, this version of crisis theory redeploys the Weberian logic along a structuralist trajectory.

The pragmatic approach challenges the logic of externalities and, in so doing, clears some ground for working out how to put this logic to the side. While I do not think that it is the only alternative approach, I think pragmatism may well be the only serious materialist contender in the post-structuralist intellectual landscape. Most post-structuralist, genealogical, or culturalist approaches make no bones about abandoning materialism in practice, though they do so in a way that insists that they are transcending the debate between materialists and idealists. I cannot defend this point at length here, certainly no better than others have before me, but I have usually found this posture to be an analytical bait-and-switch. Generally speaking, this perspective has not grasped the system-logic any better than their structural-functionalist opponents without it disappearing. And I am not sure how it could be otherwise, if the starting point is that what needs to be understood is not structurally bounded agency but subjectivity as such. One may indeed conclude that rejecting the logic of externalities means that the process of subjectification—how persons become social, political, and economic subjects—in highly differentiated relations of power is the question of the philosophical age. But I think that what our contemporary concerns with systemic crises suggest to us is that we ought to try to understand how and why our political agency came to be as constrained as we currently feel that it is.

These are related questions, to be sure, but they do demand a different methodological approach. Understanding structurally bounded agency requires that one develop a plausible account of social dynamics that are more than the sum of their parts. Such a view must ask how social conflicts generate changes that amount to historical developments with some kind of regularity. Pragmatism describes practices first as acquiring tacit knowledge, second as problem-solving, and third as social learning, so the question is how to work some idea of practice into one of structure. Already one notices that agency becomes deeply social in the pragmatic perspective, even if an individual is acting alone. It is this deeply social aspect of agency that makes pragmatism more pliable than more traditional structuralisms for developing a concept of social structure. It more readily enables the theorist to imagine sources of social conflict and motivation, various moments of cognitive dissonance and contradiction, and the creative ways that people try to resolve problems that lead to consequences that are often unintended.

But not all practices are structures, even if all structures are practices. Consider how Iris Young (2011) defines structure as (1) human actions and intentionality, (2) positioning, (3) objective constraint, and (4) unintended consequences (pp. 43–74). If all four conditions are present, then what makes a structure distinct is how it imposes constraints with a high degree of regularity on human agents. Abstractly, a constraint is what Jean-Paul Sartre calls the practico-inert. The practico-inert is useful here because it literally means that which is practically inert, or what confronts agents that they do not choose to confront themselves. It emphasizes having been thrown into a nexus of constraints that present themselves to a person as objectively given, even if they are not in fact “objective” in the sense of being external to the human actions that reproduce them. Structural practices differ in quality and degree but not in kind from other practices. In a structure, agency, and therefore intentionality, are present as they are in all practices, but constraints bind agency in a consistent and pervasive way.

The economy can be understood better if one describes it as a set of structural practices, or a regular way that individuals orient themselves toward problems that are given as constraints. One does not need a narrow notion of rational agency or of instrumental reason to hold this view. People are rational, but what is interesting about the economy is how it selects against some rational alternatives by imposing constraints. As Neurath points out, decision-making happens in the context of judgments that have already been made about what is valuable, which does not wholly represent what individual human beings value nor must it represent what they value the most; problem-solving is underdetermined but nonetheless structurally bound, happening in contexts where not all strategies are equally possible. Thus, structurally bounded agency has a developmental logic. That some problem-solving strategies recur with a high degree of regularity is a testament to how pervasive some constraints are, not the presence of instrumental reason over and against practical reason.

Structuralist pragmatism, therefore, denies what Weber, Adorno, and Horkheimer affirm, which is that the socialist movement attributed too benign of a role to instrumental reason, thus putting too much faith in the capacities of workers to initiate a transition out of capitalism. What it did was underestimate the constraints to which working people are subject as well as the risks associated with overcoming them. But in contrast to Weber, the socialist movement was not wrong to think about working people as potential or actual world builders. They thought that solving the problems that are germane to capitalist development required collective action and they encouraged working people to take the lead in building a counter-hegemonic force that could change historical course. This point of view certainly requires a leap of faith, but it is neither without reason nor more fantastical than where the Frankfurt School themselves landed on the terrain of marginalization or refusal. Nor is it more fantastical than encouraging the model set by international non-governmental organizations, which do not have a reputation around the world for their democratic engagement with the publics that they serve (Honneth, 2017a, pp. 102–103).

The questions that one might ask today are how and where capitalist competition has created new interdependencies and antagonisms among working people, the poor, and their dependents. Do some of these appear as conflicts of interest but reflect some common vulnerability to capital, to the state, or to imperial rivalry? Is there a good reason for people to view the matter solidaristically rather than antagonistically? Normative reconstructions of historical development may then, by way of considering their material conditions, give way to normative arguments for solidarity based on shared problems, which, of course, means articulating problems as structural and therefore collective problems—perhaps even as class problems. Such a project is what the classical tradition called class formation. The alternative to it was then, as I believe it is now, nationalism, imperialism, and racism. But rather than seeing class formation as a matter of historical course as some of the classical theorists did, the structurally minded pragmatist takes their lead from the political militants who knew in practice, if not in theory, that nothing was a matter of course.

I have argued that reengaging or introducing political economy into critical theory, depending on one's perspective, should involve reevaluating some of the Frankfurt School's central categories. I focused on instrumental reason, since it is central to what they thought the economy was and what was wrong with it, then discussed critical theory's pragmatic turn as an alternative methodology. I then argued for a further structuralist turn. A structuralist pragmatism posits that structures are a type of practice, though not all practices are structures. Practices exist along a continuum of human actions that can be more or less constraining and contingent, but that are always the product of attempts to solve social problems. What I call structures are constraining in a highly regulative sense; they bind human agency into developmental patterns. This view is deterministic to a point, but not to a fateful one. It seeks to analyze political opportunity structures and where collective agents may intervene.

One may think about this perspective as putting philosophical language to a more historicist interpretation of historical materialism. Though what is most important is that it refuses the deep pessimism of the critique of instrumental reason by adopting a cautious realism about the capacities that ordinary people have of remaking the world. What I called the logic of externalities has long sidelined this issue. It has ironically turned the economy into a black box in which it is hard to imagine how oppressed people within it might shift the horizon of political possibility toward freedom. While there have certainly been good political and historical reasons for accepting these analytical limits, and therefore, some limits on one's political imagination, I think critical theory ought to enliven itself to the possibility that world-building might once again be possible. Perhaps, as Neurath thought, there is a different way of solving the world's problems.