It is useful to distinguish between the system and lifeworld perspectives. The distinction corresponds to the third-person and first-person perspectives, respectively. The lifeworld concerns the meaning that actors attach to their own situations. The system concerns material conditions and functional interdependencies that can transcend the consciousness of given individuals. The champion of lifeworld analysis is Alfred Schutz; the patron of systems analysis is Talcott Parsons. The two perspectives receive an elaborate treatment in Jürgen Habermas’s Theory of Communicative Action, Vol. 2.
The distinction was foreshadowed in earlier work, places where one might not expect it, particularly Carl Menger’s Investigations. Menger distinguished between pragmatic and organic social structures. Pragmatic structures are those social formations that are the result of human design, such as a particular courthouse, church, or store—corresponding to the lifeworld. Organic structures are those that result from human interaction but not human design, such as common law, religion, and markets—corresponding to the system. In this way he provided the background for Friedrich Hayek’s work. In the market, for example, it is the unintended process of supply and demand via the price system that leads to overall outcomes. (Interestingly, Habermas briefly mentions Menger is his On the Logic of the Social Sciences [{1967} 1988, 45], but not in connection with the distinction between pragmatic and organic structures.)
Habermas |
Menger |
Hayek |
Example |
|---|---|---|---|
Lifeworld |
Pragmatic |
Taxis, Intended, Constructed Order |
Church, Courthouse, Grocery Store |
System |
Organic |
Cosmos, Unintended, Spontaneous Order |
Religion, Common Law, Markets |
The system/lifeworld distinction also stems from the base vs. superstructure distinction proposed by Marx and Engels. It is a perspective that considers the economy as the underpinning or base of society. The economic base includes the forces of production, which influence ideological constructions. Hence, the institutional, political and organizational formations are superstructures emerging from the base. Within this context, systemic processes are beneficial to some groups and detrimental to others. Likewise, within the economic tradition of the Austrian School, monetary inflation via central banks typically entails systemic processes—namely, business cycles—that are overall unfavorable. Though monetary policy may be deliberate, encompassed by the lifeworld, the consequences are largely unintended, the purview of the system. For example, few would argue that bringing about a housing crisis was the deliberate intention of Alan Greenspan’s loose monetary policy. Systemic processes nevertheless intrude on the lifeworld via price distortions and the subsequent misallocation of resources via malinvestment. We can see from this that lifeworld and system map directly to “what is seen and unseen,” as Frederic Bastiat would say. Friedrich Hayek, who takes something like the system and lifeworld distinction over implicitly from Menger, even suggests that the central task of the economist is to navigate the gap, as it were, between intended and unintended consequences. In this connection, it is fascinating that Hayek instigated the dialogue between Schutz and Parsons that, in a way, culminates in Habermas’s work.
Although Habermas himself sees systemic processes as possibly beneficial or detrimental to human welfare, Habermasians tend to emphasize the negative impact of market and government subsystems. They understand negative impacts of the market primarily in terms of commodification; negative impacts of the government, primarily in terms of juridification. These entail an overreach of the market and an overreach of government, respectively. The juridification thesis involves the expansion of formal law in a manner that is detached from ethics and in a way that bypasses the need for mutual understanding. The commodification thesis comes from neo-Marxism and retains viability despite flaws within Marx’s overall architecture—esp. the labor theory of value (Habermas 1987, 375). At the extreme of excessive commodification is slavery; that is, the treatment of persons as merely objects readily available for use and exchange. Without doubt, this is a failure to respect another person as one who should actively seek happiness (https://forum.freecapitalists.org/t/illegitimate-disturbance-a-brief-introduction/18716). A more subtle instance concerns the medical industry, where pecuniary motivations—narrowly understood as wealth maximization—can supplant the ethical imperative for better health. According to this perspective, there is a pecuniary motivation to merely treat symptoms via the ongoing creation and prescription of marketable drugs—commodities—rather than a value-rational motivation to eliminate causes through holistic medicine. Commodification can be generally understood in terms of the classical distinction between use value and exchange value. Use values directly concern the attainment of happiness as opposed to merely pecuniary motivations; hence, use values do not involve merely the anticipation of further exchange. Commodification, of course, is not necessarily a bad thing. Indeed, it is a precondition for the development of markets. Excessive commodification takes place when exchange values and pecuniary motivations overtake use values in a way that subverts ethical concern.
