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 (http://mises.org/Community/forums/p/24094/414485.aspx#414485). 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.
This is only on cursory thought about this, but so far I can't see what value Habernas might have added to the Hayekian view. The commodification thing seems like Marxist error seeping in, and in the healthcare example confusing near (proximal) causes with far ones. And Horwitz introduced the same qualms about the possible "damage" from spontaneous orders here, but I didn't find it very plausible when he suggested it either. I suspect that this kind of "harm" from spontaneous orders is the kind of thing you only see if you're thinking like a statist.
For example, this:
"Excessive commodification takes place when exchange values and pecuniary motivations overtake use values in a way that subverts ethical concern."
seems collectivist, like if you sorted out who was actually doing the valuing in each case (methodological individualism), the problem would disappear. If you come in with the assumption that there has to be a state, then I can see how you get there though, and that (statism vs. anti-statism) would be where the debate is.
Why anarchy fails
I agree that we need to be wary of statism in this context, but Habermas makes some refined distinctions between system and lifeworld that could be quite useful among Austrians and libertarians. At the same time, I think that this would elucidate points of contention in a language that both parties can understand.
Well I always welcome more discussion of spontaneous order, because I think it is one of the main things people need to understand in order to be able think past the "statist quo." If you could explain more or in smaller bites that would get more responses I think.
AJ: And Horwitz introduced the same qualms about the possible "damage" from spontaneous orders here, but I didn't find it very plausible when he suggested it either.
And Horwitz introduced the same qualms about the possible "damage" from spontaneous orders here, but I didn't find it very plausible when he suggested it either.
Thanks for the link to Horwitz. I was surprised and delighted to find that Horwitz refers to Gus DiZerega's work, which is influenced by Hayek and Habermas.
Along these lines, it's important to note that not everything that calls into question the limits of the market is necessarily statist. Many social thinkers view social space in a threefold manner: political society, civil society, economic society. Talcott Parsons was considered by many to be a conservative, but he still upheld societal community (civil society) over against the market--and the state, for that matter. Habermasians, as another example, are preoccupied with the limits of the market and the state, and seek to defend the role of civil society. Personally, I think we should minimize or do away with the state, and that civil and economic society are paramount, but they should both have a degree of autonomy.
What exactly do you mean by societal community (civil society), as opposed to economic society?
EDIT: You answered this here. It is basically the voluntary but non-economic sphere of social cooperation and influence, such as social groups, churches, and other associations.
In that case, yeah I agree. But Horwitz's qualms about "damage" from spontaneous orders still seems dubious and to me, as if they were remnants of a statist paradigm.
I'm glad we agree :)
(However, many libertarians take issue with the term "non-economic sphere of social cooperation," as they rightly believe there is no sphere outside the economic. (Even Hoppe's garden of eden has the scarcity of unique space, for example; that is, two people can't stand in the same place at the same time.) To clarify, within civil society, use values tend to trump exchange values. "Economic" concerns, narrowly understood as *pecuniary* wealth maximization, take a secondary role. )
In that case, it might be better to substitute the word catallactic for economic.
To further clarify, excessive commodification cannot be overcome merely by state coercion because it has to do with intrinsic motivations. In simple terms, people in situations of excessive commodification need to recognize that they should put first things first, and recognize that while money isn't evil, it is indeed secondary. You cannot legislate moral integrity. There is a place for moral discourse.
One irony is that among economists one is more likely to find talk of "incentives" in a way that suggests social engineering and statist intervention through whatever favored policy; while the preacher can at times show greater respect for the other by recognizing that he is not merely a lab rat, but that his mind must ultimately be changed. Hence, economists tend to treat preferences as givens, while moral discourse treats preferences as fluid.
Your table is all kinds of messed up. The thing that would correspond to lifeworld under Hayek would be what you have corresponding to system and vice versa.