The Power of Money: Critical Theory, Democracy, and Capitalism

Abstract

The question of capitalism—of whether capitalist economic structures and their characteristic forms of power are compatible with democratic principles—is unsettled. In the wake of the 2008 financial and then Eurozone crises, in an era of skyrocketing material inequality and incredibly concentrated forms of capitalist power, critical theorists can no longer presume that Keynesian technocratic administration will successfully manage capitalist crises and economic conflicts (Azmanova, 2014; Fraser & Jaeeggi, 2018; Kim, 2014; O'Neill, 2017; Ronzoni, 2018; Streeck, 2014; Thomas, 2016a). In particular, as capitalist societies have moved from an era of industrial, welfare state capitalism to debt-based growth and consumption (Crouch, 2009; Prasad, 2013; Streeck, 2014), conflicts over the politics of debt, whether at the individual, the national, or, in the case of the Eurozone, the super-national level, have become increasingly important. This article draws together the social and political theory of Jurgen Habermas and Karl Polanyi to develop a general framework for critically analyzing this contemporary political situation. Advancing a new interpretation of Polanyi’s theory, I contend it can help correct shortcomings in Habermas’s theory of capitalism. While Habermas’s theory seeks to realize social freedom through law, Polanyi argues for the concrete institutionalization of social freedom through democratic self-organization and collective struggle in the economy. Critical theorists have drawn on Polanyi’s empirical categories like the double movement (Fraser, 2013, 2014), but I here reconstruct the broader theoretical concepts that inform his empirical analyses and illustrate their analytic and normative value.