The welfare state between juridification and commodification: how the Frankfurt School gave up on economic democracy

Abstract

AbstractThe aim of this contribution is to critically introduce and assess the Frankfurt School’s theory of late capitalism as it emerged in the 1970s, when a combined crisis of inflation and stagnation began to unravel the Keynesian orthodoxies of state-organised capitalism. In the process, Frankfurt theorists such as Jürgen Habermas and Claus Offe developed powerful critiques of commodification and juridification. The origins of their theory of late capitalism are first traced to the interwar debates on the Weimar Constitution – Germany’s first experiment in both constitutional and economic democracy. The rest of the Article takes a closer look at the Frankfurt School’s changing posture towards economic democracy in the 1970s. Accordingly, I first reiterate how the theory of late capitalism converged with that of the other major crisis theory of the time – the neo-conservative theory of ‘ungovernability’. In diagnosing the ‘governability crisis’ as a crisis of democracy, the Frankfurt School’s increasing pessimism about democracy’s economic reach becomes apparent. Secondly, by looking at the way the Frankfurt School perceived the emergence of the ‘neoliberal’ alternative in the early 1980s, I also argue that the theory of late capitalism had, and did, little to resist the de-democratisation of the economy through the rise of economic constitutionalism in the 1980s. As the welfare state was caught between the two logics of commodification and juridification, economic democracy was its unwitting victim.