Thesis on Discourse Capitalism
Markets and Discourses – Politics after the Libertarian Revolution
Abstract
This paper argues from a radical libertarian, indeed anarcho-capitalist, perspective but challenges the dominant libertarian conception of society as reducible to market exchanges by arguing for the indispensable role of critical discourse in the reproduction and advancement of modern civilization. The argument involves a critique of libertarianism’s ahistorical conception of society, drawing on Marx’s materialist conception of history emphasizing technological advances as key drivers of societal transformations. This leads to the recognition of a new, unique advantage for libertarianism in the era of post-fordism and thus an historically unprecedented potential for libertarian revolution. The argument also involves a critique of libertarianism’s impoverished concept of human action. Drawing on insights from the work of Jürgen Habermas (b.1929) — the paper outlines a vision of 'Discourse Capitalism' in which markets and discourses are complementary societal mechanisms of coordination that together can substitute for all state functions. The paper thus articulates a new libertarian conception of social order that augments the anarcho-capitalist conception by emphasizing the increasing importance of guiding discourses in the era of rapid technological innovation.
Introduction
It is generally understood that a public sphere with a lively culture of debate is an important, indeed indispensable ingredient of democracy. This paper argues that such a public sphere can altogether take over and deliver the functions expected to be delivered by the democratic state, namely the continuous adaptation of the systems of rules that frame and regulate the life of society, including economic life. In such a libertarian society this adaptation process would not be mediated by state power delivering collectively binding decisions as majoritarian dictates on the basis of elections but rules would adapt via the soft power of emergent majority trends and convergences on the basis of individual choices guided by ongoing public debate. It’s a question of semantics whether such a society (which the author presumes could only evolve from liberal democracies) should still be referred to as democracy. This would not be wide off the mark: such a system would be democratic in accordance with many of this term’s connotations. Such a societal system would be a form democracy, a highly informal, liquid and intensive form of “democracy”.
The heavy lifting of making a stateless market society plausible has been delivered by Murray Rothbard and his followers (under the heading of anarcho-capitalism) as well as by figures like David Friedman. Their reflections, speculations and compelling arguments are presupposed here. This paper focusses on augmenting this work with an emphasis on public discourse. The expectation here is that if and when the libertarian movement succeeds in rolling back the state, a lively discursive public sphere, including an ongoing energetic political debate would continue and indeed intensify.
This paper - while building on anarcho-capitalism - involves a critique of Rothbardian anarcho-capitalism - a critique that also challenges the philosophical underpinnings of the wider libertarian and classical liberal community of thinkers. This critique then leads on to the proposition of a discourse-led, free market-based society: discourse capitalism. This paper argues that markets, while essential, are insufficient to account for the dynamics of modern society. Instead, it proposes that ‘discourse capitalism’—a society where markets are guided by discourses —provides a more adequate framework for understanding modernity’s progress and for re-imagining society after the libertarian revolution. On the methodological basis of Marx’s historical materialism and with the critical resources from Habermas’ Theory of Communicative Action, the argument charts a path beyond the binary of state versus market to posit an anarcho-capitalism augmented by the increasingly important dimension of public discourse, including political discourse.
Here is a clarification of Habermas’ concept of discourse employed in the markets-and- discourses approach: Discourse here means critical-reflective communication or dialogue. Discourse comes into play when the smooth routine of doing things with words - with its underlying, taken for granted meanings, premises, rights, shared beliefs etc. – fails, fractures or breaks down. Discourse is reflective and argumentative and involves questioning of the implicit validity claims involved in all speech, like the claim of truth, truthfulness, and rightness. Discourse demands reasons and operates via arguments.
The phrase ‘libertarian revolution’ denotes the rolling back of the state via privatization, i.e. the substitution - by competitive market provisions - of all state functions, including: education, health, social security, welfare, money, roads/rails, utilities, land/rivers/lakes, planning, public space, police, courts, law/legislation, military defense. The feasibility of privatizing all current state functions has been considered elsewhere by the author, in his recent article ‘Pathways to a stateless World Society’ (Schumacher, 2025). There, readers also find arguments that these functions could be delivered privately at a higher quality and lower costs, as well as descriptions of the various pathways towards this result: libertarian electoral success, special economic zones, private autonomous cities, and secessions.
Will the libertarian revolution spell the end of politics? Anarcho-capitalist political debate and activism is focused on the goal of eliminating the state, on wresting resources and decision powers from political institutions to return them to private institutions and individuals. It seems as if the endgame of anarcho-capitalist activism is to achieve this withdrawal of all political power with the prospect that thereafter everybody can finally go back to their respective private and individual pursuits of happiness via markets. This seems to imply the abandonment of the res publica, the abolishment of the political arena. This implicitly self-effacing bent of libertarian political discourse, and its prospect of a society of pure market exchanges, is unrealistic and unsustainable.
It is much more realistic to expect that political discourse will flourish more than ever when issues are no longer reduced to two or three policy bundles to be voted on, and instead many possible trends and developments can simultaneously be experimented with, compared, analysed and discussed. After the libertarian revolution there will be neither government, nor any central legislation via governments or parliaments. However, the discourse of e.g. juris prudence will continue after the libertarian revolution. Once the development of the legal system, has been wrested from the inefficient hands of state courts and parliaments, and transferred to the initiative of entrepreneurs competing in markets of law provision, legal discourse will be, more than ever, in demand. For instance, the advantages or disadvantages of recognizing intellectual property rights will continue to be debated after the libertarian revolution. Such public discourses, both in their scholarly and in their more popularized layers, make sense and will be conducted aiming for and probably achieving legal convergence, even in the absence of once-for-all and one-fits-all decisions backed up by force.
The historical materialist argument here is that the prosperity potential of a libertarian revolution that would roll back the state altogether is, compared with 20th Century conditions, much enhanced under current technological premises. The economic stagnation afflicting advanced societies stems from pervasive state intervention, which increasingly paralyses technological and entrepreneurial dynamism. The author posits that the shift from mechanically based Fordism to computationally empowered post-Fordism necessitates a libertarian revolution to fully unlock latent productivity and innovation potentials. The character of our current knowledge economy and post-fordist network society also implies that discourses are playing a much enhanced and increasingly indispensable role in furthering prosperity.
Prosperity and Liberty: The Two Dimensions of Freedom
“The destiny of the spiritual World, and … the final cause of the World at large, we allege to be the consciousness of its own freedom on the part of Spirit, and ipso facto, the reality of that freedom.”
Georg Wilhelm Friedrich Hegel, Lectures on the Philosophy of History, 1837
Freedom emerges in the evolution of living systems. Most sentient, mobile creatures strive for freedom and instinctively resist shackles and controls because they need freedom of action to provide for themselves. The beginning of freedom of action is movement of a self-preserving living creature towards sources of energy and to move out of harm’s way. The more moves the creature can make, i.e. the more degrees of freedom the creature acquires, the greater are the creature’s chances to persist and reproduce (Dennett, 2011). However, these moves must not be random, but information-based. Freedom must be coupled with foresight, and freedom to act crucially includes freedom to plan and prepare and indeed to labor, to make the environment more hospitable and predictable. This implies the self-binding of actions as part of a planned, goal-oriented concatenation of actions, and requires self-discipline. The freedom to act becomes the freedom to pursue projects.
Human life and survival is dependent on social cooperation. Compared to our closest relatives in the animal kingdom - the great apes – human life is unique in terms of density and scale of cooperation. Humans are ultrasocial. Our most momentous projects are always cooperative projects.
Productive cooperation requires a division of labour, social organisation and rules of cooperation, i.e. a social order including hierarchies, demanding discipline and social control or rule enforcement. This necessary social control is hard to distinguish from no longer necessary forms of control or from unnecessary forms of social control with predatory and exploitative-parasitic admixtures. Only unnecessary social controls should/can be subjected to sustainable liberation or social emancipation. Only a comparative analysis of different concurrent societies operating with historically given material technologies and the competition between these societies can distil what’s necessary and expose the admixtures of predation. Can we expect that competition will weed out all predatory excesses? Competition has often worked in this direction.
Freedom (emancipation) encompasses both a material dimension and a social dimension. Material freedom refers to increasing liberation from the material necessities and impositions of an indifferent or hostile nature/universe, while social freedom refers to liberation from the social discipline imposed to facilitate our cooperative conquering of material freedom. A more familiar term for material freedom is prosperity. However, the term material freedom adds value by heightening the existential import of prosperity. A more familiar term for social freedom is liberty.
The thesis put forward here is that material freedom is primary as it is the final success criterion of all forms of social organization and forms of society. As history has shown, materially successful societal systems tend to win over materially inferior systems by means of population proliferation, warfare/subjugation, imitation/emulation, and migration to prosperity. Another important consideration for privileging prosperity over liberty is that prosperity, i.e. economic growth based on technology-fueled productivity gains, is cumulative, exponential, and without upper limit.
The concept of freedom must be historicized. To be sure, both prosperity and liberty are desirable in their own right. They are interdependent dimensions and factors of freedom. The interdependence between prosperity and liberty is neither straightforward, nor historically invariant. A certain level of prosperity might be required to loosen social control and increase liberty. On the other hand, liberalization might lead to prosperity gains. The libertarian presumption that more liberty is always materially feasible and always unleashes more prosperity is a fallacy. Sustainable social freedoms have material prerequisites. There can be too much liberty, in the form of unwarranted relaxation or weakening of social control and rule enforcement, signaling a dissolution of materially necessary social order. In this sense an increase in social freedom might undermine prosperity, thereby also compromising more long-term liberty potentials. A liberty-increasing revolution only makes sense where the historical material prerequisites for such an emancipation are in place. This has sometimes been the case. This implies the need to think historically and to keep re-examining what’s new in terms of transformative technological advances. Sometimes (often enough but not always) increases in social freedom can unleash prosperity potentials. This is definitely the case currently: The unleashing of our current technology-based prosperity potentials requires a libertarian revolution.
The Unique Prosperity Take-off of Modernity
“Constant revolutionising of production distinguishes the bourgeois epoch from all earlier ones. All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away. All that is solid melts into air. … The bourgeoisie has given a cosmopolitan character to production and consumption. … The intellectual creations of individual nations become common property.”
Karl Marx & Friedrich Engels, The Communist Manifesto, 1848
Modern civilization is a creation of capitalism and its preservation and continuing progress depends on the preservation of capitalism. Modern civilization is equally a creation of science facilitating transformative technologies. Modern civilization is also a creation of critical discourses more generally: the ‘Enlightenment’, and the creation of the public sphere via salons, books, journals, newspapers etc. This includes the creation of extensive bodies of literature in historiography, political theory, jurisprudence, economics, moral philosophy, sociology etc. These discourses support the development of capitalist economic institutions, capitalist morality, as well as legal and political institutions that are compatible with capitalism’s progress. In generating unprecedented prosperity take-off of modern Western civilization three related innovations mutually catalyzed and complemented each other: capitalism, i.e. economic freedom and entrepreneurship, science-based technological innovations, and ideological emancipation via Enlightenment philosophy.
The entirety of world economic history contains only one truly significant event: the industrial revolution facilitating the escape from the ‘Malthusian trap’. The quantitative economic historian Gregory Clark (2007) emphasized that there was no increase in the average standard of living whatsoever for thousands of years, all the way up to 1800, despite all the progress in technology and culture achieved by the great historical civilizations. The escape from the Malthusian trap was possible only after the pace of productivity gains via innovation and capital accumulation was outpacing the natural population growth that had hitherto always absorbed all prior technological advances, thereby keeping living standards at subsistence levels.
Libertarians, especially those - but not only those - who emphasise liberty (on the basis of natural rights) over prosperity (on the basis of utilitarian philosophy), suffer from a lack of historical consciousness. There is the ahistorical tendency to promote maximal liberty equally at all times. This ahistorical stance has to be overcome. In this respect libertarians have a lot to learn from Marxist with their mantra: Always historicise! The viability and thus prospect of any envisaged societal order depends on the historical level of technological and cultural development of the society in question. It is important to distinguish socio-economic epochs like feudalism and capitalism, as well as a series of distinct stages of capitalism as a basis for understanding significant political transitions.
Marx’s distinction between the forces of production and the relations of production is pertinent here. The historical process involves both, the development of the forces of production and the complementary development of the relations of production. Marx rightly understood that technological progress is more continuous than social and political transformations which are marked by inertia. This means that with the historical development of the forces of production there gradually builds up an incompatibility with the relations of production. Formerly necessary forms of social control become obsolete. The relations of production then increasingly stand in the way of the full exploitation of the evolved forces of production and become fetters on the further development of the forces of production. This is the moment when a social revolution becomes potentially productive.
Marx was right in identifying technology as the driving force in history, i.e. history’s active aspect. This is insight remains eminently pertinent today. We are currently living through rapid technological advancements. Not all forms of political or societal order are equally capable of facilitating the further development and prosperity potentials of the currently most promising technologies. Those political forms that paralyse progress will not be sustainable. Those which unleash pent up potentials will flourish and find imitators.
The convergence of computation and tele-communication delivers a technology induced socio-economic restructuring with momentous work & life-style implications, i.e. a new economy and society: the knowledge economy powering post-fordist network society. Fordism was based on repetitive mechanical mass production while Post-fordism is based on computationally empowered flexible specialisation and computationally empowered forms of communication. The technologies of Fordism were rigid without agile adaptivity and without the ability to quickly absorb and utilize innovations. In contrast, the new numerically controlled systems like robotic fabrication, 3D printing as well as the massive new field of software-as-a-service (SaaS) are capable of absorbing unlimited numbers of innovations. This in turn dynamizes business and business organisation and pulls workers away from assembly lines into R&D, marketing, finance etc. All work becomes innovative and project-like rather than routine.
These transformations were not only leaving communism behind as obsolete shell to be broken and thrown off but also brought the semi-socialist economies of Europe to the brink, leading to a rather sharp political transformation in Britain and slower but also serious adaptations elsewhere in Europe. However, these political adaptations were insufficient. As stagnation has once more set in, especially since 2008, the project of liberalisation is becoming increasingly urgent again. The upshot of this is that this technological revolution must be followed by a libertarian political revolution to unleash its potential. The hypothesis promoted in this paper – as well as in the earlier paper on Pathways to a Stateless World Society (Schumacher, 2025) – is that rolling back the state all the way to zero is now not only possible in the most economically and culturally advanced arena of world society but that this wholesale substitution of all state functions via markets and discourses will lead to the world’s (and world history’s) most productive and prosperous economies.
This appraisal of the state as barrier to further development is historically specific and does not at all imply that the state has always been such a barrier. This historical perspective distinguishes the theory of discourse capitalism proposed here from the libertarian (anarcho-capitalist) political philosophy of Murray Rothbard[1] (1926–1995) and his followers who see the state and its ruling class - in the original sense of Charles Comte (1782–1837) and Charles Dunoyer (1786–1862) - as inherently illegitimate, as nothing but a predatory gang of robbers, as always and everywhere a negative force. In contrast to this ahistorical stance, it is not only possible - but indeed very important for the credibility of radically libertarian political philosophy - to see and admit that states throughout most of history, including the modern states in West since the 17th century with their more comprehensive state powers and capacities, have, at times, made a significant contribution to world civilisation and economic development. Such an admission does not contradict or undermine the vigorously anti-state stance we argue for at our current historical juncture. This point about the constructive, on balance net positive, historical role of states does not imply that we do not also entertain more nuanced analyses about the kinds of states and states systems that were most conducive to the development of humanity’s intellectual and productive forces. Such an analysis points already, starting with the unique early flourishing of the ancient Greek civilisation, to systems of smaller states energized via competition rather than large, integrated, autocratic empires. The Norther Italian city states that delivered early capitalism, as well as the experiences of the Dutch Republic, England and the large number of independent, competing German principalities in the 18th and 19th Century are other examples where systems of competing small states delivered momentous boosts of cultural, scientific and economic flourishing.
The Emergence of a Critical Public Sphere
“Our age is the age of criticism, to which everything must be subjected. The sacredness of religion, and the authority of legislation, are by many regarded as grounds of exemption from the examination of this tribunal. But, if they are exempted, they become the subjects of just suspicion, and cannot lay claim to sincere respect, which reason accords only to that which has stood the test of a free and public examination.”(Kant, 1998, p.100)
Kant, Immanuel. The Critique of Pure Reason, 1781
Markets are institutionalized in forums of consumption like shops, malls, online shopping sites, as well as in forums of exchange like industry trade fairs, stock exchanges, commodity exchanges etc. Discourses are institutionalized via forums for face-to-face communications in discussion circles, universities, conferences etc., as well as via technical media of communication, including printing, broadcasting, podcasting, and social media etc. Capitalist markets and critical discourses evolved together as a uniquely successful historical trajectory. This co-evolution was a combustive relation of mutual amplification and acceleration.
The historically unprecedented sphere of public discourse - although not itself a market - nevertheless was only possible within the era of capitalism. As Juergen Habermas emphasized in his 1962 book-length critical-historical study ‘The Structural Transformation of the Public Sphere’, the original bourgeois public sphere that emerged in Western Europe in the 18th Century was a public of private persons whose autonomy was based on private property guaranteeing economic independence within an economic sphere largely liberated from traditional political hierarchies and privileges. This independence was an important prerequisite of an unpressured, open, frank debate among participants that recognized each other as equal with respect to the right to put forward arguments, in a process of deliberation where only arguments count. The middle of the 19th century was the short highpoint of laissez faire capitalism. This was simultaneously the highpoint of the critical political capacity and effective political function of the public sphere as unrestricted, deliberative realm where the force of the better argument wins out determining truth and rightness in debates about the common wheal feeding into legislation.
In its fullest expression the public sphere was also market mediated. It was not per se the invention of printing technology that was decisive but rather the massive proliferation of books, pamphlets, newspapers and journals via capitalist publishing enterprises. This is what created a reading public at an unprecedented scale. The availability of books, newspapers and journals inspired reading societies. Habermas describes the scene at the end of the 18th Century in Germany:
“They were mostly associations with rooms that provide the opportunity both for reading newspapers and journals and, just as importantly, for discussing what had been read. The oldest reading circles had involved nothing more than collective subscriptions that helped to lower the cost of the papers. In contrast, the reading societies no longer arose from such financial motives. These societies … exclusively served the need of bourgeois private people to create a forum for a critically debating public: to read periodicals and to discuss them, to exchange personal opinions, and to contribute to the formulation of an opinion that from the nineties on will be called ‘public’. Journals with political content had the largest number of subscribers and were most widely read.” (Habermas, 1989, p.72-73).
Newspapers evolved from ‘news letters’, i.e. correspondences, commercially organized by newsdealers, for capitalist market participants. Habermas explains: “The organization of this traffic on a continuous basis became imperative to the degree to which the exchange of commodities and of securities became continuous. Almost simultaneously with the origin of stock markets, postal services and the press institutionalized regular contacts and regular communication.” (Habermas, 1989, p.16) The newsletters initially procured for closed networks of business subscribers was then also made available to a larger public, evolving into newspapers proper. It did not take long until governments started to use these papers regularly, towards the end of the 18th Century weekly, for public announcements. Some papers became official gazettes. However, the attempt of governments to take over and control all newspapers and journals failed and a politically effective, independent press became an important institutional component of liberal, constitutional societies. The French Revolution, for instance, enshrined the freedom of the press in the constitution of 1791 (quoted after Habermas): “The free communication of ideas and opinions is one of the most precious rights of man. Everyone can therefore speak, write, and print freely, with the proviso of responsibility for the misuse of this liberty in the cases determined by law.” (Habermas, 1989, p.70). The reality of actual freedom of the press had to wait longer in France: The leaders of the revolution did not honor this commitment. A year later an edict of the Paris Commune denounced the opposition as poisoners of public opinion and confiscated their press, and two days after Napoleon had taken power in his coup d’etat in January 1800 he prohibited all but a select list of 13 named papers. In 1811 this list was reduced to three papers (besides the official Moniteur), subject to strict censorship. While the returning Bourbons declared that “the French have the right to have their views published and printed”(Habermas, 1989, p.71), it was only after the July Revolution of 1830 that freedom of the press as key political ingredient of liberal societies became a reality in France.
The development in Great Britain was more continuous and more advanced earlier. Compared with Continental Europe, the British press evolved earlier, at the end of the 17th Century, and enjoyed unique liberties. Censorship came to an end with the Licensing Act of 1695. At the same time a lively scene of first literary and then political debating circles arose in coffee houses, critically monitoring and debating parliamentary proceedings and government action. By the first third of the 18th century London alone featured about 2000 coffee houses. Defoe’s Review, Tutchin’s Observator, and Swift’s Examiner, were discussed in clubs and coffee houses, at home and in the streets. Habermas describes the creation of a vehemently critical, political press in Britain: “It was not the Whigs who created political journalism in the grand style; this was the work of the Tories who now constituted themselves as the opposition under Bolingbroke. … Bolingbroke brought out the first issue of the Craftsman, the publicist platform of the opposition. … With this journal, followed by the Gentleman’s Magazine, the press was for the first time established as a genuinely critical organ of a public engaged in critical political debate. … Thus, raised to the status of an institution, the ongoing commentary on and criticism of the Crown’s actions and Parliament’s decisions transformed a public authority now being called before the forum of the public.” (Habermas, 1989, p.60)
The Whigs soon followed the Tories’ lead. The public sphere, feeding into the continuous controversy between government and opposition, became an indispensable factor of modern, liberal society on a national scale. Habermas: “Until then political opposition at the national level had been possible only as the attempt to push one’s interests by resorting to violence in the forms of the Fronde and the Civil War; now, through the critical debate of the public, it took the form of a permanent controversy between the governing party and the opposition. This discussion in principle went beyond the issues of the day to include the “topics of government”; the separation of powers, British liberties, patriotism and corruption, party and faction, the question of the legality of the opposition’s new relationship to the government—and even basic questions of political anthropology.” (Habermas, 1989, p.64)
Habermas quotes a speech by Fox in the House of Commons in 1792 to show how politics had explicitly acknowledged the force of public opinion:
“It is certainly right and prudent to consult the public opinion. … If the public opinion did not happen to square with mine; if, after pointing out to them the danger, they did not see it in the same light with me, or if they conceived that another remedy was preferable to mine, I should consider it as my due to my king, due to my Country, due to my honour to retire, that they might persue the plan which they thought better, by a fit instrument, that is by a man who thought with them … but one thing is most clear, that I ought to give the public the means of forming an opinion.” Habermas, 1889, pp. 65-66)
From Marxism via Anarcho-capitalism to Discourse Capitalism
For a former Marxist, the hardest aspect of the ideological shift to anarcho-capitalism was the renunciation of Marx’s uplifting vision of mankind reaching full collective self-consciousness and self-determination, escaping the alienation whereby the results of “anarchic” market processes confront each participant as an alien force. The anarchic market was to be abolished, and democratic economic planning was to take over. Mankind would finally be constituted to consciously shape its own future and make history a project of conscious collective self-development.
The presumption of Marx and the socialists was and is that socialist revolution would allow overall productivity levels to soar. Tragically the opposite was the case (and more than ever remains the case): the socialist revolution and the system of state planning slowed down the further development of productivity and prosperity. The compelling explanation for this tragic failure was delivered by Ludwig von Mises (1881-1973) (Mises, 1920) and Friedrich von Hayek (1899-1992) (Hayek, 1945). In 1920 von Mises published a devastating critique of the feasibility of a socialist planned economy, rightly arguing that the concept of a socialist economy is an oxymoron. In a socialist economy all means of production (resources) are state-managed, i.e. there is no bidding and price formation process for resources. Without prices there can be no economic calculation and no projects (resource allocation options) can be compared in terms of costs. Without cost information there can be no rational allocation decisions, no economizing resources, i.e. this system does not deserve to be classified as “economy”. The authorities are groping in the dark, making arbitrary decisions.[2] In 1945 von Hayek pointed to the insurmountable knowledge problem faced by a central planning agency. There is no way all the dispersed local and often only tacit knowledge and experience of all producers can be centralized, and there is no substitute for the price mechanism as information processing and parsimonious signaling mechanism. This price formation is the result of competitive bidding processes and resource prices continuously adapt with respect to changing relative end-product values and changing resource scarcities. State planning cannot offer a functionally equivalent substitute.
However, socialism – while always inferior to capitalism – had a certain viability during the era of concentrated, large scale mechanical mass production. Socialism was, to some extent, a viable pathway of modernisation in this era. In the most advanced industrial economies the most important industries had consolidated into a small number of highly concentrated, both horizontally and vertically integrated concerns, already shifting the balance between hierarchy and market towards hierarchical coordination within very large private concerns. To nationalize and centrally plan such an economy was feasible, in any event much more feasible than in earlier times and certainly much more feasible than it would be now. The massive economies of scale – together with the punitive dis-economies of scope - that result from mechanical mass production implied a strong tendency towards a dramatic equalisation of living standards, delivering a universal consumption bundle to all. “Communism”, in the sense of an unprecedented material egalitarianism was, as it were, nearly a physical necessity.
Here is another noteworthy fact for libertarians to acknowledge and reflect upon: The 20th Century social-democratic mixed economies were growing faster than the 19th Century classical liberal laissez faire economies: 2.5% versus 1.5% on average across the century. To be sure, this does not demonstrate that a state-regulated economy is (always) superior to a laissez faire economy. Such statements are ahistorical and thus fallacious. (Also, even in the post-war era, the economically more liberal economy of Germany was outperforming the more socialised British economy). However, these figures mean that the social-democratic mixed economy was a viable, indeed a historically very successful development model. However, this is no longer the case since the 3rd quarter of the 20th Century. Thatcher’s and Reagan’s neoliberal revolution did put the languishing British economy back onto a viable growth path.
Marx’s vision and project, that had inspired millions around the world, was crushed, both in practice and in theory, receiving its Coup de Grâce in 1990. Hayek’s vision of the epistemic power of freely competitive, indeed anarchic but adaptive and self-optimising rationality of market processes is equally inspiring. Marx wanted to replace markets with conscious collective decision making. This falters as it increasingly meets an insurmountable complexity barrier. Most libertarians based on Mises, Hayek, Rothbard etc. want to shift everything to markets and nothing but markets.
In contrast, the thesis here bets on markets plus discourses, including political discourses, but in contrast to the usual conception of politics, these political discourses are not presumed to lead to elections, government and collectively binding decisions. The libertarian political project is the project of unleashing this rationality for contemporary world societal progress. However, the thesis of this paper is that Habermas’ discourse theory has to be injected as another essential ingredient of the libertarian movement’s self-conception and project.
The discourse part of the markets-and-discourses approach retains an echo of Marx’s and Habermas’ grand emancipatory vision, namely the aspiration to shape human destiny self-consciously via discourse, however, crucially, without requiring or allowing any scope for society-wide authoritative and collectively binding decision making. Instead of the democratic centralism championed by Marx, and instead of the deliberative democracy championed by Habermas, the goal is a deliberative market society or discourse capitalism.
A Libertarian Blindspot: Communicative Action
“Society is purely and solely a continual series of exchanges. It is never anything else. … And this is the greatest eulogy we can give to it, for exchange is an admirable transaction, in which the two contracting parties always both gain.”
Antoine Destutt de Tracy, A Treatise on Political Economy 1817
The libertarian conception of a pure exchange-based society is blind to Habermas’ crucial distinction of communicative action versus instrumental action. There is a blind spot in classical liberal and libertarian theory: its neglect of non-instrumental, communicative-discursive action as foundational to societal reproduction and progress. Classical liberal and libertarian social philosophy only recognize what Habermas calls instrumental action which includes strategic action as sub-category, i.e. instrumental action in relation to other people rather than in relation to inanimate things.
Libertarians as well as classical liberals tend to think: all action is instrumental action, in pursuit of the actor’s interest. We can quote Ludwig von Mises to this effect:
"Action is … aiming at a definite end and guided by ideas concerning the suitability of definite means. … A man's ends are always his own. They are guided by his own valuations, his own will, and his own interest.“ (Mises, 1949)
Not only libertarians, but classical liberals and indeed most economists, tend to model all action as instrumental, guided by personal ends and means. However, this is an impoverished model of human action. Juergen Habermas offers an alternative, expanded typology of cation types. Over and above instrumental action he introduces and emphasizes communicative action — i.e. actions, or interactions, oriented toward mutual understanding rather than strategic success. In contrast to instrumental action, communicative action is dialogical, aimed at reaching consensus through arguments. This type of action presupposes a shared life and often has no explicit goal. It can thus not be reduced to the model of individual goal-oriented action that sees interlocutors as means to the individual’s end. Communicative interaction is cooperative rather than competitive/adversarial. In communicative action, in contrast to strategic action, all motives except that of finding a mutual and consensual understanding are suspended.
In genuine communicative interactions the participants never regard or treat each other as mere means to one-sided ends but always also as selves in their own right, with their own ends. Communicative interactions operate implicitly in accordance with Kant’s categorical imperative: "Act in such a way that you treat humanity, whether in your own person or in the person of another, always at the same time as an end, never merely as a means." (Kant,2012, p.41)[3]. This underlying trust and expectation will become explicit in reflective discourse if suspicion concerning this arises.
Habermas put forward a general, unified theory of social action. This is an important, necessary contribution in the context of a divided (rather than unified) social science landscape. In the social sciences we find radically divergent action-theoretic premises, i.e. different disciplines are based on very different theories about how people make decisions and are motivated to act. On one side of the divide, we find economics and political theory, both based on rational choice theory, on the premise that all human action is (expected) utility maximizing instrumental or strategic action. On the other side of the divide, we find sociology and anthropology with an action theory privileging role-conforming, norm-governed action.
Habermas recognizes both action types and sees that capitalist modernity allowed for instrumental action to become more prevalent via the differentiation of the economic realm as a zone less encumbered by moral bonds and normative prescriptions.
“Only the relative uncoupling of the economic system from the political permits a sphere to arise in bourgeois society that is free from the traditional ties and given over to the strategic-utilitarian action orientations of market participants. Competing entrepreneurs then make their decisions according to maxims of profit-oriented competition and replace value-oriented with interest-guided action.” (Habermas, 1988)
Habermas recognizes both action types - instrumental and normative - but adds a further crucial but mostly overlooked type, namely consensus seeking communicative action. Habermas offers the crucial insight that both instrumental action (privileged by economics) and norm-governed action (privileged by sociology) depend on communicative interaction for their rationality, reassurance and continuous updating. Habermas takes the two most prominent special action theories and integrates them into his unified, general action theory and theory of society.
Game theory has been hailed as unifying paradigm for the social sciences. However, game theory works with the same sparse, impoverished action theory - rational choice based on expected utility - like the rest of economics, just like classical liberalism and libertarianism. Habermas’ student and expert rational choice critic Joseph Heath rightly criticizes – with a view to game theory - that “the instrumental model of social interaction most often used in the social sciences explicitly excludes any kind of communication among agents”.(Heath, 2001). He further notes: “Given the absolute centrality of language for all forms of social life, it is hard to imagine that a theory of action that excludes communication could have more than limited applicability.”(Heath, 2001). He formulates the very reasonable demand that “a general theory of rational action must give some account of all rational activities - not just consumption and voting decisions, but also such paradigmatically rational activities as … debating economic policy, and … reading a book on rational choice theory.” (Heath, 2001). Habermas offers such a general theory of rational action, and it makes sense for us libertarians to augment our theoretical resources and thinking accordingly.
The Social Self: The Communicative Constitution of Economic Agents
"If the individual reaches his self only through communication with others, only through the elaboration of social processes by means of significant communication, then the self could not antedate the social organism. The latter would have to be there first.”
George Herbert Mead, Mind, Self and Society, 1934
Communicative action includes the conversational sharing of our ideas and thinking - in the form of gratuitous chats and that fill our days - and which do serve the function, not necessarily the explicit purpose, of continuous updates of our knowledge and world orientation. Habermas does not refer explicitly to casual, chatty, “random” communications as an important type of communicative action. Habermas, however, uses the phrase life-world with connotations of everyday life and he does emphasize that genuine communicative action is a precondition of the formation and reproduction of the self-conception, understanding of interests, and action-orienting beliefs/knowledge that is in turn presupposed in all instrumental action. Communicative action is thus primary and cannot be dispensed with.
Communicative action is communication seeking mutual understanding, consensus and coordination within inherently shared pursuits. Communicative actions are about the innocent, trusting exchange of ideas and information, in the context of inherently shared lives. In this sincere exchange of information, ideas and concerns, shared goals might be presumed or indeed discovered and defined.
Communicative interaction is about coming to an understanding about the means in view of presupposed shared purposes or about together finding those shared purposes themselves.
The crucial point is that the prior learning processes of communicative interaction - the cooperative seeking of the truth - is always presupposed when individuals make their instrumental or strategic calculations.
Means-end calculations must be reassured and empowered by the knowledge of possible means that could only be gained via prior communicative interaction. Reliable knowledge, including scientific knowledge, is always and everywhere a collective social endeavour in which non-strategic motives like sincerity, repression-free inclusiveness, and openness to criticism must be presupposed. Without positing one's thinking sincerely (non-strategically) one obviously cannot test one's ideas, and one forgoes the required corrective input.
The exposure to criticism is indispensable for learning processes. Isolated individual thinking is very vulnerable to going astray. Once individual agents have been formed by the communicative-cooperative search for truth, they can, from their thus constituted self-interested perspective, launch their strategic actions and negotiations. However, they cannot stay in strategic isolation, i.e. without genuine communicative interactions, for too long without going astray. Everybody needs continuous guiding correctives that flow from sincere and sincerely probing and confirming communications in order to remain a competent rational agent, especially when our lives, in an increasingly complex and demanding societal environment, continuously exposes us to new, non-trivial challenges.
Libertarianism celebrates the market’s capacity to explore possibilities via dispersed knowledges confronting each other in competition. However, learning from these discoveries depends on a complementary domain: non-strategic, scientific discourse.
Hayek famously described markets as discovery procedures. The more free, and unhampered by state regulation, market participants can act, the more exploration, experimentation and discovery can take place. We can therefore expect the libertarian revolution to unleash an unprecedented amount of experimentation and potential discoveries. However, it is never trivial to attribute the success of a complex venture to specific features or aspects of the effort. In order to engender real learning processes the results of market experimentations require scientific analysis and thus non-strategic discourse to capitalise on the experimentation.
Without sincere communication, ideas cannot be tested, corrected, or refined. In our sophisticated knowledge economy, nearly all economic work and consumption choices depend on discourse. Medical therapy choices, legal frameworks, engineering, and finance all rest on discursive validation. In such domains, trial-and-error in markets alone is insufficient. The competitive search for truth, embedded in open-access discursive practices, becomes indispensable.
The production and sharing of the knowledge required for the establishment of means-end reasoning and the effective selection of means thus requires prior, as well as ongoing, communicative action with the shared goal of understanding the world.
Furthermore, the same dependency on genuine communicative action holds with respect to establishing ends worthy to be pursued. These should not be brought to social theory as exogenous and inexplicable data but should be endogenous to a theory that claims generality. The very constitution, identity and stability of rational individual selves, including their goals and subjective interests, depends not only on prior societal socialisation but on continuous elaboration and confirmation in non-strategic communicative interactions.
Thus, Habermas rightly insists in his ‘Theory of Communicative Action’ that instrumental reason is dependent (or “parasitic”) on communicative reason. Habermas writes: “the use of language with an orientation to reaching understanding is the original mode of language use, upon which … the instrumental use of language in general is parasitic.” (Habermas, 1984, p.288). Elsewhere, in ‘Truth and Justification’, Habermas has expressed this inside as follows: “the social practices of a linguistic community are prior to the private intentions of individual speakers” (Habermas, 2003, p.133). Habermas further elaborates: “With the linguistic turn, epistemic authority passes over from the private experiences of a subject to the public practices of a linguistic community.” (Habermas, 2003, p.134). In these passages Habermas engages positively with the American philosopher of language Robert Brandom who’s 1994 work ‘Making it Explicit – Reasoning, Representing and Discursive Commitment’ Habermas calls “a milestone in theoretical philosophy” (Habermas, 2003, p.131).
Robert Brandom shares with Jürgen Habermas the view that communicative, norm-governed practices are fundamental to human social life and cannot be reduced to instrumental or strategic action. Both thinkers situate rationality within a linguistic and normative space of reasons, emphasizing that meaning and agency are constituted by participation in discursive practices. While Brandom does not often cite Habermas directly (though he does so occasionally), he developed a complementary account of normativity and discursive practice that strongly supports the idea that rational agency is fundamentally dialogical, not merely instrumental. In particular, Brandom emphasizes that even instrumental reasoning operates within a background of normative commitments and presupposes participation in social practices of giving and asking for reasons—which aligns closely with Habermas' notion of communicative action as the medium of social integration.
This congeniality of Brandom’s and Habermas’ position and insights, initially reached independently, is significant as it exemplifies the more general convergence of the formerly divergent strands of Anglo-Saxon and continental philosophy.
Markets and Discourses: What they Share, how they Differ and how they Interact
Markets and discourses share important characteristics: Both markets and discourses are bottom-up, decentralised and inherently based on free/voluntary interactions. Both markets and discourses can only function properly and realize their rationality potential if they are open access institutions, i.e. entry must not be barred by incumbents. Neither markets, nor discourses must be monopolized.
However, discourses are not markets and operate rather differently. (The metaphor of a 'marketplace of ideas' does not imply that discourses are markets.) There is a crucial social difference between market exchanges and discursive 'exchanges'. These are very different types of interaction, each with its distinct rules of engagement and criteria of success: Discourses, unlike markets aim for consensus. They operate via the exchange of arguments rather than via the exchange of commodities or services.
The ethics of business dealings is very different from the ethics of discourse. Market exchanges are legitimately self-interested.[4] Discursive exchanges are meant to be serving the common interest in truth/knowledge. Arguments are not a matter of mere personal preference but a matter of evidence-based reasoning.
While it is perfectly permissible, expected and viable in business transactions to instrumentalize counterparties and use them only as a mere means to for one’s own private interests, this is not a viable attitude in discursive interactions. In business transactions, no shared purposes are presupposed. Discourse, in contrast is always a shared learning project. A strategic attitude, e.g. aiming at winning the debate by means of withholding information, is subverting the learning opportunity for both parties. Any attempt to instrumentalize one’s interlocutor in a one-sided way for ulterior purposes will, if detected, lead to the breakdown of communication. Therefore, while instrumentalizing others is both permissible and viable in markets, it is both impermissible and self-defeating in discourses.
In the terms of Juergen Habermas’ fundamental distinction of action types, discursive exchanges are 'communicative’ interactions, in contrast to the 'instrumental' or ‘strategic’ (inter)actions that make up markets.
Classical liberal and libertarian social philosophy are blind to Habermas’ distinction of communicative versus instrumental action. This blind spot in the basic typology of action types leads to a further blind spot, namely the failure to take account of discourse, a special reflective variant of communicative action, as necessary ingredient of societal self-regulation and progress.
Discourse, including political discourse and scholarly legal discourse, although a bottom up, competitive process in its own way, is itself no market process. Exchanges of property titles, money and monetary negotiations neither can nor should determine political legitimacy, legality or justice, just as monetary exchanges neither can nor should determine scientific truth. Rather, political legitimacy, justice and truth are determined by the exchange of arguments in discourses.
In modern liberal society the domains of the economy, the sciences, morality, law, and politics have been differentiated and cannot be collapsed, as the Marxists tragically presumed, trying to subordinate them to politics, thereby annihilating them. Neither can these distinct domains be collapsed into a mere market process. These insights have been most emphatically articulated in Niklas Luhmann’s (1927-1998) theory of modern, functionally differentiated society (Luhmann, 1984), and have also been absorbed within Habermas’ theory of society.
Discourses interact with markets by way of informing market participants. Market participants may choose not to bother to join discourses. However, this is rather limiting and potentially self-injuring. Many products and services are too complex and opaque in their effectiveness to allow for fail-safe intuitive choices. That is why discourses, including scientific discourses, are often required to establish their functioning or lack of functioning, their beneficial effects or detrimental side-effects.
Propositions about utility or economic best practice are operating with arguments based on evidence and logic. These are not questions of mere preference or choice.
This does not mean that economic actors cannot choose to make uninformed individual choices. This freedom is not in question.
However, if actors want to claim that their choices are beneficial (for themselves or for society at large) they have to argue within discourses rather than merely exchanging in markets. Again, these are very different types of interaction, each with its distinct rules of engagement and criteria of success. Market exchanges, especially in the knowledge economy, rely on the communicative rationality of discourses.
This reliance on globally shared and accessible discourses is ever increasing and bound to increase further into the future as the life of society increases in technological and organisational sophistication. The rationality of market exchanges is increasingly underpinned by competencies that only non-strategic communicative interactions in discourses can deliver. More than ever before, in our sophisticated “knowledge economy”, nearly all economic work/production is highly dependent on (scientific/technological) discourses. The same applies to consumption choices (e.g. medical consumption). All business operations (management accounting, economic calculation) and financial interactions are also increasingly dependent on management science, legal expertise for contracting, accounting science, economic science and finance science, utilizing asset pricing models, portfolio theory etc.
All these rationality enhancements are underpinned by public, open discourses within which viable approaches and theories compete, are weeded out or are selected and gain ground on the basis of arguments and evidence withstanding criticism and scrutiny, rather than on the basis of profitability or power. Successful contributions inspire citation, application, following and further work in the competitive and cooperative search for truth.
Science and Discourse Ethics
The very technological base of economic progress depends on the progress of science. Science is a discourse, and discourses constitute a radically distinct type of human institution with a distinct social logic and criterion of success. The sciences therefore cannot be equated with markets, nor should they be assimilated to markets, even after all government subsidies to science have been abolished. Even today, all scientific activities are also somehow tied up with economic exchanges, labouring at least indirectly under the constraint of economic reproduction. This constraint does not determine the essential governing logic of scientific discourse. If suspicions arise that private economic prerogatives and motives are at play and intervene in the outcome of a scientific investigation, e.g. in areas like health, environmental impact or economic policy, the scientific credibility of the result is thereby undermined, and its status as scientific knowledge is suspended. Discourses cannot be constituted via strategic interactions. Indeed, strategic action undermines and prevents discourse.
Any knowledge claim becomes suspect or even void, if the originating social/communicative process significantly deviates from the regulative ideal of a sincere, open, critical, “democratic”, repression-free discourse. This means that modern, enlightened knowledge claims, as well as all practical rationality claims, presuppose not only the absence of special/private economic interests, but furthermore presuppose modern liberal non-stratified social relations between ‘free’ individuals and exclude relations of bondage or indeed reifications like nobility, papal infallibility, the authority of the bible etc. These reflections show that modern knowledge, science, and rationality depend on modern liberal morality.
Proper knowledge can only emerge within a liberal regime. The concept of pre-modern knowledge (excepting ancient Greece) is an oxymoron. For instance: The fundamental principle/criterion of universal reproducibility in science presupposes open access to the discursive search for truth.
The knowledge we mean cannot exist in traditional societies, and in fact did not exist. They could live, seemed to “know” something, a lot in fact, but they did not really securely KNOW anything. It was all very uncertain, mixed up with superstition, and far less practically successful than modern scientifically based societies. In particular, the scarcity and fragility of usable knowledge also limited those in power who tried to control and actively suppressed discourse.
Habermas uses this reflective insight to ground this liberal morality, rebutting relativistic philosophical positions that claim all morality to be a matter of mere subjective choice not susceptible to rational argument. Habermas argues: Relativist/subjectivist moral philosophy, by joining the discourse and trying to convince the participants in this discourse that the search for a rationally justifiable morality is vain, fails to reflect that it thereby is already implicitly committed to a particular morality, namely to the liberal morality underpinning the modern social institution of discourse. Science and rationality, including moral philosophy, is always already underpinned by a specific morality, namely ‘discourse ethics’. Habermas project of discourse ethics is then to make these moral presuppositions of all discourse explicit, thereby rationally grounding “our” particular, enlightened, liberal moral system. This system of morality evolved together with other ingredients of modernity, like the scientific worldview, the rule of law, constitutional government etc.
Conclusion: From Market Society to Discourse Society
This paper argues that a libertarian social order cannot subsist on markets alone. While market exchanges are essential to coordination and innovation, they must be complemented by discursive processes. Discourses are not reducible to markets or market transactions. They operate via communicative, not via strategic action; they aim for understanding, consensus and truth, not profit.
Drawing on Habermas’ theory of communicative action, the paper argues that rational agency presupposes participation in discursive practices. These insights challenge the libertarian reduction of all social processes to instrumental exchanges. Instead, discourse capitalism proposes a voluntary, decentralized society rich in critical-reflective communication without collective coercion—a new vision of a stateless societal order.
Libertarianism seems to call for a society of private market exchanges with a diminished scope for politics, while Libertarianism’s most radical expression, anarcho-capitalism, even implies, seemingly, that politics will disappear altogether. The author challenges this aspiration for an ‘apolitical’ society and instead insists that political life, understood properly, will, for good reasons, very much intensify rather than vane after the libertarian revolution. This intensification is due to the proliferation of innovations and parallel options in all the ‘political’ areas of societal development like the introduction of cutting-edge technology, environmentally sustainable energy provision, ethical questions raise by new technologies or social trends, new business models, employment relations, financial innovations, innovative forms of social control, the development of new law, new forms of legal dispute resolution and law enforcement etc. There will be myriads of public issues to debate, evaluate, warn against or promote and proselytize about. This should be good news for all of us libertarians who are passionate about politics and the common weal: the success of the libertarian political project does not imply that political discourse ceases and that we’ll have to retire from political life and thereafter care for our back gardens rather than for humanity’s world-historical progress. This essay thus anticipates and paints a positive picture about a much needed and much energized political life after the libertarian revolution, a revolution that will have to be, to borrow a phrase from Leon Trotsky, a permanent revolution (Trotsky, 1931). This entails not only ongoing vigilance in order to keep any insipient re-emergence of statism in check, but also the expansion and ultimately universalization of the libertarian revolution across the world, radiating out from wherever it first breaks through. Political parties will transmute into activist think tanks or proselytizing movements. A specifically libertarian 'party' might persist—not to oppose state coercion, but to resist illiberal practices and attitudes across society.
To conclude: The thesis of this essay maintains that the future libertarian society cannot be a society of pure market exchanges but must be a society that is constituted via both markets and discourses. However, with a view to a free society it is important to note that both markets and discourses are wholly voluntary, open, repression-free, non-coercive institutions. A society based on markets and discourses as mechanisms of societal integration is an inherently free society. To distinguish this theory from current versions of anarcho-capitalism, this treatise puts forward and promotes the term ‘discourse-led capitalism’, or abbreviated ‘discourse-capitalism’, to emphasize the increasing importance of discourses for contemporary society with its increasingly sophisticated economic life. The conditions of the unconstrained, rational, productive flourishing of market processes are distinct from the conditions of the unconstrained, rational, productive flourishing of discourses. In fact, discourses are crucial to steer the institutional development of market processes, while well-functioning special markets are required to materially underpin and reproduce the flourishing of discourses without distortions or special interest capture.
Thus, the future progress of human civilization within a stateless world society will be ordered via markets and steered via discourses.
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[1] Rothbard laid out the case for anarcho-capitalism in his 1973 book For a New Liberty, The Libertarian Manifesto.
[2] Socialist countries muddled through by drawing price orientation from capitalist world prices and prices from capitalist countries. Obviously this crutch would no longer be available after the communist world revolution.
[3] Kant’s moral philosophy was one of Habermas’ sources in developing his theory of communicative action.
[4] In the economy instrumental rationality prevails, but instrumental rationality is far from absolutely dominating here. Communicative rationality via communicative action also plays a role in work and business relations.