jürgen habermas explains the twentieth century—parts III and IV



Jürgen Habermas

Learning from Catastrophe?

A Look Back at the Short Twentieth Century

At the End of the Welfare-State Compromise

Ironically, developed societies in the twenty-first century

are faced with the reappearance of a problem that they seemd to

have only recently solved under the pressure of systemic competition.

The problem is as old as capitalism itself: how to make

the most effective use of the allocative and innovative functions

of self-regulating markets, while simultaneously avoiding

unequal patterns of distribution and other social costs that are

incompatible with the conditions for social integration in

liberal democratic states. In the mixed economies of the

West, states had a considerable portion of the domestic product

at their disposal, and could therefore use transfer payments,

subsidies, and effective policies in the areas of infrastructure,

employment, and social security. They were able to exert a

definite influence on the overall conditions of production and

distribution with the goal of maintaining growth, stable prices,

and full employment. In other words, by applying growth-

stimulating measures on the one side, and social policies on

the other, the regulatory state could simultaneously stimulate

the economy and guarantee social integration.


Notwithstanding the considerable differences between them,

the social-political spheres in countries like the United States,

Japan, and the Federal Republic of Germany saw continued

expansion until the 1980s. Since then, this trend has been

reversed in all OECD countries: benefits have been reduced,

while at the same time access to social security has been

tightened and the pressure on the unemployed has increased.

The transformation and reduction of the social welfare state

is the direct consequence of supply-side economic policies —

anti-inflationary monetary and fiscal policies, the reduction of

direct taxation, the transfer of state-owned enterprises into the

private sector, and so on — aimed at deregulating markets,

reducing subsidies, and creating a more favorable investment



Of course, the consequence of the revocation of the welfare-state

compromise is that the crisis tendencies it had previously

counteracted now break out into open view. Emerging social

costs threaten to over burden the integration capacities of liberal

societies. The indicators of a rise in poverty and income disparities

are unmistakable, as are the tendencies toward social disintegration.3

The gap between the standard of living of the employed, the

underemployed, and the unemployed is widening.

“Underclasses” arise wherever exclusions — from the

employment system, from higher education, from the benefits

of transfer payments, from housing markets, from family

resources, and so on — are compounded. Impoverished social

groups, largely cordoned off from the broader society, can no

longer improve their social position through their own efforts.4

In the long run, a loss of solidarity such as this will inevitably

destroy a liberal political culture whose universalistic self-understanding

democratic societies depend on. Procedurally

correct majority decisions that merely reflect the fears and self-

defensive reactions of social classes threatened with downward

mobility — decisions that reflect the sentiments of right-wing

populism, in other words — will end up eroding the legitimacy of

democratic procedures and institutions themselves.


Neoliberals, who are prepared to accept a higher level of

social inequities, who even believe in the inherent fairness of

“position valuations” via globalized financial markets, will naturally

differ in their appraisal of this situation from those who

recognize that equal social rights are the mainstays of democratic

citizenship, and who thus still adhere to the “social-democratic

age.” But both sides describe the dilemma similarly.

The gist of their diagnoses is that national governments have

been forced into a zero-sum game where necessary economic

objectives can be reached only at the expense of social and

political objectives. In the context of a global economy,

nation-states can only increase the international competitiveness

of their “position” by imposing self-restrictions on the

formative powers of the state itself. And this justifies the sort

of “dismantling” policies that end up damaging social cohesion

and social stability as such.5 I cannot go into a full description of

this dilemma here.6 But it boils down to two theses: First, the

economic problems besetting affluent societies can be explained

by a structural transformation of the world economic system, a

transformation characterized by the term “globalization.” Second,

this transformation so radically reduces nation-states’ capacity

for action that the options remaining open to them are not

sufficient to shield their populations from the undesired social

and political consequences of a transnational economy.7


The nation-state has fewer and fewer options open to it. Two

of these options are now completely ruled out: protectionism,

and the return to a demand-oriented economic policy. Insofar

as the movement of capital can be controlled at all, the costs of

a protectionist closure of domestic economies would quickly

become intolerably high under the conditions of a global economy.

And the failure of state employment programs today is

not just due to limits on national domestic budgets; these

programs are also simply no longer effective within the national

framework. In a globalized economy, “Keynsianism in one’s

own country” just won’t work any more. Policies that promote

a proactive, intelligent, and sustainable adaptation of national

conditions to global competition are much more promising.

Such policies include familiar measures for a long-range industrial

policy, support for research and development, improving

the competitiveness of the workforce through retraining and

continuing education, and a reasonable degree of “flexibility”

for the labor market. For the middle term, measures such as

these would produce locational advantages but would not fundamentally

alter the pattern of international competition as

such. No matter how one looks at it, the globalization of the

economy destroys a historical constellation that made the welfare

state compromise temporarily possible. Even if this compromise

was never the ideal solution for a problem inherent

within capitalism itself, it nevertheless held capitalism’s social

costs within tolerable limits.


Until the seventeenth century, emerging European states

were defined by their sovereign rule over a specific territory;

their enhanced steering capacities made these states superior to

earlier political forms such as the ancient empires or city-states.

As a functionally specialized administrative state, the modern

state differentiated itself from the legally institutionalized private

sphere of a market economy; at the same time, as a tax-based

state, it grew dependent on a capitalist economy. Over

the course of the nineteenth century, now in the form of the

nation-state, the modern state began for the first time to open

itself to democratic forms of legitimation. In some privileged

regions of the world, and under the favorable conditions of the

postwar period, the nation-state — which had in the meantime

established the worldwide model for political organization —

succeeded in transforming itself into a social welfare state by

regulating the national economy without interfering with

its self-correcting mechanisms. But this successful combination

is menaced by a global economy that now increasingly escapes

the control of a regulatory state. Obviously, welfare-state functions

can be maintained at their previous level only if they

are transferred from the nation-state to larger political

entities which could manage to keep pace with a transnational



IV. Beyond the Nation-State?


For this reason, the focus is on the construction of supranational

institutions. Continent-wide economic alliances such as

NAFTA or APEC let national governments enter into binding

agreements, or at least agreements that are backed by mild

sanctions. The benefits of cooperation are greater for more

ambitious projects such as the European Union. Continent-wide

regimes of this sort can establish unified currency zones

that help reduce the risk of fluctuating exchange rates, but,

more significantly, they can also create larger political entities

with a hierarchical organization of competencies. In the future,

we will have to decide whether we want to rely on the status

quo ofa Europe that remains integrated only through markets,

or whether we want to a set a course for a European democracy.8


Of course, even a geographically and economically expanded

regime of this sort would at best still generate internal advantages

for global competition, and would thus enhance its position

against other regimes. The creation of larger political

entities leads to defensive alliances against the rest of the

world, but it changes nothing in the mode of locational competition

as such. It does not, per se, bring about a change of
course that would replace various adaptations to the transnational

economic system with an attempt to influence the overall

context of the economic system itself. On the other hand,

expanded political alliances are a necessary condition if politics

are to catch up with the forces of a globalized economy. With

the emergence of each new supranational entity, the overall

number of political actors grows smaller, but the club of those

very few actors capable of global action, or capable of cooperation,

gains a new member. Given the required political will,

such actors will be in the position to enter into binding agreements

that will set up a basic framework for a globalized



Given all the difficulties of creating a European Union, an

agreement for the creation of a worldwide order — especially

one that would not simply exhaust itself in creating and legally

institutionalizing markets, but would introduce elements of a

global political will-formation, and would work toward addressing

the undesired social consequences of global commerce —

would be much more difficult. As nation-states are increasingly

overwhelmed by the global economy, one clear alternative

emerges, even if somewhat abstractly and viewed, so to speak,

from the academic ivory tower: transferring functions that

social welfare states had previously exercised at the national

level onto supranational authorities. At this supranational level,

however, there is no mode of political coordination that would

both guide market-driven transnational commerce and maintain

social standards. Of course, the world’s 191 sovereign

states are bound together in a thick network of institutions

subsisting belowthe level of the United Nations.9 Approximately

350 intergovernmental organizations, half of which

were created after 1960, serve a variety of economic, social,

and peacekeeping functions. But these organizations are naturally

in no position to exercise any positive political coordination,

or to fulfill any regulatory functions in areas of social,

economic, or labor policy that are relevant for questions of



Nobody wants to spin out utopian fantasies; certainly not

these days when all utopian energies seem to be exhausted.10

Without some significant effort on the part of the social

sciences, the idea of supranational politics “catching up” with

markets cannot even attain the status of a “project.” Such a

project would, at the very least, need to be guided by examples

where differing interest positions are equalized in a way that all

involved could find reasonable, and it would need to sketch the

outlines for a range of unified procedures and practices. Social

science’s resistance to the project of a transnational regime

along the lines of a world domestic policy is understandableif

we assume that such a project could only be justified by the

given interest positions of existing states and their populations,

and put in place by independent political powers. In a stratified

world society, unredeemable conflicts of interest seem to result

from the asymmetrical interdependencies between developed

nations, newly industrialized nations, and the less developed

nations. But this perception is only correct as long as there are

no institutionalized procedures of transnational will-formation

that could induce globally competent actors to broaden their

individual preferences into a “global governance.”11


Globalization processes are not just economic. Bit by bit,

they introduce us to another perspective, from which we see

the growing interdependence of social arenas, communities of

risks, and the networks of shared fate ever more clearly. The

acceleration and the intensification of communication and commerce

shrink spatial and temporal distances; expanding markets

run up against the limits of the planet; the exploitation of

resources meets the limits of nature. These narrowed horizons

rule out the option of externalizing the consequences of many

of our actions: it is increasingly rare that costs and risks can be

shifted onto others — whether other sectors of society, other

geographical regions, other cultures, or future generations —

without sanctions of one kind or another. This fact is as obvious

for the risks of large-scale technologies, which can no longer be

localized, as it is for affluent societies’ production of toxic

wastes, which now endanger every part of the earth.12 But

how much longer will we be able to shift social costs onto the

“superfluous” segment of the working population?


International agreements and regulations aimed at counteracting

such externalizations of costs can certainly not be

expected from governments as long as they are perceived as

independent actors controlling their own national arenas, where

governments must always secure the support of (and reelection

by) their populations. The incorporation of each

individual state into the binding cooperative procedures of a

cosmopolitan community of states would have to be perceived

as a part of states’ own domestic policies. Thus the decisive

question is whether the civil society and the political public

sphere of increasingly large regimes can foster the consciousness

of an obligatory cosmopolitan solidarity. Only the transformed

consciousness of citizens, as it imposes itself in areas of domestic

policy, can pressure global actors to change their own self-understanding

sufficiently to begin to see themselves as members

of an international community who are compelled to

cooperate with one another, and hence to take one another’s

interests into account. And this change in perspective from

“international relations” to a world domestic policy cannot be

expected from ruling elites until the population itself, on the

basis of its own understanding of its own best interests, rewards

them for it.13


An encouraging example of this is the pacifist consciousness

that had clearly developed in the wake of two barbaric world

wars in the nations that were directly involved, and which

subsequently spread to many other countries. We know that

this change of consciousness did not prevent further regional

wars, or countless civil wars in other parts of the world. But it

did bring about a change in the political and cultural parameters

of interstate relations large enough for the UN Declaration of

Human Rights, with its prohibition against wars of aggression

and crimes against humanity, to gain the weak normative binding

force of a publicly recognized convention. This is not

enough, of course, for the institutionalization of the economic

procedures, practices, and regulations that could solve the problems

of economic globalization. An effective regulation of world society
demands policies that successfully redistribute

burdens. And that will be possible only on the basis of a cosmopolitan

solidarity that is still lacking; a solidarity that would

certainly be weaker and less binding than the civil solidarity that

developed within nation-states. The human population has

long since coalesced into an unwilling community of shared

risk. Under this pressure, it is thus quite plausible that the

great, historically momentous dynamic of abstraction from

local, to dynastic, to national to democratic consciousness

would take one more step forward.


The institutionalization of procedures for global coordination

and generalization of interests, and for the imaginative construction

of common interests, will not work in the organizational

form of a world state; a form that is itself not even

desirable. The autonomy, particularity, and uniqueness of formerly

sovereign states will have to be taken into account. But

what sort of path will take us there? The Hobbesian problem —

how to create a stable social order — overtaxes the cooperative

capacities of rational egoists, even on the global level. Institutional

innovations come out of societies whose political elites

find a resonance and support for them in the already transformed

basic value orientations of their populations. Thus the

first addressees for this “project” are not governments. They are

social movements and non-governmental organizations; the

active members of a civil society that stretches beyond national

borders. The idea that the regulatory power of politics has to

grow to catch up with globalized markets, in any event, refers

to the complex relationships between the coordinative capacities

of political regimes, on the one hand, and on the other a

new mode of integration: cosmopolitan solidarity.

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