Writing under the spell of Marx, Habermas claims that far from being a liberating force the extension of markets represents a ‘colonisation of the life world’ by the medium of money. Instead of being regulated by face to face interactions, in a market economy, relations between people are dominated by impersonal economic forces (such as prices) that atomise individuals from their society and which encourage an ethos of self-preservation rather than commitment to the common good. The implication of this critique is that wherever possible we should replace markets with institutional structures that reproduce a sense of face to face interaction and which allow people to transcend self-interest. The assumption here is that the ideal of a deliberative democracy modelled on something akin to the civic republicanism of ancient Greece would facilitate the desired social transformation.
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Mark Pennington is the author of Robust Political Economy: Classical Liberalism and the Future of Public Policy