infonet-economy

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With the award of a Nobel prize in 1986 to James M. Buchanan, the time-honoured social contract theory of political philosophy finally (re-)entered the realm of economic theory. The contractarian approach has turned out to be a crucial element in the foundation of what is called now the New Institutional Economics. The new openness of the discipline to contractarian thinking has not, however, become valid for all the variations of social contract theory so far. It is only the Hobbesian variant of social contract theory that has become an acceptable part of economic theory. The critical version of contractarian thinking, which goes back to Kant's Critical Philosophy and which today has taken the advanced form of a discourse theory of ethics, has hardly been adopted by economic theorists until now. Although the indisputable similarities between discursive ethics and the contractarian approach to economic theory have been noted by a few economists, they appear to have evoked hardly more than "some serious irritations," as Karl Homann (1989: 44) recently observed. As long as this is the case, there is a danger that the basic differences between the contractarian approach (in its Hobbesian tradition) and the much younger approach of discourse ethics (as it has been elaborated by Karl-Otto Apel and Jürgen Habermas) will be neglected and, as a result, considerable confusions between economics and ethics take place. Certainly the two ap­proaches of contractarian economics and discourse ethics have a number of significant aspects in common, but it leads to systematic mistakes to reduce one of them to the other. In this paper, it is suggested that a paradigmatic shift from (Ho­bbesian) contract theory to (basically Kantian) discourse ethics might well prove worth investigating with respect to a new foundation of political economy. The focus will be a critical turn of economic rationality towards an idea of socio-economic rationality, which might have advantages for a better comprehension of the central practical problems in the strained relations between market economy and modern society of today. It would appear to be impossible to reach this aim, however, without the recon­struction and critical reflection of the historical background of the above-mentioned "irritations," which for this reason will be dealt with briefly at the outset (Part 1). This will be followed by a critical discussion of the paradig­matic potential of the contractarian approach as it has been introduced in economics (Part 2). Finally, the perspectives of the discursive-ethical advance­ment of political economy will be outlined (Part 3).