infonet-economy

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 ethical and political thinking has not, however, become valid for all the variations of contractarian 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 discoursive theory of ethics, has hardly been adopted by economic theorists until now. Although the indisputable similarities between discoursive 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, p. 44) recently observed. As long as this is the case, there is a danger that sharp contradictions will be suggested between the contractarian approach (in its Hobbesian tradition) and the approach of discoursive ethics, presumably on account of deep-seated historical reasons. Instead, reality shows smooth transitions between the two approaches, which have a number of significant aspects in common, and whose partial - if no less important - shifts of emphasis may have advantages that might well prove worth investigating with respect to a new foundation of political economics based on discoursive ethics. 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 theoutset (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 discoursive-ethical advancement of political economy will be outlined (Part 3).