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distribution’ (Habermas in Dews 1986, pp. 67, 107). Given the superior efficiency of many worker owned and controlled firms, Habermas’s presumption that workplace democracy would necessitate a sacrifice of efficiency is certainly questionable. It could also be argued that in distancing himself from Marx, Habermas has overtly discounted Marx’s understanding of the selfcreation of humans through labour. However, Habermas at times appears victim to the illusion—which has been presented as horrid by some, and utopian by others—that work is disappearing, or will do so. See, for instance, Habermas in Dews 1986, pp. 140–1.

27As Habermas’s critics have made clear, this is no mean task. The problem is how to move beyond relativism without falling into a discredited objectivism; that is, how can a non-foundationalist grounding for critical theory be established? Habermas’s earlier theory of knowledge-guiding human interests and his later theory of communicative action have been attempts to deal with just this problem.

28Peter L.Berger and Thomas Luckmann have explained the necessity of legitimation in terms of our ‘instinct poverty’. Unlike other species, humans possess relatively little in the way of a fixed relationship to their environment. Although humans possess genetically inherited drives, ‘these drives are highly unspecialized and undirected’. There is, then, an intrinsic ‘world-openness’, and it is through cultural institutions and legitimation that a relative ‘world-closedness’ is achieved. In other words cultural institutions and legitimation complement inherited drives to provide behavioural guidance for humans (Berger and Luckmann 1967, p. 148).

29This insistence that interpretation must be fused with ideology-critique led to one of the most famous of Habermas’s interchanges with another philosopher, HansGeorg Gadamer. According to Gadamer, Habermas traps himself into the sort of foundationalism which he believes himself to be beyond. For superb treatments of this debate, see McCarthy (1978) pp. 187–93, and McCarthy (1982).

30The argument that economists must supplement the third-person stance of the detached observer with the first-person stance of the participant observer is seldom heard within the discipline. For an insightful essay on this topic—tellingly not published in an economics journal, see Sivakumar 1986.

REFERENCES

Berger, Peter L. and Luckmann, Thomas (1967) The Social Construction of Reality Garden City, N.Y.: Anchor Books.

Berger, Peter L. (1969) The Sacred Canopy, New York: Doubleday.

Bernstein, Richard J. (1976) The Restructuring of Social and Political Theory, New York: Harcourt Brace Jovanovich.

——(ed.) (1985) Habermas and Modernity, Cambridge: MIT Press.

Boddy, Radford and Crotty, James (1974) ‘Class conflict, Keynesian policies, and the business cycle’, Monthly Review 26 (5), October 1974, pp. 1–7.

Boland, Lawrence (1979) ‘A critique of Friedman’s critics’, Journal of Economic Literature 17 (June), pp. 503–22.

Dews, Peter (ed.) (1986) Habermas, Autonomy and Solidarity: Interviews with Jürgen Habermas, London: Verso.

Friedman, Milton (1953) ‘The methodology of positive economics’, Essays in Positive Economics, Chicago: University of Chicago Press.

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Habermas, Jürgen (1970a) Toward a Rational Society, trans. Jeremy J.Shapiro, Boston: Beacon Press.

——(1970b) ‘Toward a theory of communicative competence’, Boston: Beacon Press. ——(1971) Knowledge and Human Interests, trans. Jeremy J.Shapiro, Boston: Beacon

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——(1974) Theory and Practice, trans. John Viertel, Boston: Beacon Press. ——(1975) Legitimation Crisis, trans. Thomas McCarthy, Boston: Beacon Press.

——(1979) Communication and The Evolution of Society, trans. Thomas McCarthy, Boston: Beacon Press.

——(1982) ‘A reply to my critics’, in John B.Thompson and David Held (eds) Habermas: Critical Debates, Cambridge, Massachussetts: MIT Press, pp. 219–83.

——(1984) The Theory of Communicative Action, vol. 1, trans. Thomas McCarthy, Boston: Beacon Press.

——(1987) The Theory of Communicative Action, vol. 2, trans. Thomas McCarthy, Boston: Beacon Press.

Heilbroner, Robert L. (1985) The Nature and Logic of Capitalism, New York: W.W.Norton.

Heller, Agnes (1982) ‘Habermas and Marxism’, in John B.Thompson and David Held (eds) Habermas: Critical Debates, Cambridge, Massachusetts: MIT Press, pp. 21–41.

Kuttner, Robert (1985) ‘The poverty of economics’, The Atlantic Monthly, Feb., pp. 74– 84.

McCarthy, Thomas (1978) The Critical Theory of Jürgen Habermas, Cambridge, Massachusetts: MIT Press.

——(1982) ‘Rationality and relativism: Habermas’s “overcoming” of hermeneutics’, in John B.Thompson and David Held (eds) Habermas: Critical Debates, Cambridge, Massachusetts: MIT Press, pp. 57–78.

McCloskey, Donald (1985) The Rhetoric of Economics, Madison, Wisconsin: University of Wisconsin Press.

Mini, Piero (1974) Philosophy and Economics, Gainseville: University of Florida Press. Nordhaus, William (1975) ‘The political business cycle’, Review of Economic Studies 42,

April, pp. 169–90.

Paldam, Martin (1981) ‘An essay on the rationality of economic policy: the test case of the election cycle’, Public Choice 37, November, pp. 287–305.

Sivakumar, S.S. (1986) ‘Is method all madness? Comments from a participantobserver economist’, Social Research 53 (4), Winter, pp. 615–46.

Smith, Adam (1937 [1776]) The Wealth of Nations, New York: Modern Library. Ynger, Roberto Mangabeira (1975) Knowledge and Politics, New York: Free Press. Ward, Benjamin (1972) What’s Wrong with Economics, New York: Basic Books.