Speculative Institutionalism: Hegel’s Legacy for Any Political Economy that Will Be Able to Present Itself as a Science

Abstract

In this chapter, I demonstrate that in his philosophy of ‘objective spirit’ Hegel was dealing with the problems that still preoccupy economic and social theory today. His starting points, an individual inhabiting capitalist economy, and this economy with its swift modernization and growing sophistication of needs and techniques, remind of—but surely do not coincide with—the basic presuppositions of current economic thinking. The new social form envisaged by Hegel, known under the name of ‘civil society,’ was, however, conceived as requiring a remedy to the phenomena it comprised: to the increasing atomization and isolation of human particularities and to the unrestrained self-seeking, the consequences of which were unemployment and pauperization. Homo oeconomicus had to be integrated into the more overwhelming cooperative framework of concrete universality—the state as actualized freedom. This general normative and political task in Hegel’s practical philosophy is paired with certain explanatory strategies that, I argue, play the major role in understanding the ‘objective spirit’ as a system of institutions. These ontological and heuristic principles include: continuity between physicality of individual action and sociality of institutional structures externalizing the inner; performativity implying that the spirit is a dynamic teleological embodiment of itself, its own becoming, revealing the meaning of its parts only in realization; and recognition designating the social bond and the struggle underlying the institutional edifice of modernity. Hence, not merely Hegel’s policy proposals aimed at limiting poverty and unemployment are familiar to modern economists. His institutional theory involves the challenges to and tensions of economic theorizing as it is practiced right now. Examples I draw upon are theories of social preferences, economic psychology of preferences as actions, and the suggestions to revive the notion of habit (so prominent in Hegel) as the very substance of institutional reality. Given the recent upsurge of institutional economics, these concurrences imply the lasting relevance of Hegel’s methodological and political perspectives and the need to re-integrate them as a classical foundation into any economic science to come.