The Political Order’s Crisis: The Early 20th Century
(Part 3)
The crisis of liberalism and political economy, György Lukács and the Frankfurt School
By Riccardo Piroddi
Abstract: A partire dagli anni 1880, la relazione tra politica ed economia subì una svolta radicale, segnata dalla crisi del liberalismo classico e dalla crescente esigenza di intervento statale per proteggere i lavoratori. Questo cambiamento si acuì con la Grande Depressione del 1929, che impose un passaggio dalla “economia politica” alla “politica economica”, sancendo il ruolo attivo dello Stato nella regolazione economica.
Il New Deal di Roosevelt ne fu l’esempio emblematico: pur senza negare il capitalismo, promosse l’intervento statale per sostenere la domanda e prevenire crisi future. Alla base di questo approccio vi era la teoria di John Maynard Keynes, che proponeva la spesa pubblica come strumento per combattere la disoccupazione e stabilizzare l’economia, senza rinunciare ai princìpi liberali. Parallelamente, in ambito filosofico, György Lukács e la Scuola di Francoforte rinnovarono il pensiero marxista attraverso una critica dialettica del capitalismo. Lukács introdusse i concetti di totalità concreta e coscienza di classe, attribuendo al proletariato un ruolo storico attivo. La Scuola di Francoforte, fondata nel 1924, si propose di denunciare l’alienazione e l’omologazione prodotte dal capitalismo e dalla società di massa. Marcuse e Horkheimer, figure centrali del gruppo, criticarono la razionalità repressiva del sistema capitalistico e invocarono una “grande rifiuto” per riconquistare la libertà umana. Il loro lavoro costituisce un pilastro della teoria critica contemporanea.
The crisis of liberalism and political economy
Beginning in the 1880s, the relationship between politics and economics underwent a significant transformation. The growing acceptance of pluralism created an urgent need for the State to establish basic principles and rules of social legislation to protect workers. This shift was also driven by the crisis of modern liberalism, rooted in the laissez-faire doctrine, which had initiated a comprehensive “economization of politics” that lacked any emphasis on solidarity or social welfare.
This connection between politics and economics became even more critical in the aftermath of the 1929 Great Depression, which stemmed from North American overproduction and triggered a global economic and financial crisis. The severity of the crisis necessitated State intervention through economic planning to prevent further disasters. This shift represented the broader transition from the field of political economy to economic policy—a discipline focused on developing strategies across various economic sectors to justify State intervention while maintaining constitutional protections and the principle of free economic initiative.
The New Deal, introduced by U.S. President Franklin Delano Roosevelt, was the most prominent example of such a policy. Without undermining private property or free enterprise, Roosevelt’s plan placed the State in control of the economic cycle and emphasized stimulating global demand through social interventions. These measures were designed to address the fallout from the 1929 crisis and stabilize the economy.
The central intellectual force behind this new approach was John Maynard Keynes (1883-1946). As an alternative to classical economics, Keynes rejected the idea that markets could self-regulate through automatic adjustments between supply and demand. He argued that crises of overproduction—such as the one in 1929—led to unemployment, social unrest, and economic chaos, conditions that could potentially fuel socialist movements.
Keynes proposed that the State should support demand through public spending to sustain global demand and ensure that even the poorer segments of society could continue purchasing goods. His approach relied on an active fiscal and social policy to combat unemployment, largely through expansive public spending. By filling the gap in demand left by private consumers, public spending would stabilize consumption and investment levels.
Keynes’ concept of socialization of investments emerged as a more humane alternative to free trade, aiming to stabilize the economy without inciting a socialist revolution. While his theory encouraged State intervention, it did not fundamentally challenge the market’s laws or disrupt capitalism, but instead sought to limit its potential for crisis.
Despite its success in reviving the U.S. economy, Keynes did not advocate abandoning liberal principles. He believed that State intervention could coexist with the supremacy and legitimacy of liberal economic systems. Keynesian theory sparked a long-lasting debate: critics argue that it encourages inflation and excessive State intervention, while supporters praise its foundation of economic growth, full employment theory, and the welfare state.
Keynesian economics remains influential today, continuing to shape debates on how governments should manage economic crises and promote stable growth.
György Lukács and the Frankfurt School
The revival of dialectics in Germany played a crucial role in reshaping Marxist thought, emerging from a rigorous reassessment of Marx’s philosophy and engaging with key issues raised during the debates of the Second International. Two major figures in this intellectual movement were the Hungarian philosopher György Lukács and the scholars associated with the Frankfurt School.
Lukács, in particular, made a significant impact with his work History and Class Consciousness (1923), which is widely regarded as a foundational text of “Western Marxism.” In this text, Lukács introduces two key concepts: the dominant concrete totality and knowledge aimed at action.
- Dominant concrete totality refers to the unity of objective and subjective elements within social practice. Lukács argues that society should be analysed as a whole rather than in isolated parts, emphasizing the deep, dialectical connections that link facts and events. This holistic approach stems from the dialectical method, which Lukács believed was the only effective way to understand history. He maintained that the proletariat—the working class—was uniquely positioned to live and shape history by confronting the alienation imposed by the State in exchange for security.
- Class consciousness is the second critical idea in Lukács’ work. He posits that when the proletariat gains self-awareness as a class, it simultaneously comes to understand society. This dual awareness enables the working class to actively transform social reality through its actions. Thus, the proletariat’s self-knowledge becomes inseparable from an understanding of the objective historical process.
The Frankfurt School, formally known as the Institut für Sozialforschung (Institute for Social Research), was founded in 1924 in Frankfurt and initially directed by Carl Grünberg, later succeeded by Max Horkheimer. With the rise of Nazism, Horkheimer and many members of the school relocated to the United States, only returning to Frankfurt after World War II. The school became a major intellectual hub for philosophers, social scientists, and scholars whose shared goal was to critique alienation, mass society, and the capitalist economy. Drawing on the theoretical framework of Marx’s philosophy, they aimed to expose the contradictions of capitalism and theorize a future society free from human exploitation.
The Frankfurt School’s work, grounded in Marxist theory but also influenced by broader social and cultural critiques, challenged the structures of capitalism and mass culture, offering a rich critique of modern social conditions. Their analysis sought to bring to light the ways in which capitalism not only exploited labour but also manipulated human consciousness, and their intellectual legacy has had a lasting impact on critical theory and social philosophy.
One of the central themes of the Frankfurt School was the exploration of the relationship between politics and economics, particularly in the aftermath of the 1929 economic crisis. Two key strands of thought emerged within the School. The first, led by MaxHorkheimer, focused on examining the distinctions between State capitalisms—such as Communist Russia and Nazi Germany—and classical capitalism. The second, represented by thinkers like Franz Leopold Neumann and Herbert Marcuse, criticized political authoritarianism, which they saw as the inevitable outcome of capitalism’s degeneration, leading to profound alienation of the individual.
Despite these different approaches, the Frankfurt School’s common goal remained a dialectical critique of all forms of domination across human life, constantly seeking ways to liberate individuals from these oppressive structures.
Among the School’s most influential figures were Herbert Marcuse and Max Horkheimer, both of whom made significant contributions to the field of sociological research and critical theory.
Herbert Marcuse (1899-1979) sought to revive and reformulate Marxism by reasserting a revolutionary vision for building a non-repressive society. He argued for a civilization driven by the principle of pleasure, where humanity could be liberated from the constraints imposed by a technologically dominated society. For Marcuse, philosophy was both a practical and autonomous science, tasked with revealing the concrete realities of existence and replacing the irrationality born of capitalist development with a new concreterationality.
This rationality took shape as a critique of liberalism, which, according to Marcuse, had reduced individuals to one-dimensional men—people trapped within a technologically organized system where the productive apparatus becomes totalizing. This system imposes total control from above, leaving no room for protest or dissent. The modern individual, Marcuse argued, exists in a world dominated by technology and productivity, where personal freedoms, needs, and aspirations are shaped and constrained by the system. In this context, freedom of thought is stifled, and meaningful change becomes impossible. Marcuse called for individuals to engage in the great refusal—a rejection of this total oppression in order to maintain true freedom.
Max Horkheimer (1895-1973), on the other hand, emphasized that social criticism must address both authoritarian and liberal states, which, in their own ways, affirm the totality of domination inherent in the capitalist order. Horkheimer argued that human alienation was not only a result of economic exploitation but also stemmed from the merging of the principles of organization and production. In this way, the masses were incorporated into structures of domination that stripped individuals of their identity, leading to the eclipse of reason, where rationality became subservient to the administration and bureaucratic needs of the State.
For Horkheimer, the task of overthrowing these oppressive structures could only be accomplished by those willing to stand outside the system’s rules and refuse to submit to its dynamics. This rejection was a necessary step towards recovering human freedom from the totalizing grip of capitalist society. Both Marcuse and Horkheimer’s critiques remain central to the Frankfurt School’s legacy, deeply influencing critical theory’s approach to the interplay between political, economic, and social systems.
