System and lifeworld: is the two-level social theory a genuine diagnosis of modernity, or a concession to functionalism that puts the economy beyond the reach of critique?

Jürgen Habermas, answered from the texts and cited to the page.

The position in brief

Modern society must be described at two levels at once. The lifeworld is the horizon of shared background understanding, reproduced through communicative action, in which culture, solidarity and persons are transmitted. System refers to the domains — the capitalist economy, the administrative state — that coordinate action not through reasons but through the steering media of money and power, and thereby relieve actors of the burden of reaching understanding.¹

Their uncoupling is an evolutionary achievement and not a fall. The pathology of modernity is that system imperatives penetrate the domains that can only be reproduced communicatively, replacing understanding with money and administration in the very places where meaning has to be transmitted.² That is the internal colonization of the lifeworld: a deformation of the medium in which persons are made, not merely an unjust distribution of goods.³⁴

Sources

1. The legitimacy of the legal order and the moral-practical foundation of the realms of action that are regulated by law—that is, formally organized—form the links that connect the economic system (differentiated out via money) and the administrative system (differentiated out via power) to the lifeworld.

   The Theory of Communicative Action Vol 1 - Reason and the Rationalization of Society, pp. 342–343

2. This dependency, resulting from the Mediatization of the lifeworld by system imperatives, assumes the sociopathological form of an internal colonization when critical disequilibria in material reproduction—that is, systemic crises amenable to systemstheoretical analysis—can be avoided only at the cost of disturbances in the symbolic reproduction of the lifeworld—that is, of "subjectively" experienced,…

   The Theory of Communicative Action Vol 2 - Lifeworld and System, pp. 305–306

3. If we permit ourselves to simplify in an ideal-typical manner and limit ourselves to the two dominant variants of postliberal societies, and if we start from the assumption that alienation phenomena arise as systemically induced deformations of the lifeworld, then we can take a few steps toward a comparative analysis of principles of societal organizations, kinds of ΟἹ tendencies, and forms of social pathology.

   The Theory of Communicative Action Vol 2 - Lifeworld and System, pp. 384–385

4. Whereas for Marx systemically autonomous functional contexts go up in smoke after a successful revolution, for Luhmann the lifeworld now has already lost all significance in the functionally differentiated societies of the modern world.

   The Philosophical Discourse of Modernity, pp. 304–305

Where the argument is made

• The Theory of Communicative Action, vol. 2, Lifeworld and System: A Critique of Functionalist Reason (1981
• McCarthy trans. 1987), especially the uncoupling of system and lifeworld, the media of money and power, and the thesis of internal colonization
• vol. 1 (1984) on the rationalization of the lifeworld
• Legitimation Crisis (1973) for the earlier version of the same diagnosis

How the argument was received

The architectural centre of the mature theory and the place where sympathetic critics have pressed hardest. Honneth's objection — that describing economy and administration as norm-free systems removes them from the field of moral struggle, so that the theory can see colonization but not resistance — has been the most productive criticism the work has received, and generated the recognition-theoretic turn in the next generation of Frankfurt theory.