I find the third, and decisive, weakness of the theory of value to be the overgeneralization of a specific case of the subsumption of the lifeworld under the system. Even if we trace the dynamics of class conflict back to the "fundamental contradiction" between wage labor and capital, processes of reification need not appear only in the sphere in which they were caused-in the sphere of social labor. As we have seen, the economy steered by money depends on being functionally supplemented by an administrative system differentiated out via the medium of power. Thus, formally organized domains of action are able to absorb communicative contexts of life through both media-money and power. The process of reification can manifest itself just as well in public as in private domains, and in the latter areas it can attach to consumer as well as to occupational roles. By contrast, the theory of value allows for only one channel through which the monetarization of labor power expropriates from producers work activities abstracted into performances. Habermas, The Theory of Communicative Action, Vol 2, p.342

There is in the action-theoretic foundations of the theory of value an error similar to the one found in Weber and in two lines of Weber reception, Western Marxism and Parsons: the model of purposive rationality is viewed as fundamental for social action as well. Marx was unable to conceive the transformation of concrete into abstract labor as a special case of the systemically induced reification of social relations in general because he started from the model of the purposive actor who, along with his products, is robbed of the possibility of developing his essential powers. The theory of value is carried through in action-theoretic concepts that make it necessary to approach the genesis of reification below the level of interaction, and to treat as derived phenomena the de-formation of interaction relations themselves-the deworlding of communicative action that is transferred over to media and the technicizing of the lifeworld that follows upon this. "The one-sided interpretation of basic action concepts, according to which action can be understood only as productive-objectifying activity, takes its revenge in underestimating the extent of neutralization that comes with the reduction of abstract labor. Marx is too harmless, in categorial terms, when it comes to determining the neutralizations of action required for system integration” Habermas, The Theory of Communicative Action, Vol 2, p.342

Marx was right to assign an evolutionary primacy to the economy in such societies: the problems in this subsystem determine the path of development of the society as a whole. But this primacy should not mislead us into tailoring the complementary relationship between the economy and the state apparatus to a trivial notion of base and superstructure. As opposed to the monism of the theory of value, we have to allow for two steering media and four channels through which the two complementary subsystems subject the lifeworld to their imperatives. Reification effects can result in like manner from the bureaucratization and monetarization of public and private areas of life. Habermas, The Theory of Communicative Action, Vol 2, p.343

As against these revolutionary expectations, Weber's prognosis has proven correct: the abolition of private capitalism would not at all mean the destruction of the iron cage of modem industrial labor. Marx's error stems in the end from dialectically clamping together system and lifeworld in a way that does not allow for a sufficiently sharp separation between the level of system differentiation attained in the modern period and the class-specific forms in which it has been institutionalized Marx did not withstand the temptations of Hegelian totality-thinking; he construed the unity of system and lifeworld dialectically as an "untrue whole:' Otherwise he could not have failed to see that every modem society, whatever its class structure, has to exhibit a high degree of structural differentiation. Habermas, The Theory of Communicative Action, Vol 2, p.340

Marx's misperception also has consequences for his theory of revolution. He does not want merely to describe how the systemically autonomous process of capital's self-realization is experienced from the lifeworld perspective of the wage laborer as a continual exploitation, how the subsumption of labor power under the commodity form tears the workers out of their traditional conditions of life, uproots feudal modes of existence in a plebian fashion, and then shapes them into proletarian forms. Rather, he projects a practical-political perspective for action, which, in its assumptions, is exactly contrary to the perspective tacitly adopted by systems functionalism. Systems theory presupposes that the world-historical process of instrumentalizing the lifeworld, particularly the sphere of social labor, in line with the imperatives of self-regulating systems - the process that Marx denounces-has already come to a close. The marginalized lifeworld can, it is supposed, survive only if it transforms itself in tum into a media-steered subsystem and leaves be- hind the communicative practice of everyday life as the empty shell of formally organized domains of action. As opposed to this, Marx has in view a future state of affairs in which the objective semblance of capital has dissolved and the lifeworld, which had been held captive under the dictates of the law of value, gets back its spontaneity. He foresees that the forces of the industrial proletariat, at first merely in revolt, will, under the leadership of a theoretically enlightened avant-garde, form them- selves into a movement that seizes political power for the purpose of revolutionizing society. Along with the private ownership of the means of production, the movement will also destroy the institutional foundations of the medium through which the capitalist economic system was differentiated out, and will bring the systemically autonomous process of economic growth back again into the horizon of the lifeworld. Habermas, The Theory of Communicative Action, Vol 2, p.339-340

System and lifeworld appear in Marx under the metaphors of the "realm of necessity" and the "realm of freedom:· The socialist revolution is to free the latter from the dictates of the former. It seems as if theoretical critique has only to lift the spell cast by abstract labor (subsumed under the commodity form). The intersubjectivity ofworkers associated in large industries is crippled under the self-movement of capital; theo- retical critique has only to free it of its stiffness for an avant-garde to mobilize living-critically enlivened-labor against dead labor and to lead it to the triumph of the lifeworld over the system of deworlded labor power. Habermas, The Theory of Communicative Action, Vol 2, p.340

This new equilibrium between normalized occupational roles and upgraded consumer roles is, as we have seen, the result of a welfare arrangement that comes about under the legitimation conditions of mass democracy. The theory of value was wrong to ignore the interchange relations between the political system and the lifeworld. For the pacification of the sphere of social labor is only the counterpart to an equilibrium established on the other side, between an expanded, but at the same time neutralized, citizen's role and blown-up client's role. The establishment of basic political rights in the framework of mass democracy means, on the one hand, a universalization of the role of citizen and, on the other hand, a segmenting of this role from the decision-making process, a cleansing of political participation from any participatory content. Habermas, The Theory of Communicative Action, Vol 2, p.342