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The Frankfurt School refers to a group of German theorists connected with the Institute for Social Research, which was set up in 1923 as an affiliate of Frankfurt University. Although initially designed to promote an interdisciplinary Marxist theory, the Frankfurt School is best known for initiating a critical theory of society. The theorists associated with the first generation of the Frankfurt School include Max Horkheimer (who became the institute's director in 1930), Theodor Adorno, Herbert Marcuse, Friedrich Pollock, Leo Lowenthal, Erich Fromm, and Walter Benjamin. During the 1970s, Jürgen Habermas became the leader of the Frankfurt School's second generation, and his thought continues to delineate its program.

Critical theory endeavors to mediate the ideals of philosophy and the facts of the social sciences. When philosophical ideals such as justice, freedom, and happiness are not grounded in the sociohistorical facts, they can suffer one of two fates. Either they can become incongruously utopian, such that no basis in existing social practices can be discerned that might bridge the gap between how things are and how they ought to be, or they can become inadvertently corrupted by the existing social practices, for even the most diligent thinkers inevitably draw on their own sociohistorically engendered biases in thinking about justice, freedom, and happiness. For this reason, the Frankfurt School theorists were especially sensitive to, and critical of, their own root assumptions, otherwise known as the “standpoint of critique.” Conversely, when the facts of the social sciences are privileged at the expense of philosophy's ideals, the existing sociohistorical conditions turn into an ideal, and this deification of the “given” leads to an uncritical realism.

This problematic directly bears, in turn, on what is called the theory-practice problem. A critical theory of society must arise out of society's practices and yet point beyond them to make good the philosophical ideals inherent in them. Such a theory, both descriptive and normative, is designed to expose the ideological obfuscations that operate in the service of the status quo, and this is accomplished through an “immanent critique,” which shows how society's practices fall short of its own professed ideals. Equipped with a more accurate theory, which better explains society's most basic practices and the ideologies that support them, the critical theorist is better able to determine how to act for the sake of promoting justice, freedom, and happiness. Ideally, then, theory and practice intertwine: Theory clarifies the imperatives of praxis (i.e., self-creating activities aimed toward developing more enlightened social practices), praxis restructures social practices, restructured social practices transform the sociohistorical landscape, and a transformed sociohistorical landscape requires a further advancement of theory.

The first generation of Frankfurt School thinkers was heavily influenced by Hegel and Marx. On Hegel's groundbreaking account, reason is an objective force in history, and when forms of life, as exhibited in social institutions, do not fully manifest it, they break down due to their own internal contradictions, which give rise to a richer, more rational form of social life. Hegel thought that this dynamic, developmental process, often called the dialectic, had ended and that reason had fully manifested itself in history. Politically, he argued, this was reflected in the modern state, to which all citizens should be reconciled. Picking up on Hegel's dialectic but rejecting its philosophical orientation, Marx argued that history was motored by contradictions within modes of economic production and that the state is not a rational arbiter of class conflicts but rather the agent of the dominant economic class. Marx discerned in capitalist development contradictions that would tend to increasingly impoverish an ever-burgeoning industrial working class, which would seize political power to ultimately set up a classless society in which justice, freedom, and happiness might be achieved. Accordingly, Marx's critique of political economy was supposed to make good the theory-practice problem, for it offered a developmental account of how political economy would unfold to realize philosophy's ideals. Yet, as the 20th century unfolded, Marx's scenario did not play out. The three phases that constitute the thought of the Frankfurt School's first generation reflect its attempt to cope with the growing crisis of Marxism, and the despair of the last phase spurs Habermas to reconfigure the Frankfurt School program.

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