According to the first generation of critical theorists, the development of rationality results in the domination, oppression, and alienation of the individual. In the Dialectic of Enlightenment, Frankfurt-school critical theorists Theodor Adorno and Max Horkheimer argue that humanity’s domination is the inevitable consequence of its ability to dominate nature.

For Adorno and Horkheimer, as humans evolved they learned to manipulate nature to satisfy their needs. This meant that their relationship with nature, and by consequence reason, was wholly instrumental. Some critical theorists concluded that humanity's mastery of nature (through its faculty of rationality) fundamentally leads to the domination and unfreedom of the individual.

Critical theorists argued that the United States and other capitalist countries had evolved into totalitarian states or "fully administered societies." This was due in large part because of the trajectory of the Enlightenment, an intellectual and philosophical movement that began in the seventeenth century and advocated the primacy of reason over religion and superstition. The Enlightenment, according to Adorno and Horkheimer, entrenched instrumental reason in our culture and denied humanity of its agency.

Habermas rejected this conception of reason and sought to preserve Enlightenment rationality in the canon of critical theory, highlighting its importance in developing a notion of freedom. For Habermas, the Enlightenment was simply an unfinished project, not something to be discarded like some early critical theorists argued. Habermas critiqued early critical theorists by accusing them of pessimism. He believed that the Enlightenment dream of a democratic society, where people are free and have agency, was possible if a robust public sphere could be cultivated.