This passage comes from one of Derrida’s earlier works, a short treatise dismissing Husserl’s phenomenology as hopeless due to the nature of language. Ultimately I don’t think it has much to do with Husserl; Derrida is just looking for a place on which to hang his theory of différance, deferrals of meaning, and traces. This is not to say that language doesn’t pose a problem for Husserl, but Derrida’s argument is far more tenuous than it needs to be if you are actually interested in how Husserl’s phenomenology relates to language.
The ideal form of a written signifier, for example, is not in the world, and the distinction between the grapheme and the empirical body of the corresponding graphic sign separates an inside from an outside, phenomenological consciousness from the world. And this is true for every visual or spatial signifier. And yet every non-phonic signifier involves a spatial reference in its very “phenomenon,” in the phenomenological (nonworldly) sphere of experience in which it is given. The sense of being “outside,” “in the world,” is an essential component of its phenomenon. Apparently there is nothing like this in the phenomenon of speech. In phenomenological interiority, hearing oneself and seeing oneself are two radically different orders of self-relation. Even before a description of this difference is sketched out, we can understand why the hypothesis of the “monologue” could have sanctioned the distinction between indication and expression only by presupposing an essential tie between expression and phone. Between the phonic element (in the phenomenological sense and not that of a real sound) and expression, taken as the logical character of a signifier that is animatedin view of the ideal presence of a Bedeutung (itself related to an object), there must be a necessary bond. Husserl is unable to bracket what in glossamatics is called the “substance of expression” without menacing his whole enterprise. The appeal to this substance thus plays a major philosophical role.
Speech and Phenomena VI, “The Voice that Keeps Silence”
Derrida is talking about two aspects of language that Husserl identifies: expression (Ausdruck) and indication (Anzeichen). Expression denotes the aspect of meaning that we give to a linguistic sign. Indication denotes the way in which it empirically points to something else, as well as any contextual and conventional role it may have. When I speak to others, words serve as an indication of my meaning. Husserl believes that within the realm of thought and phenomenology, indication does not have a role to play, and so phenomenology only needs to deal with expression. For me, the meaning is prior to the words, and so I don’t need to worry about what my words indicate. This approach renders language “transparent,” and indeed, Husserl doesn’t talk much about language.
Derrida starts by discussing how, since the mind uses signs that have an indicative role, indication and expression cannot be separated. This is not a new point (Wittgenstein, amongst others, had spent much time here). But he then says, in passages such as the above, that in fact, expression is dependent on indication and in fact expression is nothing more than indication. (The arguments here are fairly arcane and I will not go into them because I’m prepared to grant this point for the sake of my greater argument.) We now have a problem, because indication is incomplete: a sign points to something else, rather than containing any sort of meaning in itself. In other words, all mental relations must also be ones of indication and not of any other type. And since indication can only point to something else rather than contain innate meaning, that meaning is endlessly deferred. Cue Derrida’s larger project and the attack on what Derrida terms “presence,” which seems to be whatever may lie underneath the endless map of signs pointing to one another. And of course Husserl’s project is invalid because the sort of phenomenological bracketing of meaning that Husserl wants is impossible.
But Derrida has cheated. He’s gone from an atomic relation of sign to sign and assumed that because a single signification is bereft of meaning, the entire system must be. This is a negative claim–that no meaning is possible–and he’s achieved it by narrowing the gap on both sides. First, he’s abandoned consideration of the holistic view in which a system of significations could have a meaning which is not contained in isolation in any single signification. (This is basically Quine’s argument in “Two Dogmas of Empiricism“: “The unit of empirical significance is the whole of science.”) Second, he’s insisted that a particular type of meaning, Husserl’s, is the only one possible, so any problem with Husserl’s admittedly naive theory extends to language in general.
So Derrida silently assumes logical atomism and a naive theory of reference, then posits that position as one side of a dichotomy and his endless deferral of meaning as the other, with no middle ground. That tons of philosophers had already discussed exactly that middle ground seems to be of little concern to him. He has used Husserl as a straw man, he has ignored stronger arguments against his position, and he has employed false dichotomies so as to prove himself correct by contradiction. Anything other than pure indication is suddenly “presence” and is automatically invalid. This is pretty lame, especially when it later becomes a trapdoor to transcendence in which you can only get past the endless deferral through “radical” means of some form or another.
There are other problems in his thinking here, but these particular flaws stand out because they seem so representative of Derrida’s entire project and its tactics. He is not the first and will not be the last to commit these fallacies, but as houses of sand go, his is particularly egregious.
(For a more thorough examination of these issues, see Kevin Mulligan’s “How Not to Read.”)
Postscript: I read Martin Hagglund’s chapter on Derrida and Husserl in Radical Atheism, which is indeed a reasonably-written book. He says: “The decisive question for Derrida, however, is whether the structure of re-presentation is a condition for consciousness as such.” Hagglund ignores, however, the question of whether, even if it is a condition, it has the implications for meaning that Derrida claims it does. All this stuff about fundamental presence and ideality remains a strawman.
Update: In addition to NN’s helpful comment below examining a section of “Signature Event Context,” I just found that Jon Cogburn made a similar point in passing last year in the context of a much larger discussion of Derrida, Levinas, and Critchley:
[Derrida's arguments] seem to constitutively involve the fallacy of false dichotomy at every stage of his career, starting with the ur-false dichotomy between some kind of radical holism and an Augustinian philosophy of language/mind, a false dichotomy no reader of Wittgenstein would make.
That about sums it up. Cogburn also cites the Kevin Mulligan article above while discussing Derrida’s responses to the sort of critique I give here:
A number of years Man and World (now Continental Philosophy Review) published an article where the author criticized Derrida’s interpretation of Husserl (note that every serious Husserl scholar I know agrees that Derrida is a terrible reader of Husserl, e.g. http://www.unige.ch/lettres/philo/enseignants/km/doc/HowNotRead1.pdf ). They invited a response from Derrida, but he just wrote a short note saying he disapproved of the spirit in which the author wrote the critique of Derrida. And this is a maneuver Derrida did again and again. Attacking the motives and personality of people much less powerful than him who had the audacity to suggest that he might be mistaken. And this is what bothers me the most.