If understanding is always shaped by prior assumptions, doesn't this produce a vicious circle, you only find in a text what you already brought to it? This is the ancient worry about the hermeneutic circle: to understand the whole, you need to understand the parts; to understand the parts, you need to understand the whole. You seem trapped in a loop with no entry point.
Gadamer's response, following Heidegger, is to insist that the hermeneutic circle is not vicious but productive. Understanding does not proceed linearly from ignorance to knowledge; it proceeds by progressive refinement of a provisional whole. You begin with a rough anticipation of the whole meaning, what Gadamer, following Heidegger, calls the fore-structure of understanding (Vorverständnis, or fore-understanding). This anticipation is not a mistake to be corrected; it is what makes reading possible at all. As you proceed through the text, the parts revise the anticipated whole, which in turn changes how you read subsequent parts. Understanding grows by this circular movement, not by escaping it.
The important distinction is between prejudices that are enabling, they give you a grip on the material, open questions, allow meaning to emerge, and prejudices that are blocking, they prevent you from hearing what the text is actually saying. The task of interpretation is not to eliminate all prejudices but to put them at risk: to allow the text to speak back, to notice when your anticipations are not confirmed, and to revise accordingly.
Gadamer's most famous concept, the ==fusion of horizons== (Horizontverschmelzung), captures what genuine understanding achieves. A horizon is the range of what can be seen, thought, and questioned from a particular historical and cultural standpoint. You have a horizon; the text or person you are trying to understand has a horizon. Genuine understanding is not the erasure of one horizon by the other, it is not projecting your horizon onto the text, and it is not dissolving your horizon into the text's. It is the creation of a third, enlarged horizon that encompasses both, within which genuine communication has occurred.
Understanding the other is not just becoming familiar with a different subjective world but addressing an initially rival claim to truth.
— Gadamer, Truth and Method, quoted and discussed in Gadamer's Truth and Method Revisited (Dialogue Studies, 2019)
This is why Gadamer describes genuine understanding as dialogue, not monologue, not method, but the back-and-forth of question and answer through which both parties are genuinely changed. The model is Socratic conversation: not the deployment of a predetermined method but the joint pursuit of a question whose answer neither party knows in advance. The text, for Gadamer, is not a passive object to be decoded but a partner in dialogue, it makes a claim on the reader, asks them questions, challenges their assumptions.
Gadamer develops the concept of Wirkungsgeschichte, the history of effects, or effective history, to describe how texts shape their interpreters even without the interpreters being aware of it. Every reading of Hamlet is shaped by centuries of readings of Hamlet that you have absorbed without ever being told you were absorbing them. The history of a text's reception is part of what the text means, not a distortion but an expansion of its meaning over time. This makes the idea of a single "correct" interpretation of a great text not merely practically difficult but philosophically confused: the text is not a fixed deposit waiting to be excavated but a living event in the ongoing conversation of culture.
Gadamer's position has been challenged most incisively by Jürgen Habermas, who argues that the rehabilitation of tradition and authority, however nuanced, cannot account for the distortions introduced by power: ideological traditions that serve the interests of the powerful look, from inside, like genuine wisdom. You need a critical standard, ultimately grounded in rational discourse, to distinguish between traditions worth preserving and those that need to be exposed and dismantled. Gadamer's response is that Habermas's critical theory is itself a tradition, operating within a horizon it cannot fully see.