Ubiquity Press

Chapter Title: DIFFERENT WAYS OF MAKING SENSE OF CULTURE IN RELATIONSHIP TO

THE ECONOMY

Book Title: Doing the Right Thing

Book Subtitle: A Value Based Economy
Book Author(s): Arjo Klamer
Published by: Ubiquity Press

Stable URL: http://www.jstor.com/stable/j.ctv3t5r85.5

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 CHAPTER 2

DIFFERENT WAYS OF MAKING SENSE

OF CULTURE IN RELATIONSHIP TO
THE ECONOMY

When you and I are trying to do the right thing, we will not immediately
consider the cultural context in which we are operating. Inside the elephant,
culture is like water for a fish: as long as you swim in it, you are not aware of
its existence. Only in contrast with another world with another culture, does
your own culture become noticeable. I myself realized my Dutchness only
when I began studying in the US, in North Carolina. And I am aware of the
significance of culture each time I switch between the academia to political
life. Gosh, how different those two worlds are.
This chapter aims to demonstrate the consequences of the “culture mat-
ters” position, how different that point of departure is from so many other
approaches, including that of standard economics, but also that of cultural
economics – the field in which I have done a great deal of my research.
Accordingly, this chapter addresses scholarly discussions and illustrates the
particular position that this book represents. The purpose is orientation for
you, the reader, and to provide context for the exploration that follows.

Scholarly positions on the role of culture

Scholars like me want tools in order to explore the role of culture, how to talk
about it. I am concerned with the practice and thus also with the meaning of
the expression “culture matters” in practice. Furthermore, I am interested in
the type of conversations that render it meaningful.
There are, for example, scholars who focus on cultural processes and dis-
cuss nothing else. We could name them culturalists. They are anthropologists,
sociologists, historians, archaeologists and others who are studying culture in
general (C1 and C2) or, like art historians, the arts (C3) in particular. As an
economist, I cannot help but notice that their work offers little to no insight

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12  DOING THE RIGHT THING: A VALUE BASED ECONOMY

into the financial aspects of their fields. They suggest that culture stands alone.
In their case culture is all that matters!
When I turn to standard economists, the discussion is biased toward the
opposite side of the spectrum. Economic discussions zero in on the financial
aspects of life, on the instrumental part. Culture does not figure into those dis-
cussions. So, that does not help when we are interested in the way culture (C1,
C2 or C3) works in the economy and how economic processes affect culture
(again in all three kinds).
Recently, scholars in a wide variety of disciplines have broken with the
one-sidedness of culturalist and economic discussions and have begun to
explore the relationship between economy and culture. Historians are studying
cultural factors in the development of, for example, the financial sector; soci-
ologists and anthropologists are exploring interactions between economic and
cultural phenomena; business economists have turned to cultural processes
in organizations; social geographers point to the importance of geographical
factors for the arts and the creative industries; and cultural economists study
the economics of the arts. The sociologists Ray and Sayer coined the notion
of the “cultural turn” to characterize the surge of interest in the interactions
between culture and economy (Ray & Sayer, 1999).
As scholars, we seek the right conversation to be in. There are all kinds
of conversations for us to join. So which is the right one when we want to
understand the right thing to do, when we want to understand the intricacies
of economic life while pursuing what is important to us?
If you are accustomed to the standard conversation of economics, you
must already have noticed that I am nudging you towards a different con-
versation, a conversation that does justice to the oikos, to culture, while tak-
ing financial phenomena seriously. I am trying to change the conversation
by recovering long neglected concepts, such as values and goods. I do so by
connecting other ongoing conversations.
I first need to define this notion of “conversation” that I am using.

“Conversation” is a metaphor
I will use the metaphor of the conversation quite a bit in this book, in addi-
tion to terms like “practice,” “praxis” and “a commons”. Earlier I dedicated
an entire book to the exploration of the metaphor (Klamer, 2007), so I will
be brief here. Conversation, as I use the metaphor, denotes the more or less
organized exchange of ideas of a group of people on a particular subject
in a particular way. A conversation can take place at a particular moment
in time, or in a particular situation but usually I will refer to a conversation
that takes place over a period of time in all kinds of settings with a range of
participants. “Science” is such a conversation, as are “art,” “politics,” “busi-
ness” and “sport.” Each of these conversations consists of many distinctive

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 CULTURE IN RELATIONSHIP TO THE ECONOMY  13

conversations. “Science” consists of conversations like “physics,” which in

turn consists of conversations on “thermodynamics,” “elementary particles”
and so on. “Economics” is a conversation, too, made up of the conversations
on “game theory,” “microeconomics,” “cultural economics” and many other
subjects (as you can see when you consult the index of the Journal of Economic
Literature).
When I speak and write of a conversation, I do not only intend to get
you thinking about people talking. They may just as well be writing, reading,
gesturing, listening, attending a conference, checking out a journal and chat-
ting in the corridor. Economists generally prefer to refer to fields, evoking the
image of people trotting around in Wellingtons. The German philosopher
Jürgen Habermas speaks of communicative action (Habermas, 1984). That
gets closer to what I would like to draw your attention to. I follow the British
philosopher Michael Oakeshott (1901-1990), the German philosopher Hans
Georg Gadamer (1900-2002), the American pragmatist Richard Rorty (1931-
2007) and the sociologist Randall Collins (1941-), among others, and opt for
the term “conversation.” The idea is that you think about practices, about
people trying to make sense in a particular context with certain topics and in a
certain mode of reasoning, with certain habits, customs and rules of conduct.
A conversation, as I use the term here, is a commons, that is, a shared
practice. Chapter 6 is dedicated to developing the notion of the commons
and of shared goods and practices.
The question, then, is in what conversation are you or in what conversa-
tion do you want to be. Or, if you are a practitioner, what conversation do you
want to consult in order to make sense of your world, and in order to figure
out what is the right thing to do in your life and your line of business.

Six conversations on the relationship between culture, economy,

economics, and the arts
When I survey the field, I distinguish six ongoing conversations on the rela-
tionship between the economy (E) and culture or, more restrictive, on eco-
nomics as a science (e) and culture (C1, C2 or C3).

1. The “culture does not matter for economics and the economy”
conversation.
This is the conversation that I learned when I studied economics. It is still
the dominant conversation, also in the world of politics, business and jour-
nalism. In this conversation the notion of culture does not show up at all. It
is not taught and it is not used. The presumption here is that economists do
not have to bother with culture (C1, C2 and C3) as it has no significant influ-
ence on economic processes and is therefore not something economists have

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14  DOING THE RIGHT THING: A VALUE BASED ECONOMY

to account for. Quite a few economists, if pressed with the issue, will remark
that they would not know how to bring cultural factors into their model. They
would not see why they should bother explaining cultural phenomena, such as
the existence of national cultures or the rise or decline of the arts. They will
insist that culture does not matter much in economic processes and therefore
does not have to figure into their economics.
According to this conversation, culture (C1, C2 or C3) is separate from
economy (E).

E C1, C2 or C3

This is clearly not the conversation I am seeking out here, although I will use
some of the insights it provides.

2. The “economy does not matter to culture” conversation

Open a book on art history, read a novel or talk with scholars in history, soci-
ology, anthropology, archeology or philosophy, and you will wonder whether
something like an economy even exists. Quite a few discussions about arts
and culture focus on cultural matters only and bypass financial processes alto-
gether. You will not find references to prices, incomes, financial conditions,
market transactions or any other financial factors.

C1, C2 E

In an even more ambitious version of this conversation, culture stands for

what could be called ‘the transcendental part of a civilization’. This kind of
culture involves the arts, the sciences and religion, as well as other domains
(like those of nature lovers, and sports fans). In general, these kinds of cultural
practices reach for something that is beyond earthly matters (our daily food,
social status and pecuniary income): they may express a quest for beauty, the
truth, the good, the spiritual, the sacred.
If interpreted this way, these conversations comprise literary conversa-
tions in which economic processes are somehow incorporated, as in the novels
of Charles Dickens, John Steinbeck and Thomas Wolfe. When I hear col-
leagues in the faculties of the natural sciences and the humanities speak, I
suspect that they operate in this conversation. In their world, knowledge and
the pursuit thereof, the esthetical, the truth, and human sensibilities and all

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 CULTURE IN RELATIONSHIP TO THE ECONOMY  15

such cultural phenomena crowd out economic (mostly financial) factors and
processes. This is also the conversation of quite a few artists and people work-
ing in the artistic field: they tend to write everything artistic in capital letters
and keep all things of the economy small.
More importantly, these are the conversations that engage people who
are immersed in a religious or spiritual world. Not only the Pope will be in
this conversation when he addresses economic questions, but so will Muslims
when they plead the Sharia or ban usury. The Dalai Lama will always put
economic factors in the larger context of transcendental meanings. He will
characterize the pursuit of money and other such aspects of the ordinary
business of mankind as a distraction from the search for enlightenment. “Let
go of the ego,” he will tell economists and anyone else willing to listen, “for
the ego holds you back.”
Although I can easily get caught up in culturalist discussions, I am too
much of an economist to be able to forget about financial aspects.

3. The “economics matters to culture” conversation.

Cultural economists apply the tools of economic analysis to the world of the
arts. You could call their conversation an instance of economic imperialism:
the tendency for economists to consider any phenomenon, from love to sui-
cide and so also art, religion and science, suitable subjects for their approach.
Marriage, Gary Becker famously argued, is a rational choice, the outcome of
a rational calculation of costs and benefits (Becker, 1976). So is the choice to
have children or to abort them, whether or not to believe in God, to do art,
or to do science.
In the “economics matters” conversations the standard concepts and
tools of standard economic analysis are pivotal. So this conversation is about
markets, rational choice, elasticities, contingent valuation, consumer surplus,
externalities, public choice and more of such concepts.
As can be expected, economists dominate the “economics matters” con-
versation. They have applied their analysis to the phenomenon of religion
and to science (for instance Oslington (2003) and Mirowski and Sent (2008)).
Economists who study the world of the arts label themselves cultural econ-
omists. The well-known economist William Baumol (1922-) was a pioneer.
Prominent members of this research community are David Throsby, Bruno
Frey, Ruth Towse, and Françoise Benhamou.

E C3 (the arts)

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16  DOING THE RIGHT THING: A VALUE BASED ECONOMY

When you are in love with the peculiar reasoning that economists apply (in
terms of rational choice, opportunity costs, marginal costs and marginal ben-
efits, asymmetric information, game theory and so on), you will love these
conversations. If you do not, you may wonder why people get paid for devel-
oping this kind of discourse. Cultural economists will appeal to the relevance
of their conversation for policy makers and to its legitimacy in academia.

4. The “arts matters to the economy” conversation

Some cultural economists, but especially people from the cultural field and
policy makers, like to point at the relevance of the arts and artists for the
economy. This discussion gravitates around the issue of the economic impact
of culture, and of the arts in particular. The objective is to demonstrate that
some economies grow better and faster than others due to the presence of art-
ists and a creative climate, that badly functioning cities flourish because of the
arts, that creative industries come to thrive in certain cities and not in others,
and that culture (C3) attracts tourists (and their money).

C3 E

For the economic impact of the arts, the Guggenheim Museum in Bilbao is
exemplary. Although the jury is actually still out, it is generally assumed to
have transformed and boosted the economy of that once desolate Spanish
city, by bringing in crowds of tourists, and in their slipstream, new businesses.
The argument is that arts and their cultural organization can be good for the
economy. Richard Florida famously argued the importance of the creative
class for local economies, spurring the increasingly important creative indus-
tries and politicians will point to the economic effects of proposed investments
in the arts, such as new museums, theatres, festivals and the like (Florida,
2002). The literature on “creative cities” makes more or less the same point.
The conversation includes studies that show how artists can contribute to
urban generation (as happened in the Soho neighborhood in New York), and
how prices of real estate go up when cultural organizations move in.
Note that this conversation renders the arts instrumental for economic
processes. Economic growth is apparently the goal and the arts are its maiden.

5. The “culture matters to the economy” conversation

The “culture matters to the economy” conversation focuses on culture in its
anthropological meaning (C1) and as civilization (C3) as well as the economic
impact that those cultures can have. Most famously, Max Weber (1864-1920)
argued that protestant culture was responsible for the rise of capitalism and

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 CULTURE IN RELATIONSHIP TO THE ECONOMY  17

the concurrent economic growth in northern European countries (Weber,

2001). Economic anthropologists have pursued this line of research while
standard economists have ignored it. You will look in vain for the notion of
culture in economic textbooks.
Recently, economists like Deirdre McCloskey, Virgil Storr, and Robert
Lane (although he is actually a political scientist) have picked up the line of
argument where Weber left it (McCloskey, 2007; Lane, 1991). McCloskey, for
example, argues that values and virtues affect economic processes and should
account for the Dutch Golden Age in the early 17th century and the takeoff
of economic growth in the late 18th and 19th centuries. In 2000, Lawrence
Harrison and Samuel Huntington (1927-2008) published their book entitled:
Culture Matters: How Values Shape Human Progress (Huntington, 1997). The title
says it all. I should also mention here the French sociologist Pierre Bourdieu
(1930-2002), who not only argued that economic factors influence culture, but
also that knowledge of the arts and other knowledge stands for cultural capital
that is needed for the accumulation of economic capital. So again, culture
impacts economy (Grube & Storr, 2015).
Quite recently literary scholars, historians and social geographers have
developed their own separate conversations on the “culture matter” thesis.
Inger Leemans, for example, sorts out the importance of peculiar Dutch cul-
tural traits for the Golden Age that Dutch society enjoyed in the first half of
the 17th century (Leemans & Johannes, 2013; Goede de, 2005).
Also important in the “culture matters” conversation is the discussion
of culture in business literature. In the seventies, the Japanese miracle got
business economists interested in the value of culture in successful business
strategies (Cameron & Quinn, 1999; Waterman & Peters, 1982). The Dutch
scholar Hofstede made a big impression with his identification of cultural
differences among IBM organizations across the world (Hofstede, 2003). This
research evolved into an extensive research conducted under the name of cul-
tural economics and dealt with questions on the role of culture in organiza-
tions, on the impact of cultural context on organization performance, and the
management of culture in organizations (Beugelsdijk & Maseland, 2014). All
this contributes to an increasing awareness in the business world that culture
matters not only in the environments in which businesses operate, but also
within businesses themselves.
Another discussion centers on creative processes in businesses and how
artists can contribute to such processes.
The “culture matters” conversations appeal to politicians and business
leaders to pay attention to culture in the anthropological sense and to the
arts in particular. Politicians should care about art and culture--so this con-
versation seems to imply--because culture boosts the economy. Business lead-
ers should understand that the culture of their organization is critical for its

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18  DOING THE RIGHT THING: A VALUE BASED ECONOMY

performance. A strong culture makes for a strong and sustainable organiza-

tion, at least that is the suggestion.

6. The “economy is embedded in culture” conversation

I now come to the conversation that is most relevant for my inquiry. This is the
conversation that views economic phenomena as manifestations of culture.
In the “economy is embedded in culture” conversation, culture is what life is
about and the ordinary business of mankind--including the trading, consum-
ing and working that people do--are part of cultural phenomenon.
Suppose you finished a painting. What you do with the painting is a mat-
ter of what you are used to doing. It is a matter of your values and, with that,
it is a matter of the culture that you are part of. In the culture of cavemen,
painting is a strange kind of activity. When you’ve finished your cave paint-
ing, you must be pleased if you get your share of the food that others hunted
down or gathered. In order to get the time to paint, you most likely have a
special status in the group, such as a medicine man, or as a spiritual man. In
the culture of 17th century Netherlands, you have to realize your value as a
craftsman. In order to get anywhere with your work, you need to be part of
the guild and partake in its customs and rituals. Selling your painting is part
of the ordinary business of the guild. In the contemporary culture of high art
you will seek the approval of fellow artists, and socialize with the right people
in the hope of getting your painting into the collection of a contemporary art
museum or an important art collector. Maybe a critic will write about it! In all
three cases you operate in a different culture.
In the “economy is embedded in culture” conversation, the variations of
the conversation are what evoke interest. What do the actions say about the
culture in which the actor, you, is operating? Clearly, speaking of guilds in the
contemporary setting would be meaningless. Then again, some artists may
wish they had the status that the painters of cave paintings had.
The “economy is embedded in culture” conversations stress the mean-
ingfulness and value-laden character of human actions, and will tend to put
them in the (cultural) context. Whether you and I go shopping, do our job,
or engage in entrepreneurial activities, we attribute meanings to things and
activities, we value them and, along the way, we generate meanings and values
for ourselves and for others. We humans are signifying people: we attribute
meanings to what we do and need a cultural context in order to make sense
of what we and what others do. See for example Van Heusden in (Klamer,
1996).
In these conversations the main purpose of studying the behavior of
people is to sort out, interpret and characterize the meanings and values
that people attribute to things and activities, and the meanings and values
that they realize with their actions. Exemplary is the work of the well-known
American anthropologist Clifford Geertz (1926-2006) who shows in his

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 CULTURE IN RELATIONSHIP TO THE ECONOMY  19

lengthy descriptions of how culture becomes manifest in daily practices, such

as cockfights in Bali. His article Deep Play: Notes on the Balinese Cockfight is a clas-
sic as it demonstrates how to “read” culture (Geertz, 2005).
In recent reinterpretations, Adam Smith is considered a participant in
this conversation. When we read The Wealth of Nations in the light of his ear-
lier Theory of Moral Sentiments we understand that people, in their striving to
do right, answer to their moral sentiments (Smith, 1776). In Theory of Moral
Sentiments Smith depicts people in their moral life, acting out of sympathy for
others, and seeking to be virtuous. In The Wealth of Nations, he confronts the
problem that sympathy and virtue appear to lose their relevance in market
situations. The market poses a special situation since you and I cannot ask
for favors and will not expect pity from others for the simple reason that we
usually do not know our trading partners very well. That is why we appeal to
their self-love, as Adam Smith famously argued. By acknowledging as much,
Smith hastens to add that the market is but one element in society. There is
sufficient space in which people can be virtuous and be benevolent towards
fellow people. At least, that is the point of The Theory of Moral Sentiments,
the book that he most cared about.
The “economy is embedded” vision is also present in the writings of
Karl Polanyi (1886-1964). This economic historian shows how all kinds of
economic institutions, foremost among them the market, are historical and
therefore not universal. Markets function in some settings and not in others.
Children are bought and sold in some historical and cultural settings, whereas
such a practice is a taboo in the contemporary Western world. High bonuses
are in some situations a sign of success, whereas in others they are considered
immoral. It is all a matter of culture, this conversation will suggest.
A similar inquiry into the embeddedness of economic processes and phe-
nomena you find in the conversations of economic sociologists such as Mark
Granovetter and Viviana Zelizer, and of economic anthropologists such as
Stephen Gudeman (Granovetter, 1985; Zelizer, 2005; Gudeman, 2008).

C
e
I would like to make sense of C, of what makes life meaningful,
of the content of our lives, be it our oikos, friendships, society,
art, religion or science. For that purpose I am in need of a con-
versation, a conversation that, for example, can make sense of
the banner that I picked up in the dusty streets of Kampala.
So let us see what happens when we think in terms of culture,
when we focus on the things that are really important to us.

The first thing that happens, at least in this book, is that we start paying atten-
tion to values and, more particularly, to the realization of values.

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