For a Critical Cultural

Political Economy
Andrew Sayer
Department of Sociology, Lancaster University, Lancaster, UK;
e-mail: a.sayer@lancaster.ac.uk

This paper argues that, if cultural political economy is to be worthwhile, it needs to be

critical of its object. In order to develop its critical understanding of contemporary
society, it needs to do at least three things. Firstly, while the cultural turn has corrected
and sometimes inverted economic reductionisms dismissive treatment of culture and
the lifeworld, it needs to avoid reducing economic systems to the lifeworld in which
they are embedded, so that the extent to which systems are responsible for economic
and cultural effectsgood or badis not obscured. Secondly, it needs to take a more
critical look at the social and cultural embedding of economic activities, and at the way
system mechanisms of capital accumulation and uneven development have powerful
disembedding and disruptive effects. Thirdly, it needs to reconsider, rather than ignore,
classical political economy, which was always cultural and is still of relevance today,
even though it failed to anticipate new issues of cultural and political significance, such
as the politics of identity.

Introduction
In the last 25 years, there has been a remarkable turnaround in radical
political sensibilities. Formerly, problems deriving from economic
system mechanisms, such as inequality, insecurity and unemployment,
were recognised and criticised, on the understanding that it would be
possible to construct alternative economic systems that would resolve
such problems. At the same time, issues of inequalities and differences
relating to gender, ethnicity and sexuality were either not noticed,
dismissed or treated fatalistically as unavoidable. Now the position
seems to have reversed. There is considerable interest in gender, ethnicity
and sexuality and a general belief that, despite the deeply ingrained
nature of inequalities and problems of recognition, they can be opposed successfully. However, there is now either much less interest in
economic systems and less concern about the problems they generate
or a fatalistic approach to them (Phillips 1999).
2001 Editorial Board of Antipode.
Published by Blackwell Publishers, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street, Malden,
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With respect to the more cultural issues of the politics of recognition, this turnaround looks radical and progressive, and these are
the areas in which postmodernism and poststructuralism have been
influential. From the perspective of political economy they look less
progressive, for they offer no means for challenging the economic
system, indeed, there are many unacknowledged affinities between
postmodernism and neoliberalism (Nussbaum 1999; ONeill 1998a;
Sayer 1995). This shift, or cultural turn, from the politics of distribution
to the politics of recognition has influenced radical geography and
sociology and related subjects, and cultural political economy is one
of its products (eg Harvey 1996; Lee and Wills 1997; Ray and Sayer
1999; Schoenberger 1997). It is also a shift of focus from system to
lifeworld, to use Habermass terms (Habermas 1984, 1987).
In this paper, I argue that, if the new cultural political economy is to
be a worthwhile enterprise, it needs to be more critical of contemporary
economy, culture and society than it has been thus far. In particular,
it needs to retain a distinction between system and lifeworld, and avoid
reducing the former to the latter, as appears to be happening. It also
needs to couple its interests in the social and cultural embedding of
economic processes with a focus on the powerful disembedding forces
of economic systems and the problems these cause, eloquently identified
by Marx and Engels (1967) and Polanyi (1944). Finally, a critical cultural
political economy should expand its scope to include and develop
some older perspectives on economy and society, going back to the
classical political economy of the 18th and early 19th centuries, and even
as far back as Aristotle. I shall deal with these three themes in order.

System and Lifeworld

Cultural political economy emphasises the lifeworld aspects of economic processesidentities, discourses, work cultures and the social
and cultural embedding of economic activity, reversing the pattern
of emphasis of conventional political economy with its concern for
systems. I argue that a critical cultural political economy needs to study
both without reducing systems to lifeworld if it is to understand both
the relation between culture and economy and the different, noncorresponding relation between the politics of recognition and the
politics of distribution. Without such a distinction, the causes of both
the problematic and the progressive features of economic processes in
modernity are likely to be misunderstood.
First, some definitions are needed. Although this distinction has
recently been associated mostly with Habermas, my version of it

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differs from his in several respects. For Habermas, lifeworld refers

both to the world as given in experienceand, one might add, as
influenced by the subconscious, tooand to the relatively informal
aspects of life that are contrasted to administrative and market
systems (Outhwaite 1996). I would also add that it is a product of the
relation between embodied actors and the cultures into which they are
socialised, though it can, of course, become an object of reflection by
actors. In defining the lifeworld as involving not only communicative
interaction but noncognitive and embodied elements as well, in which
the habitus as defined by Bourdieu is a major influence, I depart from
Habermass more linguistic and cognitivist view.1 (Bourdieu 1986;
Bowring 1996; Habermas 1987).
In contrast, systems are relatively formal and have a logic and a
momentum of their own that go beyond the subjective experience of
actors, both insofar as they impart a formal rationality to action and
through their interlacing and steering of the consequences of actions,
whether intended or unintended. They also respond to other systems
and the rest of their environment in terms of their own formal, limited
codes, rather than through hermeneutic negotiation: a firm codes
work possibilities as profitable or unprofitable; a university admissions
office codes applicants as qualified or unqualified. Note that this is
emphatically a more restricted usage of system than is found in most
social science literature.2
Of course, concrete examples of systems such as bureaucratic organisations or markets depend on the actions and, to some extent, the
understandings of knowledgeable actors. In this sense, they are always
culturally embedded in and dependent on the lifeworld; hence, the
latter is a precondition of systems, not an add-on. However, systems
have emergent powersthat is, powers dependent on but not
reducible to the lifeworld. What differentiates them from the lifeworld
is that they routinise, formalise and govern actions through specific
signals and rules, such as prices, money, accounting systems, bureaucratic rules and procedures, which standardise and fix relationships
and responses for sometimes long periods, until they are redefined.
Thus, even though these signals and rules often have to be interpreted
by actors, the way the systems operate is in varying degrees independent
of their intentions and understandingsor delinguistifiedand
disconnected from norms and values, as Habermas (1987:154) puts it.
The clearest examples of this can be found in systems in which money
is the dominant mediator between activities.
There are certain further respects in which, largely following Nancy
Frasers critique of Habermas, I diverge from his usage of these terms

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and the common interpretations of them (Fraser 1989). First, system

and lifeworld are dimensions of the modern social world rather than
natural kinds; they do not correspond to particular physical spaces.
The lifeworld is not limited to the private sphere of the home or the
public sphere of political debate and opinion formation, but is present
in organisations, too. Concrete economic organisations like firms exist
in both system and lifeworld.
Second, system and lifeworld do not correspond respectively to economy and culture, since some important economic activitiesin particular domestic labourare part of the lifeworld rather than systems, and
some systemsparticularly the legal systemare not primarily economic.
Third, the lifeworld is not all soft; it includes hard and durable
structures, as well as more negotiable forms of subjective experience
and communication. Thus, gender relations may form durable structures
and have what in everyday language might be termed a systematic
character, but they do not have the characteristics of systems as defined
above, even though they may be associated with systems in organisations,
and indeed gain reinforcement from system relations.
Fourth, the lifeworld should not be idealised or systems simply condemned; power is certainly not limited to systemsthe lifeworld can
be a site of domination and misrecognition, as in the case of racism
while systems bring benefits as well as problems.
Finally, and linking back to our first qualification, the grounding of
systems in the lifeworld gives a certain fuzziness to the distinction: it
is not about two externally related phenomena, but about a difference
between two things which are related (albeit asymmetrically, since
systems presupposes lifeworld but not vice versa, since not all societies
have systems). However, this fuzziness is no more fatal to the conceptual distinction than dawn and dusk are to the distinction between
night and day; that a distinction is fuzzy doesnt mean that theres no
difference between its poles. Fuzzy distinctions, like that between the
front of your head and the back of your head (where would you draw
the line?) can be clear enough to be useful, even indispensable.
From what I have said so far, it should be clear that, while it might
be tempting to align the following distinctions (fuzzy or otherwise), in
fact they do not correspond and indeed there are many mismatches
between them:
system/lifeworld
organizations/domestic sphere, civil society, community
hard/soft
economy/culture

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The way in which systems develop out of but gain some independence from the lifeworld is particularly clear in the case of market systems,
where the role of unintended consequences of actions is particularly
important. Market forces are largely unintended outcomes of myriad
individual decisions to produce, consume, buy and sell or change
prices, and of relationships that are not the product of any intentional
design but that shape subsequent decisions. Once we have acted in a
market, the wider effects of our actions in terms of movements of prices
and stocks are largely beyond our control. Consequently, markets
exemplify the way in which systems have a logic and momentum that
are not wholly reducible to the actions on which they depend.
Habermas (1987:155) refers to this as the uncoupling of system
from lifeworld. Yet the uncoupling, and the domination of practical
reason by instrumental reason, can only ever be partial, so it is preferable to talk of systems developing relative autonomyor emergent
propertiesfrom the lifeworld, rather than uncoupling or detaching
themselves. To the extent that systems are necessarily embedded
in the lifeworld, they can never be pure. Thus, as we noted regarding the fuzziness of the distinction, in using these concepts we can
keep in mind continuous and related qualitative difference, not a
purification equivalent to imagining that the front of our head is
separate from the back.
This is consistent with Geoffrey Hodgsons principle of impurity,
which asserts that no single type of economic or organisational system
can exist entirely on its own without the support of different forms of
organisation (Hodgson 1999:12430). Markets need nonmarket forms
of organisation, such as state regulation, to make them sustainable
and are always embedded in relations of trust, at least at a minimal
level. The central economic planning attempted in the former communist countries needed an informal shadow economy of markets
and barter to function. Similarly, in practice, bureaucracies need some
degree of support from nonbureaucratic forms of organisation, particularly in terms of ad hoc action and interpersonal relations among
members of such organisations, if they are to function effectively. In
each case, at least up to a point, the second alternative form of organisation supports rather than undermines the first dominant form. The
principle exposes some of the limitations of bureaucracies and markets,
though of course it does not mean that they are ineffective. It also
reminds us that the differentiation of modern society into separate
spheres is (fortunately!) never fully achieved, and draws attention to
the problems of the modernist overenthusiasm for simple, monistic
principles or schema.

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Although systems presuppose and depend on the lifeworld, they

produce effects which go beyond it and can colonise it, as Habermas
puts it (1984:331). Thus, no matter how much influence management
may have over the culture of firms, and no matter how much firms
may network and attempt to learn, they are still subject to powerful
system forces over which they have little control. Much of the political
economic analysis of capitalism, therefore, still stands. Attempts to
manipulate work cultures and social relations within and between
firms may have some effect, but firms cannot make consumers buy or
investors invest if market forces encourage them to behave differently,
nor can they prevent macroeconomic shifts.
To the extent that systems have a relative autonomy from the
lifeworld, they can operate without regard for persons, as Weber put
it (1978:975). This contention has come under fire in recent years,
particularly in relation to organisations and gender, where it has been
widely argued that organisations are actually far from neutral with
respect to identity (Halford, Savage and Witz 1997; McDowell 1997;
Savage and Witz 1992) This is correct as regards concrete organisations;
however, as I argue below, it should surely be possible to acknowledge
this without losing sight of identity-blind system mechanisms also
operating within and between organisations and also generating social
inequalities and other problems, whether in conjunction with identitysensitive mechanisms of gendering or not (Sayer 2000b). Marxism
deals with capitalist organisations by abstracting from their lifeworld
side in order to focus on their character as systems. It is thus relatively
ill-equipped to deal with such features of the lifeworld of organisations
as how they are gendered (Halford, Savage and Witz 1997; Savage and
Witz 1992). Huge strides have been made in rectifying the earlier
neglect of economic and cultural effects and problems in the lifeworld. However, if this comes at the price of a neglect of systems or a
reduction of systems to the lifeworld in which they are embedded,
then it is a case of one step forward and one step back.
System and lifeworld are abstractions made from more complex concrete situations. Political economic theory, with its traditional
focus on the formal economy and exchange-value, has dealt mainly
with systems, and until recently has usually abstracted from the lifeworld,
even though the latter includes some kinds of economic activity
especially, as already noted, domestic work. Although these kinds
of abstraction are valuable for developing theories of systems, the
temptation has sometimes been to assumein the manner of
pseudoconcrete researchthat they can also serve as adequate
representations of concrete situations (Sayer 1992:238). However,

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concrete economic life is a product of many determinations, with both

system and lifeworld aspects. Thus, while Webers abstract ideal type
of bureaucracies or Marxs abstractions of capitals concern their
character as systems, concrete bureaucracies and capitalist firms are
also part of the lifeworld and subject to its influences, with which
different theories might deal (Marx 1976; Weber 1978).
Cultural political economy deals with the level of the concrete and
hence with firms, bureaucracies and households embedded in the
relationships and meanings of the lifeworld, such as those of gender
and race. Insofar as it deals with concrete situations where system
mechanisms are often present, it should combine and work up
abstractions of both system and lifeworld. Just as an earlier political
economy imperialistically ignored the lifeworld, it is also possible for
an imperialistic culturalism to ignore systems, arguing that actors
cultural interpretations go all the way down. However, although
culture is everywhere in human society, it is not everything (Jasper
1997).3
The implications of the differences and interrelations between
systems and lifeworld can be demonstrated further by reference to
what might appear at first sight to be an equivalent distinction and
set of relationsthose between the politics of redistribution and the
politics of recognition. Fraser (1995) has theorised about these in
an influential paper. Fraser rejects attempts to align the two kinds of
politics regarding redistribution and recognition with economic and
cultural matters respectively, and shows that the apparent equivalence
is illusory. Some kinds of economic problems are culturally determined,
and most forms of symbolic domination or cultural misrecognition are
accompanied by economic discrimination. For example, womens economic insecurity and dependence on men is overwhelmingly culturally
determined by gender norms in the last instance. The stigmatisation
produced by racist cultural values is almost always accompanied by
economic inequalities. Figure 1 shows how not to theorise the relations
between culture and economy, the politics of recognition and the
politics of culture. We might also add that not all cultural politics are
about recognition and difference. Some are about values and practices
that groups want to universalise; thus, green politics is not primarily
about a struggle for recognition but about universalising certain values
towards the environment.
In place of the alignment in Figure 1, Fraser proposes a continuum
running between two hypothetical extremes, as illustrated in Figure 2.
The extremes are hypothetical because a fully marketised society
that is, one in which everything, including interpersonal relations, is

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Economic
politics of
redistribution

Cultural
politics of
recognition

Class

Gender, race
sexuality

Figure 1: How not to understand the politics of redistribution and recognition.

Hypothetical "pure"
politics of redistribution
(fully marketised
society)

"Bivalent"
categories

Hypothetical "pure"
politics of recognition

Figure 2: Frasers continuum.

tradedis unattainable, and because stigmatised identities are unlikely to escape economic penalties. Fraser (1999:31) sees gender as a
bivalent social differentiation a hybrid category with roots in both
culture and political economy. Other forms of politics are located
between these two extremes, though they may be closer to one end
than the other. For example, the politics of sexuality is predominantly
about recognition, but, insofar as this influences distribution, so
that those with despised identities are denied access to economic
resources, it is to some extent bivalent.
However, while this conceptualisation is an improvement on the
schema illustrated in Figure 1, and while concrete political struggles
are usually bivalent to some degree, the different origins of the forms
of division and the problems they contest are obscured in this conceptualisation. I would like to propose a different schema, one that
highlights the origins of the various kinds of inequality, difference and
oppression. In particular, while most social divisions and problems
involve both economic inequalities and misrecognition or symbolic
domination, one of these is usually determinant in the lastor rather,
the firstinstance. Thus, for example, the economic problems experienced by gays and lesbians are in the first instance culturally generated. The economic disadvantages suffered by gays and lesbians
derive from homophobia, which bars them from access to some

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economic positions and goods. Similarly, the economic disadvantages

suffered by women in many societies who are denied access to the
public sphere, particularly employment, are in the first instance culturally determined; their economic problems derive from their culturally
assigned economic roles.
What is needed is the fuzzy but illuminating distinction between
system and lifeworld, which partially cuts across the culture-economy
and recognition-distribution distinctions. The generation of economic
and cultural problems by system and lifeworld can be summarised as
outlined in Table 1.4 Thus economic (and other) systems generate
cultural as well as economic problems, and the lifeworld generates
economic as well as cultural problems.
In this view, class is both something that happens to us and positions
us regardless of what we or others think (Coole 1996), as a consequence of the workings of systems, particularly the formal economy,
and something which we experience in the lifeworld in terms of the
glaring and subtle signifiers of class differences and hierarchies, which
are very definitely the product of the construction of meaning.
Workers can lose their jobs for reasons having nothing to do with their
identityfor example, if their firm goes bankrupt because consumers
switch to another firms product that they regard as superior. Or they
can lose them for reasons that have everything to do with responses to
their identityfor example, if racists drive them out.
Since systems are always embedded in the lifeworld, it is common
for the two sources of economic problemssystem and lifeworldto
combine, as in the case of the restriction of culturally stigmatised groups
to those jobs within economic systems that are the most susceptible to

Table 1: System and Lifeworld and Economic and Cultural Problems

System

Lifeworld

Economic problems eg unemployment due to

decreasing demand for
products or macroeconomic
crises

eg female poverty due to

restrictions on access to
labour market;
unemployment due to
racial discrimination

Cultural problems

eg sexism, racism,
homophobia, and so on;
misrecognition,
symbolic domination

eg instrumentalisation of
cultural values and practices
for profit, undermining
uneconomic but beneficial
cultural forms

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redundancy. However, even then, if consumers stop buying workers

products because they prefer others and this results in those workers
losing their jobs, this is still a case of an identity-blind cause impacting
on a culturally differentiated or identity-sensitive context to produce
effects that are not neutral.5 Just because markets, as systems, are
always socially embeddedwhich inevitably, in our society, means in
ways that are gendered, raced and so onit does not follow that their
behaviour is wholly reducible to these lifeworld dimensions. On the
other hand, while systems may be largely identity-blind,6 they are
embedded in a lifeworld that is certainly not.
This partial autonomy of market systems from the identity of those
involved in them, evident in the most extreme form in the colourlessness and social indifference of money, provides an important
reason for retaining a structural concept of class as product of those
systems, in addition to concepts of class in the lifeworld. In the latter
case, the way in which class behaviour and identities develop is always
in and through gender, ethnicity, age and sexuality. Thus, there are
significant differences between working-class culture of men and of
women, of black and of white-working class people and so on (Skeggs
1997). However, class in the structural sense is a product of identityblind system mechanisms that go beyond the lifeworld, giving a certain
justification to the insulation of abstract political economic theory of
such systems from the theorisation of culture (pace Shields 1999), though
it can only give a partial understanding of concrete situations and hence
certainly does not justify ignoring the lifeworld in concrete studies.
Methodologically, this underlines the importance of appreciating
the differenceagain fuzzy, but crucialbetween abstract and concrete
analysis, and the difference between assessing what must be the case
about some object and what may be the case about it (or happen
contingently to have been the case). For example, we may find from a
concrete study of labour markets that every observed process in them
is inflected in some way by racism. This is not surprising given the
(contingent7) pervasiveness of racism, but it does not entail the
fatalistic conclusion that no labour market process anywhere could
operate in a way not affected by racism, ie that it is a necessary
feature of labour markets (Sayer 2000b). And, of course, the point of
an abstract theory of labour markets or whatever is to try and work out
what is necessarily the case about them. A concrete study of an actual
labour market should not only show these necessary features but also
reveal what is contingently codetermining outcomes in themand
it is these concrete circumstances that cultural political economists,
quite reasonably, tend to study.

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As a final point about system and lifeworld, consider the political

implications of trying to collapse lifeworld into system, or system
into lifeworld. Ignoring culturally generated problems, many of them
economic, is far from progressive; so is the converse tendency of
neglecting system-generated problems, or reducing the latter to the
former. Governments often prefer to treat unemployment as a problem of the identity of individuals who are unemployed, their inability
to make themselves marketable and their reliance on a culture of
dependency, rather than as a problem of the inability of the economic system to provide sufficient employment. Some governments
have attributed poverty to an alleged culture of poverty. Such denials
of system mechanisms and attempts to attribute their effects to
culture are a pernicious form of mystification. Culturalist imperialism
is not necessarily progressive! In this context, the fashionable idea that
culture goes all the way down takes on a distinctly reactionary tone.

The Social/Cultural Embedding of Economic Activities

One of the hallmarks and prime achievements of cultural political
economy is its exploration of the embedded nature of economic
activitieshow they are set within social relations and cultural contexts that make a difference to those economic processes. In contrast
to liberal economic theory, it has been demonstrated that these social
relations do not reduce to those of markets and hierarchies, but include
networks too, and that economic relations in general presuppose
certain degrees of trust.
Comparative studies of capitalism in different countries have
made this embeddedness and its variable character abundantly clear
(eg Dore 1983; Granovetter 1985; Granovetter and Swedberg 1992;
Kitschelt et al 1999; Uzzi 1996). There have been productive interchanges
between researchers in economic sociology, anthropology, cultural economic geography of industries, evolutionary and institutional economics
and critical geography on industrial districts, learning regions and the
like (Abolafia 1996; Asheim 1997; Hollingsworth and Boyer 1997;
McDowell 2000), and cultural economic geography has contributed to
the understanding of industries such as banking and finance (Massey,
Quintas and Wield 1992; McDowell 1997; Thrift and Leyshon 1992).
However, while this is all to the good, a similar mixture of advances
and retreats as regards explanatory and critical power, such as we saw
in the previous section, applies to the literature on embeddedness,
trust and networks. This work generally supports a critique of neoliberal regimes, with their suspicion of embedding as involving various

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forms of restrictive practices or conspiracies against the public.

Far from being impediments to efficiency, some observers have argued
that such strong embedding has been a crucial element of successful
economies (eg Dore 1983 with regard to precrisis Japan; Schmitter
1997 with regard to Europe8). These observers favour economic and
social policies that support the development of trust and networking,
an educated workforce, relatively small income differentials and social
inclusion. Though very much in favour of the more social democratic
variants of these highly embedded economies, I am not alone in
believing that there is a danger of falling into an uncritical kind of
economic boosterism regarding them (see Amin and Hausner 1997;
Amin and Thrift 1995).
The focus on embeddedness can inadvertently produce an overly
benign view of economic relations and processes, in that it is sometimes taken to mean that practices hitherto seen as governed purely by
narrow self-interestor the icy water of egotistical calculation, as
Marx and Engels put itare actually embedded in relations of trust,
in which there are shared norms and various forms of reciprocity
(Marx and Engels 1967:82). While this is partly true, Marx and the
other theorists of self-interest, economic power and impersonal
system mechanisms were not wrong either. Such embedding is often
strongly adapted to the system pressures of market forces, and, as
Abolafia (1996) shows in the case of financial markets, may be instrumentally constructed to protect the pursuit of self-interest. As authors
such as McDowell (1997) and Massey, Quintas and Weld (1992) point
out, it often involves relations of domination, some of them based on
gender, class or race. The metaphor of embeddedness sounds soft and
comforting, and possibly sends our critical faculties to sleep, but what
it describes can be harsh and oppressive on occasion.
The comforting view of embedding is reinforced by the enthusiasm
of cultural political economy for networks and trust. As Ash Amin and
Jerzy Hausner (1997:13) note:
There is a creeping tendency in the socioeconomics literature
to privilege the qualities of networks over those of markets and
hierarchies. Relations within and across networks are seen to be
somehow more reciprocal and more egalitarian, because they rely
on interaction. Nothing could be further from the truth. Not all
networks are nonhierarchical, mutually beneficial or discursive
The social and cultural embedding of relations between firms
usually depends, not so much on trust per se, but on overlaps in their

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self-interest. Firms A and B enter an embedded relationship not

simply because they trust one another but because it is in their respective
self-interests to do so, given economic synergies such as complimentary asset specificities. Where they engage in trust-building, they
do so in order to reduce the risk of opportunism and malfeasance,
which the short-term pressures of a capitalist economic order encourage. In one sense, trust-builders are pushing against these capitalist
pressures; in another, they are just pursuing their self-interest in a
different, more long-term orientated way through creating interdependences and lock-ins that override opportunism. As Marx (1844
[1974]:265) said, the basis of trust in economics is mistrust. While
this sounds similar to the neoclassical assumption of universal opportunism and malfeasance, it differs crucially in that, for Marx, these are
not transhistorical features of economic behaviour but historically
specific products of capitalism.
Networks do not necessarily fuse the self-interest of different actors
into a harmonious and egalitarian whole; they may be characterised by
inequalities of power, strategic coalitions, dissembling and opportunistic
collaboration. By the same token, members of industrial groups need
not see themselves as belonging to a particular moral community, as
Granovetter (1998) argues. Even where such groups are associated
with kinship networks, as many are, these are likely to be characterised by power asymmetries as well as a sense of moral obligation.
What appears to indicate trust may be largely a consequence of domination or lack of alternatives, or simple mutual dependency; trust can
stem from relations of domination instead of relations among equals,
for the dominant trust the subordinate to behave as their status befits
them (Baier 1994). However good the networking, however strong
the reliance on information, economic survival for capitalist firms
depends on costs and cash, though extraordinarily the socioeconomics
literature says remarkably little about these things. Furthermore, the
lack of success in developing economic relations being experienced in
some postcommunist countries may have less to do with lack of trust
than with a lack of material preconditions for the development of
firms and markets, owing to unsuitable or uncertain property relations
and disrupted forces of production.9
When a system crisis like that experienced recently in East Asia
strikes, the local forms of embedding may provide some resistance,
but they also form some of the conduits along which system/market
pressuressuch as those that follow from a collapse of the currency
flow. Sometimes the pressures may sweep the networks away. Stable
forms of embedding, including networks and regulations, are not

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necessarily the product of a free consensus. They may represent an

uneasy compromise between interests that would interact differently
given the chance. Consequently, agents such as companies may sometimes use a crisis as an opportunity to escape onerous conventions and
commitmentsmost typically with reference to organised labour
that arose in the context of the balance of power-obtaining in more
prosperous times. In other words, we need to remember the dialectic
of regime of accumulation and mode of regulation, or forces and
relations of production. As may turn out to be the case in Japan or
Europe, forms of embedding of economic relations that hitherto worked
successfully may not survive severe system crises.
Up to a point, the literature on embeddedness, networks and trust
provides a welcome counter to neoliberal fatalism, showing that not
only alternatives but superior ones exist. However, it does this only up
to a point, because it tends to play down the system imperatives that
abstract political economy has always emphasised, which even the
most embedded economic relations may not manage to survive. Compared to the dire warnings of the dangers of rampant global neoliberalism and economic fatalism from authors such as Bourdieu (1998),
Gray (1998), Hutton (1995) and Strange (1998), the mood of the literature on networks and embeddedness is altogether more comforting.
Embedding can be good or bad; it can protect people from unemployment and superexploitation, or it can support sclerotic conspiracies of
mediocracy within and among institutions. We should be suspicious.
Otherwise, as is evident in American economic sociology, cultural political economy may merely provide a softer treatment of capitalismone
that admittedly has a limited critique of neoclassical economics and its
narrow view of economic motivations, but one that is basically uncritical
of capitalism (eg Granovetter and Swedberg 1992). Where coupled
with optimistic analyses and projections of learning regions and the
like, this can conceal the fundamental system problems of capitalism.
The irony of reducing system to lifeworld is that it comes at a time
of continuing colonisation of the lifeworld by systems, particularly
by the formal economy. On a variety of fronts within and beyond the
sphere of private capital, we see the spread of the economic logic of
cost. Exchange value criteria reach deeper within organisations, as
departments and even individual employees are made responsible for
budgets and have to cost more and more items and activities. This is a
pervasive tendency in many capitalist societies. It produces problems
that are both economic and cultural, such as a tendency to neglect the
public good. Vertical disintegration tends to replace intraorganisational
transfers that do not have to be costed with interorganisational exchanges

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701

that do. Although the literature on networks of firms emphasises

untraded interdependencies, the process of vertical disintegration
that has led to such networks creates a greater number of traded
interdependenciesand probably fewer untraded interdependencies
than existed within large vertically integrated firms (Storper and
Salais 1996). Where the network literature associates vertical disintegration with networks and trust, the neoliberal zealots associate it
with the unbundling of heterogeneous activities so that the profitability of each can be calculated by self-interested actors dependent
on them for their livelihood and therefore supposedly committed to
their efficient operation (though of course this may be offset by low
morale and the diseconomies of scope caused by unbundling) (Elliot
and Atkinson 1998).
If some of the literature on embeddedness presents a soft view of
capitalism, the work of the theorist often invoked as its founderKarl
Polanyidoes not. His principal concern in The Great Transformation
(1944) was the shift from embedded market relations to disembedded
ones, and the consequent cultural and social damage done by unrestrained market forces, in particular with the disastrous consequences
of the commodification of labour power. Contrary to contemporary
uses of the concept of social embeddedness, he argued that there had
been a change from a precapitalist era, in which economic activities
were indeed submerged in social relationships, to one in which social
relationships were instead embedded in economic ones, implying that
people and their social attachments have come under the domination
of system mechanisms.
Rather than argue about whether the economic is embedded in
the social or the social in the economic, the important thing about
Polanyis passionate critique is that it draws attention to the extent to
which, despite the fact that all capitalist economic relations involve
social relations, the security and well-being of individuals has much to
do with forces which operate behind their backs, even though those
forces are initiated by conscious subjects. Interestingly, he (1957:159)
also considered that the cultural consequences of this commodification of labour power were more serious than the economic ones.
Social activities as repetitive and long-lasting as employment have
strong psychological effects on workers, particularly where they
actively identify with the work. The problems of the insecurity of
capitalist employment relate not only to income, but also to loss of, or
lack of opportunity to form, work-based identities (Sennett 1998). At
the scale of communities, this is a prime example of a major economic
system-generated cultural problem.

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Given the persistence of the problems against which Polanyiand

of course Marx and many othersrailed, one has to wonder whether
what we are seeing is less the rise of what Nigel Thrift calls soft
capitalism (Thrift 1998) than the rise of soft views of capitalisma
danger of which Thrift is well aware, since he also reminds us of the
lean and mean world of downsizing and insecurity. Hence, the future
success of cultural political economy will depend not only on its
understanding of lifeworld and economic processes or embedding,
networks and trust, but on what it decides should be salvaged from the
political economy that preceded the cultural turn.

Cultural Political Economy Needs to Rediscover

Some Ancient Roots
Cultural political economy is not new. The classical political economists
and philosophers did not separate culture from economy; indeed, they
were concerned with their interrelationship. Their critiques of the
cultural effects of economic change include matters relating to the
politics of recognition, and if new cultural political economy is to
progress it needs to build on them (Benton 1994; ONeill 1999).
If we go back to Aristotle, we find some remarks on economy and
moneymaking that are extraordinarily important for a critical
understanding of culture and economy today (Booth 1994; MacIntyre
1985; Meikle 1995). In the Scottish Enlightenment, we find theorists
such as Smith, Ferguson and Hume whose interest in economic
matters was merely part of a wider interest in social and moral order.
They were particularly concerned with assessing the cultural impact of
the rise of commercial society. Would it have a civilising effect, or
undermine virtue and encourage greed, vanity and selfishness? Would
it deepen the division of labour to the point where work became
mindless and all sense of the public good was lost? These are matters
of cultural politics, though insofar as they are concerned with recognition
it is in the sense of status and whether it is deserved or undeserved.
Though the new cultural political economy has progressed by taking
matters relating to the politics of recognition more seriouslyfor
example, in terms of the gendering of organisationsit would be a
pity if this occurred at the price of ignoring the older kind of cultural
political economys concerns. They are not incompatible, and both
have much to say about contemporary societies.
The loss of the old cultural political economys critical perspective
surely reflects the partial disembedding of economic systems from the
lifeworld since the time those theorists were writing, a disembedding

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703

unknowingly reflected by the very focus of neoclassical economics.

As the social relations of economic activity became more functional,
anonymous and attenuated and the new economics narrowed its focus
to system mechanisms and exchange-value, questions of the values
and the quality of the lifeworld were gradually expelled. As normative
values were expelled from economic science, the scientific or rational
content was expelled from descriptions of values, and they increasingly came to be regarded as subjective and emotive. These changes
are evident in the vocabulary of political economy over the last three
centuries, with a shift from the use of terms like virtue, vice,
greed and vanity to more neutral terms like self-interest (which,
of course, can be defined in any way actors choose) and utility that
serve to remove economic actions and relationships from critical
evaluation (ONeill 1998b). What a new cultural political economy
could do is challenge the divorce of the positive and the normative and
the subjectivisation of values, and hence enlarge the critical resources
available to us in evaluating contemporary society.
Some of the main concerns of those old theorists still stand, of
which I shall note just three. First, consider Aristotles critique of
moneymaking (chrematistics). Aristotle regarded the point of economic activity as enabling people to live well,10 which involved having
enough time to spend developing friendships and the arts and participating in political deliberation. For this, production was directed
towards use-values, and it was necessary to have some notion of sufficiency in material consumption. He saw economic activity directed
towards moneymaking as pathological, as mistaking the means of
achieving economic well-being for the ends. Thus, he anticipated and
criticised the shiftin Marxs notationfrom C-M-C to M-C-M
(Meikle 1995).
Under capitalism, what was regarded by Aristotle as an aberration
of individuals becomes a system imperative (Booth 1994), a point that
Marx, of course, developed. Most individuals in capitalist societies are
working, not purely to make money, but also to earn money in order
to buy goods and services that they want for their use-values. A condition of those workers being allowed to do this is that they make
money for capital, which is essentially and unequivocally oriented to
chrematistics. Polanyi (1944 [1957]:53) described Aristotles distinction between moneymaking and production for use as probably the
most prophetic pointer ever made in the history of the social sciences.
Related pathologies, such as the tendency for people to subordinate
life to work rather than vice versa and to defer gratification to the point
where they forget how to gratify themselves, have been identified by

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subsequent theorists (eg Simmel 1978). The pressures on workers to

subordinate life to work (understood as employment) and on people
to develop excessive acquisitiveness (pleonaxia) have profound effects
on capitalist culture. While we need to avoid the kind of negative,
ascetic view of consumption common on the left 30 years ago, and to
recognise the possibility for consumption to be creative and social
rather than passive and individual, pleonaxia still remains a fundamental cultural problem of capitalism.
Second, thinkers like Adam Smith also criticised the tendency for
individuals to be valued for what they own rather than for what they
are or dothat is, the tendency for worth to be treated as dependent
on status rather than vice versa, or the divorce of economic rewards
(and rewards in terms of other forms of capital in Bourdieus (1986)
sense, such as social and cultural capital), from merit and desert (Smith
1757 [1976]). In such cases, recognition is distorted by distribution.
This form of relation between the politics of recognition and the
politics of distribution can operate independently of cultural identity
in terms of gender, race, sexuality and so on, as well as through them.
The capitalist prioritisation of exchange-value over use-value is mirrored
by these tendencies in society to prioritise appearance and status over
worth and deeds, and by postmodernist versions of subjective theories
of value (ONeill 1999). Capitalism generally finds it easier to make
money by appealing to aesthetic values than by appealing to moralpolitical ones. Although culture is commonly theorised today in
relation to aesthetic values and rarely to moral-political views, the
latter are far more important for human welfare, since they concern
how people behave and treat one another.
Third, and contrary to neoliberal misrepresentations of him, Smiths
work on moral order and nascent capitalism illustrates the virtues of a
principled ambivalence in observing society. He both celebrated the
economic effects of the manufacturing division of labour and damned
its effects on the minds of workers. While attacking greed and vanity,
he noted how they promoted economic development; he both advocated
benevolence and criticised the view that we can always know what
others need better than they can themselves. He saw that the instrumentalisation of culture, driven by competition, for economic ends could
have damaging effects, but he also realised that the economisation of
culture is not always bad (Smith 1757 [1976]). Whether it is depends
on what state of affairs precedes it, as in the case of women escaping
from domesticity into the labour market.
Smith (1757 [1976]) seems to have believed that a nascent
capitalism could be contained within a moral society, so that, even if

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the economy was capitalist, society need not be. Capitalism has indeed
produced those effects on labour that he feared, though advanced
capitalist countries have managed to provide free education for all,
which he advocated. His normative ideas would now be regarded as
a strange mixture of reactionary elementsparticularly his defence of
classand progressive oneshis defence of labour and his criticisms
of the effects of narrow specialisation on labour, of naturalist explanations of ability and of vanity and greed. He would presumably be
dismayed to see how the development of global capitalism has continued to cause concern on all these fronts. And, of course, he did not
anticipate how issues of gender, ethnicity and sexuality would become
issues of moral concern. As long as ideas of a feasible and desirable
alternative to capitalism are in short supply, the possibility of capitalism within a moral society becomes the next best thing to which to
turn (Tabb 1999).

Conclusion
There is no doubt that a cultural turn has been needed to counter the
previous extraordinary neglect of culture. The question is, what kind
of cultural turn is most insightful? In this context, we also need to
consider which parts of older political economic theory, including the
strongly cultural classical political economy, can be salvaged and
redeveloped. These older theories are not necessarily antithetical or
simply irrelevant to contemporary concerns. On the contrary, we can
benefit from a dialogue or synthesis between them. We do not have
to flip from the dogma of the economy as determinant in the last
instance to the dogma of culture going all the way down. There is no
sense in making general pronouncements on their relative importance, since this is always an empirical question that will depend on the
particular case in which it arises.
Some areas of social life, including economic activities, are coming
under new and progressive moral-political influences through, for
example, the weakening of patriarchy, and more generally through
attempts to counter those economic problems that originate in the
lifeworld as consequences of various forms of discrimination and
misrecognition. In other words, in recent years, the politics of recognition has had more success in influencing economic life than a more
traditional system-oriented politics of distribution has had. However,
the system mechanismsand the problems and benefits they generate
continue to grow. To comprehend this, we need a new cultural
political economy that incorporates both an understanding of these

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mechanisms and the insights of the old cultural political economy, as

well as the new.

Endnotes
1
I also leave aside much of Habermass theoretical apparatus, including his concern
with communicative rationalisation in the lifeworld.
2
For example, patriarchy would probably not qualify as this kind of system, despite
being called one under the looser definition used in discussions of dual systems
theory (eg Walby 1986).
3
One could, of course, choose to call everything cultural, but then it would mean
nothing in particular, and it would cancel all the way through (Eagleton 1996).
4
Of course, lifeworld and system have many nonproblematic and beneficial effects,
too.
5
This is a standard critical realist form of explanation, in that, instead of seeing
causality as a matter of regularities, it sees it in terms of the causal powers of an object
that, when activated, have effects that depend on the nature of the contexts in which
this happens.
6
Bureaucratic systems may contingently be given identityeg racistgoals, as in the
case of the Nazi bureaucracy dealing with the extermination of the Jews, but this is not
a necessary feature of bureaucracies.
7
Note that to say that a relation is contingentthat is, neither necessary nor
impossibledoes not mean it is less important politically than are necessary relations.
8
The single European market project tends to threaten distinctive national and
subnational forms of embedding: contrary to the orthodoxy that associates
efficiency and superior performance with the absence of any form of collective
intervention between producers and consumers. Europes competitive advantage is
confidently attributed precisely to the role that these meddling intermediaries perform in
generating and updating worker skills, in ensuring flexible use of resources, in diffusing
information, in sharing research and development costs, in lengthening time horizons and,
generally, in underwriting what Streek has called diversified quality production.
(Schmitter 1997:398; emphasis in original).
9
I am grateful to Ivaylo Vassilev for discussions on this point.
10
I know this avoids the unpalatable fact that his concerns only extended to free men
and that their well-being depended on the subordination of women and slaves, but this
can be corrected for without undermining his analysis of chrematistics and economy.

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