The Cultural Economy Moment?

Professor Terry Flew, Media and Communications,

Creative Industries Faculty, Queensland University of

Technology

Keynote Presentation to Media Technologies,

Community and Everyday Life, symposium hosted by

the Centre for Everyday Life, Murdoch University,

Perth, WA, 2 September 2009

My presentation today will focus upon the rise of the term “cultural economy” in the

2000s, and some matters arising about the relationship between both “culture” and

“economy” as fields of research and study, and cultural studies and economics as

academic disciplines that seek to understand and intervene in these fields. When I refer

here to cultural studies, I am not seeking to engage in the long process of defining what

cultural studies is (or is not), nor am I seeking to sharply differentiate cultural studies

from media studies or communication studies. Rather, taking a broad definition of the

field, I will argue that it has been constituted at least in part by an opposition to how it

understands economics as a discipline to be constituted. This is seen most clearly in the

current context in the way in which “neo-liberalism” is invoked as a term to signify what

thinking in terms of economic discourse entails, as well as a critique of its deleterious

effects when applied to the field of public policy. One of the points I want to make is that

economics as a discipline is in fact far more porous and pluralist than this one-

dimensional interpretation of it would suggest, and this emerges in interesting ways when

there is consideration of those parts of economics as a discipline that may bear upon an

understanding of culture. In keeping with the theme of today’s symposium, I will draw

upon examples relating to digital media technologies and their everyday uses by people

and communities where possible.

The Rise of Cultural Economy: Intellectual Precursors

Although the term “cultural economy” dies not gain widespread currency until the 2000s,

there is considerable work undertaken since the 1970s that invokes a relationship between

culture and economy. Herbert Schiller’s pioneering critique of international

communications posited a relationship – which Schiller’s work adhered to over a 30 year

period – between the rise of the media entertainment and information-based industries

(what he termed the Entertainment-Communication-Information (ECI) Complex) to the

centre of the United States economy, and the extension of global media and

communication industries, systems and ideologies as an instrument of cultural

domination on non-Western societies and cultures. While the resulting “cultural

imperialism” thesis has been widely critiqued, it retains considerable influence

worldwide as seen, for example, in the statement of the World Commission on the Social

Dimension of Globalization in 2004: “The fear is that constant exposure to the images of

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Western lifestyles and role models could lead to tensions which would be both culturally

and socially divisive” (World Commission on the Social Dimension of Globalization,

2004: para. 222).

There is also the small sub-branch of economic known as cultural economics. Cultural

economics has operated to some extent at the margins of economic theory, largely unable

to challenge the utilitarian assumptions of mainstream neo-classical economics nor able

to build bridges to the arts and humanities, so it has frequently operated as an applied

sub-discipline concerned with assessing the impact of public subsidy to the arts and

cultural activities. It is interesting to consider how it seeks to clarify what distinguishes

the cultural domain from other areas in terms of its goods and services, its criteria of

value, and its delineation of industries and markets. In his overview of this filed, Throsby

(2000: 4) proposes a definition of cultural activities as being those:

involving some form of creativity in their production;

concerned with the generation and communication of symbolic meaning; and

whose output embodies, at least potentially, some form of intellectual property.

One notable feature of the cultural economics literature is that it is far less anxious bout

whether the resulting industries are labeled cultural or creative industries than is the case

in cultural studies and related fields. This is because industry analysis is, from the point

of view of economics, is ‘simply a convenient box of tools for representing and analyzing

the way in which the processes of production, consumption and exchange occur for given

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commodities’ (Throsby, 2000: 111). At the same time, in his recent overview of the

variety of competing models of what the cultural or creative industries are, Throsby has

observed that one consequence of talking up the economic significance of cultural or

creative industries has been to shift cultural policy thinking so that it is ‘rescued from its

primordial past and catapulted to the forefront of the modern forward-looking policy

agenda, an essential component in any respectable economic policy-maker’s development

strategy’. This is because ‘the arts can [now] be seen as part of a wider and more dynamic

sphere of economic activity, with links through to the information and knowledge

economies, fostering creativity, embracing new technologies and feeding innovation’

(Throsby, 2008: 229).

A third and less obvious inspiration for cultural economy discourse was postmodernism,

particularly as it was developed in the early work of Jean Baudrillard (Poster, 1994).

Baudrillard argued that a feature of contemporary capitalism was that the distinction

between use-value and exchange value that Marx saw as defining the nature of the

commodity form was less and less relevant to consumer society where both were

subsumed under the more general category of sign-value. Rather than moralizing against

the inauthentic nature of, say, entertainment at a theme park as a poor substitute for “real”

culture or entertainment, Baudrillard instead proposed the “negative strategy” of

celebrating the theme park as a simulacrum of the real, or the hyper-real of postmodern

culture. While the impulse to link Baudrillard to political economy was one that in

practice not many followed, a notable series of contributions that draw upon

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Baudrillard’s insight have been made by Scott Lash and John Urry (Lash and Urry, 1989;

Lash and Urry, 1994; see also Lash, 2004). For Lash and Urry, Baudrillard’s work hints

at a series of developments - the semiotisation of everyday life, reflexive accumulation,

niche consumption leading flexible production – whereby it is not the case that culture is

being increasingly industrialized, but rather that the whole economy is being increasingly

culturalized:

Even in the heyday of Fordism, the culture industries were irretrievably more

innovation intensive, more design intensive than other industries … Our claim is

that ordinary manufacturing industry is becoming more and more like the

production of culture. It is not that commodity manufacture provides the template,

and culture follows, but that the culture industries themselves have provided the

template (Lash and Urry, 1994: 123).

More obviously connected to contemporary theories of cultural economy are those works

that developed the sociology of culture in the 1970s and 1980s. Pierre Bourdieu’s work is

highly significant here, particularly Distinction (Bourdieu, 1984). In positing a

relationship between cultural consumption and the reproduction of social class relations,

and in proposing that this occurred at least in part through the denial of “material”

concepts such as that of class being relevant to the domains of art and culture, Bourdieu

established a relationship between the distribution of economic capital and that of cultural

capital which places socio-economic relations at the heart of considerations of culture. In

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championing Bourdieu’s work as a contribution to the sociology of culture, Raymond

Williams and Nicholas Garnham observed:

The cultural field serves as a marker and thus a reinforcer of class relations for

two reasons. First, because a field occupied by objects and practices with minimal

use-value, is a field in which par excellence the struggle is governed by a pure

logic of difference or distinction, a pure logic of positionality. Secondly, because

the creation of art as a special social object and practice, defined by its difference

and distance from everyday material reality and indeed its superiority to it,

objectively depends upon the distance from economic necessity provided by the

possession of economic capital (Garnham and Williams, 1986: 124).

Finally, there is the work of Nicholas Garnham, whose contribution has been central to

British traditions of thinking about cultural economy, but whose work has led in two

quite distinct and possibly contradictory directions. In general, Garnham’s approach to

the political economy of media and culture has been one that insists that the development

of capitalism has involved the “industrialization of culture”, so that it does not make

sense to think in terms of culture as superstructural forms (as in theories of ideology, for

example), but to instead consider the dynamics of cultural industries in terms of the

general forms and practices of capitalist commodity production. This in turn shaped

Garnham’s famous critique of what he termed the “left-pessimist” approach to cultural

policy, with its focus upon residual cultural practices and the state-subsidised arts, and

influence that such work would have upon later developments in British cultural policy

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and the development of creative industries (O’Connor, 2007). Garnham called for a shift

in progressive cultural policy thinking towards the commercial cultural industries,

arguing that:

Most people’s cultural needs and aspirations are being, for better or worse,

supplied by the market as goods and services. If one turns one’s back on an

analysis of that dominant cultural process, one cannot understand either the

culture of our time or the challenges and opportunities which that dominant

culture offers to public policy makers (Garnham, 1990: 155).

At the same time, while Garnham was highly critical of non-market allocations of

cultural resources which create dependency relations between cultural workers and

cultural bureaucrats, and was applying techniques of conventional economic analysis to

the British television industry (Collins et. al., 1987), he was also drawing upon Jurgen

Habermas’s theory of the public sphere to establish a different way of dichotomizing the

market and non-market sectors of cultural production. This was seen in his normative

distinction between public service broadcasting – the BBC in the British case - and

commercial media, on the basis of the former addressing the community as citizens, and

the latter dealing with the audience as consumers. While Collins (2004) and Jacka (2004)

have argued that this normative account of public service broadcasting has in practice

provided a poor guide to what public broadcasters have done in practice, it nonetheless

instituted a distinction between the citizen and the consumer, and the argument that

addressing media audiences as consumers was somehow impoverished in comparison to

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addressing them as citizens, that developed a tenacious foothold in media policy debates

over the 1990s and 2000s (Flew, 2006).

Contemporary Theories of Cultural Economy

There exist a range of antecedent approaches that point towards the rise of cultural

economy as a concept in cultural studies and related fields. I now want to consider five

ways in which the concept has been developed in the 2000s. The best known of these in

Australia would be though the concept of the creative industries, which has been the

subject of ongoing debate since the Queensland University of Technology established a

Creative Industries Faculty in 2001, and the association of high profile cultural

researchers such as John Hartley and Stuart Cunningham with the Australian Research

Council’s Centre of Excellence for Creative Industries and Innovation (Hartley, 2005;

Flew, 2008: 168-192). Creative industries has also been associated with a range of policy

initiatives worldwide, ranging from the creative industries mapping documents of

Britain’s Department of Culture, Media and Sport in the late 1990s (DCMS, 1998), to the

analyses developed through the United Nations Commission for Trade, Aid and

Development (UNCTAD) and others on the opportunities presented by creative economy

strategies for developing countries (UNCTAD, 2008; Barrowclough and Kozul-Wright,

2008; Cunningham, 2008).

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But its important to be aware that the concept of cultural economy has been in operation

often when it has not been named as such. One of the best accounts of such developments

worldwide is found in George Yúdice’s The Expediency of Culture (Yúdice, 2003).

Yúdice develops the concept of culture as resource, arguing that in early 21st century

global capitalism ‘culture is increasingly wielded as a resource for both socio-political

and economic amelioration, that is, for increased political participation in an era of

waning political involvement, conflicts over citizenship, and the rise of … “cultural

capitalism”’ (Yúdice, 2003: 9). This involves culture being increasingly viewed as a

social resource, performing a variety of functions, ranging from redressing social

marginalisation to promoting community behaviour more conducive to economic growth,

from public investment in festivals and events that promote local tourism to energising

otherwise dormant well-springs of creative energy, and with such demands impacting

upon the conduct of contemporary cultural institutions at all levels. Manifestations of

culture as a resource can be seen with:

the need to develop economic rationales for arts and cultural funding;

the growing recognition of social capital as a factor in economic development;

the rise of the creative industries based upon wealth generation through new ideas

and intangible assets;

the uses of culture in urban promotional strategies; and

growing demands on the part of minority groups for cultural rights and

recognition of cultural citizenship.

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The growing interest on the part of governments and other institutional actors to deploy

culture as a resource has coincided with a growing interest in the business literature in

culture as a variable in economic performance. New management literature makes much

of the need to diagnose the culture of organizations in order to shift the relationship

between artifacts, values and “deep cultures” to initiate and manage change (Clegg et. al.,

2005), while to work on competitive strategy associated with Michael Porter implicitly

draws upon cultural variables in the rise of economically successful regional clusters

(Porter, 2000). This work has been picked up on by social scientists in Britain associated

with the Journal of Cultural Economy, which describes its aim as being to understand

‘the role played by various forms of material cultural practice in the organisation of the

economy and the social, and of the relations between them’ (Journal of Cultural

Economy, Aims & Scope). In their founding text on cultural economy, du Gay and Pryke

(2002) associated a growing ‘culturalization of the economy’ with such factors as:

1. Arguments that the management of culture has become the key to improving

organizational performance, particularly when there is an alignment between

organizational goals and the values and attitudes if those working within them;

2. The rise of the service sector, where the relationship between economic

transactions and their performative or cultural dimension through interpersonal

relations and communicative practices are more overt and visible;

3. The rise of the cultural or creative industries, and the spread of practices

throughout the economy that have their genesis in these industries, such as a

premium being placed upon design, the role of cultural intermediaries in

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channeling consumer demand, and the role played by networks in time-based and

project-based production activities.

A question raised by this work is whether, as Don Slater has observed, we are conflating

a greater conceptual awareness of the need to think about culture and economy in tandem

rather than separately, with a different empirical claim that cultural factors have become

more important in contemporary capitalist economies:

There is the constant danger of confusing new movements within thought (the

new understanding that culture and economy cannot be theorized separately) from

new empirical developments. Is it the case that culture is actually more central to

economic process than it was before? We need to develop more adequate theories

of the sociology of economic life rather than proclaim epochal social revolutions

that are merely the artefact of the inadequate theories and theoretical division of

labour we have inherited (Slater, 2002: 76).

Amin and Thrift has historicized the concept of cultural economy, noting significant

contributions going back to Adam Smith, Karl Marx and Thorstein Veblen. They argue

that ‘The production, distribution and accumulation of resources – loosely the pursuit of

prosperity – has always been a cultural performance … [but] with the rise of a separate

profession of economics and a set of specifically economic knowledges, such

performance has either been neglected or actively denigrated (Amin and Thrift, 2004:

xii). They trace three stages in cultural economy debates. The first, associated with neo-

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Marxists such as Sayer (1997) proposes that while the cultural and the economy

increasingly intersect, they need to remain analytically separate realms, based around the

distinction between the interpretative and the instrumental, or, put differently, between

abstract and calculable regimes of value. Second, there is the “synthetic” model

associated with authors such as du Gay and Pryke, where culture and economy are

increasingly overlapping realms, with each transforming the other as they become more

intertwined. The third approach, which they associate with actor-network theory,

questions this way of ordering the debate, noting that all of the key categories of

economic theory – markets, industries, goods and services – are formed through

processes that are simultaneously cultural and economic, as well as being shaped by law,

politics, regulations and science. To give one example of how this works in practice,

Callon et. al. (2004) have argued that one of the features of what is sometimes referred to

as the “new economy” is that consumers are themselves increasingly invited to

participate in the processes through which one type of product is differentiated from a

seemingly similar one on the basis of its perceived “qualities”, but that the qualities do

not exist independently of the judgments made by multiple agents, including consumers

as well as producers, advertisers, marketers, regulators etc. i

Many of these debates have played themselves out very actively in geography,

particularly in the emergent field of cultural economic geography. Economic geography

as a discipline has experienced two major turns since the 1970s: the ‘Marxist turn’ of the

1970s which rejected positivism and sought to reconstruct the discipline as being about

an understanding of spatial relations under capitalism (Harvey, 1982; Swyndegouw,

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2003); and the ‘cultural turn’ of the 1990s, where post-structuralist critiques of

representation were brought to bear upon the field (Barnes, 2000; Gibson-Graham, 2003).

James et. al. (2008) provide a very useful map of these developments, noting that I makes

sense to distinguish five related but somewhat distinct factors in the rise of cultural

economic geography:

1. The relationship between structuralist accounts of the spatial dimensions of global

capitalism and post-structuralist challenges to what is perceived to be an implicit

hierarchy of thought by which particular conceptions of ‘the economy’ are

prioritized (e.g. is ‘labour’ as a spatially grounded practice more ‘real’ in its

material effects than discourses surrounding ‘labour markets’?);

2. Particular ways in which culture and economy interlock, such as the relationship

between markets and production as spatially grounded economic practices and the

lived experience of people within such economic spaces;

3. The cultural constitution of economic practice, and the awareness that ‘cultural’

factors can mark significant sources of regional differentiation, local

entrepreneurship and competitive advantage in globalized economies, as seen in

the debates surrounding clusters and learning regions (e.g. Cooke and Lazzeretti,

2008);

4. Uses of actor-network theory to analyse the performative dimensions of “soft

capitalism” and the ways in which it is engaged in new business management

practices (Thrift, 1999, 2002);

5. Debates surrounding the geographical location of cultural/creative industries, and

their propensity for clustering (Scott, 2008), as well as the question of whether the

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provision of cultural and lifestyle amenities for the “creative class” generates

innovation and entrepreneurship in these industries (Florida, 2008).

Finally, I want to consider the contribution of creative industries debates, but in a

particular way. In much of the extended commentary on creative industries, there has

been a focus on the claims made about the creative side, and whether it is legitimate to

claim creativity as a sui generis category that can provide a basis for distinguishing some

industries and activities from others (Donald, 2004; Schlesinger, 2008), and whether the

analytical coherence and critical edge associated with the term ‘cultural industries’ is lost

when the concept is broadened to include sectors such as software and information

technologies in a loosely defined set of ‘creative industries’, made coherent by – of all

things – the opportunities to exploit intellectual property (Garnham, 2005; O’Connor,

2007; Galloway and Dunlop, 2008). Less attention has been given to the choice of

industries as an analytical category, possibly because reference to a set of industries

provides its own set of policy markers, as well as allowing for the loose alignment of arts

and media industries that has long been an aim of this discursive construction of the field.

Recent work by Potts et. al. (2008) and Hartley (2009) has begun to rethink this focus

upon industries as a starting point, as it derives from Standard Industrial Classifications

that have always worked poorly for sectors outside of agriculture, mining and

manufacturing, it claims a coherence to a set of outputs on the basis of their inputs that

does not stand up to close scrutiny, and it can function too easily as an “insider”

discourse promoting collusion between industry representatives and policy departments,

as has happened historically in both the arts and media industries (see e.g. Streeter, 1995).

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Recent work has proposed an alternative definition based upon social network markets

(Potts et. al., 2008). I’ll return to this below, but two points which can be made about this

are that it avoids privileging producer interests over those of consumers, and it has been

developed through a dialogue between cultural studies and evolutionary economics.

Observations on Economics

From the point of view of virtually all of the humanities, and most of the social sciences,

the first striking feature of economics as a discipline is how abstruse and mathematical its

dominant mode of argumentation seems to be. There seems little doubt that economics

was the branch of social theory where the aspiration to scientificity was most openly

embraced, and where claims towards greater precision of knowledge arising from its

mathematical representation have been made most ardently. In Foundations of Economic

Analysis, published in 1947, MIT Professor Paul Samuelson proclaimed that

“mathematics is a language”, and mathematical language became a sine qua non of

economics, tending to define who progressed in the discipline and who quietly

disappeared. As David Warsh (2006) notes, this has tended to mean that a variety of

important and suggestive topics, from moral philosophy to comparative histories of

capitalism to the theory of monopolistic competition to the nature of power and its

relevance to markets, have either tended to be shunted out of the economics mainstream

or translated into mathematical formulae such as game theory that come to strip away

much that was originally interesting about the concept. While this has tended to shunt out

more critical views towards the capitalist economy, particularly when neo-classical

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economics was combined with positivist philosophy (see e.g. Lipsey, 2008), it has also

sidelined significant non-mathematically-based defences of capitalism, most notably

Joseph Schumpeter’s theory of creative destruction as the underlying dynamic of

capitalism, and the catalytic relationship he foresaw between markets, innovation and

entrepreneurship (Schumpeter, 1942).

Another feature of economics as a discipline that can appear unusual from the perspective

of cultural studies is the existence of openly partisan conservative economists, and the

assumption that a plurality of intellectual positions can co-exist which align to political

positions across the left-right continuum. This does sit unusually with the claim that one

can undertake “value free” economics where the technical apparatus of analysis and

explanation is deemed to be able to operate separately from the ethics and values of those

applying it. To take one apparent example, the debates between Keynesians and

Monetarists about the most appropriate tools for macroeconomic management are infused

with differing positions about unemployment and government debt, that are recognisably

in a continuum of arguments between social democrats and liberals on the one hand, and

conservatives on the other. One avenue through which these competing tendencies are

expressed is, somewhat curiously, the undergraduate textbook. Avowed Republicans such

as Greg Mankiw and liberal democrats such as Paul Krugman produce undergraduate

economic textbooks in order to shape the wider debate; interestingly, economists have

also proved to be enthusiastic bloggers, with conservatives such as Mankiw and Gary

Becker and liberals such as Krugman and Brad De Long being engaged bloggers. ii

Economists have also used television programs as a way of popularising their arguments,

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as seen with John Kenneth Galbraith’s The Age of Uncertainty, produced by the BBC in

1977, and Milton and Rose Friedman’s Free to Choose, produced by the U.S. PBS in

1980.

What does stand out about economics, from the perspective of other disciplines, is

how much access economists seem to have to public policy making. The first

wave of objections to what we would today term “neo-liberalism”, which came in

the guise of the critique of “economic rationalism” led by sociologist Michael

Pusey (Pusey, 1991), were about the general influence of economists over public

policy, as much as they were about types of economics and their relationship to

types of policy. Pusey argued that ‘the state apparatus is caught within projections

of reality that give primacy to “the economy”’, so that ‘the tail that is the

economy wags the dog that is society’ (Pusey 1991: 10). The problem with the

critique of economic rationalism in its first incarnation was that it required an a

priori demand that protagonists are for or against markets, or for or against

government intervention in a generic sense, assuming that the concern for social

management and the development of economy in the practice of government have

developed as alternative policy principles; Pusey counters economic rationalism

to a bipartisan post-WWII concern for nation-building. There is, however,

considerable historical evidence that, in practice, the ethical-normative and the

calculative-technical dimensions of policy have typically been developed in

tandem, as part of what Foucault refers to a “liberal” arts of government (Miller

and Rose, 1990). Not surprisingly, then, we tend to find that government policies

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today typically combine a normative dimension with a practical and technical

dimension that has been about constructing or problematising a social domain in

order to render it governable and amenable to change through the application of

policy, and that economics is one of the techniques which emerges through that

practice of “problem finding” as well as problem solving in public policy.

The correlate of this is that seemingly small differences among economists often have

quite large policy implications. There are many examples of this, ranging from debates

about the efficiency of information flows in financial markets, the role of altruism in

economic behaviour, and the current interest in the multiplier effects of macroeconomic

stimulus packages, but one consequence is that the political implications of a

methodology are often less overt than is the case in disciplines such as cultural studies,

where the a priori expectation of engagement with a particular political project have

always been much stronger. It would be beyond the scope of this paper to develop this

proposition in detail, but two points can be noted. First, there are a significant number of

recent winners of the Nobel Prize in Economics whose work would have to be seen as

questioning claims about rational expectations and efficient market hypotheses – George

Akerlof, Paul Krugman, Amartya Sen and Joseph Stiglitz would be among the more

obvious examples. Second, even as such avowedly establishment entities such as the

American Economic Association proclaim that they take “no partisan attitude, nor does it

commit its members to any position on practical economic questions”, they have been

criticized by those who have drawn upon political fundraising data to identify a

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preponderance of Democratic Party supports among the U.S. membership over

Republican Party supporters (McEachern, 2006).

Economics as seen from Critical Cultural Studies

It is notable in considering critical literature from media and cultural studies that it tends

to work with a quite limited conception of what constitutes economics. Hesmondhalgh

(2007: 30) defined economics as being neo-classical economics, which ‘is not concerned

with determining human needs and rights, nor with intervening in questions of social

justice’, but rather with ‘how human wants might be most efficiently satisfied’, and

which ‘equates the well-being of people with their ability to maximize their

satisfactions’. Miller et. al. (2001) refer to the ‘neo-classical vision of Hollywood’ as

‘bourgeois economics’ which:

asserts that the supposedly neutral mechanism of market competition exchanges

materials at costs that ensure the most efficient people are producing, and their

customers are content. This model may occasionally describe life in some fruit

and vegetable markets today. But as a historical account, it is of no value: the

rhythms of supply and demand, operating unfettered by states, religions, unions,

superstition and fashion, have never existed as such (Miller et. al., 2001: 48).

The dominant view of economics from the perspective of critical cultural studies is of a

discipline with a singular dominant set of priorities, which are narrowly focused and lack

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realism. The next step, which emerges with the critique of neo-liberalism, is to argue that

such economics effectively functions as an ideology, serving dominant economic

interests through the mystification of social reality.

The concern is that such authors are engaging with a straw figure, drawing upon the

textbook representation of undergraduate economics as a stand-in for the economic

discipline as a whole. To take one example, Hesmondhalgh identifies the work of

Harvard economist Richard Caves (2000) as an instance where ‘even economic analysis

that recognizes the specificity of media and culture, and some of the limitations of

traditional economic analysis, tends to downplay the severity of the problems of cultural

markets’ (Hesmondhalgh, 2007: 31). Caves’ work marked an attempt to broaden the

remit of economic analysis beyond the economics of the arts, using the creative industries

rubric to analyse those activities associated with the supply of goods and services with

cultural, artistic or entertainment value. Caves used such tools as industrial organisation

theory, theories of transactions costs and information economics to understand, among

other things, the relationship between contracts and institutional relationships as

alternative means of managing uncertainty in industries characterised by high up-front

costs, considerable demand uncertainty, and the resulting need to manage risk. It is not

clear to me that such work downplays endemic uncertainty and its associated problems

for both creative workers and firms in creative industries, although it uses a language

associated with complexity theory rather than fundamental contradiction, which is more

characteristic of the Marxist political economy tradition.

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Part of the issue about the alleged ideological biases of economics in fact concerns

differences in methodology. It is not necessarily that different methodologies lead to

fundamentally different conclusions. There are certainly pathways from mainstream

economic theory, as much as there are from political economy or cultural studies, through

which a case could be made for the value of public service media, for example. The risk

is that economics has been defined in advance as a primarily ideological project, and its

claims to be anything other than ideologically motivated are treated as the mystifications

typical of a defence of bourgeois class power. As this approach to the sociology of

knowledge has been questioned from so many angles in critical social theory over the last

three decades, it is surprising to me that it has been so readily accepted in the critiques of

neo-liberalism, and the association of economics tout court with this exnominated

ideological project.

Neo-Liberalism

There has been a concern that cultural studies has become overly influenced by economic

arguments and discourses, and in Australia this often makes reference to the rise of

creative industries as a policy-oriented academic discourse. At the core of the critical

theorists’ dissent with creative industries is the claim that it promotes neo-liberalism as a

political ideology, and with that furthers the hegemony of multinational corporate capital

over the cultural sphere. Miller finds that ‘neoliberal creative industries discourse’ has

been promoted by ‘carpet-bagging consultants’ pushing a ‘cybertarian mythology’, while

‘the cultural industries remain under the control of media conglomerates’ (Miller, 2009a:

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188, 190, 194). He argues that it has been taken up in an ever-more frenzied search for

relevance by those who have found cultural policy studies to be too dirigisme and statist,

and counterposes the concerns of cultural studies with critical multiculturalism and the

rights of the dispossessed with creative industries, which has at its core ‘the hypocrisy of

neo-liberalism’ (Miller, 2009b: 270,274). Des Friedman views the rise of creative

industries discourse in the United Kingdom as part of a larger project of ‘the neo-

liberalization of media policy’ which ‘is designed to transform the existing balance of

power … to assist the expansion of private accumulation and to undermine the legitimacy

and existence of non-profit and public service media provision’ (Freedman 2008: 224).

Echoing earlier critiques by McQuire (2001) and Rossiter (2006), Hesmondhalgh (2007)

argues that creative industries as an academic discourse has been overly complicit with

“Third Way” ideologies that promote marketisation and the commodification of culture

under the guise of neo-liberalism, while O’Connor expresses similar concerns about ‘the

uncritical annexation of the creative industries to the innovation system of the knowledge

economy’ (O’Connor, 2009: forthcoming).

So what is this neo-liberalism? The term has a shorter history than many would imagine,

although the ways of thinking, conceptual frameworks and policy prescriptions that it

refers to have a longer history, variously being referred to as monetarism, Thatcherism,

Chicago School economics, the economics of the New Right, economic rationalism, and

the “Washington Consensus” as critiqued by Stiglitz (2001). There are two strands of

thought that are brought together around the concept of neo-liberalism, with one derived

from neo-Marxist arguments as developed by Harvey (2005) and Scholte (2005), among

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others, and a second strand which is derived from the later works of Michel Foucault on

governmentality.

The neo-Marxist account is the most straightforward to explain. Harvey (2005) Harvey

defined neo-liberalism as ‘[a] theory of political economic practices that proposes that

human well being can best be advanced by liberating individual entrepreneurial freedoms

and skills within an institutional framework characterized by strong private property

rights, free markets, and free trade’ (Harvey, 2005: 2). He proposes that it emerged in the

1970s as a conscious ideological strategy to reassert the class power of business and

economic elites, in the face of declining belief in neo-Keynesianism and the policy

consensus of post-WWII liberalism, and challenges to power and authority on the

domestic and international fronts. It points to the relationship between influential think-

tanks and the ideas and policies that shaped the Thatcher and Major governments in

Britain from 1979 to 1997, and the Reagan administration in the United States in the

1980s. Harvey argues that neo-liberalism has dominated the policy landscape since the

late 1970s, displacing earlier ideas associated with Keynesian economic and social

democracy, and that its influence was extended globally during the 1980s and 1990s.

Scholte (2005) explicitly links globalization and neo-liberalism, arguing that:

From a neoliberal perspective, globalization is an economically driven process

that should proceed on first principles of private property and uninhibited market

forces. Regulation should have as its primary—if not sole—function to facilitate

and protect private ownership and the “free” operation of supply and demand

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among producers and consumers. Other economic rules and institutions are

“political interferences” that undermine market efficiency and should therefore be

reduced to a minimum. With a combination of privatization, liberalization and

deregulation, globalization should bring maximum prosperity, liberty, democracy

and peace to the whole of humankind (Scholte, 2005: 1).

Foucault’s account of the emergence of neo-liberalism is quite different to the neo-

Marxist one. In his lectures at the College de France in 1978-79, Foucault does not trace

the origins of neo-liberal thinking about government to the 1970s, but to the late 18 th

century, noting that the question of ‘frugal government’ has its origins in this period. He

also does not present the question as one of an opposition between the state and the

market, but rather observes the paradox that the ‘epoch of frugal government’ is

accompanied by ‘the extensive and intensive development of government practice that …

has been constantly accompanied, outside and within government, by the question of the

too much and the too little’ (Foucault, 2008: 28). He emphasizes the need to historicize

different forms of government, arguing both that ‘an essential Capitalism … with its

logic, contradictions, and impasses does not exist’ (Foucault, 2008: 174), and that neo-

liberalism is ‘not Adam Smith … not market society … [and] is not the Gulag on the

insidious scale of capitalism’ (Foucault, 2008: 131). I would extend this point to say that,

for Foucault, neo-liberalism is not simply a doctrine that has ‘understood people simply

through the precepts of selfishness’, as Miller (2009: 271) interprets Foucault as arguing.

24

Foucault locates neo-liberalism in a general problematic of identifying what is “too much

government”, and argues that in the modern world, or at least the world since the 19 th

century, ‘a series of governmental rationalities overlap, lean on each other, challenge

each other, and struggle with each other: art of government according to truth, art of

government according to the rationality of the sovereign state, and art of government

according to the rationality of the economic agents, and more generally, according to the

rationality of the governed themselves’ (Foucault, 2008: 313). Rather than seeing ‘arts of

government’ as an evacuation of the political sphere, or in Pusey’s terms society being

subordinated to the economy, Foucault argues that ‘it is here that politics is born’

(Foucault, 2008: 313).

Foucault specifically focuses on German neo-liberalism as it emerges in the aftermath of

the Second World War, and American neo-liberalism as it is developed through the

Chicago School of political economy and through theories of human capital. Of these, it

is the American formulation which is the more radical and the more recognizable in the

critiques of neo-liberalism, proposing the generalization of the form of the market, and

particularly the application of market precepts to non-economic domains. The German

case of the Ordoliberals is more complex, as they took as their starting point the rise of

Nazism, and the question of how to avoid the return to a totally planned economy and

society in Germany, which they saw as having roots in more longstanding protectionist

and statist impulses in 19th century German political and economic thought. The resulting

concept of the “social market economy”, while explicitly developed as an alternative to

state socialism, is not neo-liberalism as understood in the Chicago School approach. It

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envisages prices being set primarily through markets, but also a role for governments in

promoting competition and restricting monopolies and unfair trading. It does point

towards generalization of the enterprise form to the point where individuals can be seen

as entrepreneurs of their own lives, but is also points towards comprehensive social

insurance, as well as forms of collective consumption and the provision of social goods.

It insists strongly upon the rule of law as a counterpoint to extending the realms of

economic planning, but does so with a view to the state being otherwise actively engaged

in other forms of planning, such as urban planning or the development of infrastructure.

One thing that Foucault is very clear upon is that there is no such thing as capitalism in

the singular and that capitalism can only be understood through empirically grounded

economic and institutional histories. It is often observed that social democracy has never

developed a foothold in the United States, but it is also the case that countries such as

Germany or France have not really had anything akin to the “Reagan revolution” and the

associated retreat from the regulatory state. Why do I focus upon this? One point is that

there is today a very clear example of a state where the influence of neo-liberalism is

minimal, and which is nonetheless moving quickly towards being one of the most

influential states on the globe. That state is of course China. Contrary to Harvey’s

assertion that China since the rise of Deng Xiaoping has exhibited “neo-liberalism with

Chinese characteristics”, Nonini (2008) argues that the depth of official commitment to

private property rights, free markets and free trade – to take three baseline commitments

of neo-liberalism – is limited, contingent and reversible, particularly if enhancement of

any of these was to challenge the power of the Chinese communist party-state. Moreover,

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he argues that popular support for a neo-liberal policy program in China is virtually non-

existent, reflecting the historically weak position of liberalism as a political philosophy in

Chinese society, and that while there may be some support for a “weak” variant of neo-

liberalism based around support for markets, entrepreneurship and consumerist values,

‘the strong version of neo-liberalism does not exist in China as a hegemonic project’

(Nonini, 2008: 168). In tracing whether the rise of suzhi (quality) discourse in China can

be seen as a proxy for popular thinking in neo-liberal terms, Kipnis has argued that ‘to

naïvely draw upon all types of analyses of neo-liberalism without noting their

contradictions leads to a hodgepodge sort of analysis in which the world as a whole and

everything in it appears to belong to a single theoretical category’ (Kipnis, 2007: 387).

It could be argued that China is an exception, although if so, it is a big one, and one that

is growing. In his debate with Will Hutton about whether China can sustain economic

growth without adopting what he terms the “Enlightenment trilogy” of individualism,

liberty and pluralism, economist Meghnad Desai makes the point that ‘capitalism … has

accommodated a variety of institutional arrangements and only in the most recent phase

of globalization have we thought that an Anglo-Saxon style liberal democracy is its sine

qua non’ (Hutton and Desai, 2007). The ability to accommodate Leninism with

capitalism is historically unique, but the experience of the Asian “developmental states”

makes it clear that capitalism can co-exist with a diverse range of institutional forms and

modes of intellectual justification. Cunningham (2008) has made a similar point about

creative industries outside of the British case, where it has a diverse range of policy and

institutional inflections and is not simply the local adaptation of a “Cool Britannia”

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template, complete with Prime Ministers posing with the brothers Gallagher. Kong et. al.

(2005) have also undertaken detailed work on why creative industries policy discourse

has found receptive environments in some Asian contexts (Singapore, Hong Kong SAR

and, in a more complicated way, China), but not in others, such as Japan or India.

More generally, there is the danger that neo-liberalism may become a junk term, akin to

the junk bonds and toxic assets that almost brought down the global financial

infrastructure of capitalism in late 2008. Observing the ballooning number of references

to neo-liberalism found in the field of anthropology in the 2000s, Nonini expresses the

concern that:

The term ‘neo-liberal’ has recently appeared so frequently, and been applied with

such abandon, that it risks being used to refer to almost any political, economic,

social or cultural process associated with contemporary capitalism … A term with

so many meanings obviously has great utility, because most progressive scholars

can agree that whatever neo-liberalism is, they don’t like it, and the ambiguity of

the term allows discursive coalitions of the like-minded to form without the

troublesome bother of having to clarify exactly what it is they oppose or are

critical of (Nonini, 2008: 149).

There is the more general risk that universalizing claims about neo-liberalism may in fact

rest upon a kind of Marxist functionalism, whereby an all-encompassing dominant

ideology is developed to “serve” capital in its latest phase, which is deemed to be global

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and flexible. Nonini proposes downsizing our claims about neo-liberalism and giving

them historical, geographical and cultural specificity. Otherwise, the real risk exists of

‘assuming that flexible capitalism brings about the very political conditions within

nation-states of deregulation and privatisation etc., which it needs for maximum capital

accumulation, and … that flexible “capital” has a universal global capacity to do so, and

that to do so is somehow “neo-liberal” governance, restructuring, domination etc.,

wherever it occurs in the world’ (Nonini, 2008: 151).

Where Economics May Help Cultural Analysis

The growing literature on cultural economy, I have argued, faces a significant limitation

in that, with some exceptions, it has avoided direct engagement with economics and

economists. While this emerges in some ways from limits of economics in dealing with

culture and intangibles generally, some of this impulse also arises from a perception that

economics as a whole is based around the limited picture that emerges from

undergraduate textbooks associating the “science of economics” with the allocation of

resources between unlimited wants and scarce means. Actual empirical work on cultural

economy suggests that the gap between economics and cultural studies may not be as

great as is sometime assumed, particularly if it is acknowledged that the language of

complexity and uncertainty may be used by economists whereas cultural theorists use

concepts such as conflict and contradiction to refer to similar phenomena. My own view

would be that interdisciplinary and collaborative work between economists and cultural

theorists offers a considerably more fruitful path to better understanding cultural

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economy that the alternative proposed, for example, by Larry Grossberg of cultural

studies’ theorists aiming to ‘do economics better than the economists’ (Grossberg, 2006:

21).

One major obstacle to such collaborative work, however, is the way in which neo-

liberalism has been constructed as an all-purpose bogey man, and economists are

represented as the ideological handmaidens of this avowedly pro-corporate mode of

policy-related academic discourse. I have indicated in this paper that the neo-Marxist

version of this argument radically understates the degree of policy diversity and

institutional forms of capitalism that we see worldwide, and mistakenly attributes a right-

wing leaning to the economics discipline rather than intellectual pluralism, but that it

rests upon a view of policy as the unmediated reflection of the ideological interests of the

most economically powerful players. It has licensed the use of “neo-liberal” as a

seemingly limitless “scare word” that can be used to denounce anything that the speaker

chooses to disagree with, in a line of apparent solidarity with anyone deemed to be

notionally progressive, against anyone deemed to be presenting “reactionary” or

“bourgeois” thought. The term has some quite distinct genealogies, with the work of

Michel Foucault pointing to a complex set of mediations on questions of “setting limits to

government” that have been preoccupations within societies governed on liberal

principles for over two centuries, whose institutional manifestations are many and varied.

It would be by going further down this path, rather than using the term “neo-liberalism”

where once there may have been reference to “bourgeois ideology”, that will be more

fruitful in understanding where economics as a discipline ahs historically been able to

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insert itself into policy processes, and the contributions and limitations of such

interventions.

I will conclude by identifying four areas where there I can identify scope for useful

collaboration around the concept of cultural economy between economic and cultural

researchers. The first concerns the value of information. Because markets are, by one

account, a vast signaling mechanism to various agents that inform decisions, economists

have done a lot of thinking about information – who has it, how it is distributed, how it is

produced, and how it is used (e.g. Shapiro and Varian, 1999). The growth of the Internet

and the rise of the digital economy has meant an exponential growth in amounts of

available information and capacities to access them, leading to a proliferation of forms of

information-driven behaviour, such as online auctions on eBay and other related sites

(David and Fopray, 2002). The question of the value of information is also emerging

sharply in the present period in debates about the future of news, and plans by

commercial media proprietors to shift to user-pays forms of access to their online news

sites. It also arises in considering the contemporary roles and purposes of the university,

but noting this draws our attention to the important distinctions between information and

knowledge, which cannot be resolved within an economic framework that takes as its

starting point undifferentiated data. More in-depth and interdisciplinary work on the

value of information is emerging as a priority.

Second, I would note discussions about the value of networks. Networks are one of the

three primary forms of co-ordination of behaviour among agents alongside hierarchies

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and markets, and there is a general view that their significance has increased over the

1990s and 2000s for reasons related to the rise of the Internet and digital media

technologies (Castells, 1996; Thompson, 2003; Benkler, 2006). Social network analysis

has its origins in sociology, but it constitutes a major potential field for collaborative

research related to the cultural economy. One recent example of such work is by Potts et.

al. (2008) which has brought together cultural studies with evolutionary and behavioural

economics to propose a redefinition of creative industries around the concept of social

network markets. This work aims to avoid the problems associated with industry-driven

definitions of the creative industries, such as boundary dilemmas and the implicit

privileging of producer interests over those of consumers, by identifiying the creative

industries as a field characterised by recurring interactions between learning agents,

social networks and market-based enterprises, organisations and coordinating institutions.

This presents the creative industries as being engaged in ‘the representation and

coordination of new ideas’ (Potts et. al., 2008: 176) whose definitional boundaries can be

expected to shift over time as a result of interactions between learning agents and

enterprises in social network markets.

A third area of interest is that of motivations for participation and collaboration in online

social networks. Economics has long been taken to task for routinely underestimating and

downplaying the significance of non-market activities and those undertaken with non-

pecuniary motivations. It is now being argued, most notably by Benkler (2006) that an

information-driven economy with digital technologies at its core places a premium upon

non-market activities with non-pecuniary motivations, as it values a non-proprietorial

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approach to information as a metapublic good, with many implications for intellectual

property, labour markets, the formation and maintenance of networks etc. This debate has

been picked up on by Australian economists John Quiggan and Jason Potts in what can

bet termed the altruism/signaling debate (Quiggan and Potts, 2008). Quiggan follows

Benkler in arguing that the Internet and innovation through it is fundamentally driven by

non-market activities with non-commercial motivations (altruism), that this has been the

Internet’s history and its future, and that this has wider ramifications for the wider

economy and for economics. Potts counters with the proposition that much non-pecuniary

online behaviour can be seen as proto-market rather than non-market in its motivations,

as it involves a range of signaling behaviours that may have economic pay-offs over a

longer-term time horizon. As we are often talking here about publicly viewable online

activities, such as Facebook profiling and personal blogging, these are activities that

clearly concern representation as well as information, and should be amenable to cultural

economy analytical frameworks.

Finally, there is the relationship of culture to the wider economy, and the particular

question of what happens to cultural activities and creative industries in periods of

economic downturn and recession. It has been a common observation that the art boom in

countries such as Britain co-evolved with what proved to be an unsustainable

hyperinflation of financial assets and bonus cultures in the City of London, rewading, as

Alice O’Keefe argued in her last arts column in the New Statesman, to a ‘contemporary

visual art scene [that] has been the most slavishly money-serving, catering as it has done

exclusively to the rich’ (O’Keefe, 2009). For O’Keefe, this was encouraged by New

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Labour with its promotion of the creative industries as a growth segment of British

industry:

I remember, in March 2007, going to see Tony Blair make a speech on the arts at

Tate Modern, in which he boldly claimed to have presided over a cultural "golden

age". The arts, he told the gathered great and good, were a vital component of

Britain's continued economic success: "A nation that cares about art will not just

be a better nation. In the early 21st century, it will be a more successful one.” In

new Labour parlance, the arts had become the "creative industries". Like bankers

and stockbrokers, artists were expected to prop up the wobbly edifice of consumer

capitalism, to generate profit, attract tourists, help Britain market itself as a

cultural - and therefore financial - "hub". Placing culture firmly at the service of

finance had its advantages for the arts administrators in the audience, too, as it

gave them a clear claim on their slice of the government pie (O’Keefe, 2009).

If this has been the case, then one would expect much of the arts and the creative

industries to sink into recessionary gloom alongside the financial sector that promoted

their unsustainable growth. At its base, this is a claim that these are not “real industries”,

and that culture remains a residual outcome of developments in the “real” economy. But

Andy Pratt, in a recent review of possible developments (Pratt, 2009), proposes that this

is only one of four possibilities for cultural sectors in a recession. Another possibility is

that the public sector picks up much of the slack arising from a private sector downturn,

and that cultural activities flourish, albeit with quite different and most likely more

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socially oriented priorities. A third possibility is that we are in a phase of creative

destruction, as Joseph Schumpeter referred to business cycles under capitalism, and that

there will be “green shoots” of new forms of culture driven by new ideas and

possibilities, as others wither as they prove to be unsustainable. The final possibility that

Pratt raises is that as many economists and policy makers have not only failed to

adequately register the rise and growth of the creative industries, but have failed to

understand their changing relationship to economy and society. The resilience of the

cultural sectors, in this account, arises from a wider shift in the relationship between

symbolic and material production, so that:

The ways in which economic transactions include, or depend upon, the cultural

dimension of their activities to not only ‘add value’; but to encourage consumers

to make the ‘buy/not buy’ decision. So, ‘culture’ is not simply an added extra, or

candy floss, it is the main action, and as such cannot be removed from the product

easily (Pratt, 2009: 496).

Such questions are very much the stuff of cultural economy research. My argument today

is that we are going to need to draw upon at least some economic analysis to begin to

answer them.

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i How the Internet was defined as being “like print” in the U.S. (striking down of Communciations

Decency Act in 1996), and “like television” in Australia (extension of Broadcasting Services Act to

online content).

ii John Quiggan in Australian context.