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- Herausgeber: John Wiley & Sons
- Kategorie: Geisteswissenschaft
- Sprache: Englisch
Throughout the Western world, governments and financial elites responded to the financial crisis of 2008 by trying to restore the conditions of business as usual, but the economic, social and human damage inflicted by the crisis has given rise to a reconsideration of the inevitability of unfettered capitalism as a fact of life. A number of economic practices and organizations emerged in Europe and the United States that embodied alternative values: the value of life over the value of money; the effectiveness of cooperation over cut-throat competition; the social responsibility of corporations and responsible regulation by governments over the short-term speculative strategies that brought the economy to the brink of catastrophe. This book examines the blossoming of innovative new experiments in organizing work and life that emerged in the wake of the financial crisis: cooperatives, barter networks, ethical banking, community currencies, shared time banks, solidarity networks, sharing of goods, non-monetary transactions, etc., experiments that paved the way for the emergence of a sharing economy in all domains of activity oriented toward the satisfaction of human needs. Other innovations included the creation of cryptographic virtual currencies, epitomized by bitcoin, which blended a libertarian, entrepreneurial spirit with information technology to provide an alternative to standard forms of currency. On the basis of a cross-cultural analysis of alternative economic practices, this book develops an important theoretical argument: that the economy, as a human practice, is shaped by culture, and that the diversity of cultures, as revealed in a time of crisis, implies the possibility of different economies depending on the values and power relations that define economic institutions. This book will be of great interest to students and scholars in sociology, economics and the social sciences generally, and to anyone who wishes to understand how our societies and economies are changing today.
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Contents
Cover
Title Page
Copyright
About the Authors
Acknowledgments
Introduction: Manuel Castells
Chapter 1 Economy Is Culture: Sarah Banet-Weiser and Manuel Castells
What is value?
The culture of financial capitalists and financial institutions
The passion to create and the value of creativity
Feminist economics
Conclusion: Economic practices beyond economics
References
Chapter 2 Economics Without Growth: Giorgos Kallis
Introduction
Part 1: Six core principles
Part 2: An alternative account of the crisis
Part 3: The alternative economy as an embodiment of the new economics
Part 4: New economic policies
Conclusion
Acknowledgments
References
Chapter 3 Analysis of Worldwide Community Economies for Sustainable Local Development: Sviatlana Hlebik
Introduction
Part 1: Conceptual framework
Part 2.1: An overview of typologies and classifications
Part 2.2: How it works (some examples)
Part 2.3: Statistical data overview
Part 3: Relationship between the community currency systems and the country’s level of social and economic development, different aspects of the financial sector and money
Main empirical findings
Conclusion
Appendix 1
Appendix 2: Methodology
Appendix 3: Statistical analysis
References
Chapter 4 Blockchain Dreams: Imagining Techno-Economic Alternatives After Bitcoin: Lana Swartz
Introduction
The bitcoin blockchain
The blockchain after bitcoin
Radical blockchain dreams
The incorporative blockchain dream?
A slow blockchain?
Conclusion
References
Chapter 5 Consumer Financial Services in the US: Why Banks May Not Be the Answer: Lisa J. Servon
Methodology
The three trends underlying the dysfunctional financial services landscape
Findings
Conclusion
References
Chapter 6 Commoning Against the Crisis: Angelos Varvarousis and Giorgos Kallis
Introduction
Part 1: Conceptual framework: commons, liminality, and rhizomes
Part 2: Greece’s great depression
Part 3: The liminal commons of the indignant squares
Part 4: The rhizomatic spread of commoning
Part 5: Limits and challenges
Conclusion
Acknowledgments
References
Chapter 7 Alternative Economic Practices in Barcelona: Surviving the Crisis, Reinventing Life: Manuel Castells and Sviatlana Hlebik
Introduction
The crisis of financial capitalism and the rise of a new economic culture
Methodology
Descriptive analysis
An empirical typology of alternative economic practices
Who practices what: socio-demographic, attitudinal and cultural determinants in the activation of alternative practices
Two alternative economic cultures: survival and the meaning of life
Conclusion: Are alternative practices sustainable?
Methodological appendix
References
Chapter 8 Imagining and Making Alternative Futures: Slow Cities as Sites for Anticipation and Trust Sarah Pink and Kirsten Seale
Introduction
Resilience as a future-oriented concept
The Slow City movement
Researching Slow Cities in Australia
Mundane future-making
Implications for making resilient futures
Acknowledgments
References
Conclusion: Manuel Castells
References
Index
End User License Agreement
List of Figures
3.1: Window of viability
3.2: Monetary ecosystem
3.3: Systemic financial collapse
3.4: The effect of diverse complementary currencies
3.5: Historical evolution of the generations of community currencies
3.6: World map of LET systems
3.7: Typology of currencies after Kennedy and Lietaer (2004):
Regionalwährungen
, p. 268f., translated from German into English
3.8: World map of complementary currency systems
3.9: Type of exchange system, annual growth
3.10: Type of exchange system (relative distribution)
3.11: Medium of exchange (relative distribution)
7.1: Structure of the alternative economic practices that are most pervasive in Catalonia in 2010–2011
7.2: Hierarchical variable clustering analysis
7.3: Correspondence analysis between five clusters of practices and socio-demographic variables: “education,” “income,” and “marital status”
7.4: Correspondence analysis between five clusters of practices and attitudes: “opinion on capitalism” and “influence of crisis”
7.5: Correspondence analysis between five clusters of practices and attitudes: “opinion on capitalism” and “motivation to carry out the practice”
7.6: Correspondence analysis between five clusters of practices and attitudes: “influence of the crisis” and “motivation to carry out the practice”
7.7: Correspondence analysis between the combination of socio-demographic factors “income” and “education” and the combination of attitudes “influence of the crisis” and “opinion on capitalism”
7.8: Correspondence analysis between the combination of socio-demographic factors “income” and “education” and the combination of attitudes “motivation to carry out the practice” and “opinion on capitalism”
7.9: Correspondence analysis between the combination of objective factors “income” and “education” and the “motivation to carry out the practice” attitude
List of Tables
3.1: Summary statistics
3.2: Summary statistics
7.1: Typology of most active organizations and networks involved in alternative economic practices in Catalonia. Estimation of organizations and participating persons
7.2: Data on a representative sample of the population of Barcelona that has engaged in each of various practices at some point since 2008
7.3: Goods Economy cluster
7.4: Agricult Economy cluster
7.5: Social Relational cluster
7.6: Relational Exchange cluster
7.7: No Relational cluster
Guide
Cover
Table of Contents
Begin Reading
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Another Economy is Possible
Culture and Economy in a Time of Crisis
Manuel CastellsSarah Banet-WeiserSviatlana HlebikGiorgos KallisSarah PinkKirsten SealeLisa J. ServonLana SwartzAngelos Varvarousis
polity
This collection copyright © Polity Press 2017
Introduction copyright © Manuel Castells
Chapter 1 copyright © Sarah Banet-Weiser and Manuel Castells
Chapter 2 copyright © Giorgos Kallis
Chapter 3 copyright © Sviatlana Hlebik
Chapter 4 copyright © Lana Swartz
Chapter 5 copyright © Lisa J. Servon
Chapter 6 copyright © Angelos Varvarousis and Giorgos Kallis
Chapter 7 copyright © Manuel Castells and Sviatlana Hlebik
Chapter 8 copyright © Sarah Pink and Kirsten Seale
Conclusion copyright © Manuel Castells
First published in 2017 by Polity Press
Polity Press65 Bridge StreetCambridge CB2 1UR, UK
Polity Press350 Main StreetMalden, MA 02148, USA
All rights reserved. Except for the quotation of short passages for the purpose of criticism and review, no part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher.
ISBN-13: 978-1-5095-1724-4
A catalogue record for this book is available from the British Library.
Library of Congress Cataloging-in-Publication Data
Names: Castells, Manuel, 1942- editor.Title: Another economy is possible : culture and economy in a time of crisis / [edited by] Manuel Castells.Description: Malden, MA : Polity, 2017. | Includes bibliographical references and index.Identifiers: LCCN 2016038452 (print) | LCCN 2016051494 (ebook) | ISBN 9781509517206 (hardback) | ISBN 9781509517213 (pbk.) | ISBN 9781509517237 (Mobi) | ISBN 9781509517244 (Epub)Subjects: LCSH: Financial crises. | Economics.Classification: LCC HB3722 .A55 2017 (print) | LCC HB3722 (ebook) | DDC 338.5/42--dc23LC record available at https://lccn.loc.gov/2016038452
The publisher has used its best endeavours to ensure that the URLs for external websites referred to in this book are correct and active at the time of going to press. However, the publisher has no responsibility for the websites and can make no guarantee that a site will remain live or that the content is or will remain appropriate.
Every effort has been made to trace all copyright holders, but if any have been inadvertently overlooked the publisher will be pleased to include any necessary credits in any subsequent reprint or edition.
For further information on Polity, visit our website: politybooks.com
About the Authors
Sarah Banet-Weiser is Professor and Director of the Annenberg School for Communication at the University of Southern California (USC), Los Angeles. She is also Professor in the School of Communication, and in the Department of American Studies and Ethnicity at USC. Her teaching and research interests include feminist theory, race and the media, youth culture, popular and consumer culture, and citizenship and national identity. She teaches courses in culture and communication, gender and media, youth culture, feminist theory and cultural studies, including economic cultures. She is the author of the award-winning book Authentic™ (2014).
Manuel Castells is University Professor and the Wallis Annenberg Chair in Communication Technology and Society at the University of Southern California (USC), Los Angeles. He is also Professor Emeritus, University of California, Berkeley, where he was Professor of City and Regional Planning and Professor of Sociology from 1979 to 2003 before joining USC. In addition, he is a Professor of Sociology at the Open University of Catalonia, and a Fellow of St. John’s College, University of Cambridge. He holds the Chair on the Network Society at the Collège d’études mondiales, Fondation Maison des sciences de l’homme, Paris.
Sviatlana Hlebik holds a PhD in Economic Policy, MS in Finance and Risk Management, and MSc in Economic Cybernetics. She is the author of works on monetary policy, banking, and alternative economic practices during the financial crisis. She currently conducts research on bank regulation. She works in the Financial Management Directorate, Cariparma Crédit Agricole, Parma, Italy.
Giorgos Kallis is an environmental scientist working on ecological economics and political ecology. He is a Leverhulme visiting professor at SOAS and an ICREA professor at ICTA, Autonomous University of Barcelona. Before that he was a Marie Curie International Fellow at the Energy and Resources Group of the University of California at Berkeley. He holds a PhD in Environmental Policy and Planning from the University of the Aegean in Greece, a Masters in Economics from Universitat Pompeu Fabra, and a Masters in Environmental Engineering and a Bachelors in Chemistry from Imperial College, London.
Sarah Pink is RMIT Distinguished Professor in Design and Media Ethnography, and Director of the Digital Ethnography Research Centre at the Royal Melbourne Institute of Technology. She is also Visiting Professor at Halmstad University (Sweden) and Loughborough University (UK) and Guest Professor at Free University Berlin (Germany). Her recent collaborative books include Digital Materialities (2016), Digital Ethnography (2016), Screen Ecologies (2016), Media, Anthropology and Public Engagement (2015), and the iBook Un/certainty (2015). She is the sole author of Doing Sensory Ethnography, 2nd edition (2015).
Kirsten Seale is senior researcher at the University of Western Sydney. Her current research interest focuses on informal urban street markets. She has examined how informal urban street markets facilitate the informal and formal economy not merely in terms of the traditional concerns of labor and consumption, but also in regards to cultural and spatial contingencies. Seale examines what these markets reveal about urban life in a time of globalized, rapid urbanization and flows of people, knowledge, and goods.
Lisa J. Servon is Professor and former Dean at the Milano School of International Affairs, Management, and Urban Policy, New School University, New York. Professor Servon holds a BA in Political Science from Bryn Mawr College, an MA in History of Art from the University of Pennsylvania, and a PhD in Urban Planning from the University of California, Berkeley. She teaches in the Urban Policy Program at the Milano School and conducts research in the areas of urban poverty, community development, economic development, and issues of gender and race.
Lana Swartz is a post-doctoral researcher in the Social Media Collective of Microsoft Research in New England. In fall 2016, she will join the faculty of the University of Virginia as an assistant professor of Media Studies. She is working on a book on money as communication, both as a form of information transmission and as a vector of relations, memory, and culture.
Angelos Varvarousis is a researcher based in Barcelona, at the Universitat Autonoma de Barcelona. He is a member in the Research and Development group of Barcelona, with a focus primarily on alternative economic practices in Greece.
Acknowledgments
This volume presents the results of the study undertaken by a collaborative international research network on alternative economic practices and their cultural foundations that investigated and met between 2011 and 2015. The annual meetings of the network took place in 2011–12 in Barcelona, at the Open University of Catalonia, and in 2013–15 in Paris, at the Collège d’études mondiales, Fondation Maison des sciences de l’homme.
The project was funded by the Collège d’études mondiales. The authors want to express their gratitude to Professor Michel Wieviorka, President of the Fondation Maison des sciences de l’homme, and to Dr Olivier Bouin, Director of the Collège d’études mondiales, for their intellectual encouragement and material support provided to the project over three years.
We also want to thank Mr Gilles Desfeux, of the Fondation Maison des sciences de l’homme, for his care in organizing our annual meetings in Paris, and Mr Jean Louis Cury, director of the Maison Suger, Fondation de la Maison des sciences de l’homme, for his hospitality in hosting our meetings in the historic venue of the Maison Suger.
The meetings in Barcelona in 2011–12 were organized by Ms. Noelia Diaz Lopez, from the Internet Interdisciplinary Institute of the Open University of Catalonia.
The coordination of the project was assured by Ms. Pauline Martinez, and by Ms. Reanna Martinez, at the Annenberg School of Communication, University of Southern California, Los Angeles. We thank them for their support.
Introduction
Manuel Castells
This volume emerged from the challenge to rethink the meaning of economic practices in the wake of the financial crisis of 2008 and beyond. While governments and financial elites reacted to the near collapse of financial capitalism by attempting to restore the conditions of business as usual, the economic, social, and human damage inflicted by the crisis prompted a reconsideration of the inevitability of unfettered capitalism as a fact of life. A number of economic practices appeared throughout Europe and the United States that embodied alternative values: the value of life over the value of money; the effectiveness of cooperation over cutthroat competition; the social responsibility of corporations and responsible regulation by governments over the short-term financial strategies, led by greed rather than long-term profit-making, that took the overall economy to the brink of catastrophe. From Spain to Greece, from the US to Australia, and to many other countries beyond our direct observation, we saw the blossoming of multiple experiences of innovation in organizing work and life: cooperatives, barter networks, ethical banking, community currencies, time sharing banks, alternative means of payment, etc., that paved the way for a fast-developing sharing economy in all domains of activities oriented toward the satisfaction of human needs. Furthermore, while some of these new economic practices appear to be a reaction to the inability of the standard economic operations to provide goods, services, and credit during the crisis, other innovations became increasingly visible when taking a broader look at the way economic transactions co-evolve with culture, technology, and institutions in a fast-changing society. This is the case with cryptographic virtual currencies, epitomized by bitcoin, which blended a libertarian, entrepreneurial spirit with information technology to provide an alternative to standard forms of currency. In a very different vein, this is also the case of forms of banking for those at the bottom of the pyramid, who are creating a financial underworld with its own rules and effects – an underworld that can only be understood through the methods of participant observation that inform some of the work presented in this volume.
Yet, this is not a collection of diverse case studies. Because throughout our collaborative research and in this volume, there is a common theme that provides the link to our polyhedric observation. There are as many economic practices as there are cultures. If standardized forms of capitalism appear to provide uniformity to economic practices it is only because of the cultural domination of capitalism, of the different forms of capitalism, enforced by institutions whose rules result from power struggles institutionalized in the law – always in flux. Thus, when standardized economic practices do not mesh with people’s practices, either because they cannot practice them in situations of crisis, or because they challenge the values embodied in financial capitalism, alternative economic practices appear. These are not necessarily anti-capitalist (bitcoin is not), but different from current capitalism. At the source of this observation is our common statement. The economy is not simply related to culture: economy is culture. Looking at a whole range of economic practices, some directly observed, others studied more broadly from a cultural perspective (such as feminist economics or ecological economics), we can understand the logic of social change at the heart of the economic system. If economy is culture and if cultures are diverse and often contradictory, a whole range of economic practices are equally relevant and equally able to organize the way people produce, consume, exchange, innovate, invest, and live. This is the terrain we explored for three years in our research network, moving freely between observation, quantitative analysis, theory, and practice. This is our project: to unveil the cultural foundation of all economic practices by focusing on those that, because they are “alternative” (to contemporary financial capitalism), make more visible the cultural content of their economic logic. We have constructed an argument, not just collected a number of research papers and theoretical elaborations. Our argument is this: economic practices are human practices that, as such, are determined by humans who embody their ways of being and thinking, their interests, their values, their projects. There is no abstract, inevitable economic logic outside human practice, a metaphysical, a-historical logic to which humans should conform. If they do, it is because they are compelled or induced to resignation. When they are not, they redefine the goals and means of their economic practices, as in all dimensions of their practices. There is no such thing as a non-human economy. There is, yes, an inhuman economy because it sometimes benefits certain humans who try to appropriate humanity as a whole for their own advantage until other humans think differently, practice differently, and end up creating alternative forms of production, consumption, and exchange. This is our story, the story of this book, told in a plurality of voices, but in the harmony of a shared intellectual purpose.
Paris, Barcelona, New York, Athens, Parma, Boston, Melbourne, Los AngelesJanuary 2016
Chapter 1Economy Is Culture
Sarah Banet-Weiser and Manuel Castells
What is value?
Like all human activities, what we call “the economy” is made up of human practices framed by institutions, both embedded in specific cultures, as argued by Douglass North, Elinor Ostrom, and Viviane Zelizer, among others (North 1981; Ostrom 2005; Castells et al. 2012; Zelizer 2013).
Economic practices refer to practices of production, consumption and exchange. But of what? In principle of “goods and services.” But the implicit materiality of this formulation is misleading, unless we extend the meaning of goods and services to everything. Because production, consumption, and exchange of knowledge is central to any economic system, as it is the production and consumption of culture itself. Moreover, contemporary economies are based on the production and exchange of financial value, an immaterial but also essential product and factor of production. Therefore, it appears that the object of economic practices is the generation and appropriation of value, whatever the material support of value is in every specific practice. This leads to the fundamental question: What is value?
A classical distinction in economic philosophy differentiates use value from exchange value. Indeed the first pages of Marx’s Capital: Critique of Political Economy open with this distinction and with a thorough elaboration on their relationship.1 The use value of anything is what is useful to satisfy human needs and desires, and it is realized by its use and its consumption. Exchange value, in Marx’s formulation, appears as the quantitative measure according to which use values of different kinds are exchanged. This relationship of exchange is constantly modified depending on time and place. However, Marx’s conceptualization refers specifically to the capitalist mode of production in which the wealth of society depends on “the immense accumulation of commodities.” Both use value and exchange value exist as commodities, and because commodities are different in quality, in order to be exchanged they need an exchange value measure that transforms different use values into a common measure of value. Therefore, the difference and interaction between use value and exchange value is internal to the logic of the capitalist mode of production and not, as is often thought, as an opposition between what humans want and like, and the capitalist process of commodification measured ultimately by money as a quantitative representation of exchange value.
What humans want and like, in Marx’s own words, has use value only if it is a “useful thing.” If it is not useful, the labor embodied in the “thing” has been wasted, and accordingly does not create value. Who, then, determines that something is useful? From the capitalist point of view there is no doubt: to increase the exchange value of the product, as determined by the mechanism of exchange value quantification, it is the marketplace, organized around the interaction of supply and demand as a means of allocation of scarce resources to satisfy ever expanding needs and desires. Thus, ultimately exchange value determines the actual value of use value. Yet, this is a logic internal to the process of capital accumulation in a society in which the entire social organization, including culture and institutions, is organized around the logic of capital. However, this logic is not an immanent feature of human nature (as the implicit essentialism of neoliberal ideology would have it; Harvey 2005), but the result of a particular social structure: capitalism in its different forms and stages of historical existence.
Therefore, economic value is exchange value, and exchange value is measured monetarily by the market. And the dominance of exchange value as the overarching value of everything is in fact an institutional feature, derived from the dominance of the institutions of capitalism over other institutional-cultural formations that are subordinated to the power of capitalism (Sennett 2006). Thus, in broader social terms, value, in a given social/institutional context, is what the dominant institutions and norms decide is valuable. Since the current global economy is capitalist, capital accumulation is the supreme value, in economic terms, and should translate in the capacity to buy everything with money, the material expression of exchange value in a fully commodified society.
However, economic organization is not tantamount to social organization, not even under capitalism. We live in a global network society structured around networks that follow different logics (Castells 2000, 2004, 2009). Each one of these global/local networks has its own principle of valuation. Thus if we consider that the power of the state, supported by its technological and organizational military capacity, is the supreme value that organizes societies, then value is what accrues this power in its various manifestations, as was the case with the Soviet Union and is still the case, largely, in China. If we say that in the last resort power resides in human minds, as humans are able to reverse the logic of institutions by their conscious actions, then major ideational systems are the holders of symbolic power, as is the case with religious institutions or mass media systems, and value will be measured by the extent and depth of adherence to God’s Law (in its diversity), or by the extent and depth of influence of media systems to construct representations of the human mind in specific contexts.
Then, the most important issue is the relative hierarchy of these global networks among themselves in each context (Castells 2009, 2011). Of course, all of these networks interact, each one with its principle of valuation, but is there a dominant network? A meta-network that organizes the functioning of the others as specific manifestations of the value-making principle of that network? Would this be the alpha network of capital accumulation that is referred to by all other networks? In a strict sense yes, but this would only be the case if we all lived in a capitalist society and not just a capitalist economy. Empirical observation shows that this is not the case. The principles of state power preempt economic considerations in the case of military conflict or potential threats: national security is priceless. The value in this case is security or victory. Economic benefits come second, although we know of many cases in which wars and conflicts are used as additional means of capital accumulation, though not for capital in general, but for the corporate allies of the state. It is what the media call crony capitalism and what these authors call the political pillage of resources using the power of the state, not the market logic. Moreover, the last century saw the formation of communist states and statist societies in much of the world. The fundamental value for these regimes was the accumulation of state power, not capital. Capital accumulation was a means to provide the resources for the enforcement of state power, domestically and internationally. This is not only the past (although it supports our analysis of value making beyond the logic of capital even if this was in the recent past) but also partially the present in the case of some societies, particularly China, the second-largest economy on the planet.
The Chinese state largely controls, owns, and ultimately dominates the Chinese economy. While economic growth and capital accumulation is a major goal, and thus a key value for Chinese society as a whole, what is valuable for the institutions that shape and control the life of Chinese is the power of the Communist Party. In China, unlike in the US, what is good for Huawei is not necessarily good for the country. Rather, what is good for the Communist State is good for Huawei (among other things because it is the property of the state). China operates simultaneously in different value systems: capital accumulation in the global economy; state power accumulation in the institutions and organizations of China (including economic organizations); and symbolic power, through cultural legitimation, in the controlled media system and consumerism as a guiding norm for the politically decisive urban middle class (Hsing 2014).
As for religion, it is the most significant source of violent conflict in today’s world. Imposing one’s religion, in multiple sectarian versions, is the most important value for the multiple theocracies and would-be theocracies around the world. God’s glory and service to God are the most important overarching values for billions of humans on the planet. Capital accumulation is only a means to broaden and deepen the kingdom of God. State power must be in the service of God. Otherwise it is a heretic institution that pretends to be superior to the law of God. This is the case in Islamic theocracies, but has been historically the case in Western countries as well: the Spanish conquest of America aimed primarily to convert the lost souls of the natives. The fundamental goal of the Reformation Church of England with the King/Queen as the nominal head of the Church was a merger of powers ultimately decided in favor of the state. In societies dominated by religious values, both by coercion and persuasion, value is defined by the conformity of behavior to God’s Law.
Thus, since value making depends on the hierarchy of power between the networks that organize human life, including strictly speaking economic activities, values and value making are largely an expression of power relationships.
Largely but not exclusively, that is. Since power, in every network or dimension of society, is contradicted by counterpower, the principles of value making projected by the counterpower networks will interact with those imposed/proposed by the institutions, and may result in different values as guiding principles of human behavior, including economic activities (Castells 2015). If we consider the economy as a set of practices organized around processes of production, consumption and exchange to generate value according to certain criteria of what is valuable, then the market and other forms of economic institutions will not be the exclusive domain of capital accumulation but the expression of different goals and projects coming from humans operating as economic subjects on their own, even disregarding the values proposed by the institutions of society. These counter-projects could come either from collective expressions of alternative forms of values or from autonomous individuals organizing their lives, and therefore their economic practices, around their own values, thus creating their own value-making procedures. We will illustrate our argument by considering two processes of value making that do not adjust to the norms of capital and yet have immense impact in the informational network economy in which we live: the open source economy and the rise of feminist economics.
However, before engaging in the analysis of alternative projects of value making, we will show how capitalist values are embedded in the social practices of the most fundamental capitalist institution in our economy: financial markets. We contend that financial practices are also culturally constructed, as the structures of capitalism evolve and change over time. Capitalism in the twenty-first century is characterized by the domination of capitalism by global financial capitalism, enacted by financial elites whose role and cultural underpinnings have been transformed in the network society under the impulse of neoliberal ideologies and politics (Harvey 2005; Crouch 2011; Engelen et al. 2011; Mason, 2015).
The culture of financial capitalists and financial institutions
Values do not exist in a social vacuum. They are enacted by individuals and embedded in institutions. Global informational financial capitalism as a specific form of capitalism has been shaped by a specific culture (Hutton and Giddens 2000). This culture is supported by financial practices because it fits the interests of the actors, the financial elites. Indeed, contemporary financial culture may be damaging for the interest of “the system” as a whole, because it threatens its stability. Yet, contemporary financial elites could not care less about the broader picture, as their behavior is guided by personal gain with a quarterly horizon for their lucrative bonuses (Nolan 2009; Engelen et al. 2011; Murray and Scott 2012). This is exactly the specific culture we refer to, and this is the culture whose content and formation we analyze in this section of the chapter.
The culture of the contemporary financial elites is formed by the articulation of different cultural layers that in their historical weaving induce a specific financial culture:
The first layer is, historically, the Protestant Ethic, following the classic analysis by Max Weber. It can be defined as the search for salvation through accumulation of wealth by reinvesting profits to increase profits: earned value is used to expand the production of value. In terms of the culture of the actors, it is characterized as a deferred gratification pattern. Their primary goal is not to consume the yield of their labor but to obtain their reward in the afterlife and in family reproduction of wealth, transforming profits into assets that will accrue their value faster than earnings because they start from a higher level of accumulation (Piketty 2013). For these elites, there is little hedonistic consumption; their lives tend to be relatively austere (at least in historical comparison with our time). Profit making is the supreme value, both for the economy as a whole and for personal salvation and reputation.
The second layer is the culture of liberty, based on the assumption that the market knows better, as supply and demand are constructed by the free decisions of investors and consumers, guided by their rational choice in terms of self-interest. Adam Smith’s “invisible hand” is the ultimate driver of the market, thus of the capitalist economy. This is the cultural tenet of liberalism and neoliberalism (Harvey 2005). The culture of liberty emerged historically as a reaction against the arbitrariness of state power and theocracy (Crouch 2011). In such context, the free exchange of economic value levels the field and allocates resources depending on supply and demand, and, as a derivative, the expectations of profits. The most important market in capitalism is the financial market. Liberalism advocates acknowledge the need for regulation of the market, including the financial market, by government and legal institutions. Indeed, North showed in his classic analysis that institutions are absolutely necessary for the market to work properly (1981). However, regulatory bodies aim for allowing rational choices to be processed in the market. Yet, values and rationality are not the same. Rationality is framed within a value system that is institutionalized. What is rational from the perspective of one set of values may not be from another. For instance, the paramount need of energy supply at a lower price may be highly beneficial for the economy even if it is accomplished by the new technologies of fracking. But if the preservation of the environment in the most fundamental sense is brought into consideration, what appears to be a rational choice is actually an irrational, damaging decision. Based on neoliberal assumptions, the financial elites believe government intervention distorts markets, and so regulation should be limited to assure fair play in the rules of the game without interpreting the value content of these rules, so that the submission to maximizing the profit rate of private investment is paramount.
The third cultural layer underlying contemporary financial cultures is individualism, defined as the culture in which the unit of reference for the benefit of an action is the individual herself (Santoro and Strauss 2013). The emphasis on individual identity predisposes the direct connection for the financial operators between their personal projects and the market by acting in the market for personal gain in priority of maximizing profits for the shareholders whose capital they represent. The priority given to personal gain is only checked by the regulatory framework and by competition with other financial operators. Yet, here is where policy and institutions matter. Because under the conditions of deregulation the priority for individual gain derived from the culture of individualism translates into financial practices such as (a) defining the success of an investment in a financial operation by quarterly financial results, which ultimately leads the market as a whole to evaluate the results of corporations also in quarterly terms, meaning short-term gains, regardless of long-term prospects for the soundness of the investment; and (b) compensation for financial operators that is largely linked to performance bonuses. These bonuses depend on: (i) short-term evaluation by the market of the traded financial products; and (ii) volume of transactions; since the amount of profit is more important than the rate of profit, it increases the market power of those investors who accumulate a larger share of assets.
The fourth layer in financial culture is the culture of risk (Admati and Hellwig 2013). In the traditional rationale for capitalism, the reward for companies and individuals alike is justified by risk taking. The assumption is that if they fail in their risky investments they lose and become responsible for their losses. If they win, their audacity is rewarded by the market. However, the current strategies of financial elites tend to minimize risk for the individuals of these elites, through several mechanisms: (a) at the individual level, financial operators set up contracts that limit their legal responsibility, which provide “golden parachutes” in case they lose their jobs, and insure their wealth in the long term through their knowledge and contacts; (b) at the institutional level, financial elites count on government bailouts in case of crisis – the so-called “too big to fail” argument – while still cashing their personal bonuses (insured by contract) even if the company goes bankrupt; (c) the high volume of transactions they perform, which is the most important counter-risk mechanism for the financial operators; in some cases the investment fails, in others it is profitable, but ultimately it is their clients who lose or win. The operators, as intermediaries protected by their contracts and conditions, win in (almost) all cases, because their compensation is based on the amount of their activity, in addition to their share of the profits they obtain. Thus, in the practice of contemporary finance, the culture of risk has become an ideological myth, self-serving individually motivated financial practices. This is in sharp contrast with innovation-driven industries, such as the technology industries in which the entrepreneurs risk their capital and their jobs, and depend on their performance (Saxenian 2006). Indeed, this confirms Schumpeter’s old fears (Schumpeter 1942) about the end of the culture of risk, the engine of entrepreneurialism and innovation, under the conditions of oligopolistic corporatization, typical of the financial industry.
The fifth cultural layer that frames the practice of financial elites is patriarchalism, defined as the structural assumption of the systemic power of males over females and their children. This is because patriarchalism, as a fundamental structure of all historically known societies, is transversal to any other form of social organization, including the economy. The meaning of patriarchalism in this context refers to unequal chances of opportunity for men and women in the management structure of key financial institutions. But even more important is the prevalence of masculine values in the practice of all financial elite members, men and women alike. These masculine values include the rejection of any criterion to evaluate financial practices other than the best performance in terms of profit making and the personal maximization of the benefits of any financial transaction, including those that do not benefit the shareholders. Winning at all costs, as in war or in politics, is the fundamental attribute of masculinity throughout history, and this is reflected in the ruthless practices of finance, in the winner takes all principle, and in the praise for extreme risk taking, and the ability to be bold against all odds, even if this endangers the stability of the economy and the preservation of the assets entrusted to financial managers. Moreover, the framework of masculinity, or masculine values, that shape financial culture acts to eclipse any other values – emotional, affective, reproductive – that are modified to function in ways that actually sustain masculine values. So there is a double movement at play here: masculine values dominate financial culture to the extent that no other values are seen as legitimate, but it is precisely these other values that allow masculine values their dominance. An overwhelming male presence in the circles of higher finance characterized the industry in earlier stages of capitalism. However, in neoliberal capitalism, masculinity as a specific set of values is more decisive than the gender symmetry in the heights of finance, as the speed and complexity of global financial transactions requires a one-dimensional determination to beat the competition, regardless of the broader, potentially damaging consequences. The macho culture of young, daring financial wizards has its roots in the history of violence associated with the cult of manhood. It manifests itself in the bravados of the new financial entrepreneurs, such as those twenty-something managers that imagined the credit default swaps (CDSs) during a weekend meeting in Atlantic City.
We hypothesize that the above described cultural layers form, in their interaction and articulation, the core of the financial culture that led to triumphant global financial capitalism and ultimately to its crisis in 2008.
There is continuity between traditional and contemporary financial elites in one fundamental attitude vis-à-vis the institutions of society. They abhor trade unions. This is not just a matter of class ideology. It comes from their deep conviction that any control or limitation to their freedom to make decisions in an ultra-competitive and complex industry may lead to their being outperformed by other companies and individuals. They would rather pay more to their workers than allow them to unionize. Indeed, the financial industry displays, in general, the lowest rates of unionization among industries in most countries.
The financial industry’s attitude toward governments is more complex. They oppose government interference, but they acknowledge the necessity of some sort of regulation and they count on governments as their guarantor in the last resort. Thus, in practice, they tend to buy politicians and place their representatives at the highest level of government, making sure their interests are well served. This is the case in the United States where Wall Street executives have traditionally served in the White House cabinets for both parties. In the world at large, in the twenty-first century we have observed increasing influence of the financial elites in governments and political institutions, as was demonstrated in the management of the financial crisis of 2008 with a massive transfer of resources from taxpayers to the financial institutions to bail them out without demanding personal or corporate responsibilities (Castells et al. 2012). In cultural terms, the prevailing attitude of the financial elites is the deep feeling that they are indispensable and that governments, all governments, must work for them and through them in a global economy built around interdependent financial markets. Arrogance and self-assurance, together with a thinly veiled disdain for politicians, characterizes the new financial elites.
Are the financial elites citizens of the world? Yes and no. Yes, in the sense that they feel they belong to a special class of cosmopolitans. They operate under similar rules in an interdependent financial system, with similar technologies, managerial techniques, and strategies. Their industry is largely global, and so they are as well. They work and live in global networks of cooperation and competition. Furthermore, they are often culturally glued by attendance to similar educational institutions around the world: business schools, law schools, and engineering schools of the top private universities in the world (for themselves and their children alike). And they socialize in similar private clubs and venues, attending exclusive meetings where they hobnob with non-financial elites (political, media, academics) in forums such as the Davos World Economic Forum, the Netherlands-based Bilderberg Group, or California’s Bohemian Grove. So, yes, there is a cosmopolitan culture of global financial elites that is crucial for their management of the global economy in their own interests.
On the other hand, the global financial elite is in fact plural, and lives in the diversity of their cultural/national origins (Anglo-Saxon, Japanese, Arab, Jewish, Chinese, Russian, French, German, Latin American, etc.), with specific norms and codes of conduct, specific references to their cultural traditions and religions, and specific references to their own institutions. Simplifying the matter, we can say they are culturally diverse but their network has a shared global, cosmopolitan identity.
Thus, there is a new kind of financial elite, whose culture and behavior have internalized the norms and structures of the network society and of the global networked economy (Kahneman and Tversky 1973; Aldridge 1997; Castells 2000; Zaloom 2006). Individual financial operators may have personal values of ethics, professionalism, and service. But the operators that the new financial system requires, in generic terms, are disembodied economic actors that increasingly insulate the global financial markets, and themselves as well, from the human condition in all its multidimensionality (Ferguson 2013). They become material supports of abstract capital markets operating with simulation models enacted with the gut feelings emerging from their feverish minds.
The passion to create and the value of creativity
Every major techno-economic transformation in history has been associated with, if not induced by, a specific cultural foundation. This was the case for the protestant ethic as the spirit of capitalism, in Max Weber’s formulation. The rise of the networked economy, related to the technological paradigm of informationalism rooted in the revolution in information technologies, should therefore be supported by a new cultural formation. What is it? Pekka Himanen suggested an illuminating hypothesis in his 2002 book The Hacker Ethic and the Spirit of the Information Age. We know hackers are not malicious geniuses, in spite of the media confusion of technological innovators and destructive minds. Hackers, in the original concept that emerged in MIT’s Artificial Intelligence Lab, are simply those technically able individuals who “hack” (that is, work relentlessly), moved by the passion to create new, cool technologies that open up avenues of thinking and doing in the context of one of the most extraordinary technological revolutions in history. Based in the history of discovery in the digital culture, and in the biographies of some of its main actors, Himanen’s concept refers to the supreme value embraced by these hackers: not money making, not power, not fame, but the feeling of creating technological excellence, the understanding and shaping of a new world in the making, the fire in the belly of creation, pursuing their own path and only recognizing their peers and the authority of their community of excellence. These individuals, each one of them and their communities of reference, did change the world, as without their passion to create and their willingness to immediately and openly distribute their discoveries without copyright, the traditional corporations who were appropriating/stalling the technological revolution would have wasted its potential yield. The Internet ICP/IP protocols that created the most potent horizontal communication network in history were designed by Vint Cerf and Robert Kahn in 1973–5 and were immediately posted on the Internet. Tim Berners-Lee created the World Wide Web in his spare time after work and posted the server program on the Internet in 1990 for everyone to use and improve. The email systems, the email lists, GNU, Unix, Linux, and Apache were among the many free and open software programs that provided the technical basis for the rapid spread of digital communication networks around the planet, reaching seven billion mobile communication users; at the time of this writing, over 50 percent of the planet’s adult population uses smartphones. Most of the key discoveries of the digital age that created the information economy and spurred productivity, thus creating wealth, were advanced by the culture and practice of open source, particularly in the key technology, computer software, the DNA of the technological revolution. Open source is based on the principle of free disclosure of the kernel (or alpha code) of any new program with the purpose of improving it by the work of a cooperative network of peers.
As Steve Weber (2004) has documented in his seminal book on open source, the community is structured with a meritocratic hierarchy based on reciprocity and moved by the reward of enhanced reputation among peers. In fact, this is not too different from the truly academic research communities, which thrive in the pursuit of science and are often spoiled and ultimately destroyed when the search for monetary gains prevails in the process of discovery. Free culture, in the terms of Larry Lessig, asserting the value of technological excellence, and the drive to create are the cornerstones of the wave of innovation that has transformed the world in the last four decades (English-Lueck 2002).
This is not to deny that out of this revolution driven by the passion of discovery a whole new business world emerged, including some of the most valuable corporations in today’s world. Indeed, capital accumulation on a gigantic scale resulted from the harvest of innovation. But this is precisely the point. The value of creation for the sake of creation, not profit searching, has been the engine of creation of capital value in the information economy. And in the process of creating a new economy, many of the actors became instant billionaires. Yet, the value drivers of this economy are mainly cultural and psychological, rather than profit searching, excepting a few significant cases, particularly Bill Gates’s Microsoft.
