The Development, Representation and Morality of Business Helmut M

Culture and Enterprise What is the animating “spirit” behind what may appear to be the coldly calculating world of markets and business enterprise? Though often mathematically modeled in dry terms, markets can be looked at instead as meaningful domains of human activity. To economists, markets have been seen as nothing but objective “forces” or allocation “mechanisms.” This book, however, argues that they can be seen as involving the human spirit, personal expression and moral commitments. It presents the view that markets are not so much things that need to be measured as meanings that need to be narrated and interpreted. The aim of this book is to introduce two scholarly fields to one another, economics and cultural studies, in order to pose the question: How does culture matter to the economy? When we look at the economy as a legitimate domain of culture it transforms our understanding of the nature of business life. By viewing markets as an integral part of our culture, filled with the drama of human creativity, we might begin to better appreciate their role in the world. Don Lavoie is the David H. and Charles G. Koch Professor of Economics at the School of Public Policy, George Mason University. His previous publications include Rivalry and Central Planning, National Economic Planning: What is Left? and Economics and Hermeneutics. Emily Chamlee-Wright is Associate Professor of Economics and Management at Beloit College. She is the author of The Cultural Foundations of Economic Development: Urban Female Entrepreneurship in Ghana. Routledge Studies in the Modern World Economy 1. Interest Rates and Budget Deficits 14. Rice A study of the advanced economies The primary commodity Kanhaya L. Gupta and Bakhtiar Moazzami A. J. H. Latham 2. World Trade after the Uruguay Round 15. Trade, Theory and Econometrics Prospects and policy options for the twenty-first century Essays in honour of John S. Chipman Edited by Harald Sander and András Inotai Edited by James C. Moore, Raymond Riezman and James R. Melvin 3. The Flow Analysis of Labour Markets Edited by Ronald Schettkat 16. Who Benefits from Privatisation? Edited by Moazzem Hossain and Justin Malbon 4. Inflation and Unemployment Contributions to a new macroeconomic approach 17. Towards a Fair Global Labour Market Edited by Alvaro Cencini and Mauro Baranzini Avoiding the New Slave Trade Ozay Mehmet, Errol Mendes and Robert Sinding 5. Macroeconomic Dimensions of Public Finance 18. Models of Futures Markets Essays in honour of Vito Tanzi Edited by Barry Goss Edited by Mario I. Blejer and Teresa M. Ter-Minassian 19. Venture Capital Investment 6. Fiscal Policy and Economic Reforms An agency analysis of UK practice Essays in honour of Vito Tanzi Gavin C. Reid Edited by Mario I. Blejer and Teresa M. Ter-Minassian 20. Macroeconomic Forecasting 7. Competition Policy in the Global Economy A sociological appraisal Modalities for co-operation Robert Evans Edited by Leonard Waverman, William S. Comanor and Akira Goto 21. Multimedia and Regional Economic Restructuring 8. Working in the Macro Economy Edited by Hans-Joachim Braczyk, Gerhard Fuchs and A study of the US labor market Hans-Georg Wolf Martin F. J. Prachowny 22. The New Industrial Geography 9. How Does Privatization Work? Regions, regulation and institutions Edited by Anthony Bennett Edited by Trevor J. Barnes and Meric S. Gertler 10. The Economics and Politics of International 23. The Employment Impact of Innovation Trade Evidence and policy Freedom and Trade: Volume II Edited by Marco Vivarelli and Mario Pianta Edited by Gary Cook 24. International Health Care Reform 11. The Legal and Moral Aspects of International A legal, economic and political analysis Trade Colleen Flood Freedom and Trade: Volume III Edited by Asif Qureshi, Hillel Steiner and Geraint Parry 25. Competition Policy Analysis Edited by Einar Hope 12. Capital Markets and Corporate Governance in Japan, Germany and the United States 26. Culture and Enterprise Organizational response to market inefficiencies The development, representation and morality of business Helmut M. Dietl Don Lavoie and Emily Chamlee-Wright 13. Competition and Trade Policies 27. Global Financial Crises and Reforms Coherence or conflict Cases and caveats Edited by Einar Hope B. N. Ghosh Culture and Enterprise The development, representation and morality of business Don Lavoie and Emily Chamlee-Wright A Cato Institute Book London and New York First published 2000 by Routledge 11 New Fetter Lane, London EC4P 4EE Simultaneously published in the USA and Canada by Routledge 29 West 35th Street, New York, NY 10001 Routledge is an imprint of the Taylor & Francis Group This edition published in the Taylor & Francis e-Library, 2001. © 2000 The Cato Institute All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Lavoie, Don, 1951– Culture and enterprise: the development, representation, and morality of business/Don Lavoie and Emily Chamlee-Wright p. cm. Includes bibliographical reference and index 1. Economic development – Social aspects. 2. Culture. 3. Business ethics. I. Chamlee-Wright, Emily, 1966– II. Title. HD75.I.38.2000 306.3–dc21 00-042489 ISBN 0-415-23358-5 (hbk) ISBN 0-415-23359-3 (pbk) ISBN 0-203-18768-7 Master e-book ISBN ISBN 0-203-18891-8 (Glassbook Format) To Mary and Brian, for your gifts of love, friendship, and laughter Contents 1 Introduction 1 1.1 The spirit of enterprise 2 1.2 The study both of markets and culture 2 1.3 Civil society and cultural studies 5 1.4 The development, representation, and morality of business 10 2 What is culture and why does it matter? 14 2.1 Culture as context: from the arts to morality 15 2.2 Culture and economy in the modernist epoch 19 2.3 The evolution of the field of cultural studies 24 2.4 Shifting the site of “politics” 30 3 But is cultural studies compatible with economics? 35 3.1 On different worlds? 35 3.2 The universality of economics, the diversity of economic culture 37 3.3 Individualism, communalism, and rights 40 3.4 Ethnocentrism and markets 47 3.5 Popular culture and markets 48 4 How does culture influence economic development? 53 4.1 Which culture prospers? Comparative cultural advantage 54 4.1.1 The meaning of economic development 55 4.1.2 Cultural nationalism 59 4.1.3 Values conducive to economic development 60 4.1.4 Checklist ethnography 62 4.1.5 Comparative cultural advantage 64 viii Contents 4.2 For example, different kinds of entrepreneurship 67 4.2.1 Entrepreneurship in its context 68 4.2.2 Culture versus rationality? 71 4.2.3 Cultural fit 73 4.2.4 Cultural studies and public policy 76 5 The culture industry’s representation of business 81 5.1 The image of business in popular culture 83 5.2 The construction of meaning 88 5.2.1 Reading the texts of popular culture 89 5.2.2 Resistance and susceptibility in the creation of meaning 92 5.2.3 Popular culture and the state 95 5.3 A new cultural reading of business 98 6 The market order and the moral order 104 6.1 Unintended consequences and the ethics of business 104 6.1.1 The invisible hand and the minimalist argument 105 6.1.2 Socialism, social responsibility, and the traditional defense of market morality 106 6.1.3 A renewed challenge to business 108 6.2 The minimalist defense of the market 109 6.2.1 The morality of obedience to stockholders 109 6.2.2 From stockholders to stakeholders 111 6.3 Markets and the construction of meaning 116 6.3.1 Room for moral choices 117 6.3.2 Resistant readings in the market context 121 6.3.3 Doesn’t business just co-opt progressive causes? 122 7 Conclusion 128 Bibliography 131 Index 143 1 Introduction A public sphere that functions politically requires more than the institutional guarantees of the constitutional state; it also needs the supportive spirit of cultural traditions and patterns of socialization, of the political culture, of a populace accustomed to freedom. Jürgen Habermas (1992a: 453) The economy, just like the democratic polity, requires more than the institutional guarantees of the constitutional state. Economists have had much of value to say about business decision-making, about the efficiency conditions for the success of individual business enterprises, and about the material and institutional conditions that are conducive to economic prosperity, but rarely do they pay attention to the question of culture. Yet it may well be that it is attention to this more “spiritual” realm that will most help us to understand the workings of the economy. The events over the past decade in the former soviet sphere illustrate well the fact that neither of the fundamental components of a free society, neither its relatively democratic political character nor its relatively entrepreneurial economic environment, can emerge without what Jürgen Habermas calls the “supportive spirit of cultural traditions and patterns of socialization.” An active democratic participation in the public sphere does not arise automatically upon the declaration of the overthrow of a dictator. A flourishing market economy does not automatically arise from the ashes of a centrally planned economy the moment somebody declares the end of communism and the institution of a formal system of property rights. Political and economic freedom is not simply the absence of government controls over the economy and of dictatorial authority.

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