Culture, society and economic theory

Abstract

Ever since the beginnings of classical economic theory in the early nineteenth century, economics has faced culturally based criticism from a long line of literay authors. None of their arguments made much impression on economic theorists, and mainstream economic theroy remains individualistic, timeless, and lacking in institutional content. Culture has now been incorporated into the noneconomic social sciences, especially sociology and social anthropology, but the resulting theory has tended to be more structural and timeless than the literary conception of culture. In extreme cases the outcome has been a structural reductionism at the opposite pole to the individualistic reductionism of neoclassical economics. This article argues that the old literary criticisms of economics are still relevant and can provide useful guidelines for non-neoclassical economic theory. Their great merit is that they rest on the original definition of culture as a process, which avoids a static separation of structure and agency. The same principle underlies some recent work in social theory, and it could be an important unifying theme for non-neoclassical economic theory. A culturally informed institutional economics could build upon much that is valuable in existing institutional, post-Keynesian and Marxian approaches. It would also be equipped to address cultural and interpretative questions beyond the ken of mainstream economics.