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Economics and Culture

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In this chapter we address the interaction between economics and culture and outline the consequences of the economic value system's dominating role in all sectors of postmodern society. We argue that the economy invades culture and that the consumer conception dominates more and more of the human mind. This is a fundamental threat not only to economics itself but also to culture and sustainable development. We argue that stakeholder theory must be interpreted in a way that opens communication between agents representing both the economy and culture. We also argue that the interplay among the diff erent stakeholders must take place in a communicative arena.

During the last decades, an increasing number of societal sectors have been subjected to privatization and the market economy in the quest to reach goals connected to economic efficiency, cost reduction and profit maximization. This trend has gone so far that it seems appropriate to characterize it as ‘economism.’ By economism we mean a situation where the economic value system plays a dominating role in society, ignoring or reducing other values in culture and nature to simplistic economic terms. Because sustainable development requires a non-reducible value system, one-dimensional economism seriously threatens sustainable development.

As Coase (1993) formulated it in his 1991 Nobel lecture, ‘The concentration on the determination of prices has led to a narrowing of focus which has had as a result the neglect of other aspects of the economic system’ (p.228). One important result of this process is that cultural values are forced to operate on an economic scale, where all values are converted to market prices.

There is a growing agreement among scholars in economics and business administration that sustainable development depends on a constructive interplay among economics, nature and culture. This conviction has resulted in the development of new subjects, such as ‘corporate social responsibility’ (Carroll 1979, 1991, Wood 1991, Gibson 2000), ‘environmental management’ (Wellford & Gouldson 1993, Hopfenbeck 1993, Wellford 2000), ‘ecological economics’ (Martinez-Alier 1990, Costanza 1991, Daly and Townsend 1993, Daly 1999) and ‘new economy’ (Zadek 2001).

Document Type: Research Article


Publication date: January 1, 2006

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