Cultural economy is a new approach to a field of inquiry hitherto dominated by mainstream economics and political economy. Mainstream economics offers a technical inquiry into the economy conceived as a sphere of instrumentality driven by the predictable rationality of calculating subjects. Political and cultural economy shift attention to the mediating and constitutive structures and relations which complicate and animate the creation and direction of markets and hierarchies. The difference is that the established forms of political economy theorise social embeddedness and the role of collective social actors like social classes; whereas the newer kinds of cultural economy focus on how discourse and cultural practice constitute the spaces within which economic action is formatted and framed.

These differences matter because heterodox economics can generate a new, critical understanding of present day capitalism. Political economy has classically done this by generalising about the stages and forms of capitalism, whether in the form of a post war Fordist regime of accumulation or via the more recent opposition between Rhenish and Anglo Saxon capitalism. Some cultural economists have tried to do something similar by proposing an epochal understanding through slogans about the rise of the network or knowledge society. Theme 1 cultural economy researchers believe that such epochal generalisations run ahead of the evidence and instead propose to deconstruct the projects of reform through more private sector management and marketisation which have dominated political agendas since 1979 in Britain and the United States.

The rhetoric of market economics and the narrative of private sector management have become increasingly important over the past 25 years as politicians of all parties have sought to extend the sphere of market competition and give corporate management a leading role. The political hope is that this mix of market and (private sector) management practice will deliver productive dynamism and consumer choice as long as social responsibility is enforced through regulation and governance which protects consumers and ensures managers act in the shareholder interest. The mixed and contradictory British results include massive re-regulation through agencies such as the Financial Services Authority and disastrous privatisations such as rail while, for that matter, private sector productivity continues to lag amidst continuing debate about public service provision.

From this point of view, theme 1 mobilises researchers with a range of expertise from numbers based business analysis to anthropology who can investigate outcomes as well as narratives and identities. They have developed a series of related inquiries into the major issues around private sector management and public sector reconfiguration which interrogate the public claims and assumptions of those who claim that more and better management in a market framework is the solution for our social problems and the key to improved performance.

What we have done so far

The scientific programme promised work on three interrelated sets of issues about the changing culture of expertise, the dynamics of cultural production and consumption in relation to social divisions, and the growth trajectory of the knowledge and cultural industries. In addressing these issues we chose to focus on finance rather than the cultural industries. Theme 1 was therefore well placed to publish pioneering academic research in relation to the social panic on Private Equity, and to present an analysis of the background to the ‘credit crunch’. The achievement of this theme has been to develop an integrative account of ‘running the cultural economy’ which highlights the tensions in financialized capitalism between the powers of intermediary elites and the masses. It also emphasises conjunctural complexities in which there are competing and conflicting logics of change in evidence.

We produced a distinctive non-epochal account of the financialization of present day capitalism which, unlike earlier rentier capitalisms, depends on mass savings and investment (Froud et al 2008). We have researched how multiple logics work through many hierarchies and divisions and have shown why the differentiation of culture and economy is unsustainable, as can be seen, for example, in the outsourcing of IT service centres where issues about process standardisation were as important as cost savings, or in the ways in which financial flows and asset values have to be visualised through specific screen software in the financial markets. We have developed revisionist accounts of institutions and their effects which reinforce the current tendency to reject ideas about institutional coherence and complementarity. In a broader social perspective, our work on the democratisation of finance shows that financialized capitalism runs on broken promises for the masses and predictable beneficial outcomes for elites and that increased financial literacy will not deliver security for all.