Table of Contents

Culture and Economic Action

Culture and Economic Action

New Thinking in Political Economy series

Edited by Laura E. Grube and Virgil Henry Storr

This edited volume, a collection of both theoretical essays and empirical studies, presents an Austrian economics perspective on the role of culture in economic action. The authors illustrate that culture cannot be separated from economic action, but that it is in fact part of all decision-making.

Chapter 18: Network closure, group identity and attitudes toward merchants

Ryan Langrill and Virgil Henry Storr

Subjects: development studies, development economics, economics and finance, austrian economics, development economics


The nature and evolution of the spirits animating commercial activity are best understood by a cultural approach to economics which focuses on the meanings that individuals attach to their circumstances and actions. This approach can illustrate how the values and ambitions of people in different times and places shape commercial activity as well as how the changes in resource availability and external institutions shape people’s values and ambitions. This chapter discusses two ‘spirits of capitalism’ in Tokugawa Japan: Osaka’s merchant spirit and Edo’s warrior spirit. The two cities had vastly different demographics, which sparked in merchants different values and ambitions. Those values and ambitions, in turn, generated a peculiar ‘spirit,’ which governed commercial activity and shaped the city’s economic landscape. The chapter will continue as follows: section 18.2 examines how ‘closure’ can initiate cultural change. Section 18.3 provides a brief history of Tokugawa Japan. Section 18.4 discusses the divergence of Osaka’s and Edo’s cultures and economies, and how those two relate. Finally, section 18.5 concludes by discussing the chapter’s implications.

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