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 20: Cultural and institutional co-determination: the case of legitimacy in exchange in Diablo II

Solomon Stein

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


When Austrian economists look at the role culture plays in economic action, it is primarily seen as operating in the background, giving shape to the observed structure of institutions and individual behavior that is the subject of economic analysis. Often, given the historical reality confronted in trying to give meaning to human affairs, this treatment is entirely acceptable: economists never observe action situations in which, out of some ur-environment, a society emerges. However, when considering how to understand the role of culture in theory, decisions that are entirely justified in these historical cases may not be giving us the whole story. In particular, while the current theoretical treatments of the role of culture in economic action tend to treat cultural factors as being logically antecedent to institutional forms, the actual relationship could be more akin to co-determination: that a certain culture develops in a particular area may be causally linked to the institutional forms chosen before the distinctive elements of that culture emerge. These causal linkages may dissipate or be severed, but there is no reason to think this is logically necessary: the culture and institutions of a society could continue to coevolve, just as their interplay shaped the initial formation of the cultural/institutional system. Situations in which there is comparatively little historical distance may give us as social scientists a chance to examine these questions without having by necessity to treat culture as a prior constraint.

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