Creative Industries and Economic Evolution

Creative Industries and Economic Evolution

New Horizons in Institutional and Evolutionary Economics series

Jason Potts

The creative industries are key drivers of modern economies. While economic analysis has traditionally advanced a market-failure model of arts and culture, this book argues for an evolutionary market dynamics or innovation-based approach. The book explores theoretical and conceptual aspects of an evolutionary economic approach to the study of the creative economy. Topics include creative businesses and labour markets, social networks, innovation processes and systems, institutions, and the role of creative industries in market dynamics and economic growth.

Chapter 11: Capitalism, Socialism and Culture

Jason Potts

Subjects: economics and finance, evolutionary economics


Prolegomena This chapter is based on a working paper that argues that the rise of the modern cultural economy is in part due to institutional change toward a global market economy, giving rise to the emergence of recognition of creative industries and the creative economy. The title is a riff on Joseph Schumpeter’s famous book Capitalism, Socialism and Democracy in which he sought to connect an evolving economy to an evolving political order. I suggest here that his arguments also extend to an evolving cultural order. 11.1 INSTITUTIONS OF THE ANCIEN REGIME AND THE CULTURAL MARKET ECONOMY This chapter offers a Schumpeterian – cf. a Marxian or political economy – analysis of the institutions of the creative industries in relation to both the institutions of the pre-capitalist order (the ancien régime) and the institutions of the market capitalist order. We begin by recognizing that the institutions of the cultural and creative economy, as elucidated in Chapter 2, are conventionally (but wrongly, as is the theme of this book) analysed in opposition to the institutions of market capitalism. Cultural studies, along with much of the arts, humanities and political economy, broadly proceed from an analytic foundation derived from or significantly influenced by Marxist formulations of the institutional structure of the economic system.1 It was of course Karl Marx who coined the term capitalism as the antonym of socialism, as an economic order defined by the pecuniary motive and the rationalization of all aspects of economic life toward the drive to accumulate capital....

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