The Emotional Logic of Capitalism

The introduction sets out the main themes and central arguments of the book. It takes issue with the tendency in the contemporary social sciences to criticize markets as eroding social ties and money as imposing a regime of cold, abstract calculation – a process of "disembedding," to use Karl Polanyi's prominent metaphor. This introductory chapter argues that instead we should conceptualize economy as an associative process of simultaneous complexification and organization, and that the signs generated in this way are best seen not as idols or fetishes but as icons. It contends that the secularizing thrust of Western capitalism should not be viewed as a disenchantment of the world but as the sacralization of money, and it advances an interpretation of the distinctive emotional dynamics that accompany this process. The progressive tradition has always had difficulty appreciating the ethical content of economy and the affective charge of money.

This chapter engages debates about the meaning of money. It argues that money should be approached as an icon, a sign that instantly communicates a complex and diffuse meaning. The difficulty of conceptually defining money expresses a paradox that is deeply embedded in our practical relation to money. An icon is a "performative" sign, born of contingent connections yet characterized by an undeniable objectivity. The chapter advocates a pragmatic understanding of performativity as involving not the linear enactment of roles but a more reflexive and interactive dynamic whereby subjects imagine life from the perspectives of others. Iconic signs are constructed through such complex processes of interactive role-taking, and they embody not a discrete, well-delineated meaning but a "quality" at the heart of contemporary society, something flexible and elusive that we nonetheless intuit effortlessly and believe in.

This chapter pursues the theme of iconicity by engaging with key themes in contemporary social theory. Although the emphasis that Foucaultian theory places on the immanent character of modern power hints at a conception of hegemonic signs as iconic in nature, it has nonetheless tended to reproduce an account of capitalist development in terms of rationalization and homogenization. A Peircean understanding of the logic of endogenous hierarchization, allied to a pragmatic understanding of performance, is useful for thinking the paradoxical nature of modern power and permits a conceptualization of the icon in terms of its affective force. The icon signifies not by reducing complexity, but by modulating an accelerating economy of pragmatically motivated association. It thus represents a specifically modern form of sovereignty: it makes no claim to transcendent status but is all the more organically rooted in our experience of life for that.

Through a selective genealogy, this chapter argues that capitalist economy and its iconic signs should be seen as having evolved through the critique of idolatry. Prior to the rise of capitalism, the chrematistical worship of money was considered a primary form of idolatry. Adam Smith's work occupies such a central place in the history of the social sciences because it formulated a perspective that saw money-making not necessarily as a corrosive force but as the basis of a new economic order. This chapter explores the logic at work, drawing a parallel with Weber's thesis of the role of Protestantism in capitalist development. The Protestant ethic renewed the critique of idolatry yet installed money as a more fertile and powerful sign than ever before. It is precisely because money is emphatically an ordinary, human-made sign that believers could prove their faithfulness by approaching it in a spirit of austerity.

This chapter explores the semiotics of iconicity by engaging pragmatically oriented perspectives on signification such as Peircean semiotics and actor-network theory. It examines the logic of social constitution in terms of the operation of metaphor and uses this to explain why networks of signification tend to be characterized by self-reinforcing, centralizing dynamics. Money can be seen as the quintessential icon of modern life because it epitomizes a logic of simultaneous unity and multiplicity. Moderns do not experience money as a source a dismal uniformity, but precisely as potentiality, as offering unconditional, universal access to difference. This generates a particular affective dynamic: money is always a source of problems and anxiety, but this paradoxically only strengthens our attachment to it. At work here is the logic of narcissism, a logic of ongoing reflexivity that continues to center on a sign that the subject experiences as problematic.

In the New World context, the alliance of the Protestant ethic with populist republicanism effected a further secularization of economy. Early twentieth century progressive thinkers viewed themselves as reformulating that alliance for modern times, and they viewed financial expansion as a potential source of moral progress and republican citizenship. This chapter argues that the pragmatist vision of an organic connection between the self and its institutional symbols (the "social self") provides a productive vantage point for understanding the development of American capitalism during the twentieth century, but it also emphasizes that this never took the form of the emergence of a public of engaged, self-governing citizens. Within American progressive thought, this political disappointment has been an important driver behind the problematic turn to the conceptualization of the problems of modern capitalism in terms of consumerist self-centeredness.

This chapter traces the conceptual lineages of the American progressive tradition, engaging with a series of key progressive thinkers. It elaborates the claim that progressive thought has never been able to deal with the problem of narcissistic attachment without reproducing the externalizing logic and judgmentality that is its defining structure. As progressive thinkers became more aware of the challenge that the affective attachments of the modern subject posed to their early political hopes, they turned to a form of idolatry critique, turning a blind eye to the internal complexity of the narcissistic experience and conceptually reducing it to a form of possessive individualism. Although this logic of externalization gave progressivism a central role in the building of twentieth century capitalism, it also meant that the progressive project has not always had a secure grasp of its own historical role and the conditions of its politics.

This chapter conceptualizes the emotional structure of modern capitalist subjectivity by drawing on Erich Fromm's understanding of narcissism as a complex interactive structure of sadistic and masochistic impulses. On this understanding, the icon is the pivot of mechanisms for psychological externalization, a resource for blaming and the redistribution of responsibility. This cannot simply be understood as a depoliticizing movement: modern iconophilia is deeply bound up with the spirit of iconoclasm, and the latter entails a definite willingness to face hegemony when it is perceived to be irrational and idolatrous. This is in an important sense the story of the post-New Deal order: not a decline of capitalist spirit but rather its gradual reconfiguration around the rejection of the attachments and expectations of progressive subjectivity, its elitist paternalism and the lazy, hedonistic sense of entitlement it was seen to have fostered.

The neoliberal discourses that found traction amidst the crisis of the 1970s were harshly critical of narcissistic selfhood and associated this specifically with the progressive mindset. Far from cynically advocating possessive individualism, neoliberalism holds out a promise of purification through austerity. Over the past decades, money has emerged as a fully iconic sign, serving as the point around which an ever accelerating proliferation of financial forms, products and credit relations revolves. The dollar functions as a source of secularized sovereignty, forswearing all claims to external or transcendent status but for that all the more capable of modulating practices from within. This argument is contrasted with the notion, current in many critical perspectives, that neoliberalism represents a movement of chrematistical disembedding that undermines the institutional foundations of capitalist order. Such perspectives are unable to account for the resilience of neoliberal capitalism.