A recent influential proposal of how to define the creative industries is to move social
Although I agree with this definition, I think that it fails to identify a truly
The centrepiece of the original proposal is the role of imitation and copying as the dominant avenue for the generation of information about values. Why do we imitate? Because there are limitations in getting information about the good, given its nature. In the creative industries, this happens because of the in-principle impossibility of assigning an individual value to a good such as a fashion item. The value of the fashion item depends on its use by others, so the only way to reach an individual value assignment is by observing others. However, if we consider other types of goods, there are many forms in which individual value assignments can be difficult, such as in the case of many experience goods, where a long learning curve might need to be traversed first and, in fact, might be impossible to complete if you can only buy the good a few times in your life. The case is similar for very complex goods with high degrees of uncertainty such as financial products, where many claim to be experts, but nobody actually can be, given the fundamental limits to information processing in hyper-complex systems. The latter point can be generalized: Once we conceive of markets as
In my view, the social network markets argument makes a methodological point of much broader significance than intended by its original proponents. This is that consumers are seen as being driven by processes that are largely external to them (which is not new as such, of course). I propose to see social network markets as an example of the much more general phenomenon of
This approach has far-reaching methodological consequences. As has been well established in the recent anthropological work on culture, analyzing networks requires advanced methods in mathematical modelling, thus opening up one channel of cross-disciplinary fertilization (e.g. Bentley et al. 2007, Ormerod and Roach 2008). Another channel can be opened up if we consider the neuronal correlates to networked interactions, which is the focus in this paper. Both approaches can be connected, in turn, with established work in consumer research, especially with a non-mainstream approach, which has, interestingly, a direct counterpart in cultural studies, as it stands so far, namely semiotics (Hartley 2003). In consumer research, semiotics deals with the influence of signs and the use of signs on all stages in consumer choice and its consummation (Mick 1986, Mick et al. 2004). Semiotics goes back to two different intellectual roots: Saussure’s theory of language; and Peirce’s theory of signs. The former, with its emphasis on distinctive features and the synchronic analysis of systems of meanings, generated many of the central notions in the postmodern discourse. In contrast, Peirce’s approach is closer to the sciences (reflecting is own background, see Burch 2010) and has been mainly used in the context of his classification of signs, which allows for empirically grounded taxonomies. This approach is much closer to a naturalistic view on semiotics, which has especially been developed in biosemiotics. In consumer research, the potential of Peirce is partly unexploited, as far as the naturalistic dimension is concerned. This is especially true for the fundamental process of semiosis. As has been shown in recent contributions to the ongoing business of interpreting Peirce, this approach to the process of semiosis offers a conceptual way to synthesize the two concepts of ‘meaning’ and ‘function’, which are constitutive for biosemiotics (Emmeche 2002, Stone 2007, Robinson and Southgate 2010).
In this paper I show that this
There is an even more fundamental reason why social networks are a driving force in markets and consumer choice. This further elaborates on the role of information constraints, but emphasizes another information problem that has only very recently attracted attention by economists (e.g. Bénabou and Tirole 2002, Fudenberg and Levine 2006, Brocas and Carrillo 2008). This is the information problem
To the best of my knowledge (although this is certainly limited), the idea of deconstructing the human brain was presented for the first time as a paradigmatic account for social theory by the sociologist James Coleman (1990: 503ff.), with important precursors in the literature about ‘multiple selves’ (Elster 1986). There is, of course, a long related tradition in psychology, especially in psychoanalysis, but this has always been only a minor side-stream in social theory, and in economics almost entirely neglected.
Coleman introduced a distinction between ‘
The object self is seen as the
The acting self is the agency that
The object self is the principal, the acting self is the agent.
Coleman had a number of reasons for introducing this distinction, particularly because it enabled him to apply the same analytical tools to both personal and corporate actors.
But one reason is methodological. Only by means of this distinction can we explain
A simple but important example for this is food consumption. Especially in the USA, there is much concern about obesity and eating disorders. These have attracted the interest of economists, who have had to face the problem that these dysfunctions persist despite the increasing levels of available information about healthy food, and despite the fact that many individuals do not feel good about their eating habits, thus revealing a high awareness of the issue. Food consumption is a problem for many, for different reasons, and information does not help (e.g. Downs et al. 2009).
So: can the acting self err about the object self? More seriously: does it err systematically?
When Coleman introduced his distinction, he could not rely on recent developments in the neurosciences, which introduced a distinction between the ‘Wanting’ system and the ‘Liking’ system, exactly matching Coleman’s distinction between the acting and the object self respectively. These insights have attracted considerable attention among economists, especially in the context of explaining dysfunctional consumer choice and designing policies accordingly (e.g. Camerer 2006). They relate with independent psychological and empirical research, which has introduced the distinction between different modes of utility, i.e. ‘experience’ and ‘decision utility’ (Kahnemann et al. 1997). There is a clear structural and process-related differentiation between two systems in the human brain that are involved in consumption activities. One is the system that chooses and plans (decision utility, ‘wanting’), the other is the system that signals the outcome of consumption (experience utility, ‘liking’). The first system is by no means identical with conscious choices, but refers to the entire process that leads towards the consumptive act, including, for example, the motions of the body.
This is not the place to go into the details of this research. Suffice to say that the brain represents subjective value in neuronal processes, and that these processes are directly connected with
Now, the point is that the wellbeing produced by the Wanting system is partly independent and certainly different from the wellbeing produced by the act of consumption, hence by the Liking system. In other words,
Again, this is most evident from the example of food consumption (Berridge 2009, Finlayson et al. 2010). On the one hand, eating is regulated by complex homeostatic mechanisms that indicate, for example, satiation. This is the domain of the
This example shows how the acting self can err about the object self:
I must now add one qualification to this claim, because the generality of the phenomenon raises doubts about whether we can speak simply of ‘dysfunctions’, if the underlying mechanism is a universal feature of the human decision system. This way of putting things might prevent us from paying attention to the
One advantage is this. Decision-making takes place in the context of ongoing strategic interaction in human groups, where different goals always work simultaneously (e.g. food-sharing might serve both the purpose of nutrition and mating, see Gurven 2003). The emergence of a separate decision system in the brain allows for the comparative assessment of different alternatives in terms of a ‘common currency’ (Landreth and Bickle 2008, Glimcher 2009). Another advantage is that this also enables phenotypical flexibility with regard to changing environments, thus creating the condition for what can be regarded the unique adaptive edge of the human species.
So, the differentiation between acting and object self provides evolutionary advantages. ‘Dysfunctions’ emerge through particular interactions between this structure and environmental cues. This implies, in turn, that ‘functioning’ is an outcome of a particular constellation of
In this view, we cannot simply uphold the notion of ‘dysfunction’ when talking about the information gap between the acting and the object self. In fact, this gap is a necessary condition for enabling the human brain to be creative and to cope with novelty through open-ended learning.
I propose to refer to this two-headed information process as semiosis in the naturalistic sense. That is, I argue that
Interestingly, Laibson (2002) has proposed a general cue-theory of consumption which makes the same point in the analytical language of standard economics (although he is not talking about semiotics here, of course). In his theory, consumption is always supported by cues, which can move the schedule of marginal utility. For instance, deliciously smelling food raises the appetite and hence the joy of eating. This implies the possibility of dysfunctions, up to the level of addiction. Thus, being addicted to smoking is fostered by the habitual presence of cues (e.g. a pub), which also intensify the craving. Laibson also introduced a further idea that is central for my unfolding argument: The
In order to take account of this idea, I propose a further generalization which starts with a change of wording. No longer do I speak of cues, but of signs. The <cigarette> is the sign of the cigarette. All <goods> are signs of goods; or all goods can be considered in two modes. These two modes relate to the acting self and the object self.
The central issue here can be summarized as in Figure 1. The upper diagram shows the
The Peircian triad as applied to dual selves
We can translate this triadic semiotic structure into the acting/object self framework. Here, we interpret the object as the interface between environment and organism, i.e. the physical causal chain that undergirds the semiotic process. No external object interacts with an organism without activating an interface. For instance, being hit by a stone is mediated as a sensory datum at the skin; a virus meets with the immune system, etc. This interface, such as the physical effects of inhaling the smoke of the cigarette, constitutes the object. Now, I posit that the intermediation via the sign corresponds to the intermediation via the acting self, which operates in a complex system of internal and external signs (e.g. internally, dopaminergic activity can be seen as a sign; externally, visual representations of objects are signs, etc.). The reaction of the object self is an interpretation, involving a confluence of this semiotic mode and the purely physical mode into a certain state, which in turn fulfils a function in a larger system. Thus, the feeling of wellbeing generated from smoking depends on the larger psychosomatic contexts, and ultimately also involves the social environment.
As we can see, in the semiotic view we retain the acting self /object self distinction, which is essentially a reflection of the distinction between the physical and the semiotic mode of interaction between a Piercian object and interpretant. However, in the notion of the interpretant as object self, the two selves are reintegrated again, because the outcome of semiosis is referred to a larger context in which it manifests a function. This function defines the unity of the self. In order to understand this process, we need to look in more detail at the mechanisms underlying semiosis.
Coming back to the social network markets argument, we can now state that there is a
Now, this view entails a principled argument that is related to the original ‘social network markets’ model, with a foundational twist. The model asserts that for certain goods, in principle, value cannot be determined independent of he choices of others. The same holds true for signs in general, if we substitute ‘meaning’ for ‘value’. Following Wittgenstein’s (1958) private language argument (overview in Candlish 2004), we can posit that signs are
In order to understand this process, the role of social networks is of paramount importance. In a nutshell, the acting self can only accumulate information about the object self if it is involved in a process of
Against this background, it is straightforward to see why
‘Random copying’ refers to the mathematical model that describes this specific
The uniqueness of the human capacity to imitate comes to the fore in comparisons with our nearest relatives in the animal kingdom (Tomasello 2008, Tomasello and Carpenter 2007). In this research, another fact about imitation stands out, namely that it requires the capacity to compare the different perspectives of the individuals involved. For example, if a child imitates a directed movement towards an object, they need not only to be able to copy the movement, but also to know the goal behind it. That is, the child reconstructs the intention of the individual who is being copied. Therefore, imitation is deeply connected with the
As a result, we can add another specification to the distributed cognition hypothesis: This is the
Once again, this is not the place to explore the details of the neuroscientific argument. The central point for cultural science is that we can define a new approach to navigate between the under- and the over-socialized notions of the human being, in economics and sociology respectively. The notion of
In a nutshell:
The assumption of collective intentionality revolutionizes the economic theory of choice, but is by no means a new position in economics. Sugden (2000) has proposed the notion of ‘team preferences’ as the more general theory of preferences in economics. My claim is that human choice is fundamentally based on what Sugden calls team preferences or, more generally, on collective intentionality. Team preferences are preferences that form as a result of ongoing social interaction, which can be regarded as the default case in human life, as compared to isolated individual preferences.
The importance of imitation results from the fact that it is a constructive process in building collective intentionality. This is how I justify the generalization of the social network market hypothesis. Markets are ‘social network markets’ because the fundamental process of consumer choice is collectively intentional and hence driven by the dynamics of the mimetic processes. These dynamics can be further analysed by common methods of network analysis.
Methodologically, my proposal boils down to analysing consumer behaviour by linking
I argue that identities are socio-psychological constructs that
So far, I have only considered a most general notion of signs, such as the object that turns into a <cigarette>. However, in human action, language plays a central role. This is also important in the context of social network markets. Most generally, there are two modes of networking. One is the mode of
Introducing language has far-reaching implications for analysing the process how collective intentionality emerges. This is because language is fundamentally
Identities are of crucial relevance if we consider the relation between the acting self and the object self in interaction with others, especially in a strategic context. Again, this has been emphasized in recent research on the human brain, resulting in the ‘social brain’ hypothesis (Frith 2007). The human species evolved in a highly socialized context, in the sense of continuous and intense social interactions with strategic tensions, such as in mate competition. In this environment, the possibility of
However, in a dual-selves setting, opaqueness also blurs information about oneself. The acting self does not have an internal anchor to fix its own identity, which is hidden in the inaccessible object self. In other words, the actor who plays a role might finally not know which is the role and which the self.
Interestingly, this problem has been articulated in the recently emerging ‘economics of identity’ (Akerlof and Kranton 2000) in terms of the tension between the notion of ‘social identity’ and ‘personal identity’ (Davis 2003, 2007). Social identity is a combination of social categorizations, which are semiotic in nature. Identities are communicated explicitly and implicitly with a vast number of signs, which, in the context of the acting self /object self dichotomy, signal identities not only to others but also to one’s acting self. But the question remains open how this interplay of different categorizations is resulting into a consistent individual identity. This is the problem of personal identity.
Here, language is the problem and the solution, at the same time.
Language is a problem because it creates the possibility of arbitrary identities. It is a solution because language is a process that evolved with certain universal principles. If language were used only for cheating, it would lose its evolutionary advantage entirely, or would fail to emerge at all in human phylogeny. Language can offer an evolutionary advantage only if it is to a large degree truthful. These conditions have long been illuminated by the philosophy of language, and assume significance also in our context (e.g. Grice, for an overview see Lycan 1999).
In a nutshell, what follows from this is that language is a store of narratives, and narratives constitute identities, because they impose conditions of consistency (Ross 2007, Davis 2008). It is those conditions for consistency where meaning emerges that goes beyond function, but at the same time fulfils a function. Meaning emerges through reasoning, as sense-making. An identity is a process of sense-making in telling a narrative about the self. These narratives are central in interaction with others, as they contribute to the common knowledge that drives the emergence of particular solutions to strategic games in society (Ross 2005).
Once a narrative is public, it is no longer arbitrary, unless everybody accepted arbitrary violations of consistency. This public nature of the narrative feeds back to the acting self. The acting self establishes its identity in a fundamentally public way, and this is also the way that it speaks to itself. Meaning emerges in the narrative process of fixing identities in the network mode of communication.
This resolves the tension between social and personal identity via the explicit introduction of
The constitution of the self in the cross of identity
This foundational point, again, extends the original idea of social network markets. Modern creative industries contribute to the individual creation of identities by offering a social medium of reference. For example, in the music business, if veteran rock stars manage to continue with highly profitable tours, this is an externalized medium for telling millions of individual narratives of their fans, many of them aged fifty plus today. All new music hypes also serve to demarcate identities across cohorts and generations, and across different socio-cultural groups in society. These processes are arbitrary in the sense of emerging in contingencies. But once the meanings are fixed, they lose this arbitrariness, and become the object of negotiations about meanings. This example reveals the almost paradoxical nature of the self, especially in the context of modernity. It is highly individualized, but at the same time highly dependent on the constant flux of signs in collectives of sign users.
To summarize, I argue that the naturalistic approach to semiosis bridges two perspectives on the role of signs in constituting the self. One is the view resulting from recent research in neuroscience, psychology and behavioural science, in which intentionality turns out to transcend the boundaries of the body, thus fusing the notions of distributed and social cognition. The other is the view resulting from the philosophy of language, which emphasises both the systemic nature of meaning and its historicity. In the end, we conclude with the general idea that the self, as a synthesis of acting self and object self, is a product of semiosis, naturalized.
In this way, we end up by fusing two conceptual domains in the notion of ‘cultural science’.
One is the conventional notion of culture in terms of systems of shared meanings. If we approach this in the semiotic way and exclusively emphasize Saussurean synchrony, we may end up with the kind of principled philosophical issues that stood at the centre of postmodernism. These are, especially, the arbitrariness of any single sign or cultural meaning, and its holistic embeddedness in the entire system of semiotically mediated meanings. As there is no logical benchmark to assess entire systems of meaning in comparison, we are left with an apparent conclusion that ‘anything goes’.
However, if we add the notion of science to this picture, it changes completely. In this context, the development of cultural studies in the past may have unduly emphasized Saussurean synchrony at the expense of diachrony. But if
One is the role of
The other is the notion of
So, we may not be able to predict the success of Lady Gaga in modern popular culture, but we can trace the dynamics of the underlying causality and build models of copying and diffusion, that explain an essential part of the picture.
Another important aspect of the scientific approach to culture is to make the cognitive foundations of culture explicit. In particular, the notion of culture can be related to the notion of
One is the process of
The second aspect refers to the distinction between
Thus, the cultural science approach to consumer behaviour offers a new framework for understanding old facts and insights, but also for generating new hypotheses. I think that the recent trend in economics to focus on the role of environmental cues in establishing rational action is already a strong pointer to recognizing the fundamental role of culture in human behaviour. Interestingly, this goes against the grain of recent theorizing about culture in economics, which seems to emphasize the role of ‘mental programs’ and ‘cognitive schemes’ (for a critical review, see Herrmann-Pillath 2010d). Instead, what is needed is a revival of very old-fashioned ideas about culture in anthropology, namely focusing on the role of artefacts and things as items external to the human mind, which have a meaning in communities (Brumann 1998). All these are signs in a material world, and they interact with processes in the brain, ultimately constituting the mind as a cultural phenomenon.