The Emotional Logic of Capitalism
What Progressives Have Missed
Martijn Konings



The contemporary social sciences offer a ready-made narrative template for expressing critical concerns with the role of markets and money in modern life. This model depicts markets as eroding social ties and weakening norms, and money as imposing a regime of cold, abstract calculation that undermines the organic connectedness and diversity of human life. It emphasizes that economic forces are often in conflict with the substance of social life, that their growth occurs at the expense of communal institutions, and that there is something artificial and therefore ultimately unsustainable about this process. In this perspective, the market has spun out of control; and the task facing society and its democratic institutions is to push back and limit the pernicious consequences of unshackled markets. This narrative finds particularly prominent expression in the growing influence of Karl Polanyi’s (1944) thought, which portrays modern capitalism as driven by countervailing movements of market dis-embedding and re-embedding; that is, by “double movements” (e.g., Ruggie 1982; Helleiner 1995; Altvater and Mahnkopf 1997; Birchfield 1999; Blyth 2002; Gills 2008; Wade 2008; Abdelal 2009; Steiner 2009; Fraser 2011; Cangiani 2011; Streeck 2012; Dale 2012; Block and Somers 2014).1 On a Polanyian reading, markets tend to autonomize themselves from society, and the destructive consequences of this process trigger a response from society that seeks to re-embed financial forces in regulatory frameworks and social norms. Polanyian thought thus defines the character of economy by its tendency to disarticulate itself from social life and to undermine the distinctive qualities of human association. If markets and money are social institutions created by human hands and minds, they are seen to be special, contradictory institutions, driven by an expansionary logic of possessive individualism that negates these social origins. Capitalist money is like an idol, a human creation that, owing to the way we lose sight of our own role in animating it, comes to face us as an independent power, an external force.

In this book, I argue that Polanyian thought represents a problematic way of understanding the nature of modern capitalism. Far from being characterized by a growing externality of economy and sociality, capitalism operates through their imbrication: morality, faith, power, and emotion, the distinctive qualities of human association, are interiorized into the logic of the economy. This is of course exactly the kind of claim that Polanyian perspectives typically reject as “economistic,” as reducing society to the utilitarian logic of the cash nexus and failing to accord independent salience to social and political factors (e.g., Block and Somers 1984, 48). According to such arguments, the problem with Marxist and neoclassical approaches alike is that they fail to recognize the independent logic of social, cultural, and political processes and consequently produce an inaccurate image of capitalist development as an effective colonization of human life by the market. It is, however, crucial to appreciate that Polanyian thought shares its basic understanding of economy with the approaches it criticizes. The depiction of economy as a corrosive, fragmentational force means that it has little eye for the social and moral content of economy itself; the “dis-embedding” metaphor encourages us to conceive of the autonomization of money in terms of disarticulation, the rise of possessive individualism and instrumental rationality at the expense of substantive associational logics. Polanyian thought by and large accepts an economistic account of economy and then seeks to compensate for this by bringing in other aspects of human life as independent factors.

This book aims to recover a different meaning of economy. It depicts economy as operating through what we might call, following actor-network theorists such as Latour (1993, 10), processes of translation and purification, forging new connections among different phenomena and synthesizing these into a coherent whole. Economy is a paradoxical process of simultaneous complexification and organization, the expansion of network connections and the constitution of these new alliances as part of objective social facts. It involves pragmatic ordering, the reconfiguration of patterns and the constitution of the new assemblage as an identity that we can relate to efficiently. In other words, economization is productive: it involves the organization of connectivity rather than disintegration. Appreciating this constructive aspect is crucial, as it is all too easy to caricature this process as nothing more than fetishism (“first you create something, and then you attribute an independent reality to it”). Such an interpretation fails to recognize that purification is not a cognitive limitation but a pragmatic capacity, an ability to intuitively discern the pattern composed by heterogeneous elements (Latour 2010). It involves the acquisition of skills, the ability to grasp a complex network of connections as a coherent entity, without having to retrace all the details of its historical emergence every time we encounter it. The process of “forgetting” at work here does not involve the actual loss of memory or growing disconnect, but the kind of forgetfulness that often attends intimate familiarity. We do not end up believing that the object is an external thing-in-itself or a god, commanding natural or transcendent powers; it’s just that we take it for granted.

Money is the quintessential outcome of the generative logic of economization. In everyday life, we continuously switch back and forth between viewing money as a simple, unitary fact and taking it as a relational construct that operates through highly complex rules of translation. Money is constructed so well that its myriad parts efficiently work together as a whole, economically. This makes money paradoxical: we rely on it as the most objective fact in our lives, the most unambiguous standard that modern society provides, even though we perfectly well know that it is nothing more than a convention that operates through contingent rules and an endless series of commensurations. Crucially, in our everyday engagement of money we do not experience this paradox as problematic: we “know how” to handle money’s duality, even though we don’t understand exactly how we came to have this skill. Indeed, we are intuitively aware that money is objective because it is constructed and differential, that money would quickly lose value if it wasn’t for the complex constellation of relations that ensures our ability to convert it into an infinite variety of other things. We experience money as possessing “iconic” characteristics: we just “get” its meaning, even though this meaning remains conceptually elusive and we may not know exactly what it is that we grasp so easily or how we do so. An icon is a sign that has the curious capacity to signify metonymically, to express a constellation of which it is a mere part, deploying patterns of connectedness to express the character of the whole. “To be iconically conscious is to understand without knowing” (Alexander 2008, 782).

It is only when we switch into a critical mind-set that we lose our appreciation of the constructive role that economy plays: we now come to view things that are constructed as “merely constructed,” as possessing only a low level of facticity, and we begin to see the tendency to attribute reality to such things as a cognitive mistake or limitation, akin to fetishism or idolatry. Suddenly we become concerned that economy is a process whereby mere conventions and fictions acquire a life of their own and, owing to the way in which people literally lose track of their own role in constructing them, become disembedded. We deny money’s iconic characteristics, its pragmatic origins and complex connectedness. This suppression of our intuitive awareness of the productive, generative aspect of economization means that the critique of disembedding looks past a practical relation to money that we perform on a daily basis. It employs what Bourdieu (1990a, 380) terms a “scholastic point of view,” turning a blind eye to key aspects of our lived experience. Economy is now depicted as producing not coherent social norms and institutions but parasitic entities, forces that turn against the very social life that produced it, Frankenstein-like: idols that are sustained only through the absorption and reification of our life force. In this way, the unreal fetish comes to feature as a truly “brute fact,” shorn of all human qualities and imposing an alien logic of instrumental rationality. Thus, as a first step, Polanyian thought polarizes the concept of money, alternately portraying it as a cold, external force devoid of human content and as a mere illusion, a fiction that exists only by virtue of all-too-human irrationality; as a second step, it rolls these two images into an image of economization as a destructive, asocial process of disembedding; and then, as a third step, appalled by the dystopian vision it has produced, it opposes this image of economy to a notion of true, communal sociality.

At the heart of the argument developed in this book, then, is the claim that the disembedding narrative amounts to a form of idolatry critique. In a Polanyian perspective, it is through the fetishization of fictions, humankind’s tendency to worship its own creations and to forget its own role in animating them, that money comes to operate as an independent, thing-like force, the god of a secular society. This is seen as a specifically modern kind of idolatry, generating not enchantment but mere reifications, lifeless forces that play havoc with our humanity.2 Of course, idolatry critique is more typically associated with Marxist thought, in particular its theory of commodity fetishism and reification. But a very similar conceptual logic is at the heart of the much more mainstream Polanyian critique of economy, which is closely associated to progressive-liberal traditions of thought. The fact that Polanyian authors never tire of contrasting the pluralistic openness of their own work to the alleged formalism and economism of Marxist thought is best understood as a strategy of disavowal, a means to divert attention from the persistence of a core of economism at the heart of Polanyian thought itself. To emphasize the role of idolatry critique is to argue that the problems with modern conceptions of critique go deeper than is appreciated in the tendency of modern progressive thought to distance itself from ideology critique, usually specifically associated with the Marxist tradition (Jarvis 2000; Benson 2002).

The critique of idolatry is characterized by a paradoxical logic that is particularly evident in its most radical manifestation, the practice of iconoclasm. Iconoclasts seek to make the worship of idols impossible by destroying them (the iconoclast thinks of himself as an “idoloclast”), but they have a way of subsequently turning themselves into iconophiles, replacing the signs they have just destroyed with signs of their own making (Mitchell 1986). This suggests that the productive force of the sign was not canceled when its material image was smashed, that the sign had iconic features that the iconoclast overlooked (Belting 2005, 308). The human connection to signs always incorporates an element of strategic motivation and pragmatic use and is therefore always more reflexive and organic than the iconoclast gives it credit for. As Ellenbogen and Tugendhaft (2011) argue, human history is pervaded by a strong streak of “idol anxiety,” an ever-present concern that we might be misled by our own fabrications. Humans are always-already reassessing their symbols and adjusting their relation to them; their attachment to their signs is therefore never just willfully irrational but the result of a long history of pragmatically motivated associations. This is exactly what the iconoclast denies: she rejects the claims that the worshippers of the sign make for its economic reason, denies the possibility of a reflexive iconophilia (cf. Latour 1997, 81; Ellenbogen and Tugendhaft 2011, 2). To a certain extent, then, the willful superstition and groundless irrationality of the idolater are always fantasies entertained by the iconoclast. That should not lead us to simply dismiss the concerns of the iconoclast, who often has good reason to be suspicious of the claims and representations made by the sign and to be wary of the allegiance that its defenders demand. The point is just that the sign was not an empty fiction, that the iconoclast was not in fact above its influence, and that the attempt to break it consequently had an unexpected constructive force. Far from occupying a position external to the symbolic economy, the iconoclast plays a highly productive role in it.

The paradoxical effects of iconoclasm are at the heart of Weber’s (2003 [1905]) account of the spirit of capitalism: it is precisely in a Protestant ethos that is hyperaware of the danger in idolizing graven images that money assumes a tremendous degree of symbolic density, affective force, and organizing power. It is money’s mundane futility, its emphatic nothingness, that makes it a source of practically infinite demands and so a central point of orientation for earthly activity. The money icon organizes a distinctly modern form of faith, a form of belief that incorporates a reflexive awareness of the dangers of idolatrous, literal belief: the promise that it holds out is not one of magic but of redemptive austerity, the purifying effects of taking personal responsibility for the operation of the economy. Of course, Weber viewed the alliance of economy and Protestant faith as the start of a process of secularization and disembedding that would end up being ruthlessly destructive of substantive values and public meanings: placing too much emphasis on self-denial and mechanical wealth maximization, his account of capitalism easily slid back into a disembedding narrative that conflated austerity with possessive individualism and instrumental rationality. This book draws rather different lessons from Weber’s observations and depicts the secularizing thrust of Western capitalism not as an attenuation but as a “metamorphosis of the sacred” (Brown 1959, 248); not as a disenchantment of the world but as the sacralization of money. It is not so much the case that “Christianity in the time of the Reformation . . . encourage[d] the emergence of capitalism,” as Weber might have put it, “but rather [that it] changed itself into capitalism” (Benjamin 2005 [1921], 261) by lodging the structure of iconoclastic faith and its paradoxical affective force at the heart of this system. The rise of modern capitalism has not evacuated belief but entailed its transformation (Jakobsen and Pellegrini 2008): we do not fetishize money, do not mistake it for a thing-in-itself, and this only makes our belief in it all the more organic and unconditional. The power of money works immanently, through the logic of its constitutive associations and attachments.

That the critique of idolatry is internal to the dynamics of discursive construction becomes especially clear in modern life. Moderns use the word “iconoclasm” in a distinctly figurative sense, which reflects an implicit awareness that there is something pointless about destroying a material image as if it were a discrete object. If we still heavily rely on idolatry critique, its use has become increasingly rhetorical: we know that signs are sustained by much more than willful irrationality, but accusing others of precisely such irrationality can serve as a source of discursive traction and influence. This judgmental style of criticism is at the heart of the modern character, who experiences all manner of problems with existing symbols and institutions yet has difficulty identifying an appropriate response to address this discontent: smashing the material carriers of hegemonic signs seems like a futile plan and, owing to the complexity of modern life, even a more gradual process of reconstructing its relation to them often seems curiously out of reach. In this context, idolatry critique comes to serve more and more as a means of externalization, a way to legitimate and sustain our own emotional investment in the sign by disavowing our issues with it, contrasting our own beliefs and commitments with the imagined superstition of others and attributing social problems to their irrational practices. Modern iconoclasts do not demand an attenuation of attachment to the sign, but a proper, nonidolatrous commitment to it. The modern subject often employs its reflexive capacities not to transform its own relation to the iconic sign but to build up a fantasy of a corrupted other that prevents the sign from operating in the proper way and delivering on its redemptive promises. In other words, idolatry critique becomes a technique of narcissism, which may be understood as the emblematic character problem of the modern subject: it denotes the logic of what Brown (1995, 52) calls “wounded attachments,” the paradoxical way in which moderns use their reflexive capacities to sustain forces that injure them. The modern subject tends to put iconoclastic sentiment at the service of its iconophilia.

For the purposes of this book, this paradoxical simultaneity of iconoclasm and iconophilia is perhaps most richly manifested in the American populist-republican subject, which is forever dissatisfied with existing institutions but maintains an unwavering belief in their redemptive promises. The colonization and expansion of the New World was centrally motivated by a renewal of the iconoclastic impulse of the Protestant ethic, by the concern that Old World attitudes to money were fetishistic, indulgent, and sinful. The spirit of popular republicanism has never sought the destruction of money but its reconstruction and democratization: it forever sees money and markets as sources of corruption but also looks to them as the basis of a redemptive form of life, as the institutional foundations of an authentic republican regime. Populist discourses feature elaborate fantasies of idolatrous subjects that act in bad faith and prevent money from playing its proper role. And it is such fantasies of corruption that permit faith in the icon’s purifying and redemptive qualities to gather force. In this way, populism’s paradoxical combination of iconophilia and iconoclasm generates tremendous emotional energy. The further secularization of the Protestant ethic through its alliance with populist republicanism has generated a capitalist spirit that is far more expressive and affective than Weber’s version. Nor, as is often suggested, has this ethos lost its hold on the American imaginary in the transition from nineteenth-century yeoman producerism to twentieth-century consumer capitalism: populist republicanism’s animated conception of economy has played a crucial role in shaping the development of American capitalism right up to the present.

Progressive-liberal discourses have always had considerable difficulty coming to terms with the moral charge at the heart of the populist-republican image of money and the market, its capacity to elicit belief and political motivation. The Polanyian image of disembedding is unable to productively relate to such conceptions of economy and consequently affords little grip on their affective force and ethical appeal. The critique of disembedding represents a form of idolatry critique that generates little iconoclastic spirit but suppresses the affective force of economy. We might then read the Polanyian image of the double movement as an intellectual sanitization of the paradoxical experience of the secularized economy: the very economic duality that in the populist imaginary serves as a source of emotional energy becomes in the Polanyian imaginary a rationale for external critique, distant lament, and technocratic managerialism. Whereas the populist spirit owns the judgmentality of its idolatry critique, progressive thought disavows even this sentiment, taking itself to be merely offering dispassionate diagnoses. The progressive inability to discern the affective force of economic signs should not therefore be considered merely a conceptual shortcoming or limitation: it is itself a practically consequential form of externalization. Indeed, seen from a populist-republican angle, this inability to discern or acknowledge the redemptive potential of economic signs is itself idolatrous. Over the past decades, it is the progressive-liberal subject that has come to occupy the position of the unfaithful, inauthentic subject within populist discourses. Its character is portrayed as steeped in spineless patronage, unprincipled dependency, and hedonistic entitlement. It is seen to relate to money in a fetishistic manner, unwilling to assume responsibility for the operation of the economy and instead looking for magical handouts and undeserved bailouts. In an important sense, then, the reality that contemporary progressive thought criticizes through the lens of disembedding is itself constituted through a harsh condemnation of progressivism as a primary threat to economic order.

The task of this book, therefore, is not merely to advance a critique of Polanyian thought but also to trace the political significance of the imaginary that it expresses. To this end, the second half of the book considers the significance of the evolution of American progressive thought from the early to the late twentieth century. While nowadays we readily associate progressive critiques with the critique of disembedding, early progressive thought (and in particular its most articulate manifestation in the guise of pragmatism) relied on an understanding of economic modernization that had much greater appreciation for its immanently generative logic: it depicted this process not as an alienating external force but as producing iconic signs and institutions that would facilitate the logic of human association of which they were born and so serve as the basis of a democratically inclusive order. Unlike Weber, early progressive thinkers viewed the economic transformation that the United States was undergoing during the late nineteenth and early twentieth centuries with considerable optimism. But, as we know, the democratization of financial institutions and the economic integration of the American public did not readily translate into increased capacities for republican self-governance. As Veblen (2007 [1899]) already observed, capitalist subjects, far from being ideal candidates for democratic citizenship, suffered from a paradoxical lack of flexibility and empathy, narcissistically stuck on economic signs in ways that were morally and psychologically injurious to both selves and others. And this disappointment with the capacities of the modern self should be seen as a crucial driving force behind the development of progressive thought during the twentieth century.

The progressive-liberal tradition has largely been unable to deal with the narcissistic structure of the modern self without reproducing the very externalizing logic that is at its heart, conceptually reducing the problem of narcissistic attachment to possessive individualism and turning a blind eye to its internal complexity, relational character, and organic roots. That is, it has dealt with its disappointment with the icon by criticizing it as an idol. Tracing the lineages of American progressivism reveals a shift from an associative conception of the self to a conception of a utilitarian individual, instrumentally rational but substantively irrational and in need of being embedded in normative structures. At an intellectual level this shift is reflected in the passage from pragmatism to the Parsonian version of Weber, but it also has an important practical dimension: the conceptual evacuation of ethics from economy entails an emphasis on the need for external infusions of morality that displace agency from ordinary people to elites, a trend that was already evident in the making of the New Deal. The twentieth-century progressive project can be read as an attempt to approach the problematic attachments of modern subjectivity as a cluster of empirical symptoms, to be managed through outside interventions by subjects who imagine themselves unaffected by them. This means that progressive discourses played a paradoxical role in the making of twentieth-century American capitalism, relying on an increasingly formalistic (economistic) conception of economy while promoting its expansion into new spheres of human life.

If this particular logic of externalization allowed progressive liberalism to play a highly productive and prominent role in the making of twentieth-century capitalist order, it also entailed a growing inability to comprehend its own historical role, a certain out-of-touchness, a growing disconnect between the republican spirit of American capitalism and the progressive imaginary. A highly successful project for the first half of the twentieth century, during the 1960s and 1970s progressivism found that its discourses were increasingly unable to govern the interests and identities that had grown up under its reign. In this context, progressive discourses lost some of their benevolent paternalism and adopted a more severe and punitive tone that was emblematically articulated in Lasch’s (1979) critique of the narcissistic subject, seen to be so concerned with its individual, hedonistic enjoyment that it was no longer capable of fulfilling even the minimal civic and public commitments required by progressive citizenship. This critique of the ungovernable subject was similar in tone to more conservative critiques—except that the latter effectively turned the accusation of narcissism back on progressivism itself. Depicting pathological self-absorption as specifically the affliction of the progressive spirit, these neoliberal discourses found far greater popular traction. Progressive discourses offered a critique of fetishistic consumerism that enjoined the subject to keep the lid on its irrationality and perform the role that progressives had imagined for it. Neoliberal discourses, by contrast, were more attuned to the relational and affective dynamics of narcissism, demanding not an attenuation of the subject’s attachment to money but precisely an intensified and more authentic commitment, a spiritual purification of the subject’s relation to the market. Neoliberal discourses manifest a fully secularized Protestant spirit: acutely aware that money is a “mere” convention, they insist that we not fetishize it, not expect proceeds without making investments and honoring our debts.

This combination of iconophilia and iconoclasm has given neoliberal discourses a tremendous ability to portray the faithful engagement of economic signs as the road to the realization of an authentic, republican self. Their affective force and mobilizational capacity have been especially evident in the paradoxical role that crises have played over the past decades. Financial instability has never failed to trigger popular anger, and neoliberal discourses have evinced far more of a capacity to connect to such popular discontent than have progressive discourses. Whereas the latter talk of improved regulation and prudent oversight, the former promise to cut degenerate elements out of the social fabric and to restore a republican ethos of redemptive self-reliance and austerity. Time and again, this has laid the basis for an accelerated expansion of the financial economy and the emergence of money as a more powerful sign than before. Popular discontent and anxiety have become driving forces behind economic expansion, and crises occasions for the renewal and elaboration of our attachment to money. The iconic sign is the focal point of a symbolic economy that is both traumatizing and redemptive, holding out the promise of solutions to the problematic experiences it engenders. What often eludes progressive commentary is not only the paradoxical way in which the malfunctioning of capitalist economy triggers emotional responses that serve to affirm and restore its key signs; but also how this iconophilia is driven by an iconoclastic spirit that levels its harsh charges of idolatry at the progressive project itself.

Centrally concerned with the disembedding image, contemporary progressive thought is increasingly incapable of penetrating this affective life of economy. To the extent that it has acknowledged the cultural spirit of neoliberal capitalism, it has tended to portray this as an external legitimating force that is curiously at odds with capitalism’s rationalizing, utilitarian thrust. Progressives who have continued a Laschian style of critique have tended to emphasize the role of neoconservative elites, seen as having advanced a pro-market agenda through appeals to traditional values, while the bulk of the American population is portrayed as unable to see through this hypocritical mixture of possessive individualism and archaic religious sentiments. But this style of critique is increasingly less representative of the mainstream progressive project, which takes itself to be more objective and less partisan. It is here that we should situate the significance of the extraordinary rise to prominence of the Polanyian image of the double movement: it fully sanitizes the progressive self-image, recasting a bankrupt political project as a model of history. The rise of the Polanyian image of the double movement, then, needs to be read as a defensive response triggered by the growing political salience of phenomena on which progressive discourses furnish no conceptual leverage; as the anxious theoretical assertion of the autonomy of sociality, moral sentiment, and authority at a time when these have become interiorized into the logic of economy to a historically unprecedented extent. The following chapters seek to breathe life into this claim, and to make plausible the connections that this introduction has suggested.


1. It bears emphasizing that I am concerned primarily with the way Polanyi’s work has been revived and incorporated into such fields as political economy and economic sociology. The interpretation of Polanyi’s work is not a straightforward affair (see Block 2003; Gemici 2008; Dale 2010), and I remain agnostic on the question of the “true Polanyi.”

2. This represents an important ambiguity in the critique of idolatry. When looking at the distant past, it tends to view the belief in fictions as a source of religious spirit. But when looking at the present, moderns’ fetishistic tendencies are held to be responsible for disenchantment, the leveling effects of financial commensuration, and the decline of faith: the modern subject does not believe that it believes, and consequently it cannot be enchanted by its own irrationality and ends up facing a world of cold, hard facts, soulless reifications that cannot elicit passionate faith but are handled with instrumental rationality. Mitchell has explicated this in terms of a process of “double forgetting,” whereby “first the capitalist forgets that it is he and his tribe who have projected life and value into commodities” and then, in “a second phase of amnesia . . . that is quite unknown to primitive fetishism,” forgets this forgetting, allowing those commodities to appear “in the rationality of purely quantitative relations” (Mitchell 1986, 193). Whereas Mitchell’s interpretation sees the modern subject as engaged in something akin to “double idolatry,” it seems more accurate to say that the kind of forgetting involved in our relation to capitalist signs is just not the same kind of forgetting that is involved in idolatrous worship, but rather a form of forgetting that retains some kind of intuitive awareness of its own role in constituting the powers of the object.