Introduction to the Symbolic Economy
The post 1960s shift away from industry changed so much more than how many people make money.
Over the last half century, conventional industry has been largely displaced as the center of economic activity in the United States.
As I detail at length in my forthcoming book, although most employees continue to work in the productive economy (at a ratio of nearly 2:1), symbolic industries are approaching the lion’s share of GDP.
Finance, insurance and real estate (FIRE) is the largest industry sector by ‘value added’ overall, despite the fact that this sector does not produce anything in the literal sense — it mostly extracts rents on assets and phenomena that already exist or are theorized to be produced downstream. More on this soon.
After FIRE comes professional and business services — with manufacturing coming in at a somewhat distant third.
What’s more, symbolic economy firms largely own the rest of the economy and often dictate how it operates. One influential study found that a small number of transnational corporations (1,318 out of more than 43,000 total) directly controlled more than 20 percent of all global revenues. These firms also collectively owned (via shares) a majority of the world’s largest ‘real’ economy firms, representing an additional 60 percent of the global economy. A small subgroup of this elite set, 147 companies (mostly in FIRE), controlled 40 percent of the entire network – a network that, again, directly and indirectly governed roughly 80 percent of the global economy.
However, even data like these, in many respects, understate the centrality of symbolic economy in contemporary life.
As philosopher Roberto Unger explains, it is insufficient to simply look at which economic sectors control the highest share of GDP or employ the largest number of workers in a country or control most company stock. To determine which mode of production is ‘dominant’ we must also consider which has the greatest capacity to reshape how people in a society live, how we relate to one-another, how we do work in all other sectors.
Following the ‘agricultural revolution,’ farming clearly played this role. It led typically small nomadic bands of hunters and foragers to form much larger, sedentary, and increasingly hierarchical communities. Following the ‘Industrial Revolution,’ the manufacturing of physical goods displaced agriculture as the dominant mode of production, radically transforming where and how people live, and recasting power relations yet again. And today, Unger argues, it is the ‘knowledge economy’ that plays this role.
Previous modes of production, such as agriculture and manufacturing, have themselves been completely reshaped (giving rise, for instance, to ‘smart’ manufacturing and ‘smart’ farming), even as their relative social prestige has been diminished. Rather than the growing and harvesting seasons – or the Monday through Friday 9 to 5 factory workdays, the symbolic industries set the pace of contemporary life. Their modes of organization increasingly pervade all other economic sectors, and indeed, society writ large: constant connection and exchange, unending data collection and surveillance, ratings and ordinal ranking, algorithmic curation of options, customized products or services, ‘on demand’ availability, and so on. Virtually everything, from state governance to entertainment to sexual relations, is increasingly inflected with these logics.
Nonetheless, pace Unger, it seems strange to define the contemporary society in terms of “knowledge.” It would have been a bit of a tangent to unpack this point in We Have Never Been Woke. But it’s worth going into here to set the stage for the discussions we’ll be having downstream in Symbolic Capital(ism). So that’s what I’ll be doing for the rest of this post.
The God That Failed
At the birth of the symbolic professions (and running through the present day), symbolic capitalists have argued that if more resources and authority were consolidated in our hands, we would usher in an age of unprecedented social cohesion, progress and prosperity:
Opportunities would be allocated according to merit. Resources redistributed according to need. Disputes would be adjudicated by disinterested experts, with decision making governed by reason and empirical facts. These experts would follow the truth wherever it leads. They’d be mindful of the details and the big picture. They’d be oriented around the long term common good instead of myopic selfishness, the agendas of special interests or parochial and inflexible ideologies. And as a consequence, longstanding social problems and tensions would be ameliorated. We’d have an increasingly shared understanding of the facts of the world and the ‘correct’ course of action.
To put it mildly, that isn’t how things have played out over the last half century, despite the global economy being increasingly reoriented around the symbolic industries. Instead, the U.S. has seen slowing innovation, economic stagnation, rising inequalities, increasing polarization, a “crisis of expertise,” diminishing trust in one-another and social institutions, and, allegedly, epistemic chaos.
Knowledge, in short, does not seem to define the contemporary era. Instead, the primary shift has been from an economy centered around physical goods and services to one oriented around the production and manipulation of data, representations, narratives and ideas — whose correspondence to “truth,” “knowledge,” “the real world,” “rationality,” etc. is often ambivalent and hotly contested (and, regularly, somewhat beside the point or orthogonal to the “bottom line”).
For this reason, I generally prefer to talk in terms of the ‘symbolic economy’ instead of the ‘knowledge economy.’ The difference may seem trivial, but shifting the frame in this way can actually be quite revelatory about the nature of contemporary society. We can explore this point more fully by leveraging some conceptual tools from social theorist Jean Baudrillard.
Brave New World
In his 1976 Symbolic Exchange and Death, Baudrillard explored the nature and implications of the shift from physical production to symbolic (re)production as the organizing mode of society. He predicted that, as this transition unfolded, many forms of physical production and exchange would be devalued. This devaluation would occur in two senses: the economic significance of producing and exchanging material goods (or physical labor) would be significantly reduced relative to representations of valued things — and the honor, dignity, attention or compensation accorded to most physical goods, physical work, and the people who carry it out, would also see significant declines relative to those tied to symbolic reproduction (who would enjoy significantly higher salaries and social prestige despite producing very little of substance).
Politics, Baudrillard theorized, would increasingly be dominated by spectacles that largely eclipse from public view, discourse, contestation or accountability the structures, mechanisms, and processes through which society is ordered.
This is a problem because symbolic reproduction often seems to operate on different rules than physical production. It’s worthwhile to tick through a few of these differences to set the stage for subsequent conversations.
Difference and Repetition
Physical production tends to require factories (and land upon which to build them), heavy equipment, huge quantities of raw materials, etc. Large upfront investments are typically needed to acquire these. As a consequence, in the industrial age, it was the already-wealthy who ended up owning and controlling almost everything required for physical production. Virtually everyone else in the industrial economy, in order to make a living, was forced to sell the one asset that the capitalists could not own outright (outside of slavery, which was increasingly forbidden): their physical labor.
In the symbolic economy, the primary means of production are useful knowledge or skills, novel and compelling ideas, social networks, and social prestige or credibility. In a nutshell: what you know, who you know, and how you’re known.
On their face, these resources may seem to be accessible to anyone. In reality, however, socioeconomic elites have a far greater capacity to acquire valued knowledge and skills (for instance, via much better-funded schools, greater ability to participate in extracurricular and cultural-enrichment activities, the capacity to hire tutors, etc.). They also have much greater access to elite credentialing institutions (which often charge tuitions of tens-of-thousands of dollars per student per year in order to certify one’s child as a nascent elite). Through their families, social circles and elite institutions, the wealthy also have access to more valuable social networks. As a result, although the means of symbolic (re)production are formally open to all (in a way that the means of material production were not), the elites of the symbolic economy have tended to be drawn overwhelmingly from already-advantaged families, just as was the case in previous eras.
In many respects, there is less fluidity in the symbolic economy relative to the industrial society. In previous decades, a worker could start at the very bottom of an organizational hierarchy and — with a lot of ambition, ingenuity, luck and elbow grease — could conceivably work their way up to the top. Today, even for companies that focus on physical goods or services, that is no longer plausible. The ‘retail’ side and the ‘corporate’ (i.e. symbolic) side are essentially entirely different organizations, and there is little crossover from one to the other. As sociologist Randall Collins put it:
“When employers speak of every job being ‘promotable’ they mean that every entry job has some other job above it to which a worker may aspire. They do not usually mean to imply (except in the vaguest, most ideological sense) that there is a clear channel of promotion from the bottom to the top… Educational requirements act as a formidable barrier to promotion across the manual-nonmanual caste barrier in organizations… a major dividing line between managers and manual laborers. One personnel manager of a large, prominent bank commented rhetorically: ‘The route from janitor to Senior Vice President is now closed.’”
These words were penned in 1979. The situation is far more drastic today.
Increasingly, the manual laborers who work in the same buildings as symbolic capitalists do not even work for the same company. Just as businesses have outsourced production to companies overseas, and warehousing and transportation needs to companies specialized in this, they have also offloaded the janitors, groundskeepers, maintenance workers and security guards.
Previously, a janitor who cleaned the offices for a given company every day would likely have been directly employed by said company, alongside non-manual workers. Today, these laborers are likely to be employed by a firm that provides janitors to buildings across a region or throughout the country — and assumes responsibility for their benefits, compensation and grievances. The profit model for such companies is, literally, to charge as much as clients are willing to pay (typically, not much) for the services provided, while giving workers as little of this money as possible (in the form of benefits or income) — keeping the difference as profit.
Studies have consistently found that this ‘domestic outsourcing’ leads to significantly worsened working conditions, pay and benefits for the employees involved. This is a ‘feature’ not a ‘bug’ of the outsourcing: the goal of clients is to pay as little as possible for this low-status labor, while offloading responsibility for the laborers onto someone else. If the affected workers struggle to get by, that is no longer viewed as being ‘the problem’ of the companies whose facilities they service — they will be instructed to take it up with their actual employer.
Symbolic economy businesses can then brag about the wages and benefits they provide to their employees, because those who receive especially poor wages or benefits, or who have little opportunity for advancement, are no longer directly employed by said businesses. Company gatherings no longer include manual workers either, because ‘those people’ now technically work for different companies, and therefore wouldn’t receive an invitation (even, again, if they work in the same place, physically speaking); ‘those people’ also tend to be excluded from facilities or amenities intended for employees; nor are they eligible for bonuses or perks provided to employees. Nor is there much exchange, let alone meaningful solidarity, between a firm’s actual employees and the laborers who provide workplace services. Although they may toil in the same physical space, they inhabit completely different social worlds.
That is, the institutions, networks and communities of symbolic capitalists are increasingly insulated from everyone else, irrespective of literal proximity. Meanwhile, those unable to join the symbolic professions are still forced to sell their physical labor—albeit increasingly in the form of services for symbolic capitalists and their patrons.
Being and Time
Physical assets can be used up, depleted or become outdated. Physical equipment and infrastructure also naturally depreciate over time due to wear and tear — as do manual laborers — leading industrial capitalists to incur regular and non-trivial maintenance, upgrading, insurance and replacement costs. Things work very differently in the symbolic economy.
For one thing, mental laborers often appreciate in value over time. As they acquire more knowledge, experience and connections they can demand a higher asking price for their work. Investments in symbolic assets, such as college degrees, also tend to maintain their value quite well. As a consequence, initial advantages tend to expand significantly over time in the symbolic economy — leading to dramatic inequalities. There tend to be significant disparities within symbolic professions, and these tend to grow increasingly pronounced over the course of careers. However, gaps between symbolic capitalists and everyone else start even larger, and grow even more rapidly, over the span of a career.
Manual and service workers’ bodies depreciate more rapidly than most as a result of the demands of their jobs; many are left with chronic pain and disabilities that employers fail to compensate them for. While symbolic capitalists may experience cognitive peaks and declines, engaging in mental labor actually slows these declines (rather than accelerating them, as heavy physical labor often does to the body).
Typically, seasoned symbolic capitalists can also offset any reductions in raw mental ability by means of their increased knowledge, skill, experience and connections — and by leveraging their institutional position to offload tasks that are especially cognitively or technically demanding onto younger people. As a result, symbolic capitalists are able to remain productive and vital long after the typical manual worker is physically tapped out, or pushed into retirement, or passed on from this life altogether.
In academia, for instance, professors are increasingly refusing to retire well into their 70s and 80s — not because they must continue working (like other workers who may struggle to pay their bills if they retire), but simply because they enjoy their jobs, and the prestige that comes with their post. This is hardly a phenomenon unique to academia; it’s common in many symbolic capitalist spaces.
The World As Will and Representation
Another major change that has accompanied the rise of the symbolic economy is that knowledge, data, ideas and representations have become property (in much the same sense as land or objects are property) – which symbolic capitalists strive to monopolize and control. Others have catalogued the adverse consequences of these tendencies for innovation and economic dynamism. Here, however, I want to call attention to the fact that these new forms of assets tend to have very different characteristics than more material resources.
Symbolic products can generally be reproduced cheaply and virtually infinitely -- and exchanged at a speed, and on a scale, unimaginable for material goods. There are often heavy expenses incurred up front to develop a new symbolic product or service, but then its owners can export it worldwide, and extract rents from it indefinitely, with very little additional cost and relatively few logistical barriers.
In order to reap these advantages of symbolic trade, physical goods are increasingly being transformed into abstract entities, allowing traditional capitalists to get in on the action too.
For example, buildings and land are increasingly converted into ‘assets.’ Often, they are not lived in or utilized as offices, residences, etc. — instead the rights to properties are leveraged for purposes of money laundering, tax avoidance, as an investment (under the assumption that the value of the property will rise, allowing owners to turn it around at a higher price), or as a resource to borrow against (often by foreign stakeholders, oligarchs and corporate entities).
As a consequence of these maneuvers, many major urban centers face a shortage of housing even as immense quantities of properties go unused — ultimately driving less affluent workers out of the urban cores and into suburbs and exurbs. Indeed, in a stark reversal of previous decades, there are now more poor Americans living in suburbs and exurbs than inside of cities.
Critically, real estate is not unique in terms of being a physical good converted into a symbolic asset. This tendency increasingly pervades almost every other sector of the traditional economy as well.
For example, in previous eras a rancher might sell his cattle to a feedlot, meatpacker, or in some cases, other ranchers. In all cases, the change of ownership would typically entail the actual cows changing hands as well — moved from one location to another. Today, cows in several locations are abstractly bundled together and traded as commodities — with ownership changing hands many, many times without any change at all in the location of the cows themselves. What is being traded in this case is not the actual ‘thing,’ but the rights to ‘things’ from various points of origin.
This kind of trading does not just occur with physical goods that currently exist in the world, but also with physical goods that are theorized to exist in the future. For instance, people can trade rights to corn that is projected to be produced in a given season by a particular farmer on a particular plot of land. There is a whole secondary (futures) market that has arisen where people essentially make bets on whether yields or prices for these anticipated commodities will exceed or fall short of expectations.
In a similar vein, individuals and organizations now commonly take on debt to acquire things outside of their current purchasing capabilities — that is, physical goods and services are acquired and consumed now in exchange for the rights to theoretical future revenues. The companies to whom these debts are owed often combine and sell the rights to these anticipated revenues (as ‘securities’) — again, giving rise to an additional market where people place bets on the likelihood and extent to which the debts will actually be paid down at their appointed time.
Individuals themselves, and their behaviors, are converted into data profiles that increasingly represent people across institutions independent of their knowledge or consent — significantly shaping our life prospects in many cases. As political theorist Shoshanna Zuboff observes, these data profiles have, in turn, given rise to ‘behavioral futures markets’ oriented towards forecasting and influencing how people will act.
Distinction
One final important aspect of the symbolic economy is that, for individuals and companies alike, economic fortunes increasingly turn on how others view one’s brand.
With respect to publicly-traded companies, for instance, high levels of investor confidence can become self-fulfilling prophecies due to companies acquiring enough market power on the basis of their stock price to devour or freeze out competitors (often stifling growth and innovation in the process). A company with hyped brand can enjoy consistent investment streams even if their revenues have been consistently in the “red” and the underlying business model is unprofitable and unsustainable. High levels of pessimism can have the opposite effect, even for businesses that are otherwise healthy, leading to liquidity shortages that prompt cutbacks, sell-offs, and in the extreme case, bankruptcies and sell-outs.
Indeed, although changes in the broader economy may not be reflected in the stock market, changes in the market often are reflected in the economy. For instance, major stock crashes can trigger widespread layoffs and closures, and even global depressions. There is a counter-intuitive asymmetrical relationship at play: it is the reproductive economy that increasingly sets the tempo for the productive economy, rather than vice-versa.
In a similar vein, Americans spend a growing share of their days in virtual and mediated worlds, from online social networks, to video games, to remote meetings. And when folks traverse or inhabit shared spaces in the “real world” they increasingly tune out the people and events around them by looking at their phones and/or listening to podcasts and music (often with noise cancelling headphones).
As Baudrillard put it, the “real world” seems ever more like a desert – comparatively austere and devoid of life – a place we try to avoid, and a scene we seek to escape as quickly as possible should we inadvertently find ourselves there.
This is all lightyears away from how things operated in industrial society. However, it’s also very far from the social order symbolic capitalists had proselytized, oriented around rational deliberation and deference to empirical realities. Reality is not where the “action” happens in a symbolic order.
For better or worse, we’ve never lived in the much-hyped '“knowledge economy” — and it’s unlikely that we we’ll approach that ideal in any foreseeable future. The mass proliferation, manipulation, and economic centrality of symbols is, instead, what defines our age. And struggles over status, symbols, representation, performative gestures and semantic distinctions consume symbolic capitalists — and dominate contemporary politics as a consequence.