part0013

The concept of disembedding, of course, is known to Niklas Luhmann as well as to other sociological modernisation theorists. They even made much more extensive use of it than Polanyi, arguing that processes of disembedding evolved not only in the sphere of markets but also in other sub-systems of society such as politics, science and art. Anthony Giddens developed his very concept of modernity around this idea, pointing to the role of money and expert systems as vehicles to ‘lift out’ social relations from local contexts of interaction and to restructure them ‘across indefinite spans of time-space’ (Giddens 1990: 21). The most elaborated conceptualisation of modern society as a disembedded system is, without a doubt, Luhmann’s system theory. As pointed out above (Chapter 5 ), Luhmann rejects the Parsonian idea of a paramount cultural value system ‘integrating’ modern society; instead, he argues that modern societies are confronted with the utmost complexity of the world. They can generate ‘meaning’ only in self-referential systemic operations which are governed by functionally specified ‘codes’, such as truth, power, scarcity or love. Modern society is a world-society based on functional differentiation, consisting of sub-systems which, despite their interdependence, are embedded into nothing but themselves. As Luhmann admits, the price of this conceptualisation is that society as a whole vanishes from view; to be precise, it comes into view only relationally via the differences between functionally specialised sub-systems (see also Schwinn 2001). There is, however, no way out of this dilemma. As Luhmann argues, society as a totality cannot be viewed by any observer, since observations are communicative operations which are possible only within society and which are dependent on the particular social and historical perspective of the observer. There is no ‘external’ standpoint allowing a view of society from the outside, like the man on the moon may look down on the Earth.

Nevertheless, as symbolically integrated entities, societies cannot do without reflecting on their unity in some way. Difference is not possible without unity, as Luhmann himself never gets tired of stressing in his work. The question for the unity of modern society beyond its functionally differentiated surface is a legitimate one that cannot be ignored. The answer is given by ‘imaginary constructions of the unity of the system’ (Luhmann 1998: 867, my translation) communicating the identity of society to itself. Luhmann calls such constructions ‘ Selbstbeschreibungen ’ (‘self-descriptions’). Pre-modern societies described their collective identities in religious terms. Here, the self-representation paradox of society is managed by the social construction of a transcendent creator and observer of the world (Luhmann 1998: 903). By taking the perspective of the creator, societies can organise and rule themselves in a coherent and legitimate way. Modern societies, by contrast, develop non-theological self-descriptions, like the ideas of nation, of class, or of modernity. The latter, however, are no less paradoxical than religious formulas, as they disclaim the unity which they are pretending by the very fact of being observations, for the observer includes and excludes himself in his portrait of society at the same time. Therefore, modern self-descriptions of society, like religious ones, cannot reclaim the status of scientific truth. 1

The epistemological dilemma that Luhmann has pointed to is fundamental for every general social theory. This applies also to Marxian historical materialism, which suffers from Karl Marx’s insufficient reflection on the dilemma. The background problem here lies with the latent Hegelian heritage in Marx’s thinking. Marx is clearly aware of the character of capitalism as a ‘commodified’ society, that is, of the encompassing character of markets and their opaqueness to the market actors, which he highlights with his well-known concept of ‘commodity fetishism’. However, the opaqueness of markets is a problem not only for the market actors, but also for the scientific observer himself. Marx fails to identify the position of a historical observer being able to verify capitalist ‘laws of motion’ and quantities of ‘socially necessary’ labour and to predict the downfall of capitalism, which he deems to be necessary. For Georg Wilhelm Hegel, the problem is not relevant due to his idealistic premises; it is vital, however, for Marx’s own historical-materialist approach. Due to his incomplete detachment from his intellectual master, Marx did not provide a thorough historical explication of his epistemic premises (Kracauer 1969; Habermas 1981: Vol. II: 489; Holz 1993). Later, Georg Lukács (1970 [1923]) tried to settle the problem by imputing a superior epistemological position to the ‘proletariat’ as a collective ‘producer’ of social reality, and by justifying the superiority of Marxian historical materialism by its affiliation with the perspective of the proletariat. Lukacs’ proletariat, however, turns out to be an only slightly disguised version of the Hegelian world-spirit, which had little to do with the historical working class and workers’ movement of his time (Habermas 1981: Vol. I: 474–475).

This is not to deny Marx’s assumptions about the key role of labour in the socio-economic process, which he explicated in his labour theory of value. However, Marx did not distinguish sufficiently between labour as a creative resource and its character as an objectified and measurable substance, as which he treats it in his theory of value in line with David Ricardo. He did not clarify how these contradictory meanings of the concept of ‘production’ are related to each other; instead, in his mature work he postulated a problematic ‘law of value’ resting exclusively on objectified labour. One may agree with Marx so far as labour values are determined ‘somehow’ within a capitalist system. However, due to the opaqueness of creative actions, the system is a black box. How labour values are determined within the system can never be transparent for any external observer because such an observer – to make my point again – would have to be more intelligent than the very sum of collective intelligence and creativity operating in the system itself. It is the social preponderance of innovation in combination with the self-intransparency of creative action – ‘I cannot turn around quick enough to catch myself’, says George Hebert Mead (1934: 174) – which makes the capitalist system incalculable as a whole, not simply the ‘anarchy of the market’ that is due to the private character of production, as Marx contended. Without a doubt, Friedrich von Hayek, with his analysis of markets as a process of discovery, was much clearer on this point than Marx. The concept of ‘socially necessary labour’ may be applicable to standard products meeting a calculable demand. However, Marx did not consider the problem of how to apply the quantitative concept of labour value to the stream of new products or services emerging continuously in the capitalist process. Just because labour a creative resource is central, the labour theory of value is inappropriate for analysing the innovative process in which technological and economic parameters themselves are being created and changed, and in which the resonance of markets to new products is no less important than the conditions of production. No supposedly ‘objective’ value analyses but only careful historical reconstructions of the perceptions and expectations of the relevant historical actors can help further at this point, as Jens Beckert (2016) has argued.

It is not difficult to show that it is the same problem of the opaqueness of society to itself that underlies the enigmatic character of religious representations. The problem becomes apparent in Emile Durkheim’s classic analysis of religion (Durkheim 1995 [1912]). On the one hand, Durkheim characterises the system of religious beliefs and practices by its separation from the profane world, the difference between the spheres of the sacred and the profane being not only a hierarchical, but an “absolute” one, as he argues (Durkheim 1995 [1912]: 36). On the other hand, it is the key conclusion of his analysis that the reality expressed in religious practices is nothing but society: ‘We have seen that this reality – which mythologies have represented in so many different forms, but which is the objective, universal, and external cause of those sui generis sensations of which religious experience is made – is society’ (Durkheim 1995 [1912]: 421). How is it possible that the religious community experiences its own inner nexus as something so alien and distinct from everyday life?

Durkheim’s point can be made clearer, if we follow Jürgen Habermas in combining the approaches of Durkheim and Mead, and translating Durkheim’s somewhat vague concept of ‘collective forces’ into the interactionist concept of ‘collective identity’ (Habermas 1981: Vol. II: 11–12). As Mead has shown, identity as a reflexive relationship evolves as a result of symbolically based interaction between at least two actors. Identity is always a social construct, emerging not as an innate property of the single individual but in the course of communicative interaction leading the individual to identify with the perspectives that others have of himself or herself. 2 Ego can become aware of itself only via the detour of taking the perspective of alter (and vice versa ), both thereby developing an awareness of moral obligation and of their individuality at the same time. Mead concentrated his analysis on the individual socialisation process and on the emergence of personal identities, as Habermas notes. One could hypothesise that group identities develop in an analogous way: an in-group constitutes itself, as its members mirror themselves collectively in the perspective of an out-group while pari passu becoming self-conscious as a distinct group. On the level of society as a totality, however, collective identity formation cannot proceed in the same way, since by definition there is no visible alter that can assume the part of a communicative mirror for ego. Society as a whole has no social counterpart; thus it cannot repeat the operation of ‘taking the perspective of the other’. It cannot become aware of itself and develop a truly collective identity, just as the eye would be invisible if there were no other eyes or a mirror to reflect it.

Indeed, this seems to be nothing but a different formulation of the epistemological dilemma which Luhmann had pointed to. It is the same dilemma which religions are responding to and which explains the enigmatic character of their constructions. The defining characteristic of religious identities lies in their singularity. Whereas group, ethnic or national identities represent only one amongst other communities of a similar kind, religious identities indicate the most encompassing community, thereby also defining the ultimate criteria for social inclusion and exclusion. Because of its uniqueness, such an encompassing identity cannot form itself via the process of mutual identification between empirical collectives; rather, it requires the social construction of a supernatural collective alter. Only by taking on the perspective of the supernatural collective alter of itself is society able to become aware of its own unity beyond the limits of individual and group identities. By identifying with God, the members of society can manage their nexus in a coherent way, and develop a genuinely universal sense of moral obligation beyond particularistic affiliations. To become an integrative social force, however, the supernatural alter must be experienced as an external entity, whose socially constructed character remains hidden from its believers; in this sense, the difference between the spheres of the sacred and the profane is indeed an ‘absolute’ one. The presence of God is experienced as a revelation to be testified to by prophets and experts, and to be kept alive collectively in rituals.

Religious belief can be characterised as an act of human ‘self-transcendence’ (Joas 1997, 2017), breaking the rules of rational discourse, since what appears behind its constructions is nothing other than the community of the believers themselves. The critique of the religious projection had been the key message of nineteenth-century atheistic humanism (Ludwig Feuerbach, Karl Marx, Auguste Comte, Friedrich Nietzsche, Sigmund Freud). It had been constitutive also for the rise of sociology as a ‘science’ of society, claiming to understand society as a secular entity independent from religious and theological traditions. However, here we are back at Luhmann’s point again: Sociological theorists fail to take account of the implicit observer position, which they reclaim for themselves in describing society as an ‘autonomous’, self-generating entity. Therefore, sociology has to acknowledge its own blind spots too and become aware of its own inability to successfully develop a theory of society as a totality. All that it can do is to take the position of a second-order observer, not taking society as a direct object of its observations, but observing the ‘self-descriptions’ which society is producing about itself. A ‘theory’ of society can be nothing but a theory of societal ‘self-descriptions’ arising in particular times and under certain historical circumstances. What self-descriptions are relevant for modern society? In the last chapter of his voluminous book, Luhmann discusses several of them: subject, nation, class, modernity and risk; however, he always does so with the aim of demonstrating their insufficiency to settle the underlying epistemological paradox. ‘Reflected autology’ (Luhmann 1998: 1128, my translation) remains Luhmann’s last word on the theory of society.

The most promising candidate to take the role of a self-representation of modern society is lacking in Luhmann’s list: the disembedded markets of modern capitalism and the liberal narrative underlying them. The reason why this is so appears clear: for Luhmann, the economy (including markets) represents only one social sub-system, amongst others, that is specialised in the function of managing scarce property rights and that is governed by the medium of money (Luhmann 1988). As he points out, the historical evolution of the economic system followed the same logic of the simultaneous specification and generalisation of codes that was characteristic of the development of the other sub-systems too. In order to secure the self-regulation of the economy, for example, the religious prohibition of interest or political interventions to guarantee ‘fair’ market prices had to be abandoned; on the other hand, a proper sphere of the ‘economy’ as distinguished from politics, religion, love and so on, had to be defined (Luhmann 1990: 101–102). Though Luhmann seems to have played with the idea of interpreting money as a quasi-religious medium representing the unity of society in his second book on religion, 3 he did not follow it further; apparently, it did not fit into the conceptual design of his theory.

It is doubtful, however, whether Luhmann’s analysis of functional differentiation gives an adequate account of the market-disembedding process and the corresponding generalisation of the money code, which I am highlighting here. Luhmann’s analysis is focused exclusively on the functional autopoiesis of the money medium underlying the evolution of markets and the economic system as a whole. What he neglects is the historical expansion of markets and property rights in the territorial, social, material and temporal dimensions, and the parallel expansion of the opportunity structure of money. Therefore, the analogies in the logic of functional differentiation between the economic and non-economic sub-systems, which Luhmann is pointing to, are spurious. Different from the non-economic sub-systems, the development of capitalist markets coincided with the logic of simultaneous generalisation and specification only on the surface. Beyond the facade of functional self-regulation, an unprecedented empirical universalisation of the market sphere, running counter to the functional differentiation of society, took place. At the same time, the options embodied in money became generalised to a degree that rendered any conventional functional definition of money implausible, whether departing from the problem of ‘adaptation’ or that of ‘scarcity’. 4 If there is a ‘function’ of capitalised money, it is clearly not a narrowly ‘economic’ one, but needs to be conceptualised on a more abstract level. Perhaps the function which Luhmann ascribes to religion comes most close to it: transforming indeterminate complexity into determinate complexity (Luhmann 1992: 26). I will not go deeper into Luhmann’s conceptualisations and their problems here. With regard to money, at least, Simmel’s paradoxical definition of money as an ‘absolute means’ – a ‘means’ that due to its absoluteness is no longer a means and thus cannot be subsumed to any particular ‘function’ – seems to meet the point much better that Luhmann’s concept of symbolically generalised media. 5

No one would object to Luhmann’s point that politics, science or love follow their own particular rules and codes, differing from those of the economy. Functional differentiation is essential for modern societies, though in practice the corrupting impact of money on the non-economic spheres certainly is as pervasive today as it had been in the past. What should not be overlooked, however, is that the operations even of non-economic sub-systems always need to be financed. Being unable to generate the financial resources they require by themselves, non-economic sub-systems depend on transfer payments, which only the economy can generate. This applies to the state, to public bureaucracies, to economic organisations, science, education, and art; in some sense, however, it even applies to love: for truly binding themselves to each other, two partners need to be personally autonomous. Personal autonomy in a modern society, however, is unthinkable without personal monetary resources. The generalisation of the opportunity structure of money – in other words – did not proceed on the same level as the formation of the other sub-systems; rather, it was basic for the process of functional differentiation itself. 6 Only due to their command over financial resources can states, organisations and families constitute themselves as autonomous social sub-systems. This is a necessary condition, not a sufficient one. The dependence of non-economic sub-systems on money is not a unilateral one, as we have seen; markets in their turn are dependent on the inputs of politics, science, education, and so on. However, the interdependence between money and non-economic media is clearly an asymmetric one. While money payments are constitutive of the economic sub-system itself as well as of the other sub-systems, this does not apply to the same degree to scientific truth, political power, or love (Deutschmann 2009b; Paul 2012; Schimank 2013, 2015). The non-economic sub-systems deliver specialised inputs to the economic sub-system, which, due to their nationally or functionally bounded character, are substitutable for each other in many cases. Markets and capitalist enterprises can work in very different institutional environments, as the varieties-of-capitalism literature has shown. 7 By contrast, the money transfers which the non-economic sub-systems receive in return are not substitutable, and they are indispensable to their very existence.

So far, I hope to have shown that disembedded markets are not only one social sub-system amongst others of a similar kind. Rather, it seems more adequate to conceptualise them as a ‘self-description’ of modern society in the sense explicated by Luhmann, indicating its latent unity beyond functional differentiation. Markets take on the function of collective self-representation, which had been the domain of religion in stratified societies. On the one hand, disembedded markets describe the most encompassing, global level of sociality; on the other, just by virtue of this description they open the view on a room of unexplored and unexplorable uncertainties beyond the socially accessible. Contrary to Durkheim’s and Parsons’ emphasis on civil religious values, I agree with Marx about the centrality of the commodity form for the integration of the modern world-society. The dominance of the commodity form over society is not due only to its functions for material reproduction, as orthodox Marxists pretend, but to the universality of the commodity nexus, which by itself is a phenomenon of religious significance (if we follow Durkheim’s argument). Similar to religious transcendence, disembedded markets are a black box which, as a totality, is invisible to any observer, but can be represented only in an ‘iconic’ mode (Konings 2015: 15).

Not by chance, therefore, does the capital form of money have parallels with religious icons. In both cases, a characteristic paradox can be observed: The difference between the sign and the object of signification vanishes. The sign seems to be what it signifies, as if the sign warning of the dog would itself bite you. The capitalist reproduction process as a totality is no less opaque than the idea that God is the ground of all being; hence, the capital form of money tends to amalgamate with its object in a way that is similar to religious myths and narratives. Just as God is not only an abstract idea, but is present in holy scripts, rituals and relics, capitalised money not only symbolises wealth, but is wealth. Despite its immaterial character, it must be treated like a numinous substance to be transferred in precise quantities from one bank account to another. Like religious representations, capitalised money can be qualified as a ‘cipher’ (Luhmann 1992: 33) – that is, a symbol representing and hiding its object of signification at the same time. The paradox of being and signifying wealth at the same time can be managed only by the quantitative difference of capital with itself, as Marx had noted: ‘Instead of representing relationships of commodities, (value) now enters into a private relationship with itself. It distinguishes itself as original value from surplus value, like God the Father from God the Son’ (Marx 1988 [1867]: 169, my translation). The dynamic character of capitalism is thus built into the capital form of money itself. A further common characteristic of money and religion is their dependence on trust and belief. As shown above, religious belief is based on an idealised projection of a collective counterpart of society, which allows individuals to identify with this counterpart and to arrange their interpersonal relations as members of one community. Likewise, the worth of intrinsically worthless money cannot be secured without an idealised projection called ‘trust’. When accepting payment, the seller does not place his or her trust in something or somebody, but solely in the notion of other actors trusting too (Ganssmann 2011; Paul 2012) – trust that appears as unconditional as the trust in God. 8

Capital as a self-description of society is thus no less numinous than religious belief. In practice, therefore, the need arises to cope with the contingencies of capitalist markets and to develop rational explanations about their functioning. Beyond everyday knowledge, scientific models are required, making market processes appear predictable and legitimising economic policy and firm decisions in order to make economic action possible (Beckert 2016: 245–246). This is the background of the ‘theological’ connotations of economic theory discussed above ( Chapter 1 ). Economic theory reconstructs the opaque reality of markets in a way that displays them as coherent, rational and legitimate. Without such a reconstruction, markets could not work in social practice, just as traditional societies could not work without the basic legitimacy provided by holy scriptures and the detailed governance by the religious and theological authorities; here, Robert Nelson’s above-discussed theses ( Chapter 1 ) find their justification.

The thesis of a functional equivalence between capitalism and religion, which has met with support even from theologians (Wagner 1985; Cox 2002), should, nevertheless, be taken with a degree of caution. Besides the parallels between both, there are also vital differences which I am going to discuss in the following chapter.

4 As shown above ( Chapter 4 ), the property claim of capital neither extends only to ‘material’ goods, nor only to a given quantity of goods or services (whether material or immaterial). It also includes a claim on what could be produced. Imaginations, not only choices between scarce means, govern capitalist dynamics (Beckert 2016). Under such conditions, the problem of scarcity obviously can no longer be taken as a starting point from which to define the function of money, as Luhmann does in line with neoclassical economic theory (Luhmann 1988: 177–178).