Culture and Development: three cheers for the all-ready wealthy

Robert J. Samuelson has a piece in the Washington Post today reviewing a new book by Gregory Clark, "A Farewell to Alms: A Brief Economic History of the World."

"Clark suggests that much of the world's remaining poverty is semi-permanent. Modern technology and management are widely available, but many societies can't take advantage because their values and social organization are antagonistic. Prescribing economically sensible policies (open markets, secure property rights, sound money)can't overcome this bedrock resistance....It's culture that nourishes productive behavior." Part of his thesis is that the Industrial Revolution accelerated the creation of the proper environment for capitalist growth because more successful men had more surviving children, who had learned attributes of success from their parents.

I have a strong negative knee-jerk reaction to pieces about the role 'culture' plays in economic development. So often, arguments about how cohesive families or forward-looking societies are necessary to fostering growth seem like a self-congratulatory excuse. The most pernicious forms of this argument are:
1) The lazy native argument (people in warm places don't work as hard because their lives are easier) mixed in with an abuse of Weber's Protestant work ethic (Protestantism places a value on hard work in and of itself that has been the key to Europe's success. The current state of the Irish economy compared to the rest of Europe pokes a major hole in this frame...)
2) The "loose families" argument used to explain the East Asian miracle. It goes something like: family structure is stronger in East Asia, therefore parents saved and invested money for their children's future and worked hard. In Africa, they have loose families so their economies suck AND they have AIDS. (I find this argument so upsetting I struggle to engage it productively. I do believe in looking at cultural variables, but this seems more like racism to me.)

To me, the central false premise is the idea that culture is immutable and behaviors are unchanging. This places culture on a glass-encased pedestal, one of my problems with cultural relativism too. Behaviors, especially economic decision-making, are as much the product of circumstance as anything else. I think family structure and 'morality' is a good way to look at this. In desperate times, poor women who can't feed their children sleep with men for money or food. It's an old story, and it was just as true during occupation and war in family-oriented East Asian tigers Korea and Japan as it is now in less-developed countries like Uganda.

I do believe a place can develop a "culture of corruption" that drives way investment, making economic growth nearly impossible. I have no clue how to lessen this, and I might be about to write myself into a chicken-and-egg trap. However, it seems to me that corruption is often a product of a lack of other opportunities or channels for entrepenerial activity. In both the UAE and Japan, it's very bad form to accept tips because it's considered a form of corruption. Decades ago, transaction gifts, whether cash or material, were common in both places. I think corruption inevitably lessens with broad-based development (an increase in opportunities, an increase in the educated population who can point out the corruption of officials) but this development won't take place without an increase in transparency. (Oh dear, I'm asking for the Big Push.)

Anyway, I think transparency comes from the strengthening of civil society and the birth of stronger institutions, not because successful parents passed on non-corrupt attitudes for generations. Lamarck is dead.

I don't have any big answers to the question the article begins with and tries to answer: Why are some countries rich and some countries poor? I do think US and EU agricultural subsidies remain a major obstacle to African growth. I do think unsuccessful Cold War policies set back many developing countries. However, it's also important to challenge the way local governments have attempted to take on poverty or lessen corruption and the (in)efficacy of international aid.

Before I went to Tanzania, I wrote an international economics paper on its prospects for growth. I was in love. I was wildly optimistic. It was, after all, a very stable democracy English-speaking democracy with a newly booming mineral and tourism sectors. The Gini index was low! Its neighbors had stopped fighting! Inflation was down and GDP was growing! Everyone should totally invest! My professor was a bit less Pollyannic. After spending a summer in Tanzania, I could better understand some of his skepticism. Corruption was endemic, and it was hard for even the bravest, most honest individuals to escape it because they were too desperate. However, I do believe that if we slashed agricultural subsidies, we'd be eating a lot more Tanzanian fruit-- and they'd be eating more, period.

I think there is some truth in the lead sentence in the article. Most of the world's remaining poverty probably is semi-permanent, due to shortage of resources if nothing else. However, blaming this inequity on intractible cultural variables is a convenient way to both get out of looking for solutions within our own society and a way to let developing-world leaders off the hook for corrupt practices. Don't mind Mobutu. It's just his culture.