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ISET Economist Blog

Cultures: Rivers or Pyramids?
Thursday, 28 June, 2012

I am writing this post in the wake of Florian Biermann’s excellent piece on the role of culture in the economic life of Georgia. The debate itself is infinitely fascinating, as culture is truly one of those complex, stupendously vast concepts, which I find very difficult to grasp, let alone define or analyze.

Cultural attitudes play a crucial role in the way human beings interact with one another, the way they define their values and priorities. From the economic perspective, culture has a significant bearing on the functioning and effectiveness of both political and economic institutions – which in turn can help explain a large amount of variation in the income levels between countries.

Following this debate, I observed that culture is often taken to mean some permanent characteristics of a nation or a society, something resembling the rigid structure of Egyptian pyramids, giving way to a kind of cultural fatalism in development economics.

According to this interpretation, the “northern” nations such as Germany or Switzerland, with a culturally strong sense of work ethics and social responsibility, would be destined to outperform the more relaxed and less cohesive “southern” societies of Europe – Greece, Portugal, Spain, etc.

Yet, I find that in the larger scheme of things, cultural attitudes while enduring, do exhibit very different degrees of persistence. Cultural traits, good or bad, are essentially adaptations to external stimuli. Sometimes these stimuli reflect more permanent external conditions: geography, climate, quality of soil, etc. Yet, other cultural traits are often brought about by less enduring external shocks – wars, conquests, crises, the structure of economic institutions, quality of enforcement.

Consider for example the case of my native Ukraine, which inherited all the institutional shortcomings brought about by the years of Soviet rule. In the system where individual initiative and enterprise were severely discouraged, tardiness, absenteeism from work, were big drains on labor productivity.  We were by any definition a “lazy” nation. After independence, the free market system forced different kinds of incentives upon people. Nowadays, Western Europeans coming to Ukraine are amazed that most of the food stores are open 24 hours. The sellers on the outdoor markets work longer than 8-hour shifts, often in extreme weather conditions. Domestically owned import-oriented companies have solved the problem of tardiness or absenteeism among their workforce. Suddenly, a different type of work culture has emerged or perhaps has been re-discovered.

Another example of shifting cultural attitudes came to my mind while I was visiting the Biennial Exhibition of Contemporary Art in Kyiv. One of the installations by a Chinese artist detailed the “culture of poverty” – something he argued run in the veins of her parents and grandparents. The installation was essentially an enormous room, filled with organized piles of junk – old newspapers, boxes of varying shapes and sizes, chairs, wooden window frames, even a pile of rotting cabbage. The exhibit reminded me how my grandparents, who had lived through the hardships of wars and famines, also used to collect every piece of scrap that could prove useful in the household. I was calculating in my mind how many years it would take for China to shift from the “culture of poverty” to the “culture of consumption” – and what consequences this shift might have for our planet.

In light of this, I think is it important to think of culture as a kind of ecosystem, a river, fluid and potentially fragile. It is important not to take the cultural traits we can be rightfully proud of for granted, but rather cultivate and cherish them. It is equally important not to get hung up on the “bad” traits – such as a propensity for nepotism, tolerance for corruption, or poor work ethics. The right kind of policies and incentives could go a long way toward changing our world and our culture for the better.

The views and analysis in this article belong solely to the author(s) and do not necessarily reflect the views of the international School of Economics at TSU (ISET) or ISET Policty Institute.
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