ISET

ISET Economist Blog

A blog about economics in the South Caucasus.

Why Georgia is not South Korea (or Israel)?

Back in October 2014, soon after the introduction of new visa regulations by the Georgian government, I visited Seoul, the capital of South Korea. An unpleasant surprise awaited me on the way back home at the Seoul airport. The young stewardess checked my (Israeli) passport and informed me that, according to the system, I will not be allowed to board the flight (to Istanbul) unless I show a Georgian residence card or buy a return ticket.

“But I live in Georgia, and it has never been a problem to come back, nobody ever checked my ticket”, I argued.

The stewardess apologized for the inconvenience but insisted – in a very pleasant Siri-ish voice: “According to the system, one has to have a return ticket or a Georgian residence card.”

Desperate to go back to my Tbilisi home, I initiated another round of negotiations.

“Look”, I said, “couldn’t there be a mistake in your system?”

“WE ALWAYS FOLLOW THE SYSTEM”, said Siri, demonstrating the futility of any further attempts to negotiate.

Ultimately, I managed to get on the flight because I found my (brand new) residence card among many other cards in my wallet, but this phrase - WE ALWAYS FOLLOW THE SYSTEM - stuck with me. It stuck because it seemed to encapsulate a quintessential truth about Korea (both South and North) – a deeply rooted tradition that “celebrates conformity and order”, as one observer put it. By the same token, “we always follow the system” is a great shorthand for everything that Georgia is not.


FOLLOWING THE SYSTEM: THE PROS

Conformity and order clearly have their advantages. One way to establish this is to plot South Korea’s GDP per capita growth over time alongside with that of Georgia.

Back in 1965, Georgia and South Korea were equally poor, with per capita income of US$ 1,266 and 1,285 (in 2005 prices), respectively. According to Forbes, “In 2004, South Korea joined the trillion-dollar club of world economies, and is currently the world's 12th largest economy.”  Today, South Korean GDP per capita is close to US$ 24,000 (in 2005 prices), that is more than seven-fold of the same indicator for Georgia in real terms.

While South Korea’s “miraculous” modernization, industrialization and export-led growth is often compared to West Germany’s Wirtschaftswunder, President Park Chung Hee’s (1961-1979) authoritarian rule and industrial policies carry much closer resemblance to those implemented by fascist Germany before and during the Second World War. In both cases, the state engaged in ambitious economic planning while coopting powerful economic elites (family-controlled industrial conglomerates known as “chaebols” in Korea’s case), suppressing and destroying trade unions [1], engaging in nation-wide education and infrastructure projects, providing credit guarantees, but demanding, in return, that all economic activity should serve the national interest, however defined.

As described on Wikipedia:

“Government-chaebol cooperation was essential to the subsequent economic growth and astounding successes that began in the early 1960s. Driven by the urgent need to turn the economy away from consumer goods and light industries toward heavy, chemical, and import-substitution industries, political leaders and government planners relied on the ideas and cooperation of the chaebol leaders. The government provided the blueprints for industrial expansion; the chaebol realized the plans. … the chaebol-led industrialization accelerated the monopolistic and oligopolistic concentration of capital and economically profitable activities in the hands of a limited number of conglomerates.”

When seen through this prism, South Korea’s miracle appears to be all about “FOLLOWING THE SYSTEM”: toeing the party line on industrialization priorities; relentlessly adapting foreign technology; willing to function under enormous pressure to perform in one’s studies and work; and, last but not least, sacrificing consumption and a “good life” today for the promise of a better future.


FOLLOWING THE SYSTEM: THE CONS

In a series of papers spanning several years, Daron Acemoglu, Philippe Aghion, and Fabrizio Zilibotti dwell on the changes firms (and, by implication, countries) must undergo as they get closer to the global technology frontier. A core feature of their models is the need for firms to eventually switch from imitation (investment and adaption of existing technologies) to innovation.

Whereas imitation is most effective in (South Korea-style) large, vertically integrated firms with a rigid hierarchical structure and disciplined workforce, innovation requires a smaller size of firms, flatter hierarchy, and greater reliance on outsourcing. Innovation is also preconditioned on a system of incentives that encourages experimentation and forgives mistakes. If “need” is viewed as the mother of invention, a lack of “discipline” and the freedom to generate new ideas and try new practices may be portrayed as its “father”.

The Start-Up Nation, a bestselling book by Dan Senor and Saul Singer, describes the chutzpa of Israeli’s entrepreneurs and engineers as one of the key factors behind Israel’s astounding success as a hub of technological innovation since the 1990s. An eye-opening example in the book is that of Intel’s Israeli development unit having sufficient autonomy with Intel’s global hierarchy and the guts to engage the company’s headquarters in a fight over abandoning the dominant “clock speed doctrine” in favor of a new chip architecture emphasizing portability and energy efficiency.

“To cultivate a culture of disagreement and debate” was considered critically important for Dov Frohman, the founder of Intel Israel:

“The goal of a leader”, Frohman is quoted by Senor and Singer, “should be to maximize resistance – in the sense of encouraging disagreement and dissent. When an organization is in crisis, lack of resistance can itself be a big problem. It can mean that the change you are trying to create isn’t radical enough… or that the opposition has gone underground…”

It is important to realize that a lack of “discipline” is a double-edged sword. Indeed, Israel’s rebellious ethos, disrespect of authority and the tendency to trick “the system” set it oceans apart from Korea’s Confucian spirit. It is at once a key factor behind Israel’s rise to prominence as a “start-up nation” and its failure to transform a larger number of its startups into global tech giants such as Korea’s Samsung, LG or Hyundai.


GEORGIAN CONTRADICTIONS

A beautiful social TV ad, which I chanced to see several years ago, contrasted the incredible harmony of Georgia’s folk dance (shown in slow motion) with the chaos on Tbilisi’s streets (played on fast-forward, view from above).

Georgians consider themselves much more traditional and religious (92% and 95%, respectively) than South Koreans (22% and 30%), according to World Value Survey. Yet, while Georgians value time-honored traditions and religious commandments, “following the system” is not in the Georgian book.

As a rule, Georgians hate rigid rules (such as coming to work on time) and do not trust any “system”. This may explain why the architects of the “system” - Georgian lawmakers – seem to pay so little attention to fine-tuning new laws and regulations. Indeed, why bother if these laws and regulations (such as those designed to please EU bureaucrats) are likely to stay on paper.

The Georgians’ love of freedom does translate, as may be expected, into incredible creativity. Georgian painting and sculpture, performing arts, film-making and writing are truly world class. Yet, not properly managed, they fail to translate into commercial success, comparable to Italy’s.

Finally, Georgians are a very talented people as witnessed by their outstanding scholarly achievements in Soviet times. Georgian physicists, mathematicians, microbiologists, and medical surgeons were recognized leaders of the Soviet elite. Today, however, Georgia’s scholarly achievements are extremely modest, and demonstrate no signs of improvement. Moreover, combined with unrealistic expectations about own abilities and “presidential” aspirations on the part of many Georgian males, poor education translates into very high unemployment and poor work ethic.

While the potential is certainly there, these contradictions do not bode well for fast catch-up growth through imitation (South Korean-style), or Israel-inspired innovation boom.


 

    1. President Park’s demolition of South Korean trade union has apparently had a lasting impact. As reported by the Wall Street Journal, the International Trade Union Confederation has recently ranked Korea “below most of 139 countries surveyed in terms of workers’ rights, based on submissions from local labor unions. Korea was assigned the lowest rating of 5, defined as a country that has no guarantee of rights.”

 

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Guest - Levan Pavlenishvili on Monday, 16 March 2015 21:00

Maybe we need some more time to learn how to monetize our talents, or start following rules. Many generations in this country lived in the union were not following the rule was appreciated and liked by everyone. As for translating talent to commercial success yet it is not the part of Georgian culture either. I believe its just a matter of time for Georgians to choose being like Italy or to "Follow the System". As we have a too much of the southern temper I think the country's will be for the first.

Maybe we need some more time to learn how to monetize our talents, or start following rules. Many generations in this country lived in the union were not following the rule was appreciated and liked by everyone. As for translating talent to commercial success yet it is not the part of Georgian culture either. I believe its just a matter of time for Georgians to choose being like Italy or to "Follow the System". As we have a too much of the southern temper I think the country's will be for the first.
Guest - Eric Livny on Monday, 16 March 2015 21:05

Levan, you always have great ideas... Just one point - Italy is a union of two large parts (themselves further subdivided), North and South. This would be a sweeping generalization, but Northern Italy is to the whole of Italy what Germany is to the EU. It brings the systems and the order which the south, however creative and temperamental, does not have.

Georgia does not have Norther Italy to rely on, but it has Megrelia!!! Maybe this explains why all contenders in the recent Tbilisi elections had names that rhymed with "Chitanava"

Levan, you always have great ideas... Just one point - Italy is a union of two large parts (themselves further subdivided), North and South. This would be a sweeping generalization, but Northern Italy is to the whole of Italy what Germany is to the EU. It brings the systems and the order which the south, however creative and temperamental, does not have. Georgia does not have Norther Italy to rely on, but it has Megrelia!!! Maybe this explains why all contenders in the recent Tbilisi elections had names that rhymed with "Chitanava"
Guest - Levan Pavlenishvili on Monday, 16 March 2015 21:36

Probably yes, results of previous Tbilisi elections were also names in rhymed with "Chitanava", so I don't have any other choice but to agree with you.

Probably yes, results of previous Tbilisi elections were also names in rhymed with "Chitanava", so I don't have any other choice but to agree with you.
Guest - funky1254 on Monday, 16 March 2015 21:17

May be the Isolation is the a one important part of the problem. Unrealistic expectations of ourselves' ability may be caused by not being aware of much of the international experience.

Many of Georgians are extremely proud of the words the author says about them: "Georgians are a very talented people as witnessed by their outstanding scholarly achievements in Soviet times. Georgian physicists, mathematicians, microbiologists, and medical surgeons were recognized leaders of the Soviet elite" and this pride do not let them to feel the necessity and urgency of development and improvement. This may be the result of not knowing what are the achievements of modern physicist, mathematicians and so on in other western or not-western countries, and what their achievements means to their country.

The Article like this and more of the advice from non-Georgians, with a clear data, showing the disaster of the extremely high pride of past will eventually make Georgians see adequately their past and current position. The picture we'll see may be painful, but as it is said: pain is the stimulus to the struggle and the struggle is the only guaranty for the victory. (ტკივილი ბრძოლის ბიძგია,ბრძოლა კი გამარჯვების ერთადერთი საწინდარია.)

May be the Isolation is the a one important part of the problem. Unrealistic expectations of ourselves' ability may be caused by not being aware of much of the international experience. Many of Georgians are extremely proud of the words the author says about them: "Georgians are a very talented people as witnessed by their outstanding scholarly achievements in Soviet times. Georgian physicists, mathematicians, microbiologists, and medical surgeons were recognized leaders of the Soviet elite" and this pride do not let them to feel the necessity and urgency of development and improvement. This may be the result of not knowing what are the achievements of modern physicist, mathematicians and so on in other western or not-western countries, and what their achievements means to their country. The Article like this and more of the advice from non-Georgians, with a clear data, showing the disaster of the extremely high pride of past will eventually make Georgians see adequately their past and current position. The picture we'll see may be painful, but as it is said: pain is the stimulus to the struggle and the struggle is the only guaranty for the victory. (ტკივილი ბრძოლის ბიძგია,ბრძოლა კი გამარჯვების ერთადერთი საწინდარია.)
Guest - Eric Livny on Monday, 16 March 2015 22:00

You may be right. "Know thyself" http://en.wikipedia.org/wiki/Know_thyself is a famous ancient Greek aphorism. Knowing one's limitations takes courage. Intellectual and otherwise.

You may be right. "Know thyself" http://en.wikipedia.org/wiki/Know_thyself is a famous ancient Greek aphorism. Knowing one's limitations takes courage. Intellectual and otherwise.
Guest - Martin Smith on Tuesday, 17 March 2015 00:01

This is a sparkling piece of writing with an almost sonata-like structure and a sustained musical invention that makes it a superb read. I come back to my 'post-Fortress' definition of Georgia. A country without a long history of sustained and transforming international contacts (albeit one on a small scale, compared to - say - China).

Such 'post-Fortress' countries tend to absorb, as well as to slavishly imitate (Japan is more creative in this respect, I would say, than South Korea; although I look in vain, these days, for original and innovative ideas from Japan in the fields I know best, English teaching and classical music: that was certainly not the case twenty or thirty years ago...) The hope is that an emerging country can balance innovation against consistency, which are the yin and yang of the art of developing new things in any field.

I am a little surprised that social scientists tend to argue from the (philosophical) standpoint of 'this is not good enough' (the headmasterly stance) rather than empathize with the Faust-like difficulties of arriving at that plateau where new things can truly emerge in the first place. As I hope to argue in another place, the truly Georgian creation, which balances exuberance, discipline, enthusiasm, colour, respectful imitation and a dash of local flair with a niche that needs to be filled practically is a somewhat nuanced and rare phenomenon; which you can find, however, in Machakala and Entree, in Goodwill and the National Gallery of Art, in the yellow (micro)bus system in Tbilisi, in the flower market, in Chardin Street, the Baia Gallery, and in the conservation philosophy and civic values of - for example - Borjomi.

There may be near misses - impressive displays tending towards the inwardly muddled - in the classical music scene (where I would discern a curious lack of balance in programming and repertoire, although I am deeply ignorant of the details) - in the curious case of Prospero's Books (where the chief protagonist appears to have broken his baton and lost his place in the score) - in the metro system, which is effective and adequate, but has none of that creativity which gives London Transport its worldwide lead...

Beyond this, there may well be be other sectors where the fresh breath of what Miyazawa Kanji called 'winds from afar' have yet to blow.

Banks and telephone companies, however, appear to be transcendently Georgian: with their blazing liveries and chic ampitheatres of the cool.

Those hegemonies traditionally closest to central control, however, like the parliamentary system and the education system, may well be particularly conservative; although I am often surprised how little credit foreign, Tbilisi-based, commentators tend to give the first; dwelling instead on its growing pains and multiple absurdities. These structures in England took at least two centuries to evolve into anything even remotely resembling a mature form.

A true lover of Georgia must perhaps scintillate to the ever-renewing originality and unpredictability of the Kartvelian spirit, knowing that a deeply entrenched lodestone in the Georgian soul guards the nation from the twin excesses of the superficial materialism of South Korea, on the one hand, and the 'flattening-out' homogenizing tendencies of Western Europe (the 'Auchan' phenomenon) on the other. Where such occur in a Georgian context (MacDonald's balloons, bus ticket inspectors, Carrefour) they look slightly ludicrous, as if Sarkozy had been handed the baton for just one gala performance.

Wonderfully, there are no mindless malls, full of trance music and that rape of values which the West - that continent 'of the flesh' which I am happily in permanent exile from - serves up as its standard consumer religion.

I have a great deal more confidence in Georgia; but with that confidence goes a need to learn - and doubtless suffer - infinitely more. But I am fairly confident that no other nation on earth has such an intriguing mixture of medieval, nineteenth-century, and 'high tech modern' psychological strands in its repertoire and make- up; nor such a kaleidoscopic palette of originality, sweetness, kindness and peculiarity.

If western nations, at times, adopt a proud (in the good sense) - even paternalistic - attitude to this favoured progeny of the earliest mythic blue moons of nascent Europe, may that attitude be one of allowing her to develop into the personality she naturally is, rather than the model one might have expected her - again, on very plausible evidence - to follow.

This is a sparkling piece of writing with an almost sonata-like structure and a sustained musical invention that makes it a superb read. I come back to my 'post-Fortress' definition of Georgia. A country without a long history of sustained and transforming international contacts (albeit one on a small scale, compared to - say - China). Such 'post-Fortress' countries tend to absorb, as well as to slavishly imitate (Japan is more creative in this respect, I would say, than South Korea; although I look in vain, these days, for original and innovative ideas from Japan in the fields I know best, English teaching and classical music: that was certainly not the case twenty or thirty years ago...) The hope is that an emerging country can balance innovation against consistency, which are the yin and yang of the art of developing new things in any field. I am a little surprised that social scientists tend to argue from the (philosophical) standpoint of 'this is not good enough' (the headmasterly stance) rather than empathize with the Faust-like difficulties of arriving at that plateau where new things can truly emerge in the first place. As I hope to argue in another place, the truly Georgian creation, which balances exuberance, discipline, enthusiasm, colour, respectful imitation and a dash of local flair with a niche that needs to be filled practically is a somewhat nuanced and rare phenomenon; which you can find, however, in Machakala and Entree, in Goodwill and the National Gallery of Art, in the yellow (micro)bus system in Tbilisi, in the flower market, in Chardin Street, the Baia Gallery, and in the conservation philosophy and civic values of - for example - Borjomi. There may be near misses - impressive displays tending towards the inwardly muddled - in the classical music scene (where I would discern a curious lack of balance in programming and repertoire, although I am deeply ignorant of the details) - in the curious case of Prospero's Books (where the chief protagonist appears to have broken his baton and lost his place in the score) - in the metro system, which is effective and adequate, but has none of that creativity which gives London Transport its worldwide lead... Beyond this, there may well be be other sectors where the fresh breath of what Miyazawa Kanji called 'winds from afar' have yet to blow. Banks and telephone companies, however, appear to be transcendently Georgian: with their blazing liveries and chic ampitheatres of the cool. Those hegemonies traditionally closest to central control, however, like the parliamentary system and the education system, may well be particularly conservative; although I am often surprised how little credit foreign, Tbilisi-based, commentators tend to give the first; dwelling instead on its growing pains and multiple absurdities. These structures in England took at least two centuries to evolve into anything even remotely resembling a mature form. A true lover of Georgia must perhaps scintillate to the ever-renewing originality and unpredictability of the Kartvelian spirit, knowing that a deeply entrenched lodestone in the Georgian soul guards the nation from the twin excesses of the superficial materialism of South Korea, on the one hand, and the 'flattening-out' homogenizing tendencies of Western Europe (the 'Auchan' phenomenon) on the other. Where such occur in a Georgian context (MacDonald's balloons, bus ticket inspectors, Carrefour) they look slightly ludicrous, as if Sarkozy had been handed the baton for just one gala performance. Wonderfully, there are no mindless malls, full of trance music and that rape of values which the West - that continent 'of the flesh' which I am happily in permanent exile from - serves up as its standard consumer religion. I have a great deal more confidence in Georgia; but with that confidence goes a need to learn - and doubtless suffer - infinitely more. But I am fairly confident that no other nation on earth has such an intriguing mixture of medieval, nineteenth-century, and 'high tech modern' psychological strands in its repertoire and make- up; nor such a kaleidoscopic palette of originality, sweetness, kindness and peculiarity. If western nations, at times, adopt a proud (in the good sense) - even paternalistic - attitude to this favoured progeny of the earliest mythic blue moons of nascent Europe, may that attitude be one of allowing her to develop into the personality she naturally is, rather than the model one might have expected her - again, on very plausible evidence - to follow.
Guest - Juan Echanove on Wednesday, 18 March 2015 04:04

A master piece, Eric!
I couldn’t agree more! Often Georgians recognize that during communist times the (theoretically rigid) rules of the system were sometimes applied in Georgia with less rigidity compare to other parts of the Soviet Union – basically because of the proverbial disconformities of Georgians in following any rules!- Them, during the 90’s , defying all rules become the rule. The Rose Revolution brought a new way for not applying rules: To officially ban all sorts of day-to-day regulations via Statehood-sponsored anarchy (or libertarism). Georgia has tried all possible ways to avoid rules. A 5 minutes drive in Georgian streets or roads proves fairly well how prone Georgians are to disobey rules.

Georgians are extremely creative, indeed. And they should be proud of that. But I don’t really think there is a tradeoff between this constant civil disobedience and creativity. Both can be compatible, as they are, in many other countries.

I believe that there is, in fact, a relation between Georgian creativity and disrespect to the rules, but of a different kind: Many Georgians tend to refuse to comply with regulations because the ultimate loyalty of the individual in Georgia does not goes towards the society as a whole, but towards the clan, the family group, the live-long guild of school classmates… Georgians will always follow the informal rules of the small community they belong to, but they will often tend to avoid broad rules impose by the State or for the public good.

My hypothesis is that this strong sense of belonging to a clan can ultimately alienate the individual, and creativity is an excellent way to recover the oneness and seek self-identity vis-à-vis the clan/family/gang dictatorship.

Georgians follow rules. But the rules that matter to them, as we all human beings do. In Georgia, this basically means following the family, class or clan codes of conduct. The goal, at the end of the day, is to build a society where the individuals embrace rules that apply to all of its members, beyond petty loyalties. Will one day the Georgians pay the cost of less creativity or authenticity, if they start following societal rules? I don’t think so, but even if that would be the risk to afford, I believe it’s worth taking it.

A master piece, Eric! I couldn’t agree more! Often Georgians recognize that during communist times the (theoretically rigid) rules of the system were sometimes applied in Georgia with less rigidity compare to other parts of the Soviet Union – basically because of the proverbial disconformities of Georgians in following any rules!- Them, during the 90’s , defying all rules become the rule. The Rose Revolution brought a new way for not applying rules: To officially ban all sorts of day-to-day regulations via Statehood-sponsored anarchy (or libertarism). Georgia has tried all possible ways to avoid rules. A 5 minutes drive in Georgian streets or roads proves fairly well how prone Georgians are to disobey rules. Georgians are extremely creative, indeed. And they should be proud of that. But I don’t really think there is a tradeoff between this constant civil disobedience and creativity. Both can be compatible, as they are, in many other countries. I believe that there is, in fact, a relation between Georgian creativity and disrespect to the rules, but of a different kind: Many Georgians tend to refuse to comply with regulations because the ultimate loyalty of the individual in Georgia does not goes towards the society as a whole, but towards the clan, the family group, the live-long guild of school classmates… Georgians will always follow the informal rules of the small community they belong to, but they will often tend to avoid broad rules impose by the State or for the public good. My hypothesis is that this strong sense of belonging to a clan can ultimately alienate the individual, and creativity is an excellent way to recover the oneness and seek self-identity vis-à-vis the clan/family/gang dictatorship. Georgians follow rules. But the rules that matter to them, as we all human beings do. In Georgia, this basically means following the family, class or clan codes of conduct. The goal, at the end of the day, is to build a society where the individuals embrace rules that apply to all of its members, beyond petty loyalties. Will one day the Georgians pay the cost of less creativity or authenticity, if they start following societal rules? I don’t think so, but even if that would be the risk to afford, I believe it’s worth taking it.
Guest - Eric Livny on Wednesday, 18 March 2015 20:10

Thanks, Juan, much appreciated!

Your hypothesis sounds VERY plausible. But if true, it spells doom on Georgian statehood and the Georgian nation-building enterprise. For how can a modern state function if the majority of its citizens only heed to tribal chiefs, ancestral traditions, and religious rites?!

Wow, the way you describe Georgian history as a process of continuously attempting to carve out more freedoms for extended families and clans is really eye-opening. Certainly a topic for a fantastic political history book. I can see the following chapters:
-- hatred of, and repeated revolts against, any central authority (Georgian kings and any regional empires: Persia and Byzantine, the Ottomans and Russia)
-- manipulating international patrons and alliances,
-- circumventing the Soviet law and "systems",
-- abolishing the state and privatizing its functions among the various mafia clans in the 1990s,
-- and, finally, establishing and enshrining in the constitution THE LIBERTARIAN GEORGIAN STATE.

Thanks, Juan, much appreciated! Your hypothesis sounds VERY plausible. But if true, it spells doom on Georgian statehood and the Georgian nation-building enterprise. For how can a modern state function if the majority of its citizens only heed to tribal chiefs, ancestral traditions, and religious rites?! Wow, the way you describe Georgian history as a process of continuously attempting to carve out more freedoms for extended families and clans is really eye-opening. Certainly a topic for a fantastic political history book. I can see the following chapters: -- hatred of, and repeated revolts against, any central authority (Georgian kings and any regional empires: Persia and Byzantine, the Ottomans and Russia) -- manipulating international patrons and alliances, -- circumventing the Soviet law and "systems", -- abolishing the state and privatizing its functions among the various mafia clans in the 1990s, -- and, finally, establishing and enshrining in the constitution THE LIBERTARIAN GEORGIAN STATE.
Guest - Nino on Wednesday, 18 March 2015 21:02

Georgians are definitely rebellious. They never even obeyed their own King. Either there was a war against an external enemy or conspiracy against the King. So, obedience is definitely not in our genes.

Arguably, law and order has never been a success strategy for Georgians. Without breaking the already existing rules, there is no way 60 000 men defeat an 400 000 army, as David Aghmashenebeli did. So, our predecessors had to be creative in order to survive.

Same is true about doing business. Georgia had one of the largest shadow economies in the world. During soviet times, if you wanted to do a business, you had to stay underground, break the rules. Even if you look at how people's lives changes afterwards, you see that those, who followed the system, could not adjust and are now poor, while others, who cheated the soviet system, live quite well today as well. And these people are used to not obeying the laws.

And what is really missing in Georgian organization, it is "the culture of disagreement and debate”. Despite rebellious soul, Georgians usually avoid debate, as it might be taken too personal. Hopefully, new developments in the education system will deal with this problem and let our creativity flourish :)

Georgians are definitely rebellious. They never even obeyed their own King. Either there was a war against an external enemy or conspiracy against the King. So, obedience is definitely not in our genes. Arguably, law and order has never been a success strategy for Georgians. Without breaking the already existing rules, there is no way 60 000 men defeat an 400 000 army, as David Aghmashenebeli did. So, our predecessors had to be creative in order to survive. Same is true about doing business. Georgia had one of the largest shadow economies in the world. During soviet times, if you wanted to do a business, you had to stay underground, break the rules. Even if you look at how people's lives changes afterwards, you see that those, who followed the system, could not adjust and are now poor, while others, who cheated the soviet system, live quite well today as well. And these people are used to not obeying the laws. And what is really missing in Georgian organization, it is "the culture of disagreement and debate”. Despite rebellious soul, Georgians usually avoid debate, as it might be taken too personal. Hopefully, new developments in the education system will deal with this problem and let our creativity flourish :)
Guest - tbilisipr on Thursday, 19 March 2015 19:13

Eric, this is a succinct piece of writing showing wit and nuance to highlight serious problems for Georgia in modernising. I second Juan's analysis, this is a society that is like 1600 with iPhones and Landcruisers - there is great adherence to social order yet this is largely hidden to the outside observer because we don't understand the rules and customs and these are unwritten. I have seen this in action in seemingly large companies - what results is a crippling nepotism and obedience to clan rule and complete disregard for meritocracy, facts and even profit - honour trumps them all every single time.

It would appear that being protected and given pocket money for a long period has fostered a laziness and "it'll-be-alrightness" of epic proportions - thus why make an effort when it'll be ok somehow anyway? Rent-seeking seems to work quite well and failing that there's bound to be a benevolent auntie or uncle somewhere. To be fair it looks like the 20-something generation is pretty tired of this and would rather like to reject these ideas, as they travel and gain experience away from the clans the values of hard work and consistency will become ingrained.

However, there is a massive bonus card waiting to be sprung and that is that laziness is the mother of creativity - this creativity means that great quality of production is possible in non-linear fields such as the arts of culture. Take a look at the global Samsung website and witness this "we always follow the system" means that they are producing products copied from Apple selling on an interface that mimics the UI of Facebook - this may work and make profit but it's not doing anything exceptional.

I concur with Levan that Italy is a most attractive model to emulate with individual freedom, creativity and beauty being central to what they do, Georgians are capable enough to do this but first they must want to, not for the clan but for themselves.

Eric, this is a succinct piece of writing showing wit and nuance to highlight serious problems for Georgia in modernising. I second Juan's analysis, this is a society that is like 1600 with iPhones and Landcruisers - there is great adherence to social order yet this is largely hidden to the outside observer because we don't understand the rules and customs and these are unwritten. I have seen this in action in seemingly large companies - what results is a crippling nepotism and obedience to clan rule and complete disregard for meritocracy, facts and even profit - honour trumps them all every single time. It would appear that being protected and given pocket money for a long period has fostered a laziness and "it'll-be-alrightness" of epic proportions - thus why make an effort when it'll be ok somehow anyway? Rent-seeking seems to work quite well and failing that there's bound to be a benevolent auntie or uncle somewhere. To be fair it looks like the 20-something generation is pretty tired of this and would rather like to reject these ideas, as they travel and gain experience away from the clans the values of hard work and consistency will become ingrained. However, there is a massive bonus card waiting to be sprung and that is that laziness is the mother of creativity - this creativity means that great quality of production is possible in non-linear fields such as the arts of culture. Take a look at the global Samsung website and witness this "we always follow the system" means that they are producing products copied from Apple selling on an interface that mimics the UI of Facebook - this may work and make profit but it's not doing anything exceptional. I concur with Levan that Italy is a most attractive model to emulate with individual freedom, creativity and beauty being central to what they do, Georgians are capable enough to do this but first they must want to, not for the clan but for themselves.
Guest - Eric Livny on Friday, 20 March 2015 00:48

Tbilisipr, thanks! You are making some very interesting points. Georgia may in fact have too much of "following the (clan) system", trumping such motives as profit and meritocracy. And, indeed, I also often see how the individual and collective ability to perceive facts is distorted by emotions (love/hatred) and considerations of honor.

I also agree with you that S.Koreans are to this day very keen on imitation. I am not a design expert, but many S.Korean cars somehow appear to combine the "facial" features of only slightly older German models (not anyone in particular, but all of them at once). Many Kia models, for instance, look like "flash face" versions of a Mercedes married with VW, BMW and Audi. There may be a lot technological imitation under the hoods of S.Korean cars as well, but these are not as easy to perceive. So far nobody protested :)

Tbilisipr, thanks! You are making some very interesting points. Georgia may in fact have too much of "following the (clan) system", trumping such motives as profit and meritocracy. And, indeed, I also often see how the individual and collective ability to perceive facts is distorted by emotions (love/hatred) and considerations of honor. I also agree with you that S.Koreans are to this day very keen on imitation. I am not a design expert, but many S.Korean cars somehow appear to combine the "facial" features of only slightly older German models (not anyone in particular, but all of them at once). Many Kia models, for instance, look like "flash face" versions of a Mercedes married with VW, BMW and Audi. There may be a lot technological imitation under the hoods of S.Korean cars as well, but these are not as easy to perceive. So far nobody protested :)
Guest - Dace on Tuesday, 29 March 2016 22:05

Eric, what a topic, what a discussion! I have been pondering a lot on this topic and generally what is wrong with Georgia. Just a few brief points because I would have too much to say.

First, following the system and being innovative are not mutually exclusive strategies, rather they have strong feedback link on each other. They are best when they are combined in such a way that there are strong institutions which allow and encourage innovation. But often they are combined in such a way that a bad system produces counterproductive innovation. Rarely, the innovation can change the system, but mostly it just reinforces it.

What regards Georgia and the Georgians, they follow the system more than innovate. I have experienced on my own skin way too often The system does not allow it, which often hides simple ignorance, laziness to find out and do something, and fears from the management. The companies are managed in an old-fashioned, patrimonial way, which discourages initiative. There is a lot of looking at each other and respect for authority - be it the church, aunt Nino, doctor Giorgi, way of cooking beans or whatever. Georgians tend to be very loyal to their authorities and generally do not like to experiment. Innovation is squeezed into the realm of arts where they are indeed good. In all other spheres doing what others do (or not doing anything) seem to be the winning strategy.

The same applies to the public governance. Yes, there is still the Soviet legacy and it will take time for the people to understand that the laws are there to serve them not they are there to serve the laws. But it should not be viewed (first of all by the legislator and the executive) as a lost case. It will require constant improvement of laws, judicial independence (a big problem still), PR and ENFORCEMENT!!! Just take the traffic rules. There was recently a good PR campaign that the police would increase enforcement of traffic rules with a stress on a 40 GEL fine for not stopping at a zebra crossing. I remember that in Latvia, where I am from, it took a couple of days of increased fining to switch from the bad equilibrium of not stopping at zebra crossings to the good equilibrium of all drivers stopping at zebra crossings. I naively expected the same here but nothing changed at all. I did not see a single instance of the police fining a driver for not stopping at a zebra crossing. PR campaign was empty words and a waste of money.

Finally, I would like to encourage the fellow Georgians to be more rebellious: it is not rebellious to break the rules when everybody does it - it is rebellious to follow the rules! It is rebellious to think, to take an action and responsibility. It is rebellious to put curry in your lobio :)

Eric, what a topic, what a discussion! I have been pondering a lot on this topic and generally what is wrong with Georgia. Just a few brief points because I would have too much to say. First, following the system and being innovative are not mutually exclusive strategies, rather they have strong feedback link on each other. They are best when they are combined in such a way that there are strong institutions which allow and encourage innovation. But often they are combined in such a way that a bad system produces counterproductive innovation. Rarely, the innovation can change the system, but mostly it just reinforces it. What regards Georgia and the Georgians, they follow the system more than innovate. I have experienced on my own skin way too often The system does not allow it, which often hides simple ignorance, laziness to find out and do something, and fears from the management. The companies are managed in an old-fashioned, patrimonial way, which discourages initiative. There is a lot of looking at each other and respect for authority - be it the church, aunt Nino, doctor Giorgi, way of cooking beans or whatever. Georgians tend to be very loyal to their authorities and generally do not like to experiment. Innovation is squeezed into the realm of arts where they are indeed good. In all other spheres doing what others do (or not doing anything) seem to be the winning strategy. The same applies to the public governance. Yes, there is still the Soviet legacy and it will take time for the people to understand that the laws are there to serve them not they are there to serve the laws. But it should not be viewed (first of all by the legislator and the executive) as a lost case. It will require constant improvement of laws, judicial independence (a big problem still), PR and ENFORCEMENT!!! Just take the traffic rules. There was recently a good PR campaign that the police would increase enforcement of traffic rules with a stress on a 40 GEL fine for not stopping at a zebra crossing. I remember that in Latvia, where I am from, it took a couple of days of increased fining to switch from the bad equilibrium of not stopping at zebra crossings to the good equilibrium of all drivers stopping at zebra crossings. I naively expected the same here but nothing changed at all. I did not see a single instance of the police fining a driver for not stopping at a zebra crossing. PR campaign was empty words and a waste of money. Finally, I would like to encourage the fellow Georgians to be more rebellious: it is not rebellious to break the rules when everybody does it - it is rebellious to follow the rules! It is rebellious to think, to take an action and responsibility. It is rebellious to put curry in your lobio :)
Eric Livny on Tuesday, 29 March 2016 22:24

Thank you, Dace! Indeed, my uni-dimensional generalizations do not do justice to any of the cultures - Georgian, Korean of Israeli. They are obviously infinitely more complex than how I present them here. Indeed, thinking out-of-the-box, that is true innovation, does not necessarily go with a lack of discipline (which may simply be a reflection of laziness). South Korea, so I was told in Seoul, finds it much more difficult to innovate now that it is at the technological frontier in pretty much any industry. But at the same time getting there must have taken quite a bit of innovating thinking. Israelis have a lot of chutzpah (наглость) but they know how to follow the rules when it comes to military and security (and not only)

Thank you, Dace! Indeed, my uni-dimensional generalizations do not do justice to any of the cultures - Georgian, Korean of Israeli. They are obviously infinitely more complex than how I present them here. Indeed, thinking out-of-the-box, that is true innovation, does not necessarily go with a lack of discipline (which may simply be a reflection of laziness). South Korea, so I was told in Seoul, finds it much more difficult to innovate now that it is at the technological frontier in pretty much any industry. But at the same time getting there must have taken quite a bit of innovating thinking. Israelis have a lot of chutzpah (наглость) but they know how to follow the rules when it comes to military and security (and not only)
Guest - DavidMarques on Friday, 01 April 2016 00:52

Whats the use of experiencing an incredible economic growth and holding at the same time extremely high suicide rates? Regardless of its beneficial side, there must be something very wrong about following this order....

Whats the use of experiencing an incredible economic growth and holding at the same time extremely high suicide rates? Regardless of its beneficial side, there must be something very wrong about following this order....
Eric Livny on Friday, 01 April 2016 07:31

I agree. There is something deeply flawed in a society that is solely focused on economic growth. Human happiness has many more dimensions. The Georgians would be the first to confirm this :-)

I agree. There is something deeply flawed in a society that is solely focused on economic growth. Human happiness has many more dimensions. The Georgians would be the first to confirm this :-)
Nodar on Sunday, 17 April 2016 20:13

Professor Livny, what a great post as always.

[WE ALWAYS FOLLOW THE SYSTEM], these words are like a bell in Georgians head and it is associated to the slavery. It is not surprising that we are not like South Korea or Israel.
According to your citation, I personally think that the lack resistance is the main factor of above mentioned contrast. Georgians can fight against the system but cannot accept innovations and different thoughts, even imitations. Government have no enough power of resistance and thats why the laws stay on paper.
Actually, in my opinion imitation is the most suitable tool for Georgia to catch up and accumulate appropriate knowledge for further (development despite our talents) and then step up into innovation to keep up the pace.

But why we cannot/do not do this?

First is itself our traditions. I respect all of them and try to keep them but we all see that they are antiquated for development. Im not saying that we have to forget our traditions but we have to concentrate o development and our future and do not expect that our traditions will do this instead of us.

Second is our laziness. We want everything to receive ready and do not want to fight to achieve something. In trying to do this, we do not realize that todays world is not mother Tereza. It punishes individuals and hence nations for to be lazy.

Professor Livny, what a great post as always. [WE ALWAYS FOLLOW THE SYSTEM], these words are like a bell in Georgians head and it is associated to the slavery. It is not surprising that we are not like South Korea or Israel. According to your citation, I personally think that the lack resistance is the main factor of above mentioned contrast. Georgians can fight against the system but cannot accept innovations and different thoughts, even imitations. Government have no enough power of resistance and thats why the laws stay on paper. Actually, in my opinion imitation is the most suitable tool for Georgia to catch up and accumulate appropriate knowledge for further (development despite our talents) and then step up into innovation to keep up the pace. But why we cannot/do not do this? First is itself our traditions. I respect all of them and try to keep them but we all see that they are antiquated for development. Im not saying that we have to forget our traditions but we have to concentrate o development and our future and do not expect that our traditions will do this instead of us. Second is our laziness. We want everything to receive ready and do not want to fight to achieve something. In trying to do this, we do not realize that todays world is not mother Tereza. It punishes individuals and hence nations for to be lazy.
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