Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism

political problems such as corruption and lack of democracy is not convincing. I have also pointed out that their alleged solutions to these problems have often made things worse. In the next chapter, I will turn to another non- policy factor, culture, which is rapidly becoming a fashionable explanation for development failure, thanks to the recent popularity of the idea of a ‘clash of civilizations’.

CHAPTER 9 Lazy Japanese and thieving Germans

Are some cultures incapable of economic development?

Having toured lots of factories in a developing country, an Australian management consultant told the government officials who had invited him: ‘My impression as to your cheap labour was soon disillusioned when I saw your people at work. No doubt they are lowly paid, but the return is equally so; to see your men at work made me feel that you are a very satisfied easy-going race who reckon time is no object. When I spoke to some managers they informed me that it was impossible to change the habits of national heritage.’

This Australian consultant was understandably worried that the workers of the country he was visiting did not have the right work ethic. In fact, he was being quite polite. He could have been blunt and just called them lazy. No wonder the country was poor – not dirt poor, but with an income level that was less than a quarter of Australia’s.

For their part, the country’s managers agreed with the Australian, but were smart enough to understand that the ‘habits of national heritage’, or culture, cannot be changed easily, if at all. As the 19th-century German economist-cum-sociologist Max Weber opined in his seminal work, The Protestant Work Ethic and the Spirit of Capitalism, there are some cultures, like Protestantism, that are simply better suited to economic development than others.

The country in question, however, was Japan in 1915.[1] It doesn’t feel quite right that someone from Australia (a nation known today for its ability to have a good time) could call the Japanese lazy. But this is how most westerners saw Japan a century ago.

In his 1903 book, Evolution of the Japanese, the American missionary Sidney Gulick observed that many Japanese ‘give an impression … of being lazy and utterly indifferent to the passage of time’.[2] Gulick was no casual observer. He lived in Japan for 25 years (1888–1913), fully mastered the Japanese language and taught in Japanese universities. After his return to the US, he was known for his campaign for racial equality on behalf of Asian Americans. Nevertheless, he saw ample confirmation of the cultural stereotype of the Japanese as an ‘easygoing’ and ‘emotional’ people who possessed qualities like ‘lightness of heart, freedom from all anxiety for the future, living chiefly for the present’.[3] The similarity between this observation and that of today’s Africa, in this case by an African himself – Daniel Etounga-Manguelle, a Cameroonian engineer and writer – is striking: ‘The African, anchored in his ancestral culture, is so convinced that the past can only repeat itself that he worries only superficially about the future. However, without a dynamic perception of the future, there is no planning, no foresight, no scenario building; in other words, no policy to affect the course of events’.[4]

After her tour of Asia in 1911–1912, Beatrice Webb, the famous leader of British Fabian socialism, described the Japanese as having ‘objectionable notions of leisure and a quite intolerable personal independence’.[5]She said that, in Japan, ‘there is evidently no desire to teach people to think’.[6] She was even more scathing about my ancestors. She described the Koreans as ‘12 millions of dirty, degraded, sullen, lazy and religionless savages who slouch about in dirty white garments of the most inept kind and who live in filthy mudhuts’. [7] No wonder she thought that ‘[i]f anyone can raise the Koreans out of their present state of barbarism I think the Japanese will’, despite her rather low opinion of the Japanese.[8]

This was not just a western prejudice against eastern peoples. The British used to say similar things about the Germans. Before their economic take-off in the mid-19th century, the Germans were typically described by the British as ‘a dull and heavy people’.[9] ‘Indolence’ was a word that was frequently associated with the Germanic nature.[10] Mary Shelley, the author of Frankenstein, wrote in exasperation after a particularly frustrating altercation with her German coach-driver: ‘the Germans never hurry’.[11] It wasn’t just the British. A French manufacturer who employed German workers complained that they ‘work as and when they please’.[12]

The British also considered the Germans to be slow-witted. According to John Russell, a travel writer of the 1820s, the Germans were a ‘plodding, easily contented people … endowed neither with great acuteness of perception nor quickness of feeling’. In particular, according to Russell, they were not open to new ideas; ‘it is long before [a German] can be brought to comprehend the bearings of what is new to him, and it is difficult to rouse him to ardour in its pursuit.’[13] No wonder that they were ‘not distinguished by enterprise or activity’, as another mid-19th century British traveller remarked.[14]

Germans were also deemed to be too individualistic and unable to co-operate with each other. The Germans’ inability to co-operate was, in the view of the British, most strongly manifested in the poor quality and maintenance of their public infrastructure, which was so bad that John McPherson, a viceroy of India (and, therefore, well used to treacherous road conditions), wrote, ‘I found the roads so bad in Germany that I directed my course to Italy’.[15] Once again, compare this with a comment by the African observer that I quoted above: ‘African societies are like a football team in which, as a result of personal rivalries and a lack of team spirit, one player will not pass the ball to another out of fear that the latter might score a goal’.[16]

British travellers in the early 19th century also found the Germans dishonest – ‘the tradesman and the shopkeeper take advantage of you wherever they can, and to the smallest imaginable amount rather than not take advantage of you at all … This knavery is universal’, observed Sir Arthur Brooke Faulkner, a physician serving in the British army.[17]

Finally, the British thought the Germans to be overly emotional. Today many British seem to think that Germans have an almost genetic emotional deficiency. Yet talking about excessive German emotion, Sir Arthur observed that ‘some will laugh all sorrows away and others will always indulge in melancholy’.[18] Sir Arthur was an Irishman, so his calling the Germans emotional would be akin to a Finn calling the Jamaicans a gloomy lot, according to the cultural stereotypes prevailing now.

So there you are. A century ago, the Japanese were lazy rather than hardworking; excessively independent-minded (even for a British socialist!) rather than loyal ‘worker ants’; emotional rather than inscrutable; light-hearted rather than serious; living for today instead of considering the future (as manifested in their sky-high savings rates). A century and half ago, the Germans were indolent rather than efficient; individualistic rather than co-operative; emotional rather than rational; stupid rather than clever; dishonest and thieving rather than law- abiding; easy-going rather than disciplined.

These characterizations are puzzling for two reasons. First, if the Japanese and the Germans had such ‘bad’ cultures, how have they become so rich? Second, why were the Japanese and the Germans then so different from their descendants today? How could they have so completely changed their ‘habits of national heritage’?

I will answer these questions in due course. But before I do, I need first to clear up some widespread misunderstandings about the relationship between culture and economic development.

Does culture influence economic development?

The view that cultural differences explain the variations in economic development across societies has been around for a long time. The underlying insight is obvious. Different cultures produce people with different values, which manifest themselves in different forms of behaviour. As some of these forms of behaviour are more helpful for economic development than others, those countries with a culture that produces more pro-developmental forms of behaviour will do better than others economically.