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

Samuel Huntington, the veteran American political scientist and author of the controversial book, The Clash of Civilizations, put this idea succinctly. In explaining the economic divergence between South Korea and Ghana, two countries that were at similar levels of economic development in the 1960s, he argued: ‘Undoubtedly, many factors played a role, but … culture had to be a large part of the explanation. South Koreans valued thrift, investment, hard work, education, organization, and discipline. Ghanaians had different values. In short, cultures count’.[19]

Few of us would dispute that people who display forms of behaviour like ‘thrift, investment, hard work, education, organization, and discipline’will be economically successful. Cultural theorists, however, say more than that. They argue that these forms of behaviour are largely, or even entirely, fixed because they are determined by culture. If economic success is really determined by ‘habits of national heritage’, some people are destined to be more successful than others, and there is not much that can be done about it. Some poor countries will just have to stay that way.

Culture-based explanations for economic development were popular right up to the 1960s. But in the era of civil rights and de-colonization, people began to feel that these explanations had cultural-supremacist (if not necessarily racist) overtones. They fell into disrepute as a result. Such explanations have, however, made a comeback in the past decade or so. They have come back into fashion just as the more dominant cultures (narrowly Anglo-American, more broadly European) have started to feel ‘threatened’ by other cultures – Confucianism in the economic sphere; Islam in the realm of politics and international relations.[20] They also offered a very convenient excuse to the Bad Samaritans – neo-liberal policies have not worked very well, not because of some inherent problems but because the people practising them had ‘wrong’ values that diminished their effectiveness.

In the current renaissance of such views, some cultural theorists do not actually talk about culture per se. Recognising that culture is too broad and amorphous a concept, they try to isolate only those components that they think are most closely related to economic development. For example, in his 1995 book, Trust, Francis Fukuyama, the neo-con American political commentator, argues that the existence or otherwise of trust extending beyond family members critically affects economic development. He argues that the absence of such trust in the cultures of countries like China, France, Italy and (to some extent) Korea makes it difficult for them to run large firms effectively, which are key to modern economic development. This is, according to Fukuyama, why high-trust societies, such as Japan, Germany and the US, are economically more developed.

But whether or not the word ‘culture’ is used, the essence of the argument is the same – different cultures make people behave differently, with resulting differences in economic development across different societies.David Landes, the distinguished American economic historian and a leader in the renaissance of culturalist theories, claims that ‘culture makes all the difference.’[21]

Different cultures produce peoples with different attitudes towards work, saving, education, cooperation, trust, authority and countless other things that affect a society’s economic progress. But this proposition does not get us very far. As we shall see in a moment, it is very difficult to define cultures precisely. Even if we can, it is not possible to establish clearly whether a particular culture is inherently good or bad for economic development. Let me explain.

What is a culture?

Many westerners mistake me for a Chinese or Japanese. It is understandable. With ‘slanted’ eyes, straight black hair and prominent cheekbones, East Asians all ‘look the same’ – at least to a westerner who does not understand all the subtle differences in facial features, mannerisms and dress sense among people from different East Asian countries. To westerners who apologise for mistaking me for a Chinese or Japanese, I tell them it’s OK, because most Koreans call all westerners ‘Americans’ – a notion that some Europeans might find disagreeable. To the uninitiated Korean, I tell them, all westerners look the same, with their big noses, round eyes and excessive facial hair.

This experience warns against excessively broad categorization of people. Of course, what is ‘excessively broad’ depends on the purpose of the categorisation. If we are comparing the human brain with that of, say, the dolphin, even the over-arching category of Homo sapiens may be good enough. But if we are studying how culture makes a difference to economic development, even the relatively narrow category ‘Korean’ may be problematic. Broader categories, like ‘Christian’ or ‘Muslim’, obscure much more than they reveal.

In most culturalist arguments, however, cultures are defined very loosely.We are often offered incredibly coarse categories, such as East-West, which I am not even going to bother to criticize. Very often, we are offered broad ‘religious’ categories, like Christian (which from time to time is lumped together with Judaism into Judaeo- Christian, and which is regularly divided into Catholic and Protestant), Muslim, Jewish, Buddhist, Hindu and Confucian (this latter category is particularly controversial, because it is not a religion).*

Yet think for a minute about these categories.Within the ostensibly homogeneous group ‘Catholic’, we have both the ultra-conservative Opus Dei movement, which has become well-known through Dan Brown’s bestselling novel, The Da Vinci Code, and left-wing liberation theology, epitomized in the famous saying by the Brazilian archbishop of Olinda and Recife, Dom Helder Camara: ‘When I give food to the poor, they call me a saint. When I ask why the poor have no food, they call me a communist.’ These two ‘Catholic’ sub- cultures produce people with very different attitudes towards wealth accumulation, income redistribution and social obligations.

Or, to take another example, there are ultra-conservative Muslim societies that seriously limit women’s public participation. Yet more than half the professional staff at the Malaysian central bank are women – a much higher proportion than at any central bank in the supposedly more ‘feminist’ Christian countries. And here is another example: some people believe that Japan succeeded economically because of its unique variety of Confucianism, which emphasizes loyalty rather than the personal edification stressed in the Chinese and Korean varieties.[22] Whether or not one agrees with this particular generalization (more on this later), it shows that there isn’t just one kind of Confucianism.

If categories like Confucian or Muslim are too broad, how about taking countries as cultural units? Unfortunately, this does not solve the problem. As the culturalists themselves would be prepared to acknowledge, a country often contains different cultural groups, especially in large and culturally diverse ones, like India and China. But even in a country like Korea, one of the most culturally homogeneous societies in the world, there are significant cultural differences between regions. In particular, people from the south-east (Kyungsang) think of those from the south-west (Cholla) as clever but totally untrustworthy double-dealers. South-westerners return the compliment by regarding the south- easterners as a crude and aggressive, albeit determined and well-organized, bunch of people. It wouldn’t be too far-fetched to say that the stereotypes of these two Korean regions are similar to the stereotypes the French and the Germans have of each other. The cultural animosity between the two regions of Korea is so intense that some families won’t even allow their children to marry into families from the other region. So is there a single ‘Korean’ culture or not? And, if things are as complicated as that for Korea, do we even need to talk about other countries?

I could go on, but I think I have made the point that broad categories, like ‘Catholic’ or ‘Chinese’, are simply too crude to be analytically meaningful, and that even a country is too big a cultural unit to generalize about. The culturalists may well retort that all we have to do is work with finer categories like Mormon or Japanese Confucian, rather than broader ones like Christian or Confucian. If only matters were that simple. There are more fundamental problems with cultur-alist theories, to which I turn now.

Dr Jekyll vs Mr Hyde

Ever since the East Asian economic ‘miracle’, it has become very popular to argue that it was Confucian culture that was responsible, at least partly, for the region’s economic successes. Confucian culture, it was pointed out, emphasizes hard work, education, frugality, co-operation and obedience to authority. It seemed obvious that a culture that encourages the accumulation of human capital (with its emphasis on education) and physical capital (with its emphasis on thrift), while encouraging co-operation and discipline, must be good for economic development.

But, before the East Asian economic ‘miracle’, people used to blame Confucianism for the region’s underdevelopment.And they were right. For Confucianism does have a lot of aspects that are inimical to economic