Fwd: NYTimes.com Article: An Old Key to Why Countries Get Rich

The great debate about economic successes and failures, according to the New 
York Times--Samuel Huntington vs. Jeffrey Sachs!

Steven Sherman

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This article from NYTimes.com 
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An Old Key to Why Countries Get Rich
http://www.nytimes.com/2001/01/13/arts/13SUCC.html

January 13, 2001

By ALEXANDER STILLE

Why has Poland prospered and Russia struggled since the end of the
cold war? Why is the economy of South Korea 15 times as large as
that of Ghana when they were comparable less than 40 years ago? Why
have the Chinese minorities thrived economically in such different
places as Malaysia, the Philippines and San Francisco?

 The answer, in all cases, is culture, according to a growing
number of scholars who have come to believe that social attitudes
are more important than politics and economics in determining why
some societies are richer than others.

 "If we learn anything from the history of economic development, it
is that culture makes almost all the difference," declares David
Landes, a professor of history at Harvard, in "Culture Matters: How
Values Shape Human Progress" (Basic Books), a new collection of
essays that is a kind of manifesto for this increasingly
influential school of thought.

 But this latest incarnation of the "culture matters" thesis,
popular early in the 20th century, is unsettling scholars and
policymakers. For starters, it challenges the assumptions of market
economists and liberal and Marxist thinkers, who share an
assumption that political and economic programs are of primary
importance and that social values and attitudes follow their lead.

 "The standard economic way of thinking is to assume that people
are rational, utility- maximizing agents that will seek their
economic self-interest," said Benjamin Friedman, a professor of
political economy at Harvard who counts himself in the culture
matters camp. "The `culture matters' idea   that different folks
have different utility functions, or even that they disregard
rational, utility-maximizing norms   is very subversive of what
most economists do." 

 Even more controversial are the political implications. "Culture
matters" essentially creates a map of world culture, comparing
various cultural values like interpersonal trust, tolerance,
attitudes toward authority and personal freedom. The book, edited
by two Harvard professors, Lawrence E. Harrison and Samuel P.
Huntington, argues that there are striking correlations between
economic and democratic development, income level and religion.

 Ronald Inglehart, a professor of political science at the
University of Michigan, writes, "The fact that a society was
historically Protestant or Orthodox or Islamic or Confucian gives
rise to cultural zones with highly distinctive value systems that
persist when we control for the effects of economic development."
Thus New Zealand has more in common with distant Canada than
neighboring Indonesia, he argues, and Argentina with its history of
heavy Italian immigration has more in common with Italy than with
some nearby South American societies.

 Many scholars find such judgments disturbing. "There is a shift
from a racism based on skin color to a racism based on culture,"
says Moustafa Bayoumi, who is researching the writings of Muslim
slaves in the United States and teaches at Brooklyn College, "which
is not to say that culture does not have a role in who we are and
how we do things."

 Certainly, the culture matters thesis tends to polarize people
into opposing camps. Conservatives tend to see it as evidence that
the solution to poverty is not government aid but internal cultural
change among the poor, while liberals see it as proof that poverty
is not intractable but subject to structural, political and
economic solutions. As Mr. Huntington, the leading theorist of the
new culture matters school, put it by quoting Daniel Patrick
Moynihan: "The central conservative truth is that it is culture,
not politics, that determines the success of a society. The central
liberal truth is that politics can change a culture and save it
from itself."

 In many ways, "Culture Matters" is a return to the thinking of the
German sociologist Max Weber and his seminal essay "The Protestant
Ethic and the Spirit of Capitalism." At the beginning of the 20th
century, at the height of Western imperialism and an earlier form
of globalization, Weber tried to identify the factors that led to
Northern Europe's sudden rise in the modern era and wrote that the
emphasis on individual responsibility in the Protestant Reformation
had provided the inner motor of the capitalist revolution. But
later scholars found the idea to be too sweeping as well as
smacking of a spirit of Western superiority.

 Why, then, has the idea been revived? One reason is the end of the
cold war, which transformed the global order as well as thinking
about how the world works. The widely divergent trajectories of the
countries of the former Soviet bloc, the recent meteoric rise of
many former East Asian colonies (Malaysia, Singapore, Taiwan and
South Korea) and the continued stagnation of most of Africa and the
Middle East have confounded traditional theories of
underdevelopment, for example, the crippling legacy of colonialism.

 "For many, the statute of limitations on colonialism as an
explanation for underdevelopment lapsed long ago," writes Mr.
Harrison, who is also a former foreign aid official.

 But Jeffrey D. Sachs, another economist at Harvard who has worked
as an economic adviser to many developing countries, says he is
"very skeptical of these cultural explanations. "I think this idea
of culture is generally used very loosely in a self-serving way in
which rich people blame poverty on the inferiority of somebody's
culture. When I went to Poland, everyone said its culture made it
impossible for it to develop, but now it's doing very well."

 Mr. Sachs recalls that in Weber's original theory about
Protestantism and capitalism, his principal counterexample was
Confucianism in China: a static, hierarchical culture that exalted
the figure of the mandarin, who with his long fingernails disdained
manual labor and commerce. "So the idea that East Asian religious
influences were adverse to modern economic growth has been turned
on its head," he said.

 Indeed, many of the essays in "Culture Matters" refer to
Confucianism as a kind of Asian equivalent of the Protestant work
ethic.

 Mr. Sachs finds geography a more compelling explanation. "Perhaps
the strongest empirical relationship in the wealth and poverty of
nations is the one between ecological zones and per capita income,"
he stated at a recent conference. "Economies in tropical ecozones
are nearly everywhere poor, while those in temperate ecozones are
generally rich."

 The hazards of geography   the prevalence of deadly tropical
diseases, poor soil quality and remoteness from trading routes  
placed Africa at a serious economic deficit, Mr. Sachs insists.
Europeans were unable to colonize Africa until they discovered a
treatment for malaria that allowed them to live in the tropics. And
the great success of the Protestant countries of Northern Europe,
Mr. Sachs said, has more to do with the importance of coal starting
in the 17th century than with religion.

 "Southern Europe had little coal, higher malaria rates and lower
soil productivity," he said. "Now that coal has lost much of its
importance, the Southern European countries are catching up.
Culture matters, but it matters a lot less when you control for
geography, climate, political structures and past history. In the
case of the transition of the former Soviet bloc countries, the
single largest explanatory factor in how well they are doing is the
number of miles from Stuttgart," closer being better.

 Mr. Huntington, whose earlier work maintained that Islam and the
West were fundamentally incompatible, counters that one of the
world's great recent success stories is Singapore, "a tropical
country located practically on the equator." But if Singapore
contradicts Mr. Sach's geography thesis, it also undermines a piece
of Mr. Huntington's cultural determinism. According to some of the
essays in "Culture Matters," Asian and African countries lag well
behind Northern Europe and the Anglo-Saxon in levels of political
corruption, while Singapore ranks with Denmark, Sweden and New
Zealand as one of the least corrupt. To Mr. Huntington, this
suggests that "cultures can change, albeit within the basic
parameters of that culture."

 To others, it suggests something different. "Politics and
political leadership is one of the great underestimated factors,"
says Timothy Garton Ash, a professor of history at All Souls
College at Oxford. "I object to the implicit determinism in
grouping countries as Protestant, Orthodox, Islamic and so forth.
We started the 1990's with a sort of vulgar economic determinism  
get the economics right and all else will follow   and we ended the
decade with what I would call 'vulgar Huntingtonism.' 

 "It's clearly true that history matters   and if you had 500 years
under the Ottoman Empire, with a very strong tradition of state
authority, there are certain ingrained ways of doing things that do
not help the development of rule of law and a modern trajectory.
But the difference between Bulgaria and Slovakia is one of degree
and not of kind. Islam in Bosnia is worlds away from Islam in Iran
or Central Asia. To say that it characterizes the fundamental
political character of a civilization seems simply wrong."

 Anthony Appiah, chairman of African studies at Harvard, finds any
single explanation overly simplistic: "Clearly history, habits,
values, religious institutions all matter but lumping them all
together under the label `culture' is too broad to be very useful,"
he said. 

 Mr. Appiah said he prefers the analysis of Robert D. Putnam, a
political scientist at Harvard who has tried to find empirical ways
of studying what Mr. Sachs calls civil society   levels of civic
participation, the strength of social bonds and trust.

 Mr. Putnam's work is heavily cited in "Culture Matters," but he
insists his own idea of what he terms "social capital" is very
different from Mr. Huntington's idea of culture. "I specifically
don't use the word culture," he said. "I try to describe patterns
of reciprocity and social networks to help explain why democracy
works better and the economy grows better in some places. I think
Russia has had such a difficult time not because of some ineffable
Russianness or Slavicness but because of specific social structures
and networks that have inhibited the emergence of a modern state."

 But as with other debates on the culture matters thesis, different
scholars can draw different conclusions from a single example. Mr.
Huntington notes that Mr. Putnam's book "Making Democracy Work"
traced social and political differences between northern and
southern Italy that stretch back to the Middle Ages. But, as Mr.
Putnam responded, "southern and northern Italy have the same
language, religion and culture." 
        


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