Cross-posted here
I've just finished a wonderful book by Eric Beinhocker called The Origin of Wealth: The Radical Remaking of Economics and What it Means for Business and Society.
Generally I'm extremely skeptical of claims about reinventing economics; the usual practitioners of this art are cranks, charlatans, hucksters, or simply people who are ignorant of the field's history. But Beinhocker is a distinguished exception, and if you have any interest in economics you should read his book. I'll probably discuss it more in future posts.
But today I want to focus on something that is sort of peripheral to the book's main theme, yet has important implications for American politics. And that is the question, long pondered by social scientists, of why some countries prosper, while others devolve in a downward spiral of poverty and hopelessness.
There are lots of proposed answers to this puzzle, most of them ideological in some way. If you're a religious zealot, you'll assert confidently that Country A failed because it had the wrong religion. If you're a free-market fundamentalist, the reason for Country B's failure is of course too much government meddling. There are even a few non-ideological explanations, such as Country C succeeding thanks to its rich natural resources, or geography that protects it from invaders.
But this question has by now been studied pretty thoroughly, and none of these explanations will suffice. As just one example, there are resource-poor countries that do quite well (Japan, South Korea), and resource-rich countries that are disasters (much of Africa).
One explanation that keeps popping up, though is culture. There are plenty of definitions of the word, but Beinhocker's captures a key point: culture is an emergent characteristic of a group of [people] and is determined by [their] rules of behavior (or norms) for acting in their social environment and for interacting with each other.
A word about this notion of "emergent" behavior. It's a popular theme in the study of complex systems (Beinhocker calls his new framework "Complexity Economics"). It means, among other things, that if you take a bunch of "agents", each guided by simple rules, and set them to interacting with each other, amazingly complex and unexpected things can appear, seemingly out of nowhere. The huge, intricate mounds built by termites aren't designed by termite architects laboring in offices, and their construction isn't supervised by termite foremen wearing tiny hardhats. They simply emerge out of the billions of interactions between the millions of insects in the colony. No individual termite knows the whole scheme, or has a plan for executing it, but the collective "hive mind" gets the job done.
Similarly, a society's culture isn't pre-planned: it just emerges from the many interactions between its people, each guided by their personal norms and the norms of the culture as a whole. And there's a feedback loop at work: culture is shaped by norms, and norms in turn are influenced by culture.
So the key question is: what kind of cultural norms tend to produce a successful country? A strong work ethic, for sure. A habit of saving for, and investing in, the future. And one of the most critical: simple trust in the people and institutions of the society. Independent of other factors, a society of suspicious, uncooperative people is marked for failure.
And that's where Reagan and his fellow travelers have really blown it: by mounting a richly-funded campaign—still in full swing—to destroy Americans' trust in government, higher education, science, the media—even in facts, logic and reason—conservatives have made it harder and harder to unite the citizenry to tackle our problems. And long-term, this is a recipe for failure as a country.
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