"Le Secret de l'Occident" cit� dans un article sur l'hypoth�se culturelle

Anglais

David Cosandey

Accueil
Théorie du miracle européen

Les 4 premières sections de l'article de Peer H.H. Vries, professeur d'histoire à l'Université de Leiden, aux Pays-Bas, sur le rôle de la culture et des institutions dans l'essor de l'Occident. L'auteur, bien que partisan de l'hypothèse culturelle, fait référence au Secret de l'Occident pour son habile réfutation de l'hypothèse religieuse (raccourci). Voir aussi l'article complet.
P. Vries: "The role of culture and institutions in economic history. Can economics be of any help?", NEHA-Jaarboek 64 (2001) 28-60.
Copie de sûreté jul 03. Source.

II The role of culture and institutions in economic history: can economics be of any help?*

Page 1

The role of culture and institutions in economic

history: can economics be of any help?*

P.H.H. VRIES

“… economists are notoriously uninterested in how people actually think or feel.”

Paul Krugman, Development, geography, and economic theory (Cambridge, Mass.

1995) 74.

1. Introduction

In 1996 The Economist published an article in which it was claimed that Goering,

who supposedly reached for his gun every time he heard the word culture, would

have an aching hand today.

The Economist, as usual, was right. References to

culture have indeed become en vogue even amongst economists. Of course they

have not taken over mainstream economics, but in many analyses so-called prox-

imate causes, like presence and nature of the forces of production, and technology,

have been losing pre-eminence to ultimate causes like culture and institutions. It is

too early yet to talk of a cultural turn in economics but there clearly are signs of

change.

The theme of this conference, the place of culture in economic history,

therefore, is well chosen. But personally I think there is no harm in broadening the

subject and include economic and political institutions. I do not mean to say that

I thank Nathalie Duval for her comments

The Economist, “Cultural explanations. The man in the Baghdad caf�(c)”, November 9th

1996, 25-32.

For literature see R. Klump, ed., Wirtschaftskultur, Wirtschaftsstil und Wirtschaftsord-

nung. Methoden und Ergebnisse der Wirtschaftskulturforschung (Marburg 1996); V. Kunz,

“Kulturelle Variablen, organisatorische Netzwerke und demokratische Staatsstrukturen als

Determinanten der wirtschaftlichen Entwicklung im internationalen Vergleich”, Kölner

Zeitschrift f�1/4r Soziologie und Sozialpsychologie 52 (2000) 194-225 and H. Siegenthaler,

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NEHA-JAARBOEK 2001

these are a direct and unequivocal reflection of culture.

On the contrary, I think

that this is hardly ever the case. But mostly culture and institutions are so strongly

intertwined that it is extremely difficult, as well as not very enlightening, to try and

disentangle them. Institutions do have dynamics and logics of their own that can-

not directly be reduced to the culture of the individual participants involved, but

on the other hand, they simply cannot be understood nor explained without refer-

ence to that culture. In a sense culture can be regarded as the software of institu-

tional arrangements that, in turn, play a big part in determining culture.

However

awkward this may be for the theoretician: we are discussing a tight and dialectical

relationship between elements that are almost impossible to keep apart. Institu-

tions as structures and culture as their software in the end are two sides to the same

coin.

I will come back to this point repeatedly.

This article will be fairly idiosyncratic. In the end it is the result of my search, as

an historian writing a book on the rise of the West, for general information about

the role of culture and institutions in promoting or hindering economic growth. In

my reading on the rise of the West I found numerous references to the role of

culture and institutions. It does not always, however, become clear how exactly to

interpret, assess, and combine them. So I thought that throwing a glance at the

literature on these themes by economists or theoretically-informed economic his-

torians might be of some avail. The more so as these topics are vigorously debated

by them. This article in no way pretends to be exhaustive. Nor does its author

pretend to be an expert in economics. I just want to shed some light on some

problems involved in trying to integrate culture and institutions in studying a spe-

cific question in economic history: why was the Western world the first region in

the world to have modern economic growth? I believe my remarks have a wider

application than only this specific topic. In this article the following topics will be

discussed in this order: Culture and institutions in current economics and econom-

ic history; The role of culture, institutions and the state in explanations of ‘the rise

of the West�(tm); The role of culture in explanations of the rise of the West: some

methodological comments; Economics on the role of culture; Economics and in-

stitutions; Institutions and the explanation of “the rise of the West”; Institutional

economics; Institutional economics, economic history and “the rise of the West”;

“Geschichte und �-konomie nach der Kulturalistischen Wende”, Geschichte und Gesells-

chaft 25 (1999) 276-301.

As North, for example, suggests in D.C. North, Structure and change in economic

history (New York 1981) 59�"60 and in D.C. North, Institutions, institutional change and

economic performance (Cambridge 1990) 137 and as does Landes in his discussion with

me in Itinerario. European Journal of Overseas History 23 (1999) 8-16, 8.

A recent and very interesting analysis of the effects of economics on culture can be

found in R. Sennett, The corrosion of character. The personal consequences of work in the

new capitalism (New York and London 1998).

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VRIES THE ROLE OF CULTURE AND INSTITUTIONS

An effort to integrate culture, institutions and the state in economics. At the end of

the article I will present some concluding remarks.

2. Culture and institutions in current economics and economic history

It does not take much effort to show that culture and institutions are on the rise in

economics and economic history. Economics has increasingly been plagued by

unease with the so-called “mainstream approach” that many feel has turned into a

kind of higher cryptology, with a sophistication in methods that is only matched by

a lack of realism in presuppositions. An increasing number of critics is claiming

that economists do not have the slightest idea what is going on in the real world,

and that economics, purportedly a social science, has nothing informative to say

on that world.

With the bluntness that has become characteristic of current schol-

arly debates the end of economic man and of economics has been proclaimed and

talk about a crisis of economics is rife. By paying more attention to culture and

institutions one hopes to mitigate this crisis. So-called “institutional economics”,

in its old as well as in its new variety, has played a major role in this development.

The best-known exponent of this approach undoubtedly is North, who won a No-

bel prize for his work. But I could also refer to Coase, another winner of the Nobel

prize, whose article on the nature of the firm already dates from 1937, and to

Williamson. Two other people who spring to mind, as they, like North, have a very

direct influence in economic history, are Chandler and the political scientist Ol-

son.

Not surprisingly the primary focus of the work of all these authors has al-

ways been on the role of institutions in economic life, in the case of Olson prima-

F. Fukuyama, Trust; The social virtues and the creation of prosperity (New York and

London 1995) 34: “…values and ideas shape concrete social relationships and vice ver-

sa.“

For the claim that something is fundamentally wrong with economics see, for exam-

ple, G.P. Brockway, The end of economic man (New York and London; 3e edition 1995);

E. Engelen, De mythe van de markt. Waarheid en leugen in de economie (Amsterdam

1995); R. Heilbroner and W. Milberg, The crisis of vision in modern economic thought

(Cambridge 1995); T.W. Hutchinson, Knowledge and ignorance in economics (Oxford

1977); A. Klamer and D. Colander, The making of an economist (Boulder 1990) and P.

Ormerod, The death of economics (London 1994).

7 For introductory information on the new institutional economy see J.S. Cohen, “Institu-

tions and economic analysis” in: Th.G. Rawski, ed., Economics and the historian (Berke-

ley 1996) 60-84; J.N. Drobak and J.V.C. Nye, eds., The frontiers of the new institutional

economics (San Diego and London 1997); B. Gustafsson, ed., Power and economic insti-

tutions. Reinterpretations in economic history (Aldershot and Brookfield 1991); Th. van

de Klundert, Groei en instituties. Over de oorzaken van economische ontwikkeling (Tilburg

1997); J. Maloney, What�(tm)s new in economics? (Manchester 1992); North, Structure and

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NEHA-JAARBOEK 2001

rily on the state. But they also have been instrumental in introducing culture into

economics. That is especially the case with North, who increasingly stresses the

significance of culture, or as he prefers to say “ideology.”

But these scholars are

part of a wider trend. Temin is right on target when he claims that in economics it

has become kosher to talk about culture.

Concepts like “business culture”, “cor-

porate culture”, “identity” or “synergy” have become stock in trade in discussions

about modern economic life. Fields like economic anthropology or economic psy-

chology have come into existence. In the Netherlands, one of the most corporatist

countries in the world and the homeland of the “poldermodel,” thinking about

economics has always been heavily institutional and impregnated by cultural con-

siderations. But matters have become even “worse”: the Dutch economist who

was cited most, by far, last year is Hofstede, famous for his publications on cultur-

al differences and their impact on economic organisation.

This shift toward cultural and institutional explanations is even more blatant in

general discussions on economic development. I just mention the debates on “Asian

values,” “Japan Incorporated”, the economic order and policy of the Newly Indus-

trialising Countries, the Anglo-Saxon model and the Rhineland model, or trust as

a source of economic progress. Even a hard-nosed economist like Alan Greenspan

maintains that capitalism is a matter of culture, not of human nature.

The Amer-

ican scholar Lawrence Harrison has probably found the smallest nutshell when he

simply states: “Underdevelopment is a state of mind”.

The most influential works

in this field have not always been written by top professional economists. But

then, how many professional economists nowadays write for a wider audience and

play any role in public intellectual debate? Publications like those by Fukuyama,

Putnam, Huntington, and, most recently, Harrison and Huntington, however, are

change; North, Institutions, institutional change and economic performance; M.C. Olson,

The logic of collective action (Cambridge 1965); M.C. Olson, The rise and decline of

nations (New Haven 1982); M.C. Olson and S. Kähkönen, eds., A not-so-dismal science.

A broader view of economies and societies (Oxford 2000); W. Plumpe, “Gustav von

Schmoller und der Institutionalismus. Zur Bedeutung der historischen Schule der Nation-

alökonomie fur die moderne Wirtschaftsgeschichtsschreibung”, Geschichte und Gesell-

schaft 25 (1999) 252-275; J.J. Vromen, Economic evolution. An enquiry into the founda-

tions of new institutional economics (London and New York 1995) and Cl. Wischermann,

“Der property-rights Ansatz und die “neue” Wirtschaftsgeschichte”, Geschichte und Ges-

ellschaft 19 (1993) 239-258.

See North, Structure and change and Institutions, institutional change, and economic

performance, in the index.

P. Temin, “Is it kosher to talk about culture?”, The Journal of Economic History 57

(1997) 267-287. For that wider trend see the literature referred to in note 2.

10 G. Hofstede, Culture�(tm)s consequences. International differences in work-related values

(Beverly Hills and London 1980) and G. Hofstede, Cultures and organizations: software

of the mind (Maidenhead, Berkshire England 1991).

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VRIES THE ROLE OF CULTURE AND INSTITUTIONS

widely read and extremely influential.

Mainstream classical economics is far

from dead and one can also find scholars who, instead of turning to culture or

institutions, think economics could profit from paying more attention to geogra-

phy, ecology or demography.

The new approaches have not taken over the disci-

pline, but they surely are making important inroads.

Undeniably economic history too is witnessing an increasing sensitivity to cul-

tural and institutional matters. Expressions like “institution”, “transaction costs”,

“property rights”, “interest group”, “logic of collective action”, “visible hand”,

“human capital”, “social capital”, and “trust” pop up in almost every text in the

field. The situation in the Netherlands is no exception to this rule, as shows in

work of, for example, Davids, Noordegraaf, De Vries and Van der Woude, Van

Zanden and Van Riel.

In this article references to economic history will be con-

fined to literature addressing the question of what made “the West” grow rich,

while “the rest” stayed so much poorer. In debates on this problem the role of

culture and institutions has always been prominent, and it still is. Again, that does

not mean they monopolise current explanations. Materialism still has its staunch

defenders in scholars like Blaut, Frank and Snooks.

Explanations that emphasise

geography and ecology, are presented by, to name a few, Diamond, Pomeranz and

11 L.E. Harrison and S. P. Huntington, eds., Culture matters: How values shape human

progress (New York 2000).

12 L.E. Harrison, Underdevelopment is a state of mind (Cambridge Mass. 1985).

13 Fukuyama, Trust; R. Putnam, with R. Leonardi and S.Y. Nanetti, Making democracy

work. Civic traditions in modern Italy (Princeton 1993); S. Huntington, The clash of

civilisations and the remaking of world order (New York 1996) and Harrison and Hunt-

ington, Culture matters.

14 See for example P. Krugman, Development, geography and economic theory (Cam-

bridge Mass. and London 1995) and J. Sachs, “Notes on a new sociology of economic

development” in: Harrison and Huntington, Culture matters, 29-43.

15 C.A. Davids, De macht der gewoonte? Economische ontwikkeling en institutionele

context in Nederland op de lange termijn (Amsterdam 1995); L. Noordegraaf, Overmoed

uit onbehagen. Positivisme en hermeneutiek in de economische en sociale geschiedenis

(Amsterdam 1991); J. de Vries and A. van der Woude, The first modern economy: success,

failure and perseverance of the Dutch economy, 1500-1815 (Cambridge 1997) and J.L.

van Zanden and A. van Riel, Nederland 1780-1914. Staat, instituties en economische

ontwikkeling (Uitgeverij Balans 2000).

16 J.M. Blaut, Eight eurocentric historians (New York 2000); A.G. Frank, ReOrient.

Global economy in the Asian Age (Berkeley 1998); G.D. Snooks, The dynamic society.

Exploring the sources of global change (London and New York 1996); idem, The laws of

history (London and New York 1998). In J.R. Goody, The East in the West (Cambridge

1996) and E.L.Jones, Growth recurring. Economic change in world history (Cambridge

1988) as well a more materialist approach is favoured, or in any case one in which not too

much is made off culture.

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NEHA-JAARBOEK 2001

Sanderson.

Demography plays a big role in the analysis of, for instance, Macfar-

lane and North and Thomas.

3. The role of culture, institutions and the state in explanations of “the rise of

the West”

As indicated, as an explanation for the rise of the West, culture has always been

popular. Landes is his book �" of which, I am afraid, more copies were sold during

the last two years than of all other books on economic history together �" flatly

claims that “the Weber thesis” is correct and that culture makes all the differ-

ence.

Fukuyama refers to Weber approvingly on various occasions and has writ-

ten an entire book on trust and social virtues in the creation of prosperity.

Sowell

has already published three best-selling volumes in which cultural factors receive

prime coverage when it comes to explaining prosperity.

A similar focus can be

found in Fromkin�(tm)s work.

Jay presented a series on BBC TV, now just appearing

in print, that also focuses on culture and institutions as the explanation for the

Western road to riches.

In France Peyrefitte wrote two books on economic de-

velopment in which culture, or as he prefers to say “mentalit�(c)” appears as the

major explanatory factor for Western prosperity.

The Indian economist Deepak

Lal wrote a complex book on the impact of factor endowments, culture, and poli-

tics on long-run economic performance. And the list could go on. Apparently there

17 J. Diamond, Guns, germs and steel. A short history of everybody for the last 13.000

years (London 1998); K. Pomeranz, The great divergence. China, Europe, and the making

of the modern world (Princeton 2000) and St.K. Sanderson, Social transformations. A

general theory of historical development (Oxford and Cambridge 1995).

18 A. Macfarlane, The savage wars of peace. England, Japan and the Malthusian trap

(Oxford 1997) and D.C. North and R. Thomas, The rise of the Western world. A new

economic history (Cambridge 1973).

19 D.S. Landes, The wealth and poverty of nations. Why some are so rich and some so

poor (New York 1998) 516.

20 Fukuyama, Trust. I want to emphasise that Weber is much less of an idealist than most

of his followers make him. See R. Collins, Weberian sociological theory (Cambridge 1986).

21 Th. Sowell, Race and culture; Migrations and cultures; Conquest and cultures (New

York 1994, 1996 and 1998).

22 D. Fromkin, The way of the world (New York 1998).

23 P. Jay, Road to riches or The wealth of man (London 2000).

24 A. Peyrefitte, Du miracle en �(c)conomie. Leçons au Collège de France (Paris 1995) and

A. Peyrefitte, La soci�(c)t�(c) de confiance. Essai sur les origines et la nature du d�(c)veloppe-

ment (Paris 1995).

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VRIES THE ROLE OF CULTURE AND INSTITUTIONS

is a wide range of cultural features that count as distinctively Western.

Again,

maybe not all of these authors count as the crème de la crème of serious scholar-

ship, but their works sell. And they are not alone: respected scholars like Gold-

stone, Hall, Jacob, Mann, and the late Gellner, are not loathe to enthusiastically

voice their opinion that there is something special to Western culture that is good

for Western economy.

Similar claims have been made for Western institutions. It will not come as a

surprise that North claims that the rise of the West was caused by its more efficient

economic institutions.

Notwithstanding their idiosyncrasies, he and Thomas, can

be included in the large group of scholars who believe that the rise of the West

basically was the rise of capitalism, and who tend to identify this with the rise of

“the market.”

Overall capitalism can be defined by the presence of private prop-

erty, private enterprise, commodification, the allocation of goods and services via

a market, and a drive for capital accumulation. Some kind of political backing,

obviously, is a necessary precondition for this mode of production, as it is for any

other. In (early) modern capitalism that backing increasingly tended to be provid-

ed by the state that defined and protected property. As economists strongly influ-

enced by neo-classical thinking, North and Thomas and a large group of kindred

spirits tend to identify capitalism with a specific kind of market economy, to wit,

one that is characterised by perfect and free competition and all that implies, like

fully defined property rights, the presence of a large number of individual actors,

market clearing and price-taking. Of course its markets were never operating per-

fectly and completely unhampered, but the West came closest, and in its rise ever

closer to this ideal. This view is shared by many scholars in the field. Landes is

only one of the most recent and most outspoken among them.

On the other hand

25 Deepak Lal, Unintended consequences. The impact of factor endowments, culture,

and politics on long-run economic performance (Cambridge 1998).

26 E. Gellner, Plough, sword and book. The structure of human history (Glasgow 1988);

J.A. Goldstone, “Cultural orthodoxy, risk, and innovation: the divergence of East and

West in the early modern world”, Sociological Theory 5 (1987) 119-135; J.A. Goldstone,

Revolution and rebellion in the early modern world (Berkeley 1991); J.A. Hall, Power &

liberties. The causes and consequences of the rise of the West (Oxford 1985); M.C. Jacob,

Scientific culture and the making of the industrial West (New York and Oxford 1997) and

M. Mann, The sources of social power. Vol I. The history of power from the beginning to

A.D. 1760 (Cambridge 1986).

27 For North�(tm)s claim that institutions explain the great divergence see his Institutions,

institutional change and economic performance, 3-10 and Rise of the Western world, chapter

28 North and Thomas, Rise of the Western World.

29 Landes, Wealth and poverty; Fromkin, Way of the world; Jay, Road to riches; E.L.

Jones, The European miracle. Environments, economies and geopolitics in the history of

Europe and Asia (second edition; Cambridge University Press 1987) and Growth recur-

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NEHA-JAARBOEK 2001

there are a lot of opponents to this identifying of the rise of the West with the rise

of perfect and free competition. They too tend to blame or praise “capitalism” for

Western economic supremacy and prosperity, but for them this capitalism is not

tantamount to ideal market economy that is so dear to mainstream economists.

One could think of scholars like Wallerstein, Braudel, Pomeranz, and various

Marxist authors.

Widely differing as these interpretations of the political econo-

my of the West may be, they all put heavy emphasis on the fact that institutionally

the West was unique and that this was fundamental in its rise.

In line with the “Smithian” view of capitalism, there are authors who connect the

rise of the West to the presence of free competition in all walks of life, not just in

the sphere of economics. As Mann puts it, in the various Western countries that

were heirs to the last European empire, that of the Romans, the sources of social

power �" political, ideological, economic, and military �" were not monopolised.

This is supposed to have promoted a specific, Western dynamism and individual-

ism, strengthened by a family structure in which already at the beginning of the

early modern period nuclear families were the rule. In this perspective Western

society was socially and geographically more mobile and open than other major

societies in the world. The diffusion of social power is also thought to have caused,

and been caused by, the existence of a so-called “civil society”, another popular

topic in discussing the uniqueness of the West. There society had countervailing

power against government. Despotism and under-government were thereby ruled

out, with all the beneficial effects that it is supposed to have had for development

and growth. In such conditions, with a network of mutual arrangements and a gov-

ernment that was held in check, trust could arise, which could also enhance oppor-

tunities for growth.

It will be obvious that scholars who do not buy the story of

the West as the home ground of perfect and free competition, will have their doubts

about all this talk about mobility, dynamism and voluntary co-operation as well.

Discussing institutions inevitably leads to discussing the state, the super- and

supra-institution in the Western world. Two features are mentioned in almost eve-

ring; J.P. Powelson, Centuries of economic endeavor. Parallel paths in Japan and Europe

and their contrast with the third world (University of Michigan Press 1994) and N. Rosen-

berg en L.E. Birdzell, How the West grew rich: the economic transformation of the indus-

trial world (New York 1986).

30 F.Braudel, Civilisation mat�(c)rielle, �(c)conomie et capitalisme, XVe-XVIIIe siècle (Paris

1979); Pomeranz, Great divergence and I.M. Wallerstein, The modern world-system I.

Capitalist agriculture and the origins of the European world economy in the sixteenth

century (New York 1974). For a classic Marxist approach see for example the work of M.

Dobb. His ideas are discussed in Gustafsson, Power and economic institutions, 38-40.

31 Mann, Sources of social power, 22-33.

32 P.H.H. Vries, “Governing growth: a comparative analysis of the role of the state in the

rise of the West”. To be published in Journal of World History.

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VRIES THE ROLE OF CULTURE AND INSTITUTIONS

ry analysis of the question to what extent it could have helped the West in acquir-

ing its leading position. The first one is its state system, the second one the nature

of the individual states. Again, overall, two lines of interpretation can be distin-

guished. One in which the Western state is regarded primarily as lean and clean

and gravitating towards laissez-faire, and one in which emphasis is laid on its

strength and its tendency to interfere in the economy. So we are confronted with

literature in which “weak” governments and “strong” governments, laissez-faire

and mercantilism, fight for prominence in explaining the rise of the West.

These few examples more than suffice to show that references to culture and insti-

tutions abound in analyses that try to explain the economic phenomenon called the

rise of the West. They also suffice to show that these references are anything but

unproblematic. A closer look is needed at what is meant by culture and institutions

and how they are supposed to influence the economy. In trying to answer the last

question we obviously will take a look at economics to see whether this discipline

can be of any help to historians.

4. The role of culture in explanations of “the rise of the West”: methodolog-

ical comments

Culture has become a buzz-word among social scientists and historians. It is not

that long ago that it was still rejected as a notoriously vague category that serious

scholars had better avoid. I will not bother to try and answer the question �" that is

unanswerable anyhow �" what culture really is and just start from the definitions I

encountered in the literature. Landes, who makes extremely far-reaching claims

for the role of culture in economic history in saying that it makes all the difference,

puts surprisingly little effort into defining it. To him in the end it amounts to “the

inner values and attitudes that guide a population.”

Huntington, who together

with Harrison wrote a manifesto Culture matters: how values shape human progress,

describes culture as “values, attitudes, beliefs, and underlying assumptions preva-

lent among people in a society.”

Fukuyama defines it as “inherited ethical hab-

it.”

North seems to prefer the expression “ideology”, by which he means “the

subjective perceptions (models, theories) all people possess to explain the world

around them.”

Olson distinguishes between two kinds of culture: marketable

33 See for an analysis of both these points of view, ibidem.

34 Landes, Wealth and poverty, 516.

35 Huntington in Harrison and Huntington, Culture matters, XV.

36 Fukuyama, Trust, 34.

37 North, Institutions, institutional change and economic performance, 23.

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NEHA-JAARBOEK 2001

human capital or personal culture, and public-good human capital, that is knowl-

edge about what public policy should be.

For the sake of convenience and to

exclude no interpretation that I have come across, I opted for an extremely broad

definition, to wit the socially acquired set of dispositions of a group of people with

regard to describing, interpreting and valuing the social and natural world.

Those who fear that introducing culture into debates on economic development

is a sure recipe for vagueness, can find ample confirmation in texts that deal with

the emergence of modern economic growth in the West. Unclear interpretations of

the concept abound. Its precise meaning is often left unspecified, distinctions ac-

cording to place and time are often lacking. Authors do not hesitate �" as Hunting-

ton does for the contemporary world

�" to call civilisations “Christian”, “Confu-

cianist” or “Muslim”, and then take this to have extremely far �" reaching

consequences for their economic performance. It would have been very surprising

indeed if no author would have tried to see some connection between Christianity

and the specific economic feats of the Western, Christian world. And indeed many

did. Some to emphasise that in the Christian conception the world is regarded as

something that may be used and changed. Others to emphasise it functioned as a

basis for trust among co-religionists.

That Protestantism, and especially Calvin-

ism, has been credited with special effects in the realm of the economy needs no

further comment. Neither does the topos that Confucianism in China, Islam in the

Muslim world, and Hinduism in India, were bad things from an economic point of

view.

As Japan industrialised relatively early, its culture almost had to be a kind

of exception to the Asian rule, and indeed positive interpretations of it are not

lacking.

Fortunately, I am tempted to say, reference to culture does not always hover at so

lofty heights. Going through the literature one can collect a whole list of more

specific and concrete cultural traits that are supposed to have played a leading role

in creating economic growth in the West. To begin with those features that are

summarised under the concept of a (good) work ethic: frugality and industrious-

ness, thrift, tenacity, patience.

Then there is of course “rationality”, a word with

38 M.C. Olson, “Big bills left on the sidewalk: why some nations are rich and others

poor” in: Olson and Kähkönen, A not-so-dismal science, 37-60, p 52.

39 Huntington, Clash of civilisations.

40 See for Christianity as a provider of, among other things, trust Hall, Power and liber-

ties and Mann, Sources of social power. For its supposedly different attitude towards na-

ture see Landes, Wealth and poverty, 58-59. For a fierce critic of the idea that Christianity

would in any way have been conducive to economic growth, see D. Cosandey, Le secret de

l'Occident. Du miracle passé au marasme présent (Paris 1997) 23-32.

41 I only refer to Landes, Wealth and poverty, the chapters on the history of China and the

Muslim world, and his remarks on India and the Weber-thesis.

42 Ibidem, chapter 22 on Japan�(tm)s industrialisation.

43 See for example Landes, Wealth and poverty, chapter 29 and M. Egnal, Divergent

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VRIES THE ROLE OF CULTURE AND INSTITUTIONS

a very wide meaning. For Weber, in whose work it is a central concept and whose

work has been immensely influential �" and for mainstream economists! �" it means

thinking in terms of the methodical, calculable and the predictable.

Its highest

materialisation in early modern Europe appears to have been double-entry book-

keeping, but it was expressed in an overall inclination to “measure” reality.

The

meaning of the word “rationality” often, I think incorrectly, tends to be widened to

comprise the whole gamut of characteristics expected of an entrepreneur. Here

Schumpeter�(tm)s characterisation of the entrepreneur, especially in capitalism, as the

creative destructor comes to mind.

It then also encloses “risk taking” and a feel

for innovation. Jay claims that “risk” is a Western word and that Western society

was a society of risk-taking entrepreneurs.

There are, however, other scholars

who think that it was risk-avoidance and manipulation of the economy that laid the

ground for Western wealth.

Other traits I have come across �" all smacking heav-

ily of the American way of life �" are competitiveness and individualism, accept-

ance of success and consumption, a positive attitude toward change, dynamism

and mobility. To end this list that has no pretence of being exhaustive but just

hopes to present the most important items, I want to mention trust and confidence,

cultural capital, literacy and scientific culture.

The big “civilisational” concepts, exemplified par excellence in religions or

belief-systems, also reflect par excellence the vagueness that cultural interpreta-

tions are accused of. They are (too) large, diffuse, under-specified. When it comes

to categories like Christianity, Protestantism, Calvinism, Hinduism, Confucianism

et cetera, the question simply cannot be suppressed what exactly it is that makes

them assets, or liabilities, for an economy. How exactly to connect lofty things like

religious beliefs to such prosaic matters like production? Not surprisingly opin-

ions differ widely on how to interpret the putative connections and to show that

they really exist. Interpretations of the supposed effects of Christianity on eco-

nomic development vary immensely, from those who think it was one of the most

paths: how culture and institutions have shaped North American economic growth (Ox-

ford 1996) “Preface” and “A concluding note.”

44 Collins, Weberian sociology, chapter 2.

45 A.W. Crosby, The measure of reality. Quantification and Western society, 1250-1600

(New York 1997).

46 J.A. Schumpeter, Capitalism, socialism and democracy (New York 1942).

47 Jay, Road to riches, TV broadcast.

48 See for this thesis for example the way Braudel defines capitalism in his Civilisation

mat�(c)rielle and Pomeranz, Great divergence, chapter 4.

49 For literature on the rise of the West, apart from that mentioned in this article, see

P.H.H. Vries, “The rise of the West in economisch perspectief “, Theoretische Geschiedenis

25 (1998) 291-321. The shortest overview of the role that culture is supposed to have

played in the rise of the West is provided by the reviews of Blaut in his Eight eurocentric

historians.

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NEHA-JAARBOEK 2001

important assets of the West, to those who see no connection at all, to those who

think the effects were much more often negative than positive.

Opinions are not

so extremely diverse when it comes to the debate on Calvinism and capitalism, but

here too scholars are torn on the question of the connection �" if any �" and its exact

nature, as the immense literature on the Weber-thesis proves. The same applies to

the relationship between Confucianism and economy.

This is not the place to solve these riddles. What is clear, however, is that in this

context the easy macro descriptions should at least be disaggregated and trans-

formed into manageable categories that can be defined in a empirically meaning-

ful sense. Cultures are very diffuse and comprise various sub-cultures. They change

and interact with what is going on in the world. Much more attention should be

paid to looking for good, empirical indicators. What should concern us here are

their implications for practical life, not their spiritual principles. This not only

applies to religion but also to the many references to Western rationality and the

scientific inclinations of the Westerner. Giving an operational definition of the

small “traits” at first sight might seem to be easier. Although on second thought

appearances may be very deceptive. How do you determine empirically that one

culture has a better work ethic than another one? How do you measure thrift on a

society-wide scale, or mobility? Fundamental categories like trust, are also hard to

pin down precisely. Where measuring is so extremely difficult, it is not clear how

authors can be so adamant in their claims that the West had so much of these good

things that it, and not any other advanced region in the world, would be the first

one with modern economic growth. Especially as so little systematic comparative

research has been undertaken.

Moreover, it is far from obvious how the various traits that are supposed to have

set the West on its specific trajectory, can be combined in one consistent story-

line. I will restrict myself to just a few examples. How exactly to combine the

thesis that the virtues of the bookkeeping petit bourgeois (being frugal and indus-

trious, thinking in terms of the calculable and the predictable, avoiding risks) are

conducive to economic growth, with the thesis that it is entrepreneurial virtues

(like a willingness to take risks, deal with uncertainty and look for innovation) that

have this effect? The bookkeeper can easily become the enemy par excellence of

the entrepreneur, although Sombart thought they both were part of the history of

Der Bourgeois.

Taking risks and venturing into the unknown can be very sensi-

50 In case anybody would want to know, I think the last group has history on its side. See

note 40.

51 I only refer to Harrison and Huntington, Culture matters chapters 16 to 20.

52 One can harbour serious doubts whether it will ever be possible for historians to con-

duct the kind of empirical research that is done by those who research contemporary rela-

tions between economics and culture. See for example Klump, “Witschaftskultur” and

Kunz, “Kulturelle Variablen”.

53 W. Sombart, Der Bourgeois: zur Geistesgeschichte des modernen Wirtschaftsmen-

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VRIES THE ROLE OF CULTURE AND INSTITUTIONS

ble in that this is the only way to keep abreast in a competitive environment. Per-

sonally, however, I would not call it rational. You simply cannot calculate and

predict that what you are about to do is the right thing to do. Risk, according to the

prevailing definition, might be measured, in the sense that ideally one could insure

oneself to make it less risky, but uncertainty can not, and innovating is by defini-

tion uncertain.

To give but one, final, example of conflicting interpretations:

traits like competitiveness, individualism, mobility and dynamism, are not always

easy to combine with trust and confidence. Institutional economists have not by

accident focused on the question how co-operation of economic actors can be

accomplished where it might, at least in the short run, often be more rational to be

a free rider.

These (apparent?) inconsistencies form an additional, but forceful reason to

try and figure out the exact mechanisms that are supposed to make all these cultur-

al traits into explanatory variables in a story about economic growth. Many of

them tend to be regarded as good because they are considered good from a moral

point of view �" somehow we like people to work hard, to save, to be individualis-

tic, et cetera �" and we tend to think that behaviour of that kind ought to be reward-

ed. But that does not necessarily mean that these private, moral virtues would be

public, economic virtues too. Individuals usually work for personal net income,

however defined, not for gross national product. Normally they do not really both-

er about GNP. If they do, that, by the way, might be a very forceful cultural factor

in explaining why some countries have had such high growth rates.

Activities

that are economically rational from a personal point of view and increase or even

maximise a private income, can be socially inefficient. Smith�(tm)s optimistic inter-

pretation of the working of the invisible hand, is simplistically over-optimistic,

even in the best of all markets. Individual behaviour can very well be rational from

the perspective of personal self-interest but irrational from the perspective of eco-

nomic development.

schen (M�1/4nchen 1913). Compare the remarks in R. Grassby, The idea of capitalism be-

fore the industrial revolution (Lanham and Oxford 1999) 47-59.

54 For the “irrationality” of risk taking and especially acting in a context of uncertainty

see R. Brenner, History. The human gamble (Chicago and London 1983) and Goldstone,

“Cultural orthodoxy, risk, and innovation.” For the current definition of risk and uncer-

tainty see also H. Pellikaan and W. Hout, eds, Economische modellen en politieke besluit-

vorming. Inleiding in de rationele�"keuzetheorie (Bussum 1998) 56-60.

55 One might think for example of Japan�(tm)s industrialisation, the German “Wirt-

schaftswunder” after World War Two, and the economic recovery of the Netherlands dur-

ing that same era.

56 Maloney, What�(tm)s new in economics, 104.

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NEHA-JAARBOEK 2001

It does not take an awful lot of imagination or technical economic schooling to

think of situations in which one or more of the character traits mentioned above

indeed might foster economic growth. But, and that is the problem, it does not take

much imagination either to think of circumstances in which they would not. Hard

work can delay mechanisation and economic innovation. It can, by the way, be-

come irrational, as Weber already knew. There is nothing rational, in an economic

sense, for people who have accumulated more than they can ever spend, to contin-

ue working. Any entrepreneur faces the problem that he can never maximise profit

and utility both at the same time. But, why does Bill Gates continue working? His

time must be scarcer than his money. What we call thrift today may be under-

consumption tomorrow. Becoming a mafioso definitely is a risky enterprise, but

would Schumpeter endorse it? Being rational and calculating can be a brake on

innovation. Individualism and a thoroughly rational approach can lead to a lack of

trust or co-operation. National economic mobilisation can create growth, but it

can also create havoc, for example when it turns into fierce nationalism and war.

What could be more rational when one is confronted with predicaments like

these than to turn to economics? Might one not expect that this most prestigious of

all social sciences could help us and tell what cultural traits are beneficial to growth,

and in what circumstances? After all explaining economic growth ought to be its

major field of interest.