Introduction to Economic and Political Thought

Prof. Foudy

Seminars 16 to 17: Culture, Identity and Globalization

Copyright : Joseph Foudy 2013 (charts and illustrations copyrighted by original sources)

Overview
1. 2. 3. 4. 5. 6. What is Culture? A Survey of World Values Dangers of Exploring Culture Huntingdons Clash of Civilization Critiques of Huntingdon Globalization

1. What is Culture

We should ask what culture is?

Highlight differences in values found globally.

Culture and Values

Thus far in the course we have been looking at a philosophical tradition from Western Europe and the United States

A fair question is whether this tradition has salience in other regions, cultures

Balance between positive and negative liberty Natural Rights And for Huntington, whether these differences will lead to major conflicts

What is Culture?
Social Structure

Religion

A Chicken and Egg Issue

Language

Culture (Norms & Value Systems)

Political Philosophy Economic Philosophy

Education

What is Culture?

In its strongest form, culture affects the very perceptions we have of the world around us
Culture: A dominant symbolic meaning system (e.g. worldview) sustained and transmitted over generations by members of a given society, which then shape the members psychological processes. Source: Masuda 2005

Individualism
US Sweden France Germany India Japan Argentina Mexico Hong Kong Singapore 91 71 71 67 48 46 46 30 25 20
Tight Ties Value collective interests

Loose ties Value Individual achievement and freedom

For Example, Compare East and West

Westerner's Attention East Asians Attention
Worldview: Things exist by themselves Worldview: Things are inter-related. and can be defined by their attributes Various factors are involved in an (context independent, object-oriented). event (context dependent, contextsensitive).

(Individualism)

(Group Centered)
Source: Masuda 2005

Comparing East and West

The Michigan Fish Test

North Americans basically referred to the attributes of the target fish, whereas the Japanese referred to the background and contextual information as well as the target fish attributes.
(Masuda & Nisbett, Journal of Personality and Social Psychology, 2001)

Comparing East and West

The eyes of a Chinese student focus on background features when tracked by a computer

Westerners Self Concept

Markus & Kitayama, 1991

East Asians Interdependent

The self relational & contextual existence

Independent
The self an entity detached from others

Thinking Style
Nisbett, Choi, Peng, Norenzayan, 2001;

Analytic
Object oriented ways of thinking

Holistic
Context oriented ways of thinking

2. One World, Many Values

Let us look at some data from Pew Global Attitudes Surveys (conducted in 2002 and 2003)

But first, health care as a right in the United States

June 2009 US News and World Report Poll

65: Percentage of voters who believe that every American should have access to quality healthcare 22: Percentage of voters who disagree 12: Percentage of voters who aren't sure

Wealth: Luck vs. Hard Work

But we should also ask why? Your speculation?

Freedom vs. Safety Net

Views of Government

Positive Freedom Challenges

Positive Freedom Challenges

Global View of US Democracy

View of the Spread of US Ideas

Differing Views on Democracy

Terrorism

Differing Views on Religion

Differing Views on Religion

Differing Views on Role of Women

Differing Views on Role of Women

Differing Views on Homosexuality

Satisfaction: Income, Family, Jobs

Acceptance of Atheism

3. Dangers of Exploring Culture

Cave! Hic Dragones! (Warning! Here be dragons!)

1) Greatest danger is to attribute too much influence to culture. It is relatively invariant in the short term, yet we observe huge shifts in economic performance. 2) A second risk is to forget that it does change over the medium and longer term (culture evolves). 3) A third risk is turn every culture into something exotic or assume all individuals fit that stereotype. 4) Fourth risk is to allow culture to be used as an excuse by people or states (e.g. Local values explain lack of democracy) 5) Finally, cultural differences like any differences - bring both advantages and disadvantages to states and firms. (Individualism is great for some activities, but group oriented societies better at others).

Constant Culture, Changing Economics

A major challenge for culture-based explanations is that economic performance varies for the same state in different periods while culture is relatively constant

China failed to grow and modernize for much of this century, but has taken off since 1980. Indias economic performance was very weak in 60s, 70s and 80s, but very impressive since 1990. Ireland has gone from one of the poorest states in Europe to one of the wealthiest (but the Irish are still Irish) Britain was the wealthiest country in the world, but fell on hard times after World War II. It is only recovering today.

Dangers of Culture

Culture changes, but most often slowly over time

For example, China and Korea are deeply influenced by Confucian thought. But they are not trapped by it. Views on society, business, family and women are changing. Modernization affects culture (urbanization, education, exposure to other cultures). It can also lead to a backlash. There are many exceptions to rules. What may be broadly true for society is often untrue for individuals. Many individuals have also received schooling or worked abroad. May also resent any stereotyping of their culture. Culture is also often used as substitute for real explanation

Cultural stereotyping

The Japanese do ______ because they are Japanese. That is what Japanese do Why did the French firm reject our takeover offer. Wasnt the low price we offered. No, it must be because they are French

4. The Clash of Civilizations

Famous (Notorious?) article in Foreign Affairs Offers Huntingtons view/prediction about the future of international politics (post cold war)

Published in 1993

The Clash of Civilizations

Huntingtons argument:

Culture matters and conflicts between civilizations will be a major driver in 21st century of conflict.

What is your analysis?

Huntingtons Civilizations

A World of Religions

Culture and Values

Democracy and Culture

Is Democracy a universal value or applicable only to some countries?

Can China be a democracy?

5. Critiques of Huntington
Sens Critique First

Closer to Sociologies View of People:

Namely that we have multiple identities (e.g. religion, age, ethnicity, political affiliation)

Must focus on common humanity, not differences

Nobel Laureate Amartya Sen

Critiques of Huntington

Do you see civilizations as the major dividing line in the world?

Or is it something else? Why do the U.S. and Europe have so many tussles over issues like Iraq, Iran, etc.?

Do these civilizational borders make sense?

Is Latin America a different civilization from Europe or U.S.? What civilization is Israel? What is Africa?

Critiques of Huntington

Is it civilizations or some other level of identity?

Look at Protestant-Catholic tension, Shia-Sunni, Kurdish-Turk, Red-state/Blue-state , etc. Look at Scotland, Wales, Quebec Look at the Rwanda genocide What is your analysis of Chinese internal and external conflicts?

Critiques of Huntington

How often do traditional realist concerns trump identity in alliances?

Look at Arab states backing U.S. in last gulf war. To what extent, does identity mask power grabs against states or peoples that happen to belong to cultures/groups/civilizations.

6. What is globalization?

A growing interconnectedness and perhaps convergence among states and peoples within the economic, political, and cultural spheres. - Personal definition My own distinctions:

Internationalization Convergence Regionalization

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Factors driving globalization

Decline in the costs of transportation Decline in the costs of communication Decline in barriers to movement of goods, services, money and people Lead to Growing integration of financial and product markets Rise of global services and information economy Creation of global culture and tastes (fusion and fast food cuisine, Hollywood/Bollywood, etc.) Ideological Convergence?

Market capitalism. Probably. Liberal democracy? Umm..Work in progress?

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1. How global is the world?

World Imports as a Percentage of GDP

Source: Chase-Dunn and Kwon http://irows.ucr.edu/papers/irows60/irows60.htm

1. How global is the world?

FDI as a percentage of Global GDP

Source: Chase-Dunn and Kwon http://irows.ucr.edu/papers/irows60/irows60.htm

Source: OECD Economic Outlook

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Role of Migrants in the Workforce

Source: OECD Economic Outlook

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A New, Flat World

Friedmans argument:

Decline in costs of communication and computers means that firms and individuals in India, China and other developing countries can compete in any industry where location does not matter (software and services that can be done offshore)

Firms began outsourcing, then Internet led to offshoring. Simultaneously, much of the world joined the global economy (India, China, former communist block). Traditionally developing states were disadvantaged in competing economically. In new world, anyone can compete anywhere with a cheap computer and Internet connection. 49

A New, Flat World

Globalization 1.0 (1492-1800)

Colonial period Globalization for resources Age of nation states Age of Europe Manufacturing period Globalization of markets Age of global corporations Age of Europe and America

Globalization 2.0 (1800-2000)

Globalization 3.0 (2000-today)

Information era Globalization of individuals Age of individuals and small groups Age of Non-West
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Why people fear globalization

Race to the Bottom in labor, environmental and other standards

To attract investment, states are less able to:

Tax firms or wealthy individuals, regulate business, run large budget deficits, protect the environment, protect wages or working conditions

Workers and unions in particular fear income and job losses Globalization of culture is a threat to national traditions and values

Assault on traditional values and cultures

Globalization as Americanization or McDonaldization

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The Race to the Bottom

Counter-evidence:

The states which are most globalized are the ones that spend the most on welfare.

What else have we learned this semester: Wages are driven by productivity. Large markets can dictate regulations more easily to firms as firms fear loss of market access (the California effect). Also: Sometimes regulation attracts business (a race to the top).

Question: If regulation discourages investment, why are firms more regulated than ever before?
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Evidence from Tax Rates

Tax rates are increasing in most states

Though not on corporations and wealthy who are most mobile.

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Evidence from Tax Rates

Tax rates vary significantly among states as well

Apparently, not a huge barrier to investment Also note spending on healthcare or education often only shifts burden away from firms or workers to state

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Evidence from Tax Rates

But there is a trend of declining taxes on corporate profits

US rate is 35%, half of large firms pay no or less than half that rate 82 of 252 large firms in a study paid no state taxes at all in U.S. GE paid no federal taxes in 2010 on 16 billion in profits (GE Tax Story)

But when the cut taxes, the also close loopholes and so it is unclear if tax reform makes taxes go up or down

Nor do differences in tax rates appear to effect investment flows (Backus 2007)

*Firms can incorporate off-shore as well to help avoid U.S. taxes on profits

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Evidence from Tax Rates

Personal Tax Rates for Highest Income Earners Have Declined Over Time Nearly Everywhere

http://media.economist.com/sites/default/files/imagecache/ful l-width/images/2012/04/blogs/graphicdetail/20120428_WOC116.png

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