Arnold Kling  

Culture, Capitalism, and Freedom

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One of Tyler Cowen's readers asks for recommendations of books that examine the cultural requirements for liberty, and Tyler has a number of good suggestions.

My instinct is to start with an evolutionary perspective. How did we get out of the habit of seeing people outside of our immediate tribe or clan as enemies, so that we could trade with them? (Even now, of course, the tribal mindset affects attitudes toward international trade. See Dobbs, Lou.) I remember Paul Seabright's The Company of Strangers being about that, but I remember not feeling very satisfied after I read it. There is also Non-zero by Robert Wright, which I have not read.

Deirdre McCloskey's The Bourgeois Virtues has something to say about a lot of topics, including this one. Douglass North has thought a lot about the issue. See what I call the NWW paper.

My mental model of economic and political life, institutions, and culture is a pyramid, with culture the base on which rest institutions, on which rests economic and political performance. That is the framework implicit in my essay on the What Causes Prosperity?.

I think that North would view institutions as having some degree of exogeneity, albeit limited. That is, when a culture is not too averse to open trade, changes in political structure can push the polity in the direction of what he calls an "open-access order," in which competition for political power and economic well-being is relatively fair and open. But if a culture is too tied up in clan loyalties, I doubt that North would see a transition to an open-access order as feasible.

UPDATE: Read the comments on this post. They are interesting.

COMMENTS (6 to date)
Cyrus writes:

My instinct is to start with an evolutionary perspective. How did we get out of the habit of seeing people outside of our immediate tribe or clan as enemies, so that we could trade with them?

This is one trap, but being in this trap represents a clan-based society, or a chiefdom if one clan can assert dominance. Leaving this trap, and making regional trade routine, only gives you a medieval standard of living. And even in this context, even in towns or villages where a large fraction of the population is involved in the production of goods for export, only a small fraction of the population is needed to actually carry out the trade: most of the population is dependant on the social networks of family and guild for support during exceptional circumstances, and conformity to social norms is an important component of human capital.

Therein lies the breaking point: can a typical person accumulate enough human or financial capital that they can generally function without depending on tradition-based social networks.

Gary writes:

In your essay, you wrote:

To achieve prosperity, a country must foster three "ethics."
A work ethic.
A public service ethic.
A learning ethic.

I think this comes closer to "hitting the nail on the head" than anything I have read in quite a while. I was going to add a sense of justice to the list, but you cover that pretty well in your next paragraph. I would also point out that prosperous societies almost always grow up around trading centers where people and ideas from all over the world come together. The exchange of ideas is education in its truest form. There is an important distinction between true education and a signal that graduates have passed the test.

Keep up the good work.

I argue that geography plays a critical role in the development of liberty, in my paper The History of Free Nations. Isabel Paterson provided the central thesis in this paper.

Steve Sailer writes:

Trade and tribalism are quite compatible. It's large scale corporate enterprise and clannishness that aren't very compatible.

Katherine writes:

Speaking of McCloskey, I regularly raid her bibliographies for reading material. In one such pilfering of sources, I happened upon Matt Ridley's The Origins of Virtue.

The book essentially takes an eclectic approach to explaining evolutionary psychology. Although I don't think this work would satisfy your curiosity about the dialectical relationship of tribalism and trade, it is, nevertheless, an excellent treatise on human nature and social relationships, which examines both phenomena at length.

Ranjit Mathoda writes:

Perhaps certain tribes came to derive a value from doing trading. They acted as honest brokers between other tribes. Or they wanted something someone else had, and the cost of taking it was too high, so they designated lower status members of the tribe to dabble in dealing with the other tribe to get it. The truth is internal to a tribe there is always trade that is beneficial. So that's a model for the behavior of trading between tribes.

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