Arnold Kling  

Individualism, Institutions, and Growth

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William Easterly writes,


values across different cultures lie along a spectrum between two separate poles: (1) valuing individual autonomy, believing in equal treatment of individuals, reliance on formal law, the same moral standards apply to all, enforcement of morality is between individuals vs. (2) seeing the individual mainly or only as part of the group, different standards of treatment for group insiders and outsiders, morality only applies to interactions within the group, group enforcement of moral standards, reliance on informal rather than formal institutions.

To continue the drastic oversimplification, the values closer to the first pole are more consistent with the kind of good government associated with democratic capitalism, while values closer to the second pole are more associated with authoritarian and collectivist politics and economics.

Read the whole thing. He claims that this is an empirical result.


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Zdeno writes:

Interesting result. It seems much more likely to me that good government -> individualism than the other way around, although I'm curious as to what others think.

Randy writes:

I think this could be narrowed down to "reliance on formal law", because type 2 cultures are otherwise completely dominate. The United States is no exception.

It is only a freedom loving elite within an otherwise mass culture that allows for any measure of individualism. And if the elites falter in this responsiblity, if they give in to the pressure of the masses, then individualism vanishes completely, along with the benefits that allowing individualism brings.

Elijah writes:

Zdeno, am I reading you wrong when you state that "good government [therefore] individualism?" Because, first off, what does good government mean? And if it means efficient government, then wouldn't China be the most individualist nation in the world?

fundamentalist writes:

A lot of ideas exist on what causes individualism. The Catholic Encyclopedia attributes its rise to the Protestant Reformation which emphasized individual salvation in contrast to the Church’s emphasis on corporate salvation. The work of Geert Hofstede lends credence to this because the countries today with the greatest levels of individualism were once highly Protestant. Traditional societies tend to be extremely collectivist.

The history of the Dutch Republic also lends support to the Catholic idea. The first time in European history that all people were considered equal under the law was in the Dutch Republic beginning in the late 16th century. The equality of commoners with the nobility under the law was a scandal to the rest of Europe, according to Jonathan Israel’s “The Dutch Republic.” The Dutch rebelled against Spain to protect Protestants from the Inquisition and established one of the first republics in Europe, outside of Venice, and the first nation to provide equality under the law for all citizens and establish the institutions of capitalism.

In Wealth of Nations, Smith cites the Dutch Republic as the nation that implemented his ideas of natural liberty the most. Later, socialists would call that system capitalism.

Other support for the Catholic idea of the origin of individualism comes from the works of Lawrence E. Harrison & Samuel P. Huntington in their book “Culture Matters” which explores the relationship of culture to economics. Cause and effect seem to flow this way: religion creates culture; culture determines institutions; institutions determine economics. Individualism comes with the culture.

Dave writes:

According to Wikipedia the Dutch Republic banned Catholic practice, which is exactly a type 2 groupy thing to do. There are other features that don't sound modern, but I admit I know nothing on the subject.

It has always seemed to me that the 'Vikings' and other northerners were pretty individualistic in the middle ages. And I think that may be a simple consequence of their not yet having a bureaucratic state or monotheistic religion. Maybe modern individualism started off in northern Europe just because they were the last to lose it in the first place. Also consider the relatively individualistic North Americans of 1491 vs. the profound collectivism seen near the Fertile Crescent.

hinjew writes:

Fundamentalist gives a great overview of the foundations of modern individualism. The Reformation seems to have clearly played a large role, if only because it ultimately led to the Enlightenment. The Enlightenment is the first time where a truly modern disposition emerges. The Dutch were indeed revolutionary, but the English arguably came to, in the end, embody the spirit of individualism more completely.

As ground zero for Enlightened thinkers, English popular culture became engrossed in the ideas, concepts, and practices of science, capitalism, and the search for knowledge. Lectures were given in coffee shops, schools, squares, pretty much anywhere where an audience could be found. Science clubs became hugely popular. Famous mechanics like Watt were surely the rockstars of their era.

Newton's calculus and the development of physics proved human domination over mother nature. The combination of rather large and integrated markets, a fairly stable political system following the institution of Parliament, and this Enlightened outlook on the world created the perfect set of incentives for the individual pursuits and technological development. This of course was the ultimate source of the Industrial Revolution.

So I would make only a small adjustment to Fundamentalists simplified summary of "religion creates culture; culture determines institutions; institutions determine economics." I would argue that religion is culture because both are "fundamentally" knowledge. Culture (and religion) is frequently described as shared tacit knowledge. Tacit knowledge is knowledge which is difficult to make explicit so instead is shared as norms, values, and beliefs. It is what our parents and their parents and their parents learned and passed down so we do not have to learn it again.

As such, it is impossible to differentiate between religion and culture. A modern person may renounce religion, but the norms, values, and beliefs coming from their parents socialization is grounded in some religion. It remains in their personal culture, no matter how hard they try. Individualism then must also be rooted in culture.

Randy writes:

Dave,

I had much the same thought. Arminius wiped out Varus' legions and the Romans never had the guts to try again. Individualism may be just a northern thing - perhaps its the climate.

fundamentalist writes:

Dave: "According to Wikipedia the Dutch Republic banned Catholic practice, which is exactly a type 2 groupy thing to do."

They did in the early days of the revolt. It took them 80 years to win their independence, but they eventually became the first country in Europe to allow religious freedom. Israel's history is excellent.

Tracing the lineage of individualism isn't an exact science. It's mainly a process of reverse engineering. People look for the effects, such as equality under the law, tolerance for choices that go against tradition and a breaking down of class barriers. As far as we know, those traits first appeared in the Dutch Republic and very soon afterwards in England. Later they spread throughout Western Europe. But it stopped there. Today, individualism i confined largely to the anglo world and Western Europe.

We take those things for granted, but they are actually very rare in the world today. Geert Hofstede's research shows the US to be an extreme outlier on the individualism scale. Traditional cultures are very collectivist, so I doubt the Vikings would have embraced individualism. And being of Native American heritage I can vouch for the collectivist culture of native tribes over much of their history.

Another excellent book on the subject is "The Disciplinary Revolution: Calvinism and the Rise of the State in Early Modern Europe" by Philip S. Gorski. He shows how Dutch and German Protestants transformed government by emphasizing reason in administrative affairs.

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