Bad Samaritans (9)

[Andy]

Bad Samaritans By Ha-joon Chang

(March 23, 2013)

Chapter 9 Lazy Japanese and Thieving Germans

Are some cultures incapable of economic development?

1. (p. 185) Does culture influence economic development?

-Different cultures produce peoples with different attitudes that affect a society's economic progress; but this is not persuasive

-not possible to establish whether a culture is inherently good or bad for economic development

2. (p. 187) What is a culture?

-broad categories, like Catholic or Chinese, are too crude to be analytically meaningful

-Cultures have doubleness like Stevenson's Dr. Jekyll and Mr. Hyde;

cf. cases of Muslim culture

1) to hold back economic development; to discourage entrepreneurship and creativity; less interested in worldly things

2) a highly developed sense of contracts; to encourage the rule of law and justice; emphasis on rational thinking and learning

-there is no culture that is either unequivocally good or gad for economic development

3. (p. 194) Lazy Japanese and thieving Germans

-laziness: what makes them lazy is their lack of an industrial sense of time

1) working with simple machinery -- not have to keep time strictly

2) working in an automated factory -- essential to keep time strictly

-people from rich countries interpret this difference in sense of time as laziness

-the negative forms of behavior of the Japanese and Germans were the outcomes of economic conditions common to all economically underdeveloped countries rather than of their specific cultures

-culture changes with economic development: Koran time

4. (p. 198) Changing culture

-culturalists: culture can be changed deliberately through persuasion

-fatalists: culture is almost impossible to change (it's destiny)

-Changes in attitudes need to be supported by real changes -- in economic activities, institutions and policies: the ratio of engineering and science graduates for humanities graduates -- 0.6 to one in the 1960s → one to one in the 1980s (in Korea's case)

-Though culture and economic development influence each other, the causality is far stronger from the latter to the former; economic development to a large extent creates a culture that it needs: Japan, Germany, Korea (e.g. hard work, time-keeping, frugality)

-Culture is not immutable. It can be changed through: a mutually reinforcing interaction with economic development; ideological persuasion; and complementary policies and institutions that encourage certain forms of behavior, which over time turn into cultural traits.

Epilogue São Paulo, October 2037

Can things get better?

1. (p. 210) Defying the market

-The free market dictates that countries stick to what they are already good at; But their engagement in those activities is exactly makes them poor. If they want to leave poverty behind, they have to defy the market and do the more difficult things that bring them higher income.

-sacrificing the present to improve the future: Americans, Finland, Korean, Swiss, Britain

2. (p. 215) Why manufacturing matters?

-it is capabilities in manufacturing to distinguish rich countries from poor countries (in history)

-productivity in manufacturing grows faster than in agriculture or services

-Alexander Hamilton promoted 'infant industries' (industrialization) in the US, defying Adam Smith

-without a strong manufacturing sector, impossible to develop high- productivity services

cf. Swiss case: 1) not a country living off black money and gullible tourists

2) the most industrialized country: the highest per capita manufacturing output; 24% more than that of Japan

Singapore case: 1) a financial center and trading port

2) 35% more manufacturing output per head of population than Korea

3. (p. 217) Tilting the playing field

-nationalist policies (like trade protection and discrimination against foreign investors) should be banned because they lead to unfair competition

-the Bad Samaritans invoke the notion of the 'level playing field'

-But a level playing field leads to unfair competition when the players are unequal

-it is fair that we tilt the playing field in favor of the weaker countries; to protect their producers; to put stricter regulations on foreign investment

4. (p. 220) What is right and what is easy

-it is much harder to persuade the ideologues who believe in Bad Samaritan policies because they think they are right, not because they benefit from them

-self-righteousness is often more stubborn than self-interest

-many Bad Samaritans go along with wrong policies for the simple reason that it's easier to be a conformist