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Wednesday, May 2, 2012

Cultural economics and the Philippines

By John Mangun / Outside the Box

ONE aspect of the global economic crisis that is just starting to be discussed is the cultural differences between the “winners” and the “losers.”

Here in the Philippines, the local culture has been a never-ending source of dialogue that seems to center on what were the benefits and detriments of Spanish, American and, to a lesser extent, Chinese influences on the country.

When the Philippines is compared to other countries in the region, usually negatively, it is always a mangos-and-apples contrast. Thailand is a monarchy with the military in a position to control the political process. Never conquered and with a homogenous society, the culture is strong and somewhat purely “Thai.”

Malaysia is a federal republic, formed by the British out of separate Malay Kingdoms. Those nine hereditary rulers of the Malay states elect a king and have strong power in the individual states.

Indonesia is a diverse country with many ethnic and cultural groups like the Philippines. However, while being a Muslim country, its Buddhist and Hindu roots are never far beneath the surface.

Vietnam also is homogenous and its political and economic policies are formed by a national council following the socialist model. Singapore is a tightly ruled nation-state governed by an elite political class.

How can the Philippines, often called the “melting pot of Asia,” compare itself to these other very different nations? It cannot, except in terms of economic results which are often substandard.

We keep looking for some sort of a model to follow. The problem with that is this country has been around for a long time. Like an old man still looking for a mentor, PHL seems to be searching and looking to other countries to figure out what it needs to do differently. That is foolish. Philippine history is what it is, and the people are who they are. Nothing is going to change that.

Having said that, the culture, the behaviors that a society believes are important, can change. However, a society must first examine itself for its cultural deficiencies, the ones that are holding it back economically, and take a different course.

Published in 2009, Jesuit priest Francis X. Hezel wrote a paper titled “The Role of Culture in Economic Development.”

Father Hezel asks why did the Industrial Revolution first bloom in Britain and not elsewhere when the same new technologies that pushed industrialization were available to all. His conclusion is certainly important for today. The European Catholic nations, Spain, Portugal, Ireland, France and Italy, were not as culturally prepared as the Protestant countries of Britain and Germany to excel. Protestant teachings viewed wealth creation and hard work as a virtue and a duty to God.

His studies lead him to identify six cultural traits that are necessary for greater economic success.

• Belief in the importance of individual effort. “Certain societies have never been distinguished for individualism or the belief system that encourages it. They have been better known for the communalism and the subordination of the individual to group interests that this demands.”

While cultures like Japan and China do not display this trait and are successful, neither are they known for great innovation but are great economic copiers. Worker bees can do well, too.

• Trust. Certain societies have great trust in the extended-family structure but the farther you get from the family to the next village or the national government, trust in those institutions grows smaller. The closely knit Sicilian part of Italy has always lagged behind the rest of the country.

• Generalized morality. This is a variation of family trust. It is the “application of ethical standards to all, not just those in one’s immediate group.” You cannot build a sound economy by just treating your family properly and cheating everyone else.

• Autonomy. Less successful economies tend to keep individual initiative and creativity as a low priority. “Follow the boss’s ideas; he knows best.”

• Ethic of hard work. Persistent and consistent work product day after day and week after week is critical. Unsuccessful economies are likely to demonstrate “feverish outbursts of hard work, but such an outburst [is] almost always followed by a long period of relaxation.” Sounds like some politicians before and then after the election.

• Thrift. This is often associated by the “losers” with being “cheap,” which is perceived as a fault rather than a virtue. The fiesta spending is more important than building a school.

It is unlikely that the society of every successful economy has all these traits as part of their heritage. So how can a nation change for the better?

It must have political leadership that strongly believes in and consistently practices these qualities personally and through the government institutions.

E-mail to mangun@gmail.com, website iswww.mangunonmarkets.com, and Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by COL Financial Group Inc.

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