Mises Wire

Cultural Change Is Necessary for Capital Development

Preserving culture is so crucial to a group’s identity that it has become sacred. For many the contents of culture don’t matter as long as they are preserved. But such a nihilistic approach to culture has led to failure and will continue to do so. Culture is a social technology that allows societies to function within a specific institutional setting. So, a constellation of traits could be useful for people living in a premodern setting but maladaptive in a postindustrial context.

In herding cultures, projecting violence deters the theft of crops by outsiders; however, when societies become less agricultural and more educated, the general refinement of the population leads people to condemn bawdy behavior. Societal evolution necessitates the demise of old cultures and the birth of novel ones because societies cannot thrive unless they are replenished by new techniques. Treating culture as an antique that must be preserved offers therapeutic benefits without advancing society. Rather than safeguarding culture, promoting progress should be society’s goal.

Invariably, on the path to modernity, there will be clashes between tradition and innovation; however, the triumph of the former results in stagnation. Like other places, Europe suffered from antimarket policies and cultural romanticism, but it became the first place where tradition was supplanted by the power of innovation, which inevitably led Europe to diverge from the globe. England, where the idea of progress was most pronounced, became the first industrial nation. Accepting national backwardness is the first step to development. It is not a random coincidence that Japan, the first non-Western nation to modernize, advocated a successful cultural and institutional reform program in the nineteenth century.

Japan entered the nineteenth century as an economic backwater, but due to its propensity to learn quickly in the latter part of that century, Japan experienced a rapid ascent. It managed to defeat the Qing dynasty of China (1894–95) and boasted globally competitive industries by the early twentieth century. Quite paradoxically, adopting Western institutions and ideas prevented the dilution of Japan’s culture. If Japan had hesitated to modernize, it could have easily become a major victim of Western imperialism. Japan’s favorable response to modernization precluded Western powers from turning it into a cultural puppet. Because Japan became a powerful country, the West had to treat her as an equal.

G. C. Allen argues that Japan’s ruthless ambition impeded Western powers from making her a subservient tool:

[The Restoration government] recognized that Japan’s military weakness and her economic backwardness might make her the easy spoil of Western Powers, and it judged that the rapid adoption of Western methods in war and industry could alone enable her to retain her independence and ultimately to secure the abrogation of the “unequal treaties.”

Had Japan been reluctant to pursue such a pragmatic approach, maybe today it would not be an economic superpower but just another non-Western country struggling due to the legacy of Western imperialism.

To combat competition from the West, China launched an initiative termed the Self-Strengthening Movement; however, it lacked widespread support from the ruling administration and hence failed to spawn an industrial renaissance. Nations advance by acquiring human capital and improving existing technologies, but this is unachievable when people express hostility to new ideas because of the fear that embracing change will undermine culture. Yet cultural myopia is costly considering that groups are penalized for resisting modernity.

In Nigeria, the Igbos demonstrated a willingness to be educated and learn Western techniques. The Igbos were rewarded for their diligence and quickly became an elite group in Nigeria, even surpassing the Yoruba people. But Islamic regions in the North were hostile to the efforts of Western missionaries and fought modern ideals. The result is that today northern regions of Nigeria have lower human capital levels than the south. Development is possible, but developing countries must be amenable to new ideas and displace irrelevant worldviews.

If poor countries want to get rich, they must modernize and pursue cultural reform. Cultural reform is hard, but it must be done if countries are serious about succeeding.

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