Mises Wire

Cultural Traits and Work Ethic: Human Capital Matters

Countries are in an economic arms race to surpass competitors by accelerating levels of human capital. It is crucial that schools and universities not only graduate students with relevant certificates but also people with the appropriate skills to make a useful contribution to the knowledge economy. The failure of employees to maximize value by applying their skills will result in businesses becoming saddled with liabilities because an inefficient employee is an expense.

Indeed, human capital is a key ingredient for achieving growth, but we should appreciate that human capital is conduced by an intricate interplay of social traits. Being a student entails challenges of completing difficult assignments and graduating on time, so naturally, there is a selection for people who are higher in conscientiousness and patience. Possessing the potential to succeed in school and business is irrelevant when a work ethic is nonexistent.

Primarily because life is challenging, work ethic builds resilience; hence people who are easily perturbed by difficulties will easily quit and never actualize their potential. In school and in business, we are compelled to navigate hostile environments by managing complicated personalities. Without grit, entrepreneurs are bound to fail, since on the path to success they will encounter naysayers and bureaucrats aiming to derail their progress. If prospective entrepreneurs were intimidated by regulations, then we would not be enjoying the fruits of their labor.

Likewise, students contend with arrogant lecturers, incompetent peers, and mindless administrators. But when success is the only option, one must literally overcome the storm. People with laser focus are undaunted by the obstacles because they can conceptualize the long-term outcomes of their labor. On the other hand, since traits that induce performance are not equally distributed, obviously some people will be deficient in social skills that enable success.

Another harrowing reality is that due to the unequal distribution of success-inducing traits, some characteristics are more abundant in certain countries relative to others. East Asians, Americans, and Germans are known for an insane work ethic that’s not replicated in most places. Although there is a resurgence of interest in the relationship between culture and economic development, economists rarely identify culture as a direct barrier to the acquisition of human capital.

Researchers have observed differences in how people value time by classifying countries as having either a clock culture or an event culture. In the latter, people are unlikely to place a premium on time, whereas in the former, there is greater reverence for time rather than celebrating the event. Event cultures are usually less productive than time cultures, since time cultures minimize waste by using time efficiently. 

The case of Jamaica adroitly illustrates how culture retards development. For instance, in Jamaica there is so little respect for time that people have created the concept of Jamaican time, thereby indicating that attendants should budget for tardiness. Now, for many in Jamaica being fashionably late is just another feature of Jamaican society, yet it has serious economic consequences. One avenue for young people to accumulate human capital is to learn a trade; however, professional institutions are unwilling to entertain tardy behavior; consequently, some young people are unable to keep a job because they lack the discipline to arrive on time. 

Once, a young woman revealed to me that she was dismissed for arriving late on three consecutive occasions despite being warned. Even though she was warned, this young woman admitted that she was late because she had to eat her breakfast. If eating breakfast was so important to her, then she should have gotten up earlier to have her meal to allow her to arrive on time. Such dismissals deprive young people of the opportunity to improve themselves; however, unfortunately many people attribute these dismissals to the grumpiness of managers. Even worse is that the subpar performance of the Jamaican worker is so glaring that Jamaicans are known for saying that one Chinese employee can muster the tasks of five Jamaicans.

Employers often complain that Jamaican workers will show up to do work on a site for the day, but you won’t see them for the rest of the week. So, to correct human capital deficiencies, some in the Jamaican private sector like Paul B. Scott are suggesting that the country import human capital from abroad:

There is little capacity on the supply side to effectively execute what needs to be done to fulfil the potential capacity of Jamaica. If you want another 10,000 hotel rooms or increase BPO (business process outsourcing) or have factories relocated here, then on the supply side, the labor front must be addressed.

Training the population would be an alternative in a different environment, but when natives are unresponsive to training and working, such recommendations raise serious problems.

Displacement automatically breeds resentment, yet the reality is that if Jamaican culture fails to evolve, then natives will be displaced. The decline of pork barrel politics in Europe and modernization in Japan and Singapore indicate that people can mature if they elect leaders capable of reforming culture and institutions. Jamaica has immense potential, and it would be quite sad for its people to perish due to a lack of knowledge and visionless leadership.

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