Prosperity: Opening Thoughts on Cultural Environment

We have visited five elements within the cycle of prosperity: technology, food supply, human capital, economic growth and wealth, and trade. We have seen how these five interact in mutually reinforcing organic ways to generate prosperity. We have also seen how the environment and natural resources can influence how an economy develops. We turn now to the cultural environment.

Examining our cultural environment is a bit like describing water to fish. It is so much a part of our experience that is all but invisible to us. It rarely occurs to us that life could be ordered in alternative ways. Yet assumptions we make about the order of the world, about human nature, and matters of ultimate meaning deeply affect how we function with regard to economic decisions, sometimes in very subtle but important ways. Here are just a few questions that highlight some of the issues.

* Is time an endless cycle of recurring events, or is there a progression from the past leading toward a better future? What impact would this have on the idea of economic growth or developing technology? How would it impact the human capital society develops in its members?

* Do the fates or the gods arbitrarily enter into human affairs and the functioning of the natural order, or is there a predictable orderliness to how the world works? Are deities and nature separable? What impact would this have on developing technology? What impact would it have on assessing risk for any activity? What impact would it have on the development of human capital?

* Can individuals own land, or is land communal property? Or maybe land is held only at the pleasure of a ruler with ultimate ownership? What impact would values about land ownership have on agricultural practices and the food supply?

* Do individuals have a right to keep the fruits of their labor and not be imprisoned on the whims of powerful people? What impact would this have on wealth accumulation and investment? What impact would it have on human capital?

* Are people outside society enemies or subhuman, or are outsiders fellow human beings with whom interaction can be beneficial? What would this mean for trade?

History shows that European culture was late to the scene compared to the Near East fertile crescent, or civilizations of Egypt and China, and possibly even civilizations in the Americas. In “The Wealth and Poverty of Nations” David Landes notes that the water wheel, eyeglasses, the mechanical clock, printing, and gunpowder were all developed in China long before Europeans developed and learned similar technologies. As late as the 15th century, on the dawn of Europe encountering the New World, the Chinese had ships far in excess of anything the Europeans could muster in size or technological capability. Greece and Rome developed various models of statecraft two millennia ago that still influence our lives today. Muslims in the Middle East were ahead of Europe in science and technology by the turn of the first and second millennia. Yet none of these cultures ever approached the widespread prosperity and personal freedom expanding throughout the world today. What was different about the European experience?

A central factor is the rise of market economies. While there have always been markets and trade, market economies and trade in the modern sense began more than a millennium ago in southern Europe, eventually taking root in Northern Italy. Later the central activity moved to Flanders before jumping the Channel to England, on to America, and then out to the world. Over the next few posts, I will explore four features that emerged in European culture that I believe had a central impact on the unique rise of Western prosperity that is now expanding throughout the globe. Each of the four links to distinctly Judeo–Christian perspectives on life and the world.

Two caveats. First, I’m not saying these cultural characteristics alone led to European prosperity. For instance, I’ve mentioned Europe’s unique geography as a contributing factor in the previous post. Second, I’m not saying that everything introduced by European culture has led to the most desirable outcomes in terms of a shalom-filled world. But I am saying that I don’t think we can look at bringing others into the cycle of prosperity we have experienced without first examining “the water we are swimming in” and asking if those we are engaging with swim in the same water.

We now turn to these four cultural features.

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Comments

[ZZMike]

As usual, there's a lot of content here.

A small complaint:

"History shows that European culture was late to the seen compared to the ...."

To continue:

"... all developed in China long before Europeans ...", "... the Chinese had ships far in excess of anything the Europeans could muster ..."

I think we have to say that the main reason is the great separation between China and Europe. One reason was simply distance, another, China's withdrawal from the world scene.

Marco Polo (around 1300) brought back a lot of information from China, but as I remember, the Venetians were unimpressed by a "barbaric" (probably meaning "un-Christian") civilization.

I do know that Chinese ships sailed practically the whole world. One reason they stopped is most likely the great tsunami of 1422 [or maybe 1500] that destroyed a large Chinese fleet near New Zealand (search 'mahuika event'). After that, the Emperor said "no more sea exploration".

"Can individuals own land or is land communal property?"

Some people have us look at the early Christians' communism, but the point is, that was voluntary, and the model used today is not (Soviet Russia, China, &c.)

"Do individuals have a right to keep the fruits of their labor and not be imprisoned at the whims of powerful people?"

Is that what they call a "loaded question"?

"... market economies and trade in the modern sense began more than a millennium ago in southern Europe eventually taking root in Northern Italy."

Where would you put the Silk Road on that continuum?

[Michael W. Kruse]

David Landes writes about the great success China's sailing merchants were having. They were so successful that they were becoming a threat to the Imperial bureaucracy. Around 1477 China's imperial government finally ordered the large "treasure" ships destroyed once they had all returned to China, and an official policy of isolationism was instituted after that.

While I'm sure many monarchs in Europe experienced similar angst with the rise of a merchant class, they could not simply end trade. The neighboring powers would simply expand their trade efforts leaving the isolationist country behind. This competition compelled European powers to make accommodations.

Thus, degree of centralized power over a region led to differing responses to an emerging merchant class.

"Is that what they call a "loaded question"?"

I don't think so at all. The fact that we might think it to be a loaded question actually makes my case. It is taken for granted by most of us today that we have a right to our personal property. That is not how it has been understood throughout much of history.

"Where would you put the Silk Road on that continuum?"

I'm distinguishing between an economy with markets and a market economy. Throughout history there has always been a measure of trade and markets. But the overwhelming majority labor of most of the people was expended growing their own food, making their own clothes, and providing their own shelter.

The Greco-Roman world existed on the patron-client model where specialized work was done on behalf of a patron who then provided for your needs. Feudalism was similar in Europe. Generally only a small wealthy minority of populations engaged in significant trade. This is what I mean by an economy with markets

By market economy, I mean most of the population providing for themselves through the production of goods and services to exchange with others who are doing the same.