I don’t think capitalism has much to do with religion – Weber was wrong about capitalism and the Protestant ethic even when he wrote it, Catholic Belgium was the second industrial country after Britain. It does, however, have to do with social structure, and that is a legacy of history. Between being the author of the vapid “End of History” and being a neocon (Torment Be Upon Them), Francis Fukuyama wrote a very good book which was hardly noticed. In “Trust” he distinguishes between different types of capitalism, depending upon levels of social trust.
· North and West Europe , Anglo-Saxondom overseas, and Japan are high trust societies. Basically one tends to trust strangers unless they give cause not to do so. Duty to the wider society overrides family solidarity. These seem to be the only societies which can develop and run well impersonal capitalist organisations: Sumitomo dates to 1653, and Siemens invented the electrical industry and is still alive and well. Interestingly these are all societies with a feudal history – there were lords and serfs, but even the lords had duties as well as rights, and the serfs were never fully slaves, they owned land and had some rights. America and Australai were never feudal, but inherited the social assumptions which underly e.g English common law.
· Italy (never properly feudalised), China and India are a second group: arbitrary power (even the British, in colonial guise) but tough and tenacious family structures. This provides family firm capitalism: lots of creative firms, and everything that is not done at that level has to be done, not so well, by the state. Duty to the wider society does not override family solidarity, corruption is a social problem, but effective capitalism of this sort can take root
· The Orthodox Christian world is heir to the arbitrary rule of Byzantium. You do what the Tsar says, unless he is not looking – in which case anarchy rules. Social and family solidarity are weak. You have to rule by state fear (tyrants) or private fear (mafias). Its fate to date, despite high culture and centuries trying to modernise, seems to be semi-development.
The medieval West was never like Islam, because the Caliphate was not feudal and was more like Byzantium (which was, after all, the only model open to it).
Like all sweeping models, there are bits that don’t fit, like Latin America ( a mix of all these elements, but mainly the second and third). German "mittelstand" companies are like Italian firms. Though still stuck in semi-development, Greece and Turkey are not Russia. South Korea has through intensive effort moved from being Confucian to an imitation Japan (but it is still a very stressed place). China seems to be able to run reasonably efficient state firms, while India cannot. But it explains a lot, such as relative economic success by country of east European countries post-1989.
Just a thought - are clan based societies the least efficient of all (Arab societies, Africa): no allegiance to the state at all, but the social unit is too large to be as effective economically as the family.
This implies that China has a good future as Greater Northern Italy, one of the most developed parts of Europe (southern Italy is Byzantine and poor). There will be storms on route, and I think a financial crash is almost certain at some stage, because overinvestment is producing assets which will never pay an adequate return. It won’t derail things for long though – the Asian crisis of 1998 did not. Politically I doubt if the highly intelligent Chinese will stand for their present system of governance for ever. The boom can continue for a long time, because there are still around 600 million poor peasants and it is the rise in productivity between farm and almost any form of industrial employment which produces rapid growth. During the "trente glorieuses" of 1945-75 there were an awful lot of European and Japanese peasants to take off the farm. Growth will shift to inland regions, but that mirrors the regional nature in capitalism in most big economies: European development started in the UK and hasn’t got to Montenegro yet. It has already started, with textiles (the low wage industry) moving from the coast to either Sichuan or Hunan, or to Vietnam.
This is if there is not a major environmental crisis, a big if. |
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