Economics can make better use of culture

Once shunned by leading economists like Robert Solow, society’s beliefs and values are just as significant for economic progress as is capital accumulation. Joel Mokyr in his book ‘A Culture of Growth The Origins of the Modern Economy’ describes culture as:

‘A set of beliefs, values, and preferences, capable of affecting behaviour, that are socially (not genetically) transmitted and that are shared by some subset of society’.

Economics has traditionally been focused on rational self-interest as the guiding light of human behaviour. The true catalyst for kick-starting the industrial revolution was not cheap labour and capital accumulation but the continent-wide evolution in beliefs. Mokyr believes that the drivers of technological progress and eventually economic performance are attitude and aptitude.

Attitude – the willingness and energy with which people try to understand the natural world around them.
Aptitude – this determines their success in turning such knowledge into higher productivity and living standards.

Mokyr’s ideas gave rise to how economists can make better use of culture with an evidence-based humanistic approach to scientific inquiry which led to a shift in behaviour that enabled industrialisation. Cultural barriers create a gap between classes and can hinder the flow of ideas and work environments – the modern economic experience cannot be explained without it. The cultural changes in the political economy over the past century cannot be explained solely on the basis of rational self-interest e.g. the fortunes of racial minorities and the increased presence of women in aspects of society. Cultural change can act as a catalyst to the economic potential of people and ideas, and matter for reasons other than their effect on GDP.

Evolving norms that allow women, ethnic minorities, immigrants, and gay and transgender people to play full roles in society not only boost growth but reduce human suffering. But because these shifts matter economically, the dismal science needs a better understanding of when and how cultures change—especially now. These norms shaped behaviour, which enabled progress. But cultures change.

Source: The Economist July27th 2019 – The uncultured science

Leave a Reply

Your email address will not be published. Required fields are marked *