Economics and Culture

I have been analyzing Geert Hofstede’s cultural dimensions assessment[1] and its potential it to elucidate the social, economic, and spiritual behavior (spiritual in this context is a reference to the conscious and unconscious being) of capitalist culture.  According to Hofstede, culture is “the collective programming of the mind that distinguishes one group or category from another (Hofstede, 2011)[2]”.  By comparing and contrasting collective behaviors of groups, the assessment outlines variations in culture using 5 indicators.  Each index is a composite piece to understanding variations in business environments from a cultural context.  The 5 indicators are:

1.      The power distance index (PDI), which measures the extent to which members of a society accept their position as a low ranking member on the power hierarchy.  

2.      The individualism index (IDV) which measures the extent to which a culture believes that individuals are responsible for their own well-being.

3.      The masculinity index (MAS), which measures the distribution of roles between genders.  

4.      The uncertainty avoidance index (UAI), which measures a society’s ability to cope with an unstructured environment.

5.      The long –term orientation index (LTO), which measures a cultures adherence to long term values (i.e. perseverance).


What I noticed was a trend emerging among 3 of the cultural indicator scores for westernized, capitalist, patriarchal countries.  Specifically, those countries consistently had high scores in the IDV and MAS indices, and ranked low in the PDI.  These indicators provide a great deal of insight into the prevailing character of western culture as a whole, and capitalism as the social and economic tool.  It was the combination of the index scores together that is very telling about western thought and attitudes in relation to universe.  If we are ever to move into an economic system that reaffirms the interconnected nature of our existence, we must learn to understand they ways in which culture affects evolution. 


A high individualism index (70 and above) suggests that the structure within a culture places emphasis on individual achievement disconnected from community influence.  These cultures overwhelmingly view success as more of a direct result of individual (as opposed to collective) effort.  For us westerners, this is not a shock.  A huge component of our back-story includes the ideology that pursuing individual wants, pursuits of happiness, is the very essence of human nature.  The pursuit of individual success is a virtual inescapable cage beckoning one from ambiguity and propelling one to the forefront of greatness.  From an economic perspective, this is profound.  The philosophical substance of mainstream, traditional, etc. economics states that it is individual wants and desires that drive economic action.  What is unique about the western perspective is the obsession with the individual juxtaposed with our knowledge and experience that it takes a village.  I find that this notion of the individual is a gross distortion of what we know to be true about our existence and our story throughout time.  Community is woven into the fabric of our DNA.  We have a double helix (at the very least), not a single one.  My quest to shed light on economic philosophies, such as socially conscientious economics, stems from the understanding that disconnected individualism is not, and should not, be the prevailing characteristic that shapes our economic reality.


Examining the individualism index alone is not enough to tell the whole economic story of the western capitalist.  It alone does not explain, for example, why those who are routinely propelled to the forefront of power and privilege are overwhelmingly are men, and are white, as is the case in the United States.  High masculinity index numbers help to explain, in part, the repeated elevation of men to positions of power and privilege.  I must take a moment here to explain that elevations in power and privilege is not meant to suggest that all white men hold elite titles that indicate power or success.  What I am stating, with regard to power and privilege, is that there is a system structured to support and affirm the rights, and privileges associated with those rights, of certain groups (in this case men), while negating, denying, and ignoring the humanity and the associated privileges of others.  The masculinity index measures the degree to which a society gravitates towards characteristics considered masculine.  The study defines and applies masculinity in a certain context that is important to note.  First, masculinity is associated with success that is gained and measured by achievement, assertiveness, and material reward, while femininity is concerned with modesty, cooperation, and caring for the weak.  The second point to note is that these fabrications of male and female indicators arise from a sexist notion of male and female roles.  It is not that the study makes these assertions, but rather that the universe in, which the roles are created, is based on patriarchal ideologies.  Because constructs of the masculine and feminine are created within a context that values maleness above all else, it can and only ever will be men who truly embody the masculine, and vice versa for women and the feminine.  Those who strive to shed association with the feminine are often rewarded within a defined set of boundaries.  In the United States for example, women who are portrayed as successful or powerful embrace the masculine often times at the abuse of the feminine.  This abuse happens because the method of assertiveness and material reward that has been given tangible value in western culture (as a whole) is assertiveness at the expense of another’s happiness, freedom, well-being, and so on. Needless to say, the U.S. MAS indicator was relatively high.  Looking at the conversation about the feminine and the masculine from an economic point of view, we can understand the economic system at work in western capitalist cultures.  It becomes clearer why the model of markets that advocates competing wants, limitation of resources, maximizing benefits and profits, is the preferred model.  This model speaks first and foremost to the masculine as defined under patriarchy, and is validated by the implication that individualism- disconnected from community- is the nature of the self, and therefore, the beginning of everything.


The question remains: how and why does this system survive?  The PDI sheds some light on the why and how of this system’s survival.  Power distance index measures the degree to which members of a culture are satisfied and accepting of the distribution of power.  Low PDI scores indicate that members of are not necessarily satisfied with existing power structures and seek to elevate or change status.  Dominant western societies had low PDI scores.  The United States scored 40 in this category.  Not so low as to foster widespread social unrest to bring about massive overhaul of the power structure, but low enough as to spark an uneasiness among people that prompts us to seek change.  The unfortunate truth is that the change we often seek happen in what Chris Argyris refers to as single loop.  In other words, only the players change but rarely the game.

So what does all of this mean? This is an alternative economic theory blog after all!  What does this mean for economics?  First, it means that we cannot be ok with only rearranging the pieces of the economic puzzle without examining the fabric upon which the puzzle is made.  It is difficult to speak of improving phenomenon such as unemployment, social services (food programs, schools, etc), business services (tax breaks, regulations, etc.) without rethinking the economic philosophy from which these things are managed.  I understand the models, I see the math that supports it, but now is the time to think outside of the boundaries that define what is said to be possible.  How would our models of supply and demand change, if we begin to redefine our economic system from a collectivist mindset, valuing the whole (both masculine and feminine) as essential?  Would we even view our interaction in terms of supply and demand or our role in economic interaction as the consumer?  That is what socially conscientious economic dares.  I invite us all to tap part in the shaping of a new economic vision that, I believe will and can propel us to actualize the endless possibilities of us.      


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