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The Culture of Prosperity and Wealth Creation

By Dr. Randy Persaud

Not so long ago Professor David Held of the London School of Economics made the following observation: “In 1960, the income of the richest 20 per cent of the world's people stood at about thirty times that of the poorest 20 per cent; by 1997 the corresponding multiple was seventy-four.” (Held: 2004: 45). The gap between rich and poor had actually widened through the development decades. Professor Held also noted that this gap is growing. Thus, by 2004 “…the richest 5 per cent of the world's people [had] incomes 114 times those of the poorest 5 per cent; and the richest 1 per cent receive as much income each year as the poorest 57 per cent (Held: 2004: 45).

There should be no doubt that there are grave economic injustices in the world. A situation in which 250 individuals own and control more wealth than the bottom 2.5 billion people in the world is unsustainable. More than that, the massive structural inequality that exists worldwide cries out for urgent redress. The big question is what should be the appropriate mix of economic strategies, tools, and policies to bring about the desired outcomes.

I have enormous 'sympathy' for those who argue that globalization is nothing other than unfettered global capitalism, and that the new world economy is increasingly based on a kind of speculative just-in-time profiteering. The British political economist, Susan Strange, went so far as to call it the new global process of accumulation casino capitalism.

The call for solutions has produced ongoing debates. Much of this debate, however, has elided the role of culture, and this is something I wish to address. President Bharat Jagdeo has himself called for a new way we do things in Guyana. Although he has not called for a revolution in culture per se, his vision entails a much sharper focus on productivity, enterprise, and innovation. Without these latter, the path to development will be stultified.

The Argentine scholar, Marino Grondona, is among one of the few who has systematically dealt with culture and economic development. His work is therefore worthy of careful consideration. Grondona produced a cultural typology of economic development in an attempt to delineate those cultural habits and practices that are conducive to wealth creation from those that act as fetters on prosperity.

Grondona draws a distinction between two kinds of cultural values, namely, intrinsic and instrumental. Intrinsic values are those that are deeply embedded in the worldview of a cultural system. They form the basic template of the dominant meaning making mechanism. On the other hand, “a value is instrumental when we support it because it is directly beneficial to us” (Grondona: 2000).

“All economic values are instrumental,” he argues. But this is exactly the problem. If we are driven only by an instrumental economic logic then once economic success is achieved, the momentum for sustained development would be gone. Another way of putting this is that once you have money, you may turn to consumption rather than further investment. When this happens, innovation and ultimately productivity and efficiency fall off. Or similarly, if you are simply driven by 'more money' once you have what is socially respectable, you may feel comfortable enough and 'ease up working'. Again, productivity falls off.
For sustained economic development to occur, instrumental economic values must become intrinsic values within the cultural system. In the context of Guyana, this would take a major transformation.

It might be helpful to compare various attitudes that are on the one hand, present in development-resistant cultures, and on the other hand, development-friendly cultures. Below is an adaptation from Grondana's schema. This is not a template, nor is it intended to be conclusive. The purpose of the exercise is to put some ideas on the table to facilitate constructive debate about the future.

Development-Resistant and Development-Friendly Cultures

Adapted from Mariano Grandona, “A Cultural Typology of Economic Development,” in L. Harrison and S. Huntington, eds. Culture Matters. New York: Basic Books, 2000, pp. 44-53.

Cultural matters are always difficult to discuss. This is especially so because we all believe that our own national culture is interesting and exciting. In the western world, the major cultural planks are work, individual achievement, and patriotism. I myself consider the last of these the product of state induced hegemonization. The big question is this: What are the major cultural attributes in our part of the world? Are these attributes and the corresponding attitudes conducive to economic, social, and cultural development? If they are not, are we prepared to make some adjustments?

I began this article with a depressing description of the situation that obtains in the world. I also raised questions about our future direction. In a recent Conversation on the Future at Lilendaal, Guyana, President Jagdeo advanced a framework with three critical components, namely, wealth creation, wealth distribution, and justice. The president was keen on pointing out that we need to make some changes in Guyana. He was emphatic that the engine of prosperity lies in increased productivity. His own vision brings to mind a telling comment from Professor Porter of Harvard University. Porter wrote that “ [i]t does not matter if a country has an agricultural economy, a service economy, or a manufacturing economy. What does matter is a country's ability to organize itself effectively around the premise that productivity determines prosperity for the individuals of that country.”