admin's picture

By Papalii Dr. Failautusi Avegalio and Dr. Jerry Glover

HONOLULU, Hawai‘i (April 4, 2001 - Fiji’s Daily Post)---Edward Schumaker, in his classic, Small is Beautiful, provides valuable insights for Fiji’s leaders as they face a task of rebuilding. "Economics is so concerned with counting and itemizing that it has lost sight of the one component, almost immeasurable, that makes all economic activity possible: human relationships. Behind every economic transaction are people making choices, acting on their values giving one thing high priority, another one low.

All the same, such countries invariably assume that they can model their economic development plans in accordance with modern (Western) economics, and they call upon modern economists from so-called advanced countries to advise them, to formulate the policies to be pursued, and to construct the grand design for development, the Five-Year Plan or whatever it may be called. No one seems to think that a Buddhist way of life would call for Buddhist economics, just as the modern materialist way of life has brought forth modern economics.

Economists themselves, like most specialists, normally suffer from a kind of metaphysical blindness, assuming that theirs is a science of absolute and invariable truths, without any presuppositions. Some go as far as to claim that economic laws are as free from "metaphysics" or "values" as the law of gravitation.

Lester Thurow, a well known economist and MIT professor, describes the influence of national cultures on economic models in an article entitled "Who Owns The Twenty First Century?" He presents two contemporary versions of capitalism, which are operating in today’s global economy, the individualistic, British-American form, and the communitarian German and Japanese versions of capitalism.

America and Britain trumpet individual values: the brilliant entrepreneur, Noble prize winners, large wage differentials, individual responsibility for skills, ease of firing and quitting, profit maximization, and hostile mergers and takeovers. Germany and Japan trumpet communitarian values: business groups, social responsibility for skills, teamwork, firm loyalty, industry strategies, and active growth-promoting industrial policies. Anglo Saxon firms are profit maxi misers; Japanese firms play a game that might better be known as "strategic conquest" - they are more focused on market share than on profit. These different versions of capitalism have profound effects on everything from labor relationships to public education.

Thurow does not feel that the individual model of capitalism is wrong. He does state that there is more to human nature than individualism and the desire for consumption and leisure. He also believes that humans are social builders who work for more collective goals.

We add a third type of contemporary capitalism, which we label "government directed." Government directed capitalism is typical for the economic "dragons" of South East Asia. South Korea, Taiwan, the People’s Republic of China, Singapore and other nations in that region have evolved into the capitalist world by a different path. For example, in Singapore, their success has come from an economic development plan in the last several decades that was strongly controlled by their government.

Singapore is a globally competitive nation with an adaptive cultural blend of competencies, capabilities, and strategies. In the 1960s the leadership of Singapore was faced with ethnic clashes, the need for economic development, and other problems faced by ex-British colonies. Using the principles of Confucianism, Lee Kwan Kew forged a highly successful model for government and business that is appropriate for Singapore’s people and environment. Concepts of social order, balance and benevolent autocracy have become the foundations of both government and corporate cultures. It has a highly skilled workforce, low crime rates, sustained economic success, and has avoided cultural traps of the past (while using positive elements of the past to develop its national and organization infrastructure).

Singapore, Malaysia, Japan, Germany and China have all developed capitalist economies, yet maintained their cultural assets. What do these nations all have in common? Leaders recognize that are many models for creating wealth in the global economy.

They did not "sell out" their cultural heritage to become capitalists. They have consciously developed models for economic development that take advantage of their cultural strengths. They recognize that the management and organizational approaches that worked elsewhere may not be of any value in their nation.

Which economic ideology will prevail in the Twenty First Century? The answer will be found in the adaptive abilities of each economic development model. In the global community, the rules for marketplace success, technology integration, and social responsibility are in a constant state of flux and change.

Past success is not a predictor of future success in the rapidly changing context of our contemporary world. The economic development models that survive will be the ones that have been the most adaptive in serving the needs of their stakeholders.

Charles Hampden-Turner and Fons Trompenaars, in The Seven Cultures of Capitalism, explain the importance of stakeholder values in economic development. "Wealth creation requires, at a minimum, that an organization successfully originate and bring to market products and services and that all groups who share these processes work together energetically and effectively... the specific way that any group accomplishes this has everything to do with the values they bring to their work."

Papalii Dr. Failautusi Avegalio and Dr. Jerry Glover of the University of Hawai‘i and Hawai‘i Pacific University respectively. Views expressed here are their personal views and not necessarily that of the universities they represent or that of the Daily Post.

Rate this article: 
Average: 2 (1 vote)

Add new comment