Capitalism and culture drive the systems

05 August, 2012

The successful growth stories outside the West have huge American and other Western share. People need to be more data-conscious in order to fully understand the reality. Cultures, if not adapted in tune with Western ones, would not be successful.

FAREED ZAKARIA, in an article, titled “Capitalism, not culture, drives economies” in The Washington Post on August 2, 2012, reacts to remarks made by Republican Presidential candidate Mitt Romney in Israel during his three nations’ visit as part of the campaign. Mr. Romney said that economic differences between Israel and Palestine are due to their cultural differences.

Mr. Zakaria writes that if cultural differences were the dominant reasons then China, India and Japan would not have grown that much; their cultures different from the Western cultures. He writes that since 1980s, China began to industrialize three times faster than the West. What changed was not China’s culture but its economic policies, embracing some elementary form of capitalism. The same is true of India and Japan. He also writes that many people believe that African and Islamic cultures inhibit economic development. But Turkey and Indonesia, both Islamic countries, would be the next to achieve GDP of 1trillion USD. Of the 10 fastest growing economies in the world, 7 are Africans. According to Zakaria, culture is important but it changes.

The arguments given by Mr. Zakaria are not the full arguments. He deliberately selectively presents half the argument and does not complete them. True, capitalist model of economy is the best model for the growth but it is the West which has invented it. As far as the argument that China, Japan and India are growing in spite of their culture being different from the US and European part of the West, is true but not without American help and not without they tuning-in their societies in Western way. Anglicization and Westernization are the inevitable result of the ongoing integration of Indian and Chinese economy with the rest of the world. Japan is anyway part of the West.

Anglicization and Westernization do not imply simply learning European languages, wearing their clothes and taking Western food; the bloated nationalism, disproportionate hopes and high consciousness driven world is the result of the Anglicization and Westernization in the Rest. People in the Rest with increasing economic success would tend to equalize themselves with the people in the West and this wish to imitate, could create bubbles and if proper policies are not followed then it could lead to future conflicts.

As far as the BRICS, African and other growth stories are concerned, the US has a big share there. The fact is that liberalization, globalization and integration help those countries which seek investment but it is still derivative growth. In these countries’ GDPs, the big share belongs to the American and other Western companies. Many a time it is only a choice of data-showing. These Western companies do business, form joint ventures and invest in those countries, in other countries and can reinvest back in the US and in the rest of the West.

But the products and primary capital belong to the parent companies. The American companies must be holding huge accounts in Yuan, INR and other local currencies. The US does not have trade deficit with China as far as products and service are concerned; only thing is that American companies sell their products made in China in the US labeling them as the products of China. May be, the Americans are buying a lot of Chinese natural resources. So while on paper the Chinese companies export, in reality it is the American companies which re-export to the US, sometimes at a lower price.

Expansionism requires second-producing capabilities as the US can not produce everything and export them to the rest of the world; the cost may be prohibitive, it may have to take huge number of immigrants who can destabilize the politics and spoil the society, and more importantly, psychologically people would not accept products if all of them are exclusively made in the US. The second production capabilities satisfy the demographic aspirations of the BRICS people in the distributive sense; it help maintains socio-political stability and contains the un-required demands for higher immigration. One day the prices of the products that American companies made in the BRICS which they sale it back to the US would be competitive, but still those companies can not produce them in the US as the functionalities of the people would change and Americans would like to produce only high-tech products and keep finance with them, other than producing for themselves and for elites all over the world. Moreover, if the Chinese Central Bank buys tens of billions of American debt, the UST should be buying much more in Yuan.

The fundamental point is that a country needs to create technologies and products themselves in order to earn primary capital. By becoming secondary producers one can not beat first producers. Ever increasing immigration to the West is the pointer that it is most viable economy. Those among Westerners who think that by letting their products labeled as those of the BRICS and by inducing second stage of illiteracy they serve their purpose more are only partly correct. The fact is that one day pubic and governments of investing countries and those of the host countries would come into conflict with each other. Increased consciousness and failed hopes would be one of the reasons. The world would show branching then; newer investments leading to the newer conflicts and world order breaking down. It is a high time that the world adjusts non-economic inflation to correct level and the West accepts that it is almost irreversibly dominant.

There is nothing wrong in what Mr. Romney said in Israel. Only thing is that he should be a bit more sympathetic with Palestinians. Continuing the march towards increased capitalism is indeed the required ideology in the US and in the rest of the West and only Mr. Romney can provide it. As long as Mr. Romney insists on capitalism, Westernism and Whiteness without appearing too choosy and classy, the likelihood of he winning the race is higher. This election victory for Republicans, if it happens, would be watershed in deciding the evolution of politics all over the world, particularly in the Europe.

The Right would return and so would be the ideology. As a consequence, the ideologies may takeover interests in many parts of the globe along with increased economic activities with de-Anglicization and de-Westernization. Mr. Romney, if he wins his first term and hypothetically wins the second term would increase the localism and people would adapt their lives in their own way, learning from the West; universality would be localized and convergence would be multi-branched, designed and wished .

Therefore, while capitalism is indeed the driving force for economic strength it can not be fruitful without non-Western people in some way adapting their cultures with the Americans and other Westerners. De-Anglicization and de-Westernization is possible as reactions to victory of political Right in the West, particularly in the US. They are useful only if the US provides supplementary theories and accepts that localized universalism is the right thing. Otherwise, the distance away from American and Western cultures in the BRICS would not only lead to future conflicts but also to exhausted and nullified hopes. The West is the dominant culture and the Rest can only maintain local cultures while embracing high growth with the Western consent.