Economic Culture and Economic Performance: What Light Is Shed on the Continent's Problem?

Abstract

Enlightenment thinkers, from Smith and Hume on to Kant and de Tocqueville, all took it for granted that a society’s culture – the people’s values, attitudes, morals and beliefs, many of them learned at their mother’s knee – mattered for the effectiveness of business life and, more broadly, the realization of the society’s potential. The Enlightenment is often caricatured as the doctrine that a society eschewing superstition and taboos and embracing reason and individual opportunity will with time attain perfection of its possibilities. Notwithstanding various dissenters, including Marx, who took culture to be a function of the economy’s structure rather than the reverse, the Enlightenment view on the influence of a nation’s culture remained prevalent right through the “Protestant ethic” in Weber (1905) and the “entrepreneurial spirit” in Schumpeter (1911). One could imagine their running regressions of intercountry differences in economic performance on differences in the culture, particularly the economic culture.