World 3.0

by Pankaj Ghemawat

  Beyond cultural innovation, a culture of openness also brings another source of gain whose importance is often overlooked: the diffusion of new technologies, knowledge, and ideas. With its us-versus-them logic, World 1.0 thinking doesn't address diffusion very much, because national societies are seen as largely self-contained and “safe” behind national boundaries. And World 2.0 takes it for granted that diffusion happens automatically and effortlessly in an unbounded world.

  The truth is that diffusion doesn't happen automatically—but when it has happened at certain key moments in history, it has exposed societies to new knowledge and greatly enhanced human welfare. Many people in the West have a negative view of China today, but a thousand years ago Europeans benefited immensely from the introduction of Chinese technologies such as the compass, the wheelbarrow, and movable type. Similarly, during the Middle Ages, Arabs brought mathematics to the West from India, helping fuel the scientific revolution. As Amartya Sen has observed, “Europe would have been a lot poorer—economically, culturally, and scientifically—had it resisted the globalization of mathematics, science, and technology.”12

  In a specifically cultural context, diffusion can be fruitful in another way as well: by helping preserve what is being diffused. Consider a contemporary example of cultural diffusion, from the West to China. Interest in Western classical music has been dwindling in countries such as the United States for decades now. China, however, seems headed in the opposite direction with its 30 million piano students and 10 million violin students, prompting some to credit it with “saving” the genre.13 And Western classical music has also led to innovations in Chinese music: according to one expert, “The whole revamped approach to traditional Chinese music is based on Western sonic ideals.”14

  Finally, even when there is cross-border displacement of a traditional culture, that may still offer some gains because not all elements of that culture may be worth preserving. The caste system in India provides an example—one that Karl Marx had in mind when he offered a curiously mixed impression of the effects of English colonization:

  English interference … dissolved these small semi-barbarian, semi-civilized communities, by blowing up their economical basis, and thus produced the greatest, and to speak the truth, the only social revolution ever heard of in Asia. Now, sickening as it must be to human feeling … we must not forget that these idyllic village-communities, inoffensive though they may appear, had always been the solid foundation of Oriental despotism, that they restrained the human mind within the smallest possible compass.15

  Having discussed the gains that accrue from cultural exchange and openness, we also need to acknowledge that some cultural losses are possible. Openness seems to render some cultures vulnerable to extinction, especially small, economically marginal cultures that typically exist at the subnational level. But some aspects even of a threatened culture may be more robust than others. Cuisine and music, for example, have the potential to achieve niche status, contributing even on a very small scale to the variety of available options. In such cases, certain kinds of connections with the outside world—for instance, trade—can help maintain or even revitalize a traditional culture, albeit in possibly modified form. Language, on the other hand, is harder because it is subject to network externalities, so its value declines sharply as the number of speakers falls.

  Let's focus on the hardest possible case, in which a traditional way of life might be sustainable if a community remains isolated, but not if it is connected. Suppose you're a member of a subsistence culture, and all of a sudden you encounter a modern welfare state that funds subsistence with generous cash handouts. In such a situation, would you want us to keep your community isolated in the interests of preserving diversity across the world? Many have argued forcefully against this, and the philosopher Kwame Anthony Appiah has gone so far as to see attempts to preserve “authentic” traditional cultures as a form of injustice and servitude levied on people who, by no choice of their own, are members of those cultures. Appiah notes that in any case, “authenticity” is illusory, since cultures are inherently in flux; judging something “authentic” reflects more what we as elite, outside observers value about a culture than what an insider values. We might try to pay homage to a traditional culture by “saving it,” but really we are only making our own cultural statement on the backs of those who actually have to live in a traditional culture, and who very well may want exposure to “modernity.”16

  One way to assess such hard cases is to see them as, in effect, extreme examples of a trade-off that often exists between widening an individual's cultural options via globalization and keeping national cultures diverse. Tyler Cowen evokes this trade-off in his book Creative Destruction when he argues that trade tends to increase the diversity of choices available to individuals within countries even as it decreases the cultural differences across national borders. And Appiah is clear about how he would resolve this trade-off, even in hard cases: in favor of the individual.

  Appiah's position draws on widespread (although by no means unanimous) agreement that development is or should be about broadening and deepening individuals' capabilities, which requires maximizing both physical and intellectual/cultural choices available to individuals. It's worth noting that liberalism in general is consistent with this view. The concept of a “marketplace of ideas,” for instance, sees human progress as drawing on an intellectual market in which the best answers to a problem arise out of an articulation of and competition among the largest number of possible answers.

  A further argument for cultural enrichment at the individual level goes beyond instrumentalism and even expansion of choices to encompass something that might be called appreciation of choices. Whatever else diversity and openness are good for, they are inherently valuable because they enrich human experience. In Sanskrit literature we find the story of the well-frog who lived in a well and had never been outside its confines. The frog's entire worldview, in other words, concerned the well, and it remained suspicious of life outside. This cautionary parable suggests that seclusion impoverishes us as human beings, and that there is something intrinsically enriching about having a broader outlook on the world. From this perspective, diversity and difference are worth nourishing in their own right, quite apart from any other effects they may have on human social and material progress.

  The Fear Factor

  Despite all the potential gains from cultural exchange described in the previous section, the evidence from the section before that one suggests that most of what is dear to us culturally isn't about to go away because of globalization. Some of this is due to differences in values or, more simply, preferences that reflect conditioning and are therefore hard to change. As the Greek historian Herodotus wrote in the fifth century BC, “If anyone, no matter who, were given the opportunity of choosing from amongst all the nations in the world the set of beliefs which he thought best, he would inevitably, after careful considerations of their relative merits, choose that of his own country. Everyone without exception believes his own native customs, and the religion he was brought up in, to be the best.”17

  The point of this section is that such differences in values or preferences don't seem to be all that come into play. The Swiss minaret controversy, for example, suggests something very different at work. There are only four mosques with minarets in the whole country, and they have long been prohibited from using loudspeakers to issue the traditional call to prayer due to noise pollution laws. Moreover, Switzerland has long prided itself on its ability to integrate immigrants, who comprise 20 percent of the population—while Muslims make up only 5 percent.18 Clearly, the movement to ban new minarets was motivated by deep-seated insecurities rather than a rational consideration of cultural threats—and of damage to Switzerland's image and influence around the world, particularly in Muslim countries. Proponents of the ban played on these insecurities by warning of “the possible introduction of Shariah law in Switzerland” and producing provocative poste
rs such as the one shown in figure 11-1, in which the Swiss flag bristles with black minarets.19

  I've picked on the Swiss, but irrational insecurities in the face of exposure to foreign cultures are widespread and manifest themselves not merely as assertions of the superiority of one's own culture, but also in the form of disparagement of foreigners' cultures. Consider figure 11-2, based on survey data from around the world, which maps perceptions of cultural superiority against perceptions of the need for cultural protection.20

  Figure 11-1: Swiss poster depicting minarets as missiles

  Source: Poster campaign at Zurich train station, November 2009 (© Naeem Mohaiemen/Shobak.org).

  In the bottom left-hand corner of the chart, we find countries with little sense of either cultural superiority or a need for protection, and in the top right-hand corner, countries with a strong sense of cultural superiority and fear of foreigners. By these measures, Swedes appear pretty laid-back about foreigners—or were back in 2007—whereas Indians, to my dismay, are not. Overall, we find high levels of belief in cultural superiority (with two-thirds support in the median country) and in the need for cultural protection (with three-quarters support in the median country). The two are obviously related; in fact, the correlation coefficient between perception of cultural superiority and need for cultural protection is a lofty 0.68.

  The correlation is a curious one: if people think that their culture really is superior, one might not expect them to clamor for cultural protection. Economic well-being (or lack thereof) seems to play a role: the four countries in the Pew sample that score highest on self-perceived superiority are, in decreasing order, India, Indonesia, Tanzania, and Bangladesh; the ones that score lowest are, in increasing order, Sweden, Britain, France, and Germany. What we seem to be seeing here is cultural insecurity rather than aggressiveness—which is good news when it comes to the prospects for confidence-building measures of the sort discussed later in this chapter and in chapter 15.

  Figure 11-2: Cultural concerns

  It's hard to analyze fear of foreigners and foreign cultures directly, but we can do so indirectly by considering levels of trust. Whole books have been written about how country-level measures of trust relate to other factors.21 Trust falls when “bads” such as the Gini index of economic inequality and corruption indices rise, and trust rises with increases in “goods” such as indices of openness of markets and of globalization, Internet usage, economic growth rates, education spending, transfer payments from rich to poor, democracy scores, and postmaterial values.22

  For our purposes, though, it makes more sense to look at the geography of trust rather than at how much trust in strangers exists in one's own country. Different data are required, involving measures of trust between country pairs (bilateral measures) rather than country by country (unilateral measures).

  The best data available come from Eurobarometer surveys that measure trust among citizens of different countries, mainly within Europe.23 Surveys in sixteen West European countries asked people whether they trusted their countrymen, the citizens of the other fifteen countries, and people from some East European countries, Japan, the United States, and China “a lot.”24 The results are reported in figure 11-3.

  Several interesting patterns are evident in the data underlying the figure. First, people trust their fellow citizens much more than they do foreigners. Thus, 57% of Germans reported trusting other Germans a lot, while only 26% reported trusting Swedes, the next highest country listed. Of course, there are exceptions to this rule, of which Italy is the most conspicuous example. Italians reported generally low levels of trust in their fellow citizens (19%) as well as citizens of all other countries in the sample (11%), but they did trust the Swiss and Japanese a bit more (26% each).

  Figure 11-3: Levels of trust

  Source: Survey conducted by the European Commission among all European countries to measure trust, 1996.

  At the other extreme, the data indicates that Swedes (and to a lesser extent, other Nordic countries) tend to be the most trusting overall (40%). What's especially striking is that this country, which as we've seen is the least superior/defensive about its own culture, is also the most trusting and well trusted itself. A more general pattern is evident here: for the fifteen countries (twelve European) for which all the data are available, the correlation coefficient between levels of trust earned and self-reported cultural superiority is -0.83 and between trust and the reported need for cultural protectionism is -0.85!

  The case of Sweden—and other Nordic countries—also illustrates a general correlation between trust extended and trust earned; these countries tend to rank high on both dimensions. What this suggests is that people from Nordic countries may simply be less prone to unreasoning fear of the “other.”25 But that said, the election of an anti-immigrant right-wing government in Sweden in 2010 is also a reminder that Swedes aren't perfectly fearless either.

  In thinking about trust, it's helpful to move beyond a dichotomy of trust in fellow citizens versus trust in foreigners. In the Swedish example, the data indicate differences between trust in fellow citizens (64%), in other Nordic countries (63%), in the remaining European countries in the sample (40%), and trust in all other countries (29%). This pattern, along with the data in figure 11-3, starts to suggest that trust is also subject to the law of distance: in terms of the CAGE framework, the other Nordic countries are very close to Sweden, and even non-Nordic European countries are much closer than the non-European countries in the sample, which include Japan, China, and the United States. The determinants of variation in how much citizens of one country trust citizens of other countries will be discussed later in this chapter.

  It is also interesting to take a look at some other countries that are highly trusted—and those that are not. Switzerland, presumably benefiting from its proximity to the EU-16 as well as a general reputation for probity, ranks highest in terms of general trust earned (34%), and Japan also fares relatively well (19%). But those are the only above-average performers of the “other countries.” The remaining fall below this subgroup's average trust level of 12 percent. Turkey was the least-trusted country in the sample; only 7 percent of respondents from the EU-16 countries reported trusting the Turks. Since these numbers were collected in 1996, and since mutual impressions seem to have declined since then, these data represent an early indication of the difficulties Turkey has faced in finding acceptance within the EU.

  Looking at trust levels, then, affirms that cultural biases can have concrete administrative and economic implications. More broadly, differences in how much people in a given country trust people in other countries greatly affect cross-border interactions. Statistical studies suggest that moving from lower to higher levels of bilateral trust can increase trade, direct investment, portfolio investment, and venture capital investment by 100 percent or more, even after controlling for other characteristics of the two countries.26

  I should add that most of these data are for Western Europe, a region where nationalism has been more or less held in check, and where countries have pursued formal administrative integration to an extent unparalleled in other regions. This region is also relatively well educated, which tends to raise general trust levels. Chances are, then, that in other countries, trust in foreigners is likely to be lower than in figure 11-3, and the fear factor higher.27

  Excess Xenophobia?

  We have seen that modern Europeans, enjoying peace and prosperity, still trust foreigners less than their fellow citizens, and many harbor deep-seated cultural fears. Fear of foreigners, or xenophobia, must be taken seriously, despite its more absurd manifestations such as the Swiss minaret ban.

  Xenophobia may have been adaptive back in World 0.0 in the evolutionary sense of helping our ancestors survive and pass on their genes. Thus, xenophobia has been linked to disease avoidance based on the observation that outsiders were more likely to carry pathogens to which a given population lacked antibodies.28 This fear of foreigners as carr
iers of disease is the basis for slurs like “Jewish vermin” and “Tutsi cockroaches” as well as for “ethnic cleansing” as a euphemism for genocide.29 The deep roots of xenophobia are also reflected in the fact that related behaviors have been documented in a wide variety of animal populations, and that human infants as young as three months old display fear of strangers without ever having had negative contact with them. Such findings lead some to theorize that genetic factors contribute to fear and hostility toward people who are different.30

  Game theory also provides rationalizations for xenophobia or, conversely, favoritism toward members of one's own group. Among the simplest rationales is that interactions with fellow group members are more likely to be repeated than one-off, facilitating cooperation rooted in reciprocity. In the absence of any other constraints (think World 0.0), it could make sense to take advantage of strangers (but not fellow group members), based on the assumption that you'll never meet them again. More recent research by Robert Axelrod and Ross Hammond has shown that “in-group favoritism can overcome egoism and dominate a population even in the absence of reciprocity and reputation, and even when ‘cheaters' (mimics) need to be suppressed.” Their model also indicates that “competition with outgroups helps promote harmony of ingroups” even without agents who have sophisticated cognitive abilities.31