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Pp-economic constraint on multi-iculti2
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Revised, but still very preliminary, incomplete references
Objections and suggestions still most welcome!
The economic constraint on multiculturalism: why Europe
should protect its Western institutional rules and values
(while avoiding racism and fascism)
Department of Institutional Economics, Prague University of Economics
In Europe, multiculturalism used to be welcome in the name of western
values of freedom and tolerance to diversity. But a growing controversy is now putting it in doubt. Some arguments against it are based on the values of patriotism and national identity. These, however, although able to attract strong emotions, are analytically weak, possible to reject as culturally relativist. Some non-relativist arguments build on the logical inconsistencies involved – such as tolerance of intolerance, or freedom for religions to oppress individuals vs. freedom of individuals. But the controversy is still far from settled.
This paper brings in another non-relativist argument that takes into account the effects
of cultures on economic performance. It starts with the well-known findings of institutional and developmental economics showing that cultures significantly differ in their effects on economies, and that the West grew rich largely thanks to certain ingredients of its cultures. It then examines in what ways these ingredients are now threatened by ingredients of other, economically less successful cultures, and by internal decay. To conclude, it briefly discusses properties of policies by which these key ingredients, without which the West would become poor again, might possibly be protected. But how to design and implement such policies is recognized to be a difficult question that is left open.
I thank the students of the course “Institutions, Evolution, and
Economic Policy” at the Prague University of Economics and the participants of the SNEEs 12th yearly conference in Mölle, Sweden, for helpful comments, and the Grant Agency of the Czech Republic for the support under grant 402/09/1991 for my research project on “Evolutionary Political Economy,” of which the last and so far the least advanced part is the topic of this paper. The usual caveat applies with emphasis.
In Europe, multiculturalism used to be welcome without qualifications in the name of
western values of freedom and tolerance to diversity. But a growing controversy is now
putting it in doubt. Some of the arguments against it are based on the values of patriotism and
national identity. These, however, although able to attracting strong emotions, are
analytically weak, possible to reject as culturally relativist. Non-relativist, analytically
stronger arguments refer to the logical inconsistencies involved – such as tolerance of
intolerance, or freedom for religions to oppress individuals vs. freedom of individuals. But
the controversy is still far from settled.
This paper brings in another non-relativist argument based on the effects of cultures on
the performance of economies. Compared to culturally relative values, economic
performance is indeed a more tangible basis of arguments. To be sure, there may be
disagreements on how the performance should exactly be measured. But most people appear
to have little difficulty in distinguishing rich economies, where individual efforts are
well rewarded, from poor ones, where hardly anyone can escape misery. This
distinction also clearly appears in the direction in which people try to vote with their feet.
The argument draws on several well-known findings of institutional and
developmental economics – in particular those by North and Thomas (1973), Rosenberg and
Birdzell (1986), and Harrison and Huntington (2000) – which it combines with some of the
author’s own views (Pelikan, 2010). Its basic claim is that cultures significantly differ in their
effect on the performance of economies, and that the West grew rich largely thanks to certain
specific ingredients – or, in Dawkins’s (1976) terminology “memes” – of its cultures.
The paper examines the threats to these memes from memes of other, economically
less successful cultures, and from own internal decay, and then raises the question of what
policies may be devised to protect these key memes, without which the West would become
poor again. Two broad strategies are found to be essential: imposing certain qualified
constraints on multiculturalism, and making the western populations more clearly aware of
how crucial for their continuing welfare these memes are. But how to design and implement
such policies is recognized to be a difficult question that is left largely open.
2 How cultures influence the performance of economies
Consider the following features of an economy:
(1) resource endowment, including human talents (potential
(2) terms of trade with nature and other economies
(3) formal institutional rules (codified law)
(4) informal institutional rules (socio-cultural norms)
(5) values (individual and social preferences)
(6) actual bounded
rationality (talents developed or inhibited by education)
(7) ornaments: music, dances, food, dresses, art .
Consider their classification into two intersecting sets: (I) factors of economic
, containing features (1) – (6); and (II) memes,
as ingredients of a culture,
containing features (4) – (7). All the important links between cultures and economic
performance stem from their intersection, that is, features (4) – (6), or, in other words,
economically relevant memes
. Their effects can be summarized as follows:
(4a) on the transactions among actual economic agents
(4b) on competition and selection, and thereby the qualities of the agents, and their
adjustment to their roles (e.g., resistance or tolerance to “competence-difficulty gaps”)
(5a) on individual objective functions (preferences, tastes)
(5b) on standards of moral, honesty, truthfulness, trustworthiness
(6a) on individual economic behaviors, the efficiency of using available resources
(6b) on socio-political behaviors, relationships with others and with institutional rules
But the remaining subsets remain important: not all factors of economic performance
are cultural, nor all memes matter for economic performance
. Undeniably, as usually
considered, the performance of an economy also depends on its resource endowments and
available terms of trade that have little to do with culture. Even formal institutional rules –
meaning codified laws – are not directly cultural: they can be dictated or imported. For them
however, cultures matter in two respects: (i) it depends on informal institutional rules to what
extent they will be voluntarily respected, and how strong formal enforcement they will
consequently require; and (ii) it depends on individual economic behaviors to what extent the
potential of formal rules – for instance, extended economic freedoms – will actually be
exploited. Note that in standard analysis, where all individuals are assumed perfectly rational,
always exploiting to a maximum whatever opportunities are offered to them, respect (ii) is
overlooked. This makes this analysis unable properly to explain the well-known fact that the
same institutional rules may lead to substantially different results in different economies.
The present use of the term “meme” calls for a clarification. Its main advantage is its
shortness. It is also becoming increasingly popular among social scientists (e.g., Blackmore,
1999, Blute, 2010). But care must be taken not to see in it an analogy to the concept of
“gene” – contrary to what Dawkins (1976) had in mind. To recall, he defined “meme” as any
unit of cultural ideas, symbols or practices that are being transmitted, and thus “replicate,”
from one mind to another. Memes and genes thus only share the abilities to replicate (to
which Dawkins limits his attention), but may substantially differ in how they instruct the
organizing and operating of their bearers. While all genes instruct, through the synthesis of
proteins, the forming and working of organisms, only some memes can be said to instruct the
forming and working of economies and societies. Memes thus logically correspond to any
segments of DNA, all of which replicate, but only some instruct, and only some of these are
genes. It is thus only the economically relevant memes, belonging to the above categories (4),
(5) and (6), that can be said to instruct the development and working of economies.
Here, however, this comparisons with biology need not be pursued any longer. It
suffices to note that a culture is understood as a set of memes, partitioned into two subsets:
economically relevant, or “instructing,” and economically irrelevant, or “ornamental”
(Pelikan, 2010). The former memes are those that influence the above-listed factors of
economic performance – that is, informal institutional rules and individual economic
behaviors. They may be exemplified by respect for property rights, sense of fairness, value of
knowledge, business ethics, truth-telling, trust, propensities for corruption, and ways of
dealing with conflicts. Examples of the latter memes are national costumes, food, music,
Admittedly, the boundary between the two subsets may not be entirely clear, and may
have to be shifted in light of new discoveries. For instance, some memes that at first appear
purely ornamental may turn out to have significant effect on economic performance – such as
food diets that may turn out to affect health and longevity, or religious rituals that may turn
out to disrupt production. Where precisely to draw the boundary is therefore to some extent
an open question. Its main lines, however, appear clear enough to make it useful in search of
the limits of admissible multiculturalism.
3 Economic differences among cultures
That there is a great variety of cultures that have been invented in, and spread across,
different human societies is rather obvious. Less obvious is how to classify them into well-
defined types and sub-types. This is indeed a difficult question which only competent
anthropologists, ethnographers and sociologists might properly answer.
Fortunately, however, no comprehensive typology of cultures is here necessary. As
the present interest is limited to their economically relevant memes, it is possible to classify
several otherwise quite disparate cultures into one category, provided they do not significantly
differ in these memes. It is also such a category that the term “western cultures” here denotes.
The adjective “western” is therefore symbolic, rather than geographic: the category may thus
include some cultures from the east and exclude some from the west.
The category is also strongly idealized. All of its economically relevant memes are
defined to have a “good” form – meaning one that allows them to help a given economy as
much as possible to perform well in given environments. Probably no real-world culture may
qualify to be its full member. It is rather that different cultures may acquire different degrees
of membership. This makes it also possible to accommodate the frequent objections that the
empirical dividing line between economically favorable and economically unfavorable
cultures does not cut between geographical west and geographical east: some Far East
cultures now clearly appear economically more favorable, and thus members to a higher
degree of what is defined here as “western cultures,” than some South-European cultures.
The question then is, why to call this category “western”? Good reasons appear
possible to find in history. As can be understood from North and Thomas (1973) and
Rosenberg and Birdzell (1986), most of the good memes have their origins in Western
Europe, and some of those needed for realization of technological innovations and the
development of industries more narrowly in its northern parts.
To identify and list all the good memes is of course impossible – not only because of
the lack of space in this paper, but because not all of them are fully and reliably known.
Modern institutional economics has undoubtedly answered many questions about them, but
even more questions still remain to be answered. Here it is possible only to offer a very
rough, incomplete, and possibly not even entirely correct sample, which appears possible
usefully to order with the help of the four above-listed categories of economically relevant
The main common property of good (4a)-memes appears to be that they minimize
transaction costs. They can be exemplified by highly respected property rights, strong
informal pressures for truth-telling and the fulfillment of explicit and implicit contracts, and
social norms for solving conflicts in calm by peaceful negotiations. It is about this category
that modern institutional economics has learnt most.
The good (4b)-memes are all those that help the economy to select the right persons
for the right positions, and thus organize efficient, flexible, and to productive innovations
open markets, firms and industries. Examples are social norms for fair competition together
with strong informal incentives for taking part in it, including public appreciation of the
winners and maintained dignity for the losers. Human rights with extensive individual
freedoms also appear to be of prime importance in this context. The economic impact of (a2)-
memes is much less explored than the one of (a1)-memes. To learn more about it,
institutional economics and the economics of industrial change would have to cooperate with
each other more closely than they have done so far.
What the good (b1)-memes should do may be described only very approximately, with
many open questions. It appears safe to say that they should make individuals seek some of
their happiness in enriching themselves while also enriching, and not impoverishing, others.
But this also requires tolerance to others’ enrichment. The problem is that the wealth of one
person often appears to have negative external effects on the happiness of other persons –
because of feelings that may be called “social justice,” “relative status,” or just “envy.” As is
now being discovered in the new field of behavioral economics, such feelings are widely
spread across all cultures. But industrial dynamics and economic development cannot work
without relatively large differences in wealth and income. One task of the good (b1)-memes
must therefore be to maximize the tolerance to such differences, especially if these are due to
differences in merits rather than chance. Note that the well-known Ultimatum games only
indicate people’s tolerance to the latter, but not to the former.
Among the good (b2)-memes, perhaps the most important ones are those that lead
individuals to rational reasoning based on facts, rather than superstition or blind faith, to
corresponding education for themselves and their children, and to search for scientific
knowledge, in both the natural and the social sciences, as well as – and here is a key historical
advantage of the West – for practical applications of this knowledge.
As admitted, all this may be only a very incomplete and very inaccurate description of
the memes thanks to which the western world “has risen” in the words of North and Thomas
(1973), and “grew rich” in the words of Rosenberg and Birdzell (1986). But whatever their
correct and precise description might be, they must be recognized to exist, be valuable, and
5 The two main dangers
To think of any defenses, it is important first to realize the dangers. Those that
threaten the good memes of the western culture can be divided into (1) exogenous, coming
from economically inferior memes of other cultures, and (2) endogenous, coming from own
Much of type (1) danger is connected with the immigration of labor from poor
countries. While economists usually limit attention to the positive effects of its quantity, it
sometimes also brings with it some economically relevant memes which are among the prime
causes of the poor countries’ poverty. Examples are low respect for property rights, great
differences in loyalty and trust between insiders and outsiders of families, reason-blackening
hatred of other religions and cultures, rules of honor that foster lasting inter-family conflicts
and/or intra-family oppression, soft constraints on corruption, and hard constraints on
education opportunities for women, which both waste their talents and lower the quality of
The tendencies to internal decay appear to have two main sources. First, probably in
all cultures, the inter-generation copying of memes is typically far from perfect. As has often
been observed, young generations are not always very willing to adopt the memes from their
parents without more or less extensive modifications (“mutations”) – although, as has also
been observed, they typically end up by departing from their parents’ memes less than they
The second source is more specific to the western culture. The very prosperity to
which this culture has lead appears to have on many young westerners negative effects. Many
of them appear to take the prosperity for granted, which tends to decrease their motivation to
educate themselves and engage in productive activities, and to turn instead to unproductive
leisure, in the worst case combined with drug addiction. These tendencies may be
strengthened by the increasing dependence of economic prosperity on complex technologies,
with increasing demands on education and talents, that more and more of today’s young
westerners appear to find difficult to meet and/or not be worth their interest.
As some of these uninterested and/or uneducated young people are children of
immigrants, the two dangers may cumulate, increasing the strength of each other.
6 What policies may help?
First, it must be soberly admitted that the search for feasible policies that could
effectively defend the economically advantageous memes of western cultures might be vain:
such policies may no longer exist. Perhaps, human societies are doomed by evolutionary
forces working above their heads to repeat periods of enlightenment and relative prosperity
with periods of dark ages and widespread misery. But it would be foolish to give up the
defense too early. So, even without any illusions about the chances of success, the search is
still worth conducting, and is in fact the only hopeful strategy actually to adopt.
The policies sought should fulfill two main tasks: (1) to impose certain qualified
constraints on multiculturalism, and (2) to make the western populations in general, and the
Europeans in particular, more clearly aware of how crucial for continuation of their relative
welfare certain memes of their cultures are.
The first task is a delicate one. The main difficulty is, how to design and enforce any
constraint on multiculturalism while steering clear of all forms of fascism and racism, which
would violate many of the very values that the constraints are intended to protect. It is indeed
an unfortunate paradox that many of the actual defenders of western civilization are not very
civilized themselves, while most of the more civilized part of the western political spectrum,
because of false political correctness, entirely avoids the problem.
In search of the constraints, the key is the above-introduced boundary between
economically relevant and ornamental memes. The constraint may, and indeed must, be
limited to the former. To welcome ornamental multiculturalism is indeed one of the
conditions for avoiding fascism and racism, and for minimizing any feelings of hostility that
such constraints may arise. Another necessary condition is to adopt a strictly individualistic
approach to immigrants, not to discriminate against the many of them who are keen to learn
and adopt the economically relevant memes of the host country.
The policies for realizing the constraints would probably have to focus more on
education than interdictions – although the two may have to be combined by interdicting
education programs that impair, rather than develop, critical rational thinking, and by obliging
all immigrants who wish to stay to let their children get the full western education, including
biology and sports for girls. But the exact form of such policies is far from clear.
It is important to emphasize that the constraints are religion-neutral. While they may
have to soften the religious commandments that blatantly violate economic efficiency, such as
the interdiction of loans with market determined interest, even this is largely religion-neutral:
such an interdiction exists in most of today’s main religions, differences only are in the ways
developed to get around it. Although some religions may appear to be more conducive to
literacy, initiative, work moral and rational economic calculus than others, there is no
deterministic link. For example, to make a little allusion to Max Weber, one definitely need
not be Protestant to be a highly productive member of a western economy.
Education also appears to be the main ingredient of the defense against internal decay.
A major part of the problem is that far from all Europeans understand the fundamental
dependence of their relative prosperity on the western institutional rules and values. But to a
large extent, this is also the fault of modern economic research. Only a small part of it may be
seen to search for a good understanding of this dependence, and only few of the results
obtained so far are sufficiently clear to help the education of European voters and politicians.
To search for more of such helpful results is thus one of the socially most useful tasks which
economists should put high on their agenda.
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Blute, M. (2010), Darwinian Sociocultural Evolution, Cambridge University Press: Cambridge.
Dawkins, R. (1976), The Selfish Gene, Paladin: London.
Harrison, L.E and S.P. Huntington (2000), Culture Matters: How Values Shape Human
North, D.C. (1990), Institutions, Institutional Change and Economic Performance, Cambridge
North, D.C. and R.P. Thomas (1973), The Rise of the Western World, Cambridge University
Pelikan, P. (2010 online and forthcoming), “Evolutionary developmental economics: how to
generalize Darwinism suitably to help comprehend economic change,” Journal of
Rosenberg, N. and L.E. Birdzell (1986), How the West Grew Rich, Basic Books: New York.
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