The Geography of Thought

nisbett_coverThe Geography of Thought from Richard Nisbett shows that East Asia and the West have had different systems of thought, including perception, assumptions about the nature of the world, and thinking processes, for thousands of years. Ancient Greek philosophers were “analytic” — objects and people are separated from their environment, categorized, and reasoned about using logical rules. Psychological experiments show the same is true of ordinary Westerners today. Ancient Chinese philosophers and ordinary East Asians today share a “holistic” orientation — perceiving and thinking about objects in relation to their environments and reasoning dialectically (focusing on contradictions, change and relationships), trying to find the Middle Way between opposing propositions. Differences in thought stem from differences in social practices, with the West being individualistic and the East collectivist.

There are strong social-psychological differences between East Asians as a group and people of European culture as a group. East Asians live in an interdependent world in which the self is part of a larger whole. Westerners live in a world in which the self is a unitary free agent. Easterners value success and achievement mostly because they reflect well on the groups they belong to, whereas Westerners value these things because they are badges of personal merit. Easterners value fitting in and engage in self-criticism to make sure they do so. Westerners value individuality and strive to make themselves look good. Easterners are more sensitive to the feelings of others and aim for interpersonal harmony. Westerners are more concerned with knowing themselves and are prepared to sacrifice harmony for fairness. Easterners are more willing to accept hierarchy and group control, whereas Westerners prefer equality and personal development. Asians are more likely to avoid controversy and debate.

Nisbett discusses a range of studies that underwrite these differences.  Asians detect more elements in an environment, whereas Westerners tend to focus on the dominant object (left figure).  Westerners are more likely to classify the cow and chicken together (focus on object classification), whereas Asians group the cow with the grass (focus on relationship).

 

These differences already characterized differences between the Greeks and ancient Chinese. Greeks focused on agency, logic, individual objects and decontextualization. Confucianism and Taoism stressed complexity, constant change, harmony, interpersonal relations and relations of objects with their environment. Children’s education plays a role in perpetuating these differences, as well as differences in the structure of languages.

The preference of Westerners for classifying objects and of Chinese for seeing relationships is reflected in their languages. East Asian languages are highly contextual with words having different meanings depending on their context. East Asian children learn verbs as easily or more easily as nouns, in contrast to Western children.

A preference for logic with Westerners may sound contradictory to the superior achievements of East Asians in international maths and science tests. Nisbett gives following explanations:

1. East Asians don’t have trouble with understanding logical principles, but are less likely to use them in daily life.
2. The Asian superiority is quite recent, with traditional Chinese and Japanese culture focusing on arts, literature and music
3. Asian teacher training is better, with more continuous teacher professional development and fewer teaching hours for Asian teachers
4. Asian students work harder than their Western counterparts, partly due to a stronger belief that success is the result of hard work (growth mindset), rather than innate ability (fixed mindset)

Additionally, there are two major advantages of Asian cognition: first, Asians see more of a given scene or context than Westerners do and, secondly, the holistic, dialectic, Middle Way approach to problems. IQ tests that are used across cultures should therefore not use words. Advantages of the Western cognition are more openness to debate and peer review and less respect for hierarchy.

Globalisation causes a convergence of Eastern and Western values. Eastern parents enroll their children in debate camps and Westerners discover the virtues of Eastern philosophies. Nevertheless, differences are likely to remain for a while.

The Globalization Paradox

Rodrik is a globalization skeptic in the line of Ha Joon Chang. He is not against globalization, but put the mantra of free markets into perspective. Rodrik spends a considerable part of his book on the history of globalization. He focuses on 2 periods of strong globalization.  The first one, between 1820 and the First World War, the increase in global trade was based on imperialist policies, thereby forcing other countries to open their markets and accept unfavorable trade treaties (globalization by gunboat), and on the gold standard, which works fine as long as you don’t have a democracy to prevent the painful internal devaluations that are needed from time to time.  The globalization drive after the second world war was based on the Bretton-Woods system and the General Agreement on Tariffs and Trade (GATT) within a multilateral world order, guaranteed by the US (dollar-exchange standard).  These are the precursors to the World Trade Organisation (WTO), founded in 1995, but are based on different premises. Bretton-Woods and GATT respect the primacy of the nation-state limiting the reach of globalization where it creates conflicts with nation states.  In contrast, the WTO aims towards hyperglobalization, even when it has negative consequences for nation states (e.g,, agriculture, food regulations, financial services) or undermines democratic decision-making within nation states.  Recent economic success stories such as China and South Korea are due more to playing by the Bretton-Woods rules than WTO rules, relying on export subsidies, import tariffs and weak enforcement of intellectual property laws.

Rodrik sees a fundamental trilemma between globalization, nation states and democracy.  You can have two, any two, but not all three. If you want globalization and democracy, you need global institutions, undermining the nation-state.  If you want nation states and democracy, you can’t have deep globalization, as this requires global rules and creates the enormous capital flows that can undermine domestic economies.


Rodrik’s trilemma helps to gain insight in many current politics.  Globalisation causes a power shift to the supranational level, often to non-democratic institutions (IMF, ECB, multinational companies, WTO).  At the same time, many challenges remain deeply national, such as ageing populations, social safety, migration, inequality as a result of winner-takes-all markets.  International mobility of goods and finance makes that nations tend to engage in races to the bottom (lowering taxes, standards) to attract investment and capital. Currently, globalisation and nation states seem to have the upper hand, eroding democracy.  The power of electorates to significantly influence key economic and social decisions has become very limited, such is the disciplining force of international markets.  The rise of populist parties and Brexit are consequences of this democratic erosion.  Rodrik does not consider global democratic institutions realistic and therefore pleads for returning to nation states more power to set their economic and social policies within a set of global “traffic rules”, such as keeping trade imbalances in check. This would require scattering some sand in the wheels of international finance, like a financial transactions tax.

For developing countries, the situation is even more dire. Globalization has a tendency to “freeze” a country’s role in the international division of labor. In a globalized world, countries that live from exporting resources have little incentives to diversify and invest in representative institutions and education level of their population. Secondly, within the WTO system, many industrial policies that were used by developed countries are no longer allowed, such as protection of domestic industries, export subsidies, capital controls, currency devaluations and weak enforcement of intellectual property.  Rodrik reminds us of the fact that the USA and the UK were notable protectionists until their industries were strong enough to stand on their own feet.  Thirdly, manufacturing as a powerful driver of economic development for low-income countries may have run its course.

Manufacturing became a powerful driver of economic development for low-income countries for three reasons. First, it was relatively easy to absorb technology from abroad and generate high-productivity jobs. Second, manufacturing jobs did not require highly skill: farmers could be turned into production workers in factories with little investment in additional training. And, third, manufacturing demand was not constrained by low domestic incomes: production could expand through exports. But manufacturing has become increasingly skill-intensive which has made it very difficult for newcomers to break into world markets for manufacturing.