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p>I’m a big fan of Tyler Cowen over at Marginal Revolution and this summary of one of his talks reminded me of a story from early in my career….. Although (or perhaps because?) I’m more libertarian than anything else, I’m also quite a bit of a culturalist and civil societarian. The distinction being that I think in many cases, informal culture (no matter how impossible it is to precisely define) has a far greater bearing on “social progress” than formal economics or policy. So, Cowen’s Libertarian Heresies don’t rattle me too much .

The example Cowen cites in his talk is the relationship between wealth and corruption in Russia –

He then moved into territory that is politically dangerous, but needs to be addressed: one of the things that helps promote both liberty and prosperity throughout the Anglosphere is citizens’ widespread ability to be loyal to a set of abstract concepts. Russia, he pointed out, is failing as a free society not because it is poor – Putin’s shrewed management of high commodity prices has put paid to much Russian poverty – but because Russians tend to privilege their friends and contacts above all else, leading to epic levels of corruption. Corruption, of course, is a signal rule of law failure.

He then asked, somewhat rhetorically, if liberty was confined (and defined) by culture: ‘We should not presume that our values are as universal as we often think they are’. What happens, he asked (also rhetorically), if – in order to enjoy the benefits of liberty and prosperity – societies have to undergo a major cultural transformation, including the loss of many appealing values? Cowen focussed on Russian loyalty and friendship, but there are potentially many others. Think, for example, of the extended family so privileged throughout the Islamic world, or the communitarian values common in many indigenous societies.

Of course, a particular country is where extended familial-warmth is lauded & a place that mutineers know quite a bit about is …. India.

Put succinctly, Cowen is reciting the argument that empirically, many cultures emphasize loyalty to the extended family (or, for that matter, tribe or religious group) to the detriment of loyalty to the nation and EveryMan. Without the latter, impartial rule of law becomes difficult and corruption soars. (and yes, there’s a nasty feedback cycle in here as well — poor, lawless countries often mean that family is the only group you can trust)

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p>But, it’s admittedly tough to rigorously study “familial loyalty” because, like culture, it’s tough to quantify & is strongly non-linear — e.g. clearly some loyalty is good (social conservatives often assert there isn’t enough in the inner city, for ex.). So, the point where there’s “too much” is almost certainly a question of degrees and tipping points. Some folks have studied the strong correlation between corruption and an extreme form of extended family ties which happens to be overt & quantifiable – consanguinity . Others are trying to bring more quantification to the broader question of development.

One anecdote I witnessed ~10 yrs ago was pretty illustrative of Cowen’s main point. The anonymized-DBD in the paraphrased dialog below went to college / grad school in the US prior to working with me in the mid-90s. An auntie-ji, whose family had helped finance his education back in the day, was visiting from India & the conversation involved her son, Sumit. My DBD friend described Sumit – someone he’d practically grown up with – as a “fun guy to drink with, especially back when we were 14, but ridiculously incompetent.”

Visiting Auntie From India – “Your mother told us about your recent manager promotion at [Fortune 500 Company]; we are so proud of you!”

DBD – “Thank you Auntie”

Visiting Auntie – “you should try to get a [Fortune 500 Company] job for my son Sumit”

DBD – (trying not to laugh out loud at the prospect of that loser working in the next cube) – “well, you should tell him to type up his resume and I’ll submit it”

Auntie – “but you are a manager, you should be able to get him a job, no?”

DBD – “well, an internally referred resume will generally get a bit more consideration”

Auntie – “no beta, you’re like his older brother, you should *get* him a job”

DBD – “Auntie, it doesn’t work like that, he’ll have to interview”

Auntie – “hmph”

That final “hmph” is perhaps one of my all-time favorite examples of how a non-word, coming from an auntie’s mouth/nasal cavity can mean an entire paragraph in English. In this case, it’s a spectrum of emotions ranging from “we’ve lost you to an uncaring America” to “if your grandfather were dead, he’d be rolling in his grave.”

Still, the exchange hints at Auntie’s mental model for wealth (it’s a basket that’s primarily allocated via connections rather than something her son should independently make) and familial obligation (tit-for-tat –> if you’ve got a position of power, use it to help the family who helped you; our DBD is an extended-family “asset” in a rather direct way). None of this is to say that wealth and connections don’t help a lot in American culture as well, it’s more a question of degree.

The interchange is also a perfect microcosm of cultural evolution before our eyes. The DBD probably recognizes where the Auntie is coming from (especially when she hmph’s). But, he still ultimately decides that the rules in his role as a software manager are separate and distinct from the rules in his role as a family member. While this exchange happened here in the US, you’re seeing more and more of the DBD’s behavior in the Desh as well as folks give EveryMan and FamilyMember more similar consideration. And the professionalism required to render unto the corp what is the corp’s & render unto Auntie what is Auntie’s is a critical attitudinal change helping make India a more productive, transparent society.

Yet, as Cowen points out, all such changes bring loss as well because they are rarely pareto optimal. Auntie and Sumit in particular are worse off in a world where economic and extended-family obligations are so strictly separated and may be a tad less likely to help fund the next cousin’s education. The family loss is direct and immediate while the Toquevillian, society-writ-large benefits are indirect and longer term. AND, there are certainly “appealing values” we all will lose – that deliciously warm sense of welcome when we stumble, unannounced, into our 3rd uncle’s house in the desh despite a 10 year hiatus is far less likely to happen when our DBD grows up.