How culture affects the economy

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How culture affects the economy
The study relating culture to economic growth has been ongoing for a long time. Max Weber, a German-based social scientist in the early 20th century, was among the first people shed more light on how culture and religion which constitute a huge part of culture can affect economic development. He compared the Protestant culture which was based on work ethics and the pursuit of wealth as a duty which made them more successful as their Catholic counterparts which lacked cultural values that promoted economic growth (Hezel 1). According to the Cambridge English Dictionary, a culture is considered as a way people live entailing the customs and beliefs of a set of individuals probably living together (Cambridge 1).
Although culture alone is not a determinant of the economic growth of a country, there have been strong links between the economic growth of a country and its culture. Granato et al. came up with two hypothesis on these subject. First, communities with cultural attitudes towards achievement and thrift had a positive effect on the economy. Second, communities with cultural attitudes towards post materialism had a negative effect on the economy (Granato et al. 607). David Landes in his book “The Wealth and Poverty of Nations” came up with various attitudes including thrift, hard work, tenacity, honesty, and even tolerance among other factors that brought about economic growth (Hezel 1).
Guido Tabellini highlighted trust, the importance of individual effort among the community, morality and autonomy as game changers in the industry (Hezel 1).

Therefore, culture comes into play in economic growth by emphasizing on certain positive traits among its community members such as hard work, individual efforts, tenacity, tolerance and even the culture of saving leading to marked economic growth. On the other hand, a culture that enhances laziness, communal efforts and property ownership among other poor cultures will realize poor economic growth.
The example of southern Italy and South Korea are the perfect examples to illustrate this relationship. South Korea was one of the poorest nations in the mid-20th century which was mainly due to the effects of the world wars and military dictatorship riddled with corruption. However, at the moment, it is among the top 20 countries with the world economic wise with a strong economic growth rate. South Korea as society is one of the most homogeneous society in the world. The strong cohesion is strengthened by the Confucian ethics which insists on harmony and well-organized society leading to good governance (Park 17). The society also presents with a high social trust which is a fundamental factor according to Tabellini. As a result of the above culture, South Korea realized a robust growth which has led it to the top of a developing country.
The contrary example is southern Italy. As compared to its counterpart in the North, Southern Italy realizes and economic growth of above half of the North despite having almost similar resources. Culture played a huge role in the predicament of the north. The Legacy of the Large Estates of Latifundia suppressed the culture of self-reliance and entrepreneurship which resulted in poor individual efforts. The era of the Mafias also instilled a sense of forced labor and ruling which suppressed personal effort as they had been used to forced efforts. Lastly, Southern Italy has been receiving too many subsidies which cultivated the culture of dependence among its citizen. The results were poor development and economic growth in the South of Italy.
The above two case studies have therefore shown that the culture of society plays a very crucial role in the economic development of that particular jurisdiction.
Works Cited
Cambridge. “CULTURE | Meaning in the Cambridge English Dictionary.” Cambridge Dictionary | English Dictionary, Translations & Thesaurus, dictionary.cambridge.org/dictionary/english/culture. Accessed 17 Nov. 2018.
Granato, Jim, et al. “The Effect of Cultural Values on Economic Development: Theory, Hypotheses, and Some Empirical Tests.” American Journal of Political Science , vol. 40, no. 3, 1996, pp. 607-637, www.jstor.org/stable/pdf/2111786.pdf?refreqid=excelsior%3A97d36c5f128e1af8cf3336238d00216e. Accessed 17 Nov. 2018.
Hezel, Francis X. “The Role of Culture in Economic Development.” Micronesian Seminar | Www.micsem.org |, 2009, www.micsem.org/pubs/counselor/frames/culture_economic_developmentfr.htm. Accessed 17 Nov. 2018.
Park, Sang-Chul. “East Asian Culture and Economic Miracle: The South Korean Experience.” Institutions and Economies, vol. 8, no. 1, 2016, pp. 1-24, ijie.um.edu.my/index.php/ijie/article/view/5024/2862. Accessed 17 Nov. 2018.