What does it take for a society to have, or maintain, economic prosperity? One can approach this from many angles, from governance to geography, or from education to gender equality. There are a myrid of angles one could take to approach this question, so I’ll narrow the question a bit: what does it take for emerging markets to reach prosperity and for developed countries to maintain it?
I claim that it takes three things in particular: religion, science and freedom.
Religion
Across the developed world (US and Europe in particular), religion has had rotten eggs thrown in its direction. After 9/11, the world discovered what happened when Salafi-Islamism is allowed to operate unchecked by our intell services. Most people probably didn’t see the nuance and instead simply became paranoid of all Muslims. Some people, mostly “intellectuals,” simply blamed America rather than worry about more plausible explanations.
The terror attacks of 9/11 (and subsequent attacks or attempts inside or outside the US) have given the likes of Sam Harris, Richard Dawkins, and others, the opportunity to launch attacks on religion in general and Christianity in particular. Hollywood is in on the fun, jeering or even demonizing religion, esp Christianity (Islam has largely been ignored from direct criticism, oddly).
Certainly, not all religions are created equally. Not all practitioners are equal in their piety. Focusing on the developed world, has religion–namely Christianity–been a bane, or a boon?
I’d argue that it has been a boon. The US was built on the system of moral values innate in Christian doctrine. Contrary to anti-Christian commentary, many scientists in this country’s history were also Christians. Our Founding Fathers were largely Christians as well. Absent their convictions, I question whether or not representative democracy would have been their priority.
But I doubt our Founding Fathers could have imagined the “values void” that we see in Europe and, increasingly, the United States. So what would happen if we were all atheists, or “humanists”? Since this blog post is economy-centered, I’ll point out that business thrives when trust and integrity are high. The “greed is good” phrase in Wall Street (a movie starring Michael Douglas) has proven to be absurdity. Look at WorldCom and Enron and you’ll see greed, not innovation, and certainly not integrity. When people are able to have a relatively high level of trust in others, and when they’re able to take them at their word, that is an environment where business is able to thrive.
The alternative is a society that requires much higher regulation and enforcement. The godless might not fear the wrath of God, but they fear the law. Since that is all that keeps them in check, regulation must be much more rigorous, and like a neighborhood of hoodlums, enforcement must be higher. Sarbox (Sarbanes-Oxley legislation) might not have been over the top after all. When people increasingly have no moral convictions and no moral concern outside themselves, more oversight isn’t just useful, but necessary.
The contrarian will argue that some religions have been harmful in some parts of the world. Look at the Middle East, where the areas of prosperity other than oil-wealth are areas where conservative Islam has taken a back seat. The UAE comes to mind. I agree with this assessment, and point again to the idea that not all religious are created equally. One could make the same argument in relation to India, whose polytheistic religion has not seemingly served to bolster their economy. Some philosophical religions, like Taoism or Buddhism, have had marginal roles in economic growth. Another contrarian argument might be this: what about “atheist China” and it’s 10%+ GDP growth for the past two decades? The China example is interesting, because China’s dabbling with the atheistic governance (call Communism) did not turn out so well for its people (tens of millions died during Mao’s unfortunate tenure). Now, China has more regular church-goers than western Europe.
So, when “God is dead,” Big Government becomes bigger. Regulations become more burdensome. People cling to their new Higher Power–the state–and freedom takes a back seat.
Science
In early 2007, Bill Gates wrote a commentary on the WP. It begins as such:
For centuries people assumed that economic growth resulted from the interplay between capital and labor. Today we know that these elements are outweighed by a single critical factor: innovation.
I think he’s right, and I think science is key to this single, critical factor. Science isn’t just about cell phones or wind turbines. It’s a thought process, one that requires analysis and detail. I can’t think of a single prosperous country that has become so without rigorous science curriculae. Although most people (that I know) would likely nod in agreement at this assertion, science courses are rarely mandatory in college, while “liberal arts” courses are always required. I suppose art history is more important than physics? Or maybe computer science takes a back seat to English Literature? In fact, current priorities are in favor of other nations excelling us in math and science, a process that is already unfolding.
Freedom
No country can achieve economic prosperity without freedom. Freedom allows us to start businesses without knowing top government insiders or being friends with the president. Freedom gives us the ability to work wherever we choose to work; it also gives employers the ability to fire employers at their whim.
Not all “free” countries are comparable. France, for eg, has restrictive labor laws. It’s difficult to fire even non-unionized employees, meaning that special care is taken in hiring them. If they’re “different,” i.e., non-white, they’re not going to be hired as frequently. The riots in France were a result to idle hands unable to get work. France’s labor laws are innately anti-freedom. Unions are inherently anti-freedom as well, displacing individual liberty with herd mentality.
Just as economies can’t prosper without freedom, freedom cannot exist without capitalism. Capitalism is freedom in the context of the marketplace, and without it, freedom (in the general sense of the word) simply doesn’t exist. How can one be free if he is a serf to the state to provide his employment and means of survival? How can he donate to charity if he does not control his own purse strings? He can’t do either.