------------ EH.NET BOOK REVIEW --------------  
Published by EH.NET (July 2006)  
  
Eric L. Jones, _Cultures Merging: A Historical and Economic Critique   
of Culture_. Princeton, NJ: Princeton University Press, 2006. xvii +   
297 pp. $30 (cloth), ISBN: 0-691-11737-3.  
  
Reviewed for EH.NET by Avner Greif, Department of Economics, Stanford   
University.  
  
  
For some scholars, a society's culture determines its economic   
destiny. For others, culture is malleable reflecting deeper political   
and economic variables and hence is epiphenomenal to economic   
outcomes. In this interesting book, Eric Jones (author of _The   
European Miracle_ among other publications, a Professorial Fellow at   
Melbourne Business School, University of Melbourne and an Emeritus   
Professor at La Trobe) provides a useful survey of this debate and   
argues for a middle ground.  
  
Jones views culture -- patterns of beliefs, habits, values, ideals,   
and preferences shared by groups of people -- as both sticky and   
fluid. Because culture reflects habituation which one acquires at   
young age, it is slow to change. Yet, culture is also fluid; it is   
often of relatively recent vintage, changes rapidly, and is promoted,   
or even created by those who stand to gain from it. Culture changes   
in response to economic, political, and social forces. Cultural   
change reflects better knowledge of alternative cultures and such   
knowledge leads to _cultural merger_, new syntheses in languages,   
religion, and other domains. Culture therefore exhibits _transient   
fixity_.  
  
Culture and the economy interrelate. A given culture influences   
transaction costs and thereby economic outcomes for a while. Yet, the   
economy shapes culture because it alters constraints and   
opportunities and provides knowledge regarding alternative cultures.   
Indeed, the rate of cultural change has accelerated in modern times   
because of the decline in information cost and the global reach of   
goods -- such as movies, contraceptives, and cars -- which embody   
alternative cultures. Cultural change also accelerated recently   
because the modern economy provides individuals with choices and   
opportunities that were not available in the past. Since culture is   
malleable, its impact on economic outcomes is less than often   
asserted. The global economy, however, will not lead to a globally   
uniform culture as it also enables new cultures to develop and   
prosper. This is the case because communication and information costs   
are so low in this new economy.  
  
Culture and institutions also interrelate. The distinction between   
institutions and culture, according to Jones, is that the latter is   
informal, socially transmitted, and taken for granted while   
institutions tend to be conscious, even political constructs. Culture   
is relatively intangible while institutions have a more rule-bound   
existence. Institutions can shape culture although informal culture   
is difficult to alter. Jones asserts, without much elaboration, that   
a growth enhancing culture must be protected by law and not man. It   
seems that he means to contrast the European traditional rule of law   
with some unspecified alternatives.  
  
Following this general discussion, Jones devotes a lengthy discussion   
to the important controversy in economic history regarding economic   
growth in China and Europe. While the "California School" of Chinese   
history claims that Europe was first to industrialize because it had   
better endowments, Jones argued that institutional distinctions   
mattered, particularly those influencing the use of resources,   
motivating technological advances, and enabling complex contracting.   
Rule of law was the most important principle. More generally, the   
fragmentation of power led to diversity of institutional development   
and institutionalized equalities brought peace and prosperity. "The   
institutions of the West were impersonal and decentralized; its   
institutional network held out the promise of extension to fresh   
social groups and new societies; and ... it evinced great power of   
self-correction" (p. 132).  
  
As the discussion of institutions illustrates, Jones does not hold   
all cultures to be born equal. He emphasizes that cultures are   
neither chosen rationally nor selected by evolutionary forces   
according to their functionality. Mediocre -- welfare reducing   
practices -- can and do prevail. Yet, competition can eradicate   
mediocre cultures. When alternative cultures are competing, a   
materially and emotionally beneficial culture is likely to be   
adopted, particularly by young adults.  
  
The first five chapters of the book elaborate on the above point and   
the following three illustrate particular points by providing   
"cultural commentary." In this commentary, Jones presents evidence   
the culture of immigration is uniform -- second and third generations   
tend to exhibit cultural mobility and adopt the local culture while   
potentially changing it in the process. He then takes issue with the   
claims that "Asian culture" is underpinning the remarkable growth in   
Asia, that the resentment to the Western cultural role model is more   
than a reflection of deeper economic and political problems, and that   
local cultural protection reflects the will of the local people   
rather than interest group politics.  
  
Regarding the debate over culture being immutable or epiphenomenal,   
Jones advances an appealing and intuitively correct assertion:   
culture is neither immutable nor epiphenomenal. Jones has done a   
wonderful job of reviewing both sides of the debate while exposing   
and articulating on the deficiency of the opposing views.   
Furthermore, Jones exposes various political and economic reasons   
that motivate the opposing sides to adopt the positions they do.   
Among these reasons are nationalistic sentiments, the fear of   
political and social elites that new culture will erode their   
positions, and the desire of local cultural producers to gain from   
subsidies. A novel aspect of the analysis is the emphasis on the role   
of knowledge regarding cultural diversity on cultural change. This   
enables Jones to link technological changes that reduce information   
costs and globalization of markets with the rate and direction of   
cultural change.  
  
The book does not employ quantitative evidence. Yet, Jones draws on   
an amazing array of anecdotal evidence, both historical and   
contemporary, to make his point. Indeed, it is relatively easy to   
knock out the two extreme positions -- that culture is either   
everything or nothing -- by providing counter examples. Lacking,   
however, is good evidence regarding the stronger claims made --   
explicitly or implicitly -- in this work. Among these claims are that   
all cultures are similarly malleable, that distinct cultures do not   
differ in their endogenous dynamics, that the interrelationships   
between culture and institutions cannot undermine the process of   
cultural change that Jones is describing, that Western institutions   
were more accommodating to cultural diversity than those of other   
societies, that the cultural assimilation of immigrants is universal,   
that mediocre cultures can perpetuate even in the presence of   
cultural competition, etc.. (For an analysis of how culture and   
institutions can mutually reinforce each other, see Greif 2006.)  
  
Similarly unsatisfying is the multiplicity, and sometimes   
contradictorily implicit models that Jones invokes in his analysis.   
Only the conclusion verbally presents a model of culture and cultural   
change. This is an evolutionary model of cultural development in   
which information about alternatives and exogenous economic shocks   
causes cultural change. Some individuals respond to new information   
and exogenous shocks by altering their behavior and hence the   
resulting culture. Because culture reflects historical habituation,   
such change is often gradual and usually the old are more resistant   
to change.  
  
No doubt, this individualistic model captures what may indeed be a   
mechanism for cultural change. Yet, central to it is that individuals   
can freely choose their culture and a rejection of the importance of   
culture as social phenomenon. This assertion is in contrast to the   
recent empirical finding (e.g., Guiso, Sapienza, and Zingales 2006)   
indicating that culture is a social phenomena. Moreover, it opposes   
many chapters in the book that consider the social dimensions of   
culture. These chapters argue, for example, that institutions   
influence culture, that the powerful attempt to shape culture, and   
that interest groups manipulate policies regarding culture. The book   
does not resolve the tension between the individualistic and the   
social-based models of culture. It does not, for example, elaborate   
on the factors determining which model is more applicable in a   
particular time and place.  
  
These reservations notwithstanding, Jones provides an accessible,   
illuminating, and inspiring book on a complex issue, while providing   
thought-provoking ideas regarding where more research is warranted.  
  
References:  
  
Avner Greif, 2006. _Institutions and the Path to the Modern Economy:   
Lessons from Medieval Trade_. Cambridge University Press, 2006.  
  
Luigi Guiso, Paola Sapienza, and Luigi Zingales, 2006. "Does Culture   
Effect Economic Outcomes?" _Journal of Economic Perspectives_ 20:   
23-48.  
  
  
Avner Greif teaches economic history and institutional analysis at   
Stanford University. Among his recent publications are _Institutions   
and the Path to the Modern Economy: Lessons from Medieval Trade_   
(Cambridge University Press, 2006); "The Origin of Impersonal   
Exchange: The Community Responsibility System and Impartial Justice"   
(_Journal of Economic Perspective_, 2006); "Commitment, Coercion, and   
Markets: The Nature and Dynamics of Institutions Supporting Exchange"   
(in the _Handbook for New Institutional Economics_, edited by Claude   
Menard and Mary M. Shirley, 2005); and "A Theory of Endogenous   
Institutional Change" (_American Political Science Review_, 2004.)  
  
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