Trust, network and framings

Scott Sumner and Noah Smith have been having an argument about China and culture. Scott's original post was here, Noah replied, Scott replied to that. This is a comment I posted on both blogs.


My general working principle is that culture-as-explanation is the last refuge of the analytically bereft.

The success of the overseas Chinese in SE Asia can largely be explained by trust and networks. (Think Jews in the diamond trade.) You get linked dialect or even common-ancestral-village networks where reputation information flows very speedily. In a situation where the default attitude of rulers to commerce was to fleece it, and the general environment was low trust, networks of trust extending across rulerships had strong advantages. Their success was also more acceptable because it was not threatening to local rulers (Chinese could not aspire to political office).

One sign of this is that the overseas Chinese are not nearly as economically important in high trust societies. The overseas Chinese do fine in Australia, but not extraordinary in the way they do in SE Asia.

(Michael Backman wrote a report for DFAT's East Asia Analytical Unit years ago Overseas Chinese Business Networks in Asia which covered this.)

Chinese culture has been agrarian, with cities and commerce for a long time. The necessary framings are built into people's outlooks.

Which is the point where I will concede culture matters. Folk coming from a hunter-gatherer culture lack the relevant framings and have real difficulties adjusting to modern commercial-industrial life.

Deepak Lal's division of culture into its material and cosmological aspects (pdf) (short summary here) captures this element (and why language groups can seem to matter: they come with attached framings).

What you call 'culture' I tag as trust, networks, and framings. More analytically tractable.