Culture and the Credit Crunch

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In Richard D. Lewis’ book, The Cultural Imperative (2003), he posited that economic determinism was perhaps not as an effective predictor of global trends as culture.

Certainly few people, not even Alan Greenspan, could have predicted how disastrously things were headed for the global economy.

Culture, however, permeates everything, and one could maintain that, in the long-term, it is a reliable predictor of how things are going to pan out.

The USA, with its risk-taking, speculation and short-termism, is always likely to tend towards boom and bust. But we should never underestimate the USA’s supreme ability to bounce back. As staff started filing out of Lehman Brothers for the last time, representatives from other investment firms were filmed outside trying to recruit those leaving. A true demonstration of the American spirit.

How about China? Its march may be held up by temporary obstacles along the way, but it is an inexorable march with an unstoppable momentum. As some of the very principles of capitalism come under global scrutiny, here is a country which has always maintained strong government control, as the pendulum for the West starts to swing inevitably towards greater state intervention.

And India? Their flexibility has been praised as a ‘soft competitive edge’ over China. And one can predict that they are likely to respond flexibly to a crisis. But there are cultural fault-lines between India and Pakistan that are always at risk of overshadowing economic development with their political fall out – as we have recently seen all too tragically in Mumbai.

Russia? Their abundant natural resources should make them a good bet for investment, but for how long? Will they be as controlled as the Norwegians in how they deal with them? Or will a tendency to asset-stripping hold sway?

Finally, what future for the EU? In a crisis, will the key countries hold together? Or will German caution berate Anglo-Saxon profligacy and French pride be hurt by German
frankness? Anyone who followed Minister Steinbruck’s comments about Gordon Brown’s recent policies and President Sarkozy’s remarks about ‘never having being spoken to so directly before’ by the same Minister, must concede that arguments are being played out on largely predictable cultural lines.

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