This is an excerpt from The End of History and the Last Man by Francis Fukuyama, translated by Chen Gaohua and proofread by Meng Fanli, and published by Guangxi Normal University Press in September 2014.
If there is a strong correlation between advanced industrialization and democracy, then a country’s ability to maintain long – term economic development seems particularly crucial for its capacity to create and sustain a free society. However, although the vast majority of successful modern economies are capitalist, not all capitalist economies are successful. At least, some capitalist economies are less successful than others. Just as there are significant differences in the ability of formal democratic countries to maintain democracy, formal capitalist economies also vary greatly in their economic development capabilities.
Adam Smith believed that the main source of the wealth gap between countries is the wisdom of government policies. Once human economic behavior is free from the constraints of wrong policies, it is somewhat universal. Therefore, many of the differences in the achievements of capitalist economies can actually be traced back to differences in government policies. As previously pointed out, many ostensibly capitalist economies in Latin America are actually mercantilist anomalies. Years of state intervention have reduced efficiency and dampened the enterprising spirit of entrepreneurs. In contrast, the economic success of many East Asian countries after World War II can be attributed to the adoption of sensible economic policies in this region, such as maintaining competitive domestic markets. Whether it is the economic opening and development of Spain, South Korea, or Mexico, or the nationalization and subsequent collapse of industries in Argentina, the importance of government policies is most vividly demonstrated.
However, people feel that differences in policies are just one factor. Culture also affects economic behavior in some important ways, just as it influences a nation’s ability to maintain stable democracy. This is most clearly reflected in attitudes towards work. According to Hegel, work is the essence of humanity. It was the working slaves who created human history, transforming the natural world into a habitable one for humans. Except for a few lazy masters, everyone works. However, there are huge differences in how and how much they work. These differences have traditionally been discussed under the heading of the “work ethic.”
In the contemporary world, it seems unacceptable to talk about “national character.” Generalizations about a nation’s ethical habits are said to be impossible to measure “scientifically.” Therefore, generalizations usually based on anecdotes are often cliché and misleading. Generalizations about national character also run counter to the relativist and egalitarian tendencies of our time because they almost always contain a potential value judgment about the relative worth of the culture in question. No one wants to hear that their culture encourages laziness and dishonesty, and in fact, such judgments are often misused.
Nevertheless, anyone who has traveled or lived abroad must have noticed that people’s attitudes towards work are deeply influenced by their national cultures. To some extent, these differences can be measured empirically. For example, we can observe the relative economic achievements of different groups in multi – ethnic societies such as Malaysia, India, or the United States. The outstanding economic achievements of European Jews, or Greeks and Armenians in the Middle East, and Chinese in Southeast Asia are obvious and need no data to confirm. In the United States, Thomas Sowell pointed out that there are significant differences in income and education between the descendants of black people who voluntarily immigrated to the United States from the West Indies and those who were directly sold to the United States as slaves from Africa. These differences indicate that economic achievement is not only related to environmental conditions, such as the presence or absence of economic opportunities, but also to the cultural differences within ethnic groups themselves.
In addition to the obvious standard of per capita income for measuring economic achievement, there are also many subtle differences in the attitudes of different cultures towards work. For example, R.V. Jones, one of the founders of British scientific intelligence during World War II, told a story about how the British were able to intercept all German radars intact and transport them back to the UK in the early days of the war. The British had already invented radar and were more advanced in technology than the Germans. However, the quality of German machines was surprisingly good because their antenna tolerances were better than those of similar British products. Germany has long been superior to its European neighbors in maintaining a tradition of highly skilled industrial craftsmanship, especially in the automotive and machine – tool industries. This is a phenomenon that cannot be explained by “macro” economic policies, and its ultimate cause must be found in the cultural field.
Traditional liberal economic theory, starting from Adam Smith, believes that work is essentially an unpleasant activity. People engage in work solely for the utility of the products created by work. Since this utility is mainly enjoyed in leisure, in a sense, the purpose of human work is not to work but to have leisure. There is a tipping point in people’s work, that is, the marginal disutility of work – for example, the unpleasantness of working late overtime or on Saturdays – begins to exceed the utility derived from the material benefits of work. Everyone’s labor productivity is different, and their subjective evaluations of the disutility of work also vary. However, the extent to which they are willing to work is essentially the result of a rational calculation, that is, a trade – off between the unpleasantness of work and the pleasure brought by the fruits of work. For an individual worker, more arduous work requires greater material incentives. If the boss is willing to pay double wages for overtime work, the worker is more likely to work overtime. Therefore, according to traditional liberal economic theory, desire and reason are sufficient to explain different attitudes towards work.
In contrast, the term “work ethic” itself implies that differences in the way and degree of people’s work are determined by culture and custom, and are thus related to passion in some aspects. In fact, it is difficult to fully explain a person’s or a nation’s strong work ethic solely in terms of the utility of traditional liberal economic theory. Take the contemporary “Type A” personality as an example, such as highly – paid lawyers, corporate managers, or Japanese “salarymen” employed by competitive Japanese multinational companies. During the rising stage of their careers, they can easily work seventy or eighty hours a week with few or short vacations. They may earn higher salaries than those who don’t work as hard, but their degree of dedication to work is not entirely for the reward. In fact, from a strict utility perspective, their behavior is irrational. They work so hard that they have no time to spend money. They cannot enjoy leisure because they have no leisure time at all. And in the process, they damage their health and a comfortable retirement life because they are more likely to die young. One might say that they work for their families or for the next generation. Undoubtedly, this is part of the motivation for work, but most “workaholics” rarely take care of their children and often focus on their careers at the expense of family life. These people work so hard only partially related to monetary rewards. They obviously gain satisfaction from the work itself or the status and recognition brought by work. Their sense of self – worth is closely related to the effort and proficiency of their work, the speed of their promotion in the corporate hierarchy, and the respect they receive from others. Even the enjoyment brought by their material wealth is more due to the fame it brings than the actual use of these wealths because they have little time to enjoy them. In other words, work is to satisfy their passion, not their desire.
In fact, many empirical studies on the work ethic believe that it has origins beyond utility. The most famous of these is Max Weber’s The Protestant Ethic and the Spirit of Capitalism (1904 – 1905). Weber was by no means the first to notice the relationship between Protestantism, especially Calvinism and Puritanism, and capitalist economic development. In fact, in the era when Weber wrote this book, this view was extremely common, and he even felt it was a burden to refute it. Since the publication of this book, his argument has been the subject of endless debate. Although many people doubt the specific causal relationship Weber assumed between religion and economic behavior, few deny the close connection between them. The relationship between Protestantism and economic growth is still evident in Latin America today. After a large – scale conversion to Protestantism (usually North American evangelicalism), there has been a significant increase in personal income and a sharp decrease in behaviors such as crime and drug use.
Weber wanted to explain why early capitalist entrepreneurs dedicated their lives to accumulating wealth but seemed to have little interest in consuming it. Their frugality, self – discipline, honesty, cleanliness, and aversion to pure pleasure constituted a kind of “this – worldly asceticism.” Weber believed that this was a transformation of the Calvinist doctrine of predestination. Work is not an unpleasant activity for utility or consumption; it is a “calling” that believers pin their hopes on, reflecting their state of salvation or damnation. Work is for a completely non – material and “irrational” goal, that is, to show that one is one of the “elect of God.” The dedication and self – discipline of believers at work cannot be explained by any secular rational calculation of pleasure and pain. Weber believed that the original spiritual motivation that laid the foundation for capitalism had declined over time, and working for material wealth had re – infiltrated capitalism. Nevertheless, the “idea of duty in a calling” still “haunts the contemporary world like the ghost of a dead religious belief.” Modern European work ethics cannot be fully explained without referring to this spiritual origin.
In other cultures, people have also found religious ideas similar to the “Protestant ethic” to explain their economic success. For example, Robert Bellah has shown that the contemporary Japanese work ethic can be traced back to certain Japanese religions, which are functionally equivalent to Calvinism. For example, the Pure Land Sect of Buddhism emphasizes thrift, simplicity, honesty, hard work, and an ascetic attitude towards consumption. At the same time, it somewhat justifies making money, which was not recognized by the early Confucian tradition in Japan. The “Shingaku” movement led by Ishida Baigan, although less influential than the Pure Land Sect, also preached a kind of “this – worldly mysticism,” emphasizing thrift and hard work and despising consumption. These religious movements are consistent with the “Bushido” ethic of the samurai class, an ideology of noble warriors that emphasizes the willingness to risk death but does not encourage masters to be lazy. Instead, it focuses on asceticism, thrift, and especially learning. Therefore, Japan did not need to import an ascetic work ethic and the “spirit of capitalism” that emphasizes rationality when it imported naval technology and the Prussian constitution because this spirit already existed in Japan’s religious and cultural traditions from the beginning.
The above shows the cases where religious beliefs promote or make economic development possible. Conversely, there are also many cases where religions and cultures become obstacles to economic development. For example, Hinduism is one of the few great world religions that is not based on the doctrine of equality for all. The doctrines of Hinduism divide people into a complex series of social castes, each with clear rights, privileges, and ways of life. Paradoxically, Hinduism has not posed much of an obstacle to India’s liberal political practices (although growing religious intolerance indicates that this situation may end sooner or later), but it seems to have hindered economic development. This is usually attributed to the fact that Hinduism sanctifies the poverty and immobility of the lower social castes, promising them a higher – caste rebirth in the next life while asking them to accept their current status. This tradition of sanctifying poverty in Hinduism was modernly repackaged and carried forward by Gandhi, the father of modern India. He promoted the simple life of farmers as a virtue of spiritual fulfillment. Hinduism may have alleviated the burden of the daily lives of India’s poorest people, and the “spirituality” of this religion has strongly attracted young people from the Western middle class. However, it may make its believers fall into “this – worldly” laziness and indolence, which runs counter to the spirit of capitalism in many ways. India has many successful entrepreneurs, but they (like the overseas Chinese) seem to be more enterprising outside of Indian culture. Noticing that many great Indian scientists work abroad, the novelist V.S. Naipaul commented:
India’s poverty is more dehumanizing than any machine; and Indians are more like parts than anyone living under a machine civilization, locked in the narrowest obedience by the concept of “dharma.” When a scientist returns to India, he has to restrain the individuality developed abroad; he regains a sense of security from his caste identity, and the world becomes simple again. There are many trivial rules here, which are as comforting as bandages; personal insights and judgments that once inspired creativity are discarded as a burden… The darkness of the caste system lies not only in the existence of the untouchable system and the sanctification of India’s filth, but also for a growing India, in its demand for resignation, acceptance of the status quo, discouragement of risk – taking, and the deprivation of people’s individuality and opportunities to stand out.
Gunnar Myrdal concluded in his magnum opus on poverty in South Asia that Indian religion is completely “a huge force that makes society lazy” and cannot be a positive driving force for change like Calvinism or the Pure Land Sect.
Considering examples like Hinduism’s sanctification of poverty, most social scientists have determined that religion is one of the “traditional cultures” that will inevitably decline under the influence of industrialization. Religious beliefs are essentially irrational and must ultimately yield to the rational appropriation that constitutes modern capitalism. However, if Weber and Bellah are correct, there is no fundamental tension between certain forms of religious belief and capitalism. In fact, in Europe and Japan, capitalism has been greatly promoted by religious doctrines because they encourage “work as a calling,” that is, work for the sake of work, not for consumption. Naked economic liberalism – the doctrine that calls on people to rationally deal with the issue of satisfying their property desires and thus become infinitely wealthy – may be sufficient to explain the operation of most capitalist societies, but it cannot fully account for those competitive and dynamic capitalist societies. The most successful capitalist societies have reached their peak because they happen to have an essentially irrational, “pre – modern” work ethic that makes people feel that work itself is a reward, and they are willing to live an ascetic life, even at the cost of dying young. This situation means that even at the end of history, in order to maintain the operation of our rational, liberal economic world, or at least to maintain our position at the forefront of the world’s economic powers, some form of irrational passion is still necessary.
It can be argued that regardless of the religious origins of this work ethic in Europe and Japan, due to the comprehensive secularization of modern society, they have now completely lost their spiritual sources. People no longer believe that they work “as a calling” but work out of a rational pursuit of their own interests, as stipulated by the laws of capitalism.
The separation of the capitalist work ethic from its spiritual roots and the development of a culture that emphasizes the legitimacy and desirability of immediate consumption have led many observers to predict a sharp decline in the work ethic and the weakening of capitalism itself. The realization of the “affluent society” will eliminate all residues of natural needs, enabling people to pursue and enjoy leisure rather than work. Predictions of the decline of the work ethic seem to be supported by many studies in the 1970s, which showed that the general consensus among American managers was that workers’ professional standards, self – discipline, and motivation were deteriorating. Today, few corporate managers are examples of the ascetic frugality described by Weber. It is believed that the decline of the work ethic is not due to direct attacks but to the elevation of other values that are contradictory to this – worldly asceticism, such as “self – realization” or the desire to not only work but also “work meaningfully.” In Japan, although the work ethic is still strong, the gradual degradation of work values may also be a problem in the future because Japanese directors and managers are now as secular as their counterparts in the United States and Europe and have lost the spiritual roots of their culture.
Whether these predictions of the decline of the work ethic also apply to the United States remains to be seen. For now, the tendency of the weakening of the work ethic in the 1970s seems to have reversed, at least among professionals and managers. The main reason for this seems to be economic rather than cultural. For many classes of people, real living standards and job security declined during the 1970s, and people found that they had to work harder to maintain the status quo. Even for those who enjoyed a higher level of material prosperity during this period, the pursuit of rational self – interest will continue to motivate them to work hard for a long time. Some people, like Marx, who identify with the work ethic out of concern for the consequences of consumerism, always forget that people’s desires and insecurities are elastic and will always drive people to work to the limit of their physical capabilities. The importance of rational self – interest in stimulating the work ethic is obvious when we compare the productivity of East German and West German workers, who share the same culture but face different material incentives. The strong work ethic in capitalist West Germany is more a testament to the power of desire connected with rationality than to the lingering “ghost of dead religious beliefs” as Weber put it.
Nevertheless, there are still significant differences in attitudes towards work among countries that advocate economic liberalism and take rational self – interest for granted. This situation seems to reflect the fact that in some countries, passion has found new objects to carry itself in the modern world outside of religion.
For example, Japanese culture (like other East Asian cultures) is more group – oriented than individual – oriented. These groups start from the smallest and most immediate family and expand through various patron – client relationships formed during growth and education, including the company one works for and, in the Japanese cultural sense, the largest group – the nation. An individual’s identity is largely submerged in the group to which he belongs. He does not work for his short – term self – interest but for a larger group, the group to which he belongs. His status is rarely determined by his personal achievements but by the achievements of the group he belongs to. Therefore, his loyalty to the group has a highly passionate nature. He works for the recognition given to him by the group and for the recognition of his group by other groups, not for the salary that constitutes his immediate material interests. When the group he seeks recognition from is the nation, the result is economic nationalism. In fact, Japan has a stronger tendency towards economic nationalism than the United States. This nationalism is not manifested as blatant protectionism but in more subtle forms, such as the traditional domestic supply networks retained by Japanese manufacturers and the concept of preferring to buy Japanese products at a higher price.
It is this group identity that enables some large Japanese companies to effectively implement the system of lifetime employment. From the perspective of Western economic liberalism, lifetime employment is detrimental to economic efficiency because it makes employees feel too secure, just as university professors may stop writing books after obtaining tenure. The experience in the communist world, where everyone was essentially in lifetime employment, also confirms this view. The most talented people should engage in the most challenging work and be rewarded with the highest salaries. Conversely, companies