I’m encouraged when I find real-world examples of finding value in differences. It reaffirms my belief that we are doing good work, the right work, in helping companies do better business through valuing cultural differences.

The latest example appeared last week, in a podcast interview that Vox-founder Ezra Klein conducted with distinguished economist Prof. Dani Rodrik,  It’s a fascinating conversation, one that challenges you to look at the world of trade, finance and economics differently. There is one passage in particular that caught my attention. At 00:26:00 the following exchange occurred (excerpted for relevance):Ezra Klein talks economics and cultural differences

[Ezra Klein] People look around and they say, you know, “Wouldn’t it be great if we all just became more alike? If we all just moved down the path towards enlightened technocratic rule together?

Okay, pause here for a moment. It’s statements like this that have me shaking my head in grave disappointment at the podcast app on my smartphone, “No. No. No.” Mr. Klein went on:

And something I see in your work is a real emphasis that, No, countries are different. They have different cultures, they have different needs – there is much more that we don’t understand about them that economists like to admit. I see you as making an argument for an economics that has much more appreciation of difference and how little we understand about what makes different countries work differently, and, as such, places a lot more value on the institutions that allow them to continue working differently. Is that a fair reading both of you and of your critique?

Prof. Rodrik’s response is one for the ages:

[Prof. Rodrik] I don’t think that there is a single, ideal way of running an economy or organizing a society. There’s no one-to-one mapping between what markets need and how you can organize these supporting institutions. So there is huge multiplicity in terms of how can do these things, reconfigure these things, and still achieve outcomes that are broadly prosperity-producing. The range of variation that we observe – it’s probably tiny compared to what we could have. In some sense we ought to be much more imaginative and courageous in terms of thinking about how we can reconfigure our systems. The notion that we’re all sort of converging on an identical model of capitalism is not just empirically and historically wrong, but also counter-productive to the deployment of that kind of imagination. Which is our only chance of saving ourselves because of where we are right now.  

I admire Prof. Rodrik’s curious and searching approach to economics very much. I find it healthy and eye-opening. In fact, and he says it as well, I also believe approaches like his are necessary to future survival, economic as well as societal.

Throughout developed capital markets, namely the US and Europe, there seems to be a great deal of fear that the world is changing and the only way to deal with the change is to put up walls, construct barriers. Among the current ruling classes there is fight to the death to keep things, not as they are, but the way things were and, in the popular imagination at any rate, have always been. Brexit, Trump, autocratic rule, tariffs and trade barriers are not only futile fights against the inevitability of change, they also limit people to the possibilities of what could be. As Prof. Rodrik puts it, by focusing on the comfortable models of the way we’ve always done things (supposedly), and to only consider one ‘right’ way of doing things, is counter-productive to finding new solutions.

What are these new solutions? There are two publications I’m currently reading that may provide some clues:    

China’s Cosmological Communism: a Challenge to Liberal Democracies by Didi Kirsten Tatlow of the Mercator Institute for China Studies (MERICS – Berlin). Makes a convincing case that the future may belong to the Chinese.

The Dawn of Eurasia: On the Trail of the New World Order by Bruno Maçães. The author weaves history, diplomacy and travelogue to give a convincing view of a new world that has China as the driver.

You can find the podcast between Mr. Klein and Prof. Rodrik here: The Ezra Klein Show – What economists and politicians get wrong about trade

A transcription of the passage excerpted above can be found here: The Ezra Klein Show – Prof. Rodrik, partial transcript

Finding Value in Differences – “Be courageous and use your imagination.”
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