Page 297 - Cultures and Organizations

266 DIMENSIONS OF NATIONAL CULTURES

The correlation between LTO and economic growth for poor coun-

tries, even after 1995, confirms Herman Kahn’s neo-Confucian hypothesis.
It also indicates which of the various Confucian values were associated
with economic growth. Very important was thrift. In a separate study,
Misho Minkov and Vesselin Blagoev added to this conclusion a low impor-
tance of leisure. They cite prominent twentieth-century U.S. development
economists who saw nothing miraculous in the East Asian economic per-
formance and attribute it to old-fashioned hard work, thrift, and better
72
education. Of course, the question remains as to why East Asian countries
did follow this road and others did not.
It also is noteworthy that it took an East Asian instrument, the Chinese
Value Survey, to isolate a dimension that proved the role of culture in the
development of East Asia and to provide an explanation of the economic
success of the Dragons. In the meantime, we moved one step further: we
discovered that similar conclusions can be drawn from data that had been
hidden in the World Values Survey, basically a Western instrument. The
logic of the growth of the Dragons now extends to the growth of several
Eastern European economies between 1995 and 2005.
In 1993 a U.S. political scientist, Russell Read, proved the relationship
between long-term orientation and various measures of saving. The stron-
gest link he found was with the marginal propensity to save (MPS)—the
change in real per capita saving—from 1970 to 1990, in percentages of the
total changes in private consumption plus saving. MPS ranged from a low
of 3 percent in the United States to a high of 64 percent in Singapore. 73
In her analysis of consumer behavior, de Mooij found that people in
high-LTO countries invested more in real estate, which is a long-term
commitment, while people in low-LTO countries invested more in mutual
funds. 74

In 2008 a new economic crisis hit the world, spreading from the United
States by the interdependence of globalized financial markets. Lack of

thrift—overspending in economies that are short-term oriented—seems
to lie at the heart of this new disaster.
The value item “thrift” (as with “persistence”) was missing in the
Rokeach Value Survey, which is supposed to have been based on a complete
inventory of American values around 1970. Spending, not thrift, seems to
have been a U.S. value at least since the second part of the twentieth cen-
tury, both at the individual level and at the government level. When asked
why Americans did not save more, Herbert Stein, former chairman of the