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The Seven Cultures of Capitalism.

Once upon a time, in Ronald Reagan's simple Cold War world, there were two ways of looking at things. One was called capitalism, the other communism. One was good, one was evil, and the world was filled with "freedom fighters," Star Wars, and deadly international proxy combat.

And then one day - seemingly over, night - the evil of communism collapsed. All that was left was capitalism.

Then international competition stepped into the breach, and suddenly post-cold War writers and pundits began noticing a fairly obvious fact: capitalism is not, and has never been, a monolith. There are variations from nation to nation, and books like Capitalism vs. Capitalism and Beyond Capitalism began to appear in the early 1990s. Into this genre falls The Seven Cultures of Capitalism by Charles Hampden-Turner and Alfons Trompenaars.

Readers looking for an exegesis that lays bare the illogic and horrors of capitalism will be disappointed by The Seven Cultures. But for those who are willing to suspend their desire for such a pay-off in exchange for something more subtle and nuanced about the inner workings of the various capitalisms that dominate the modern world, The Seven Cultures is a fascinating read.

What sets this work apart from the others of its genre is its methodology. The British and Dutch authors, both American-trained international business consultants, based their work on the results of questionnaires circulated over a seven-year period (1986 to 1993) to some 15,000 business managers from around the world who attended various seminars sponsored by the Center for International Business Studies. The questions were designed in such a way as to allow discovery of the values, habits, and cultural styles ordinarily associated with social development or the arts - except now they were analyzed as the key ingredients of economic success.

Hampden-Turner and Trompenaars deduced that each of the seven cultures of capitalism that they studied - the United States, United Kingdom, France, Germany, Japan, Sweden, and the Netherlands - has unique cultural habits and traditions reflected in their economies and social systems. The way we structure time, the way we behave as we climb the career ladder, or the loyalty we believe we owe our employer or employees all are powerfully and often unconsciously affected by cultural habits, traditions, and assumptions.

One sampling from the questionnaire asked: "Suppose you are interviewing for a position in your company. Which type of job would you prefer? (a) One in which no one is singled out for personal honor but everyone works together. (b) One in which personal initiative is encouraged and rewarded." This question - and others designed to measure individualism and self-interest - revealed that American, British, and Canadian managers assign a far higher premium to the individual's responsibility and prowess than do managers from Germany or Japan, where team, work and participation are valued far higher. From a series of such questions, a picture emerges of the different cultural assumptions which lie behind the approach of business managers in the various countries.

Why should anyone care about such hair-splitting in the capitalist camp? Because it turns out, according to The Seven Cultures and other books of this genre, that there are discernible trends affecting national policy on issues of poverty, social security, immigration, stakeholders' rights, deregulation, and more. For example, under the hyper-individualist brand of American-British capitalism, poverty is a sign of personal failure, idleness, and disgrace, the poor are culpable. But in Germany, Austria, Scandinavia, and Japan, poverty is viewed more as a consequence of the economy having to adapt, to the disadvantage of those in dying industries; the poor must be trained and assisted to make the transition. Social security and the social safety net in the latter countries are seen - by business managers, no less-as a way of socializing the inevitable dislocations of economic development and change.

German managers in particular scored high on the scale of communitarian values. For example, German managers were less inchned to fire an employee with a 15-year satisfactory service record who is no longer performing so well. Only 31 percent of German managers considered this service to the community to be irrelevant, as compared with 77 percent of American managers and 75 percent of Canadian managers.

To illustrate German communitarian values, the authors delve into German Mitbestimmung (worker codetermination). Mitbestimmung is perhaps the most democratic corporate structure in existence, including supervisory boards (Aufsichtra), with elected worker repre, entatives composing half of corporate boards of directors, and works councds Betricbsratj that give workers a great deal of input at the shop-floor level. These institutions, established into German federal law by the Codetennination Act of 1976, reflect German communitarian values much the way that highly overpaid U.S. corporate executives reflect the American value of individualism.

There are some surprises in The Seven Cultures. Particularly fascinating is the authors, discussion of Sweden's "social individualism." According to the questionnaire results, Swedish culture begins With the individual and his or her uniqueness, freedom and needs. Yet there is a wide streak of egalitarianism that the authors hypothesize originates among its yeomen farmers and the absence of feudalism in its history. A harsh climate has taught its individualists to cooperate for mutual survival, and that is reflected in questionnaire scores indicating a high value placed upon individual fulfillment through developing and sustaining others.

Hampden-Turner and Trompenaars conclude that American managers, compared to their international competitors, are hyper-individualists, whipsawed by cultural values that produce businesses which are short-sighted, overly hierarchical and authoritarian, and too narrowly focused on quarterly profit sheets.

It's impossible to capture in one review the full range of national characterizations mulled over by The Seven Cultures. The authors use the raw data from their questionnaires to delve into other values besides individualism, including longterm versus shortterm planning, reactions to and use of technology, concepts of hierarchy and community, and more. One may not always agree with their conclusions, and at times their analysis relies on overly simplistic cultural generalizations, but the discussion is always provocative and engaging.

Hampden-Turner and Trompenaars propose that the future path for capitalist enterprise lies in a kinder, gentler brand, where "no person can grow in individuality without the support of the community, and no community can long survive without the allegiance of its individuals.... For beyond separate values hes a harmony among values."

Such a reformist formula will hardly result in the overthrow of capitalism or the "withering away of the state." Yet Hampden-Turner and Trompenaars, work provides a refreshing perspective on the capitalist monolith in the post-Cold War world. The book is very well written, full of literary asides, wit, good anecdotes, and insights. If "knowing thy enemy," has any value in the struggle for social and economic justice, then The Seven Cultures of Capitalism is a solid contribution toward that effort.

Steven Hill is a journalist and a program coordinator of LaborNet at the Institute for Global Communication in San Francisco.
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Author:Hill, Steven
Publication:The Humanist
Article Type:Book Review
Date:Jan 1, 1997
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