by Interestingly, the quantification of culture seems to support this view. People in developed countries tend to be more individualistic than those in less developed countries. WEIRD [Western, Educated, Industrialized, Rich and Democratic] people also tend to be more skeptical of autocracy and more receptive to norm-shirking behavior (behavior that economists would call ‘innovation’). This evidence seems to support the narrative (cherished by economists) that economic development is a product of the free market. A paradoxAlthough WEIRD psychology fits well with the free-market narrative, it’s not clear that this narrative is actually true. In fact, there’s good evidence that economic development involves not the spread of the market, but rather, its death. Industrialization is
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Interestingly, the quantification of culture seems to support this view. People in developed countries tend to be more individualistic than those in less developed countries. WEIRD [Western, Educated, Industrialized, Rich and Democratic] people also tend to be more skeptical of autocracy and more receptive to norm-shirking behavior (behavior that economists would call ‘innovation’). This evidence seems to support the narrative (cherished by economists) that economic development is a product of the free market.
A paradox
Although WEIRD psychology fits well with the free-market narrative, it’s not clear that this narrative is actually true. In fact, there’s good evidence that economic development involves not the spread of the market, but rather, its death.Industrialization is associated with the growth of large institutions — big firms and big governments. (See Energy and Institution Size for a review of the evidence.) Look within these big institutions and you won’t find a free market. Instead, you’ll find a chain of command that concentrates power at the top. In an important sense, then, economic development involves not the spread of the free market, but the growth of hierarchy [entailing market power resulting in monopoly and monopsony]. (For details, see Economic Development and the Death of the Free Market.)
If industrialization involves the growth of hierarchy, we’re left with a paradox. Developed countries are both more hierarchical and more individualistic than their less-developed counterparts. How can this be true?
I explore here an interesting possibility. What if individualism does the opposite of what we think? Rather than promote autonomy, might individualism actually stoke the accumulation of power? This idea sounds odd at first. But I hope to convince you that it’s plausible.
Hierarchical organization implies social stratification and class structure, and asymmetric power and distribution.