Having established at the theoretical level the nature of the relationship between culture and economy, in this chapter, an attempt will be made to determine, through examination of empirical research and review of the ongoing debates, the role that culture and/or value systems play in the East Asian region's economic life and development. It is thus the purpose of this chapter to test the validity of the theoretical viewpoints outlined in the previous chapter by looking at the actual lived experiences of economic development in the East Asian region's countries such as Japan, Singapore, South Korea, Taiwan, and Hong Kong. The East Asian region was specifically chosen in view of the extensive amount of historical and contemporary research, literature and debate in which concerted efforts were and continue to be made to explain and come to grips with what has often been dubbed the economic miracle in the post-war period up to the present. Within this debate, strong evidence, inspite of some counter accounts which emphasise the significance of non-cultural factors (Castells, 1998; Pinkstone, 2000; and Sen, 2001), points out to the role of the Confucian cultural values in the East Asian countries' economic development.
Amongst some of the earliest studies which support this viewpoint is that by Ayal (1963) in which he undertook a comparative analysis of the East Asian and South East Asian countries' economic developmental experiences using the case studies of Japan and Thailand representing these two regions respectively. In this study, Ayal's hypothesis, later confirmed by his research findings, was that no sustainable economic development could be achieved if changes in the socio-political institutions and high levels of foreign investments are not backed up by fundamental human values that are conducive to development. Ayal however qualified his point by arguing that not all cultural or value systems would have positive influences on economic activities, only those that contain what he terms "certain propensities" could have such influence. The
"propensities" which make value systems economically relevant, are the following:
propensities to accumulate; to work systematically and diligently; to co-operate in organizing effort for pursuance of goals; and to innovate (Ayal, 1963: 39). By propensities, Ayal refers to "internalised behaviouristic and instrumental values, or predispositions to actions, which have their origins in the value system" or simply behavioural modes influenced by the value system. This view was later expressed by O'Malley (1988), who also did a comparative study of both the East Asian and South East Asian regions. In his acknowledgement of difficulties that accompany any
attempts to establish connections between culture and development, he argued that this could be overcome through a shift in focus from a vague discussion of culture and development as whole concepts to the isolation of those specific virtues and elements in the cultural system that have relevance and positive effect on economic actions and decisions (O'Malley, 1988: 343). For Ayal, the role of value systems in economic development is two-fold: to provide goals that may not necessarily be economic in nature but achievable through economic activity (e.g. a goal of achieving high social welfare) and also to sanction the means i.e. propensities or activities associated with them, for achieving those goals.
Ayal argues, based on his analysis, that contrary to the South East Asia's Thailand, the Japanese value system had elements that promoted and encouraged the above propensities, which consequently played a vital enhancing role in its economic development. Those elements were: active fulfilment of obligations of class status and loyalty, asceticism and frugality, development of expertise in carrying out one's task as well as diligence in performing those tasks (Ayal, 1963:43). These elements were, Ayal argues, strongly linked to the political value system as reflected in the religious teachings of Confucianism which promoted forms of activity that are encouraged by the political values. Central to the political value system was the value that encouraged loyalty to the state in order to enhance the smooth functioning of organic society. Hence, Confucianism was integrated into an official ethic forming the basis for the system of administration and law.
Later studies such as Chaibong Hahm's (1999) provide a useful explanation of this close affinity and relationship between the Confucian culture and the political system.
According to Chaibong, a central feature of the Confucian value system is an emphasis on the importance attached to family and the notion of Confucian familism.
Family, he argues, is considered as a model on which human relations and institutions should be based. Hence, in Confucian culture, no distinctions are drawn between the public and private spheres as both are guided by similar family-based principles. Thus for Confucians, a family is seen as a training ground for public functions. Note for instance Chaibong's observation based on his analysis of the passage from what is known as the Great Book, one of the books on neo-Confucianism:
"What can be gleaned from this passage is that Confucians regarded cultivating the self, regulating the family, and governing the state as inherently the same thing, requiring the application of one and the same principle. More important, it is not much a matter of extending personalist ethics to the public sphere as the application of public virtue to the private realm. That is, Confucianism is the effort to regard family not as the repository of the private but rather as the training ground for public-spiritedness.... The principle or the attitude one applies to the government of the family is not exclusivity, clannishness, or parochialism.
Rather, the principle and attitude one applies in bringing peace to the world and in governing the state are also to be applied to the family." (Chaibong, 1999: 42)
This, argues Chaibong, is attributable to two key values within the Confucian tradition i.e. filial piety and loyalty to the king or political leader. Unlike in the West, the Confucian state or the political realm is not seen as the repository of formal rules and laws or the realm in which procedural justice is the norm, but rather as the realm in which informal or personalist norms such as humaneness, harmony, and reciprocity rule. Hence that "the king or the political leader looks after the people in the same way as a father looks after his family, the point being that the Confucian family is itself already highly public in nature." (Chaibong, 1999: 45)
The Confucian cultural context enabled the state, considered as both a realm in which Confucian morality is practised and a locus of values, norms, rituals and ethics, to play a leading exemplary economic role. It fulfilled this through strategic allocation of resources to and investment in productive sectors such as education and production departments, which could directly turn out products (Zhan, 1988). As a replicate of the family, the state promoted Confucian virtues. To enhance the acceptance of these virtues by the society, while simultaneously investing little in non-production sectors such as health, welfare, labour insurance and housing, it provided material welfare to the citizens (Chaibong, 1999). Confucian virtues promoted by the state such as thrift and self-reliance saw great attention being drawn to capital accumulation through personal savings deposits (Zhan, 1988; and Chaibong, 1999).
Ayal (1963) cited as evidence of the influence of the Confucian value system on economic life in Japan the class-based ethical movements that embraced the systems' dominant virtues. Part of this wider class-based movement, which he cited as an illustrative example, is the movement of the commercial farmers known as Hotuku.
The latter's economic principles emphasised the need for increase in production and productivity improvement. Its principles also encouraged hard work, co-operation and rigorous voluntary restriction of consumption as well as re-investment of production surplus. The values of co-operation and hard work, and their resultant positive influence on production, were further enhanced by adherence to the notion and principle of "favors". This notion and principle was, according to Ayal, based on the idea that individuals' coming into being and/or acceptance of protection or status within a collective or a group automatically renders him/her the recipient of favors and imposes a sense of obligations to the source/s of the favors. Such obligations are met not through retirement to mundane activities but through service and active physical participation (Ayal, 1963: 43).
This activist nature of the Japanese value system, which promoted and dynamised the activities that incorporated the propensity to accumulate; to work diligently and systematically; as well as to co-operate in the carrying out of tasks; and to innovate, has, according to Ayal, played a vital role in the country's quick economic development. This occurred within the context in which challenges and pressures from the Western powers were immense, thus necessitating countervailing action to avert them. The Japanese, he argues, thus identified as their long term national goals, the need to strengthen their nation and maintain its power and prestige. They linked the achievement of this long term goal to economic development. Hence, that the Japanese value system played a significant role in this regard by promoting and legitimising the appropriate means for achieving the national goals i.e. the economic propensities, while at the same time innovatively integrating the Western methods, techniques and customs.
While in Japan economic growth happened at a rather faster rate during the immediate post-war period, in Thailand the opposite was the case. This was so despite the active support and direct participation by the government through the organisation of co- operatives, credit facilities, the industries' sending of students abroad and inviting of foreign experts and advisers. Ayal attributed this slow economic growth to the Thai value system, which, unlike the Japanese's system, did not contain economic propensities relevant and conducive for development. Central to the Thai value system were three main virtues which he found to be very much similar and consistent
with Buddhism. Those are the centrality of personal values; the model of the ideal personality and/or ideal self; as well as emphasis on individualism as opposed to collectivism.
Unlike the Japanese value system, which emphasises political values such as loyalty to authorities and mutual obligations in line with the principle of favors; the centrality of personal, individualised values within the Thai system places no obligations on individuals or formal collective institutions. This, Ayal (1963) argues, is in line with the Buddhist teachings which encourage individuals to spend their entire lives working out and improving their own karma (i.e. reborn with higher worldly status in the next reincarnation or in the current one) through merit-making. Forms of merit making that could be engaged in included becoming a monk for life or for a limited period with all worldly deprivations that go with it; helping others to become monks;
feeding monks on daily basis; and building temples and other religious structures.
Also observed by Ayal in the Thai value system is the absence of incentive to work towards increasing and expanding the already acquired merit through capital accumulation due to the view that merit in itself constitutes wealth and therefore does not need to be expanded.
The other virtue, which Ayal claims to have inhibited productive economic activity, is that of the model of ideal personality or ideal self, which is expected to be comprised of the following main attributes as its ethical components: karuna (compassion), metta(\o\'mg kindness), mwd/ta(emphatic joy), and uppekkha{Qqu&mm\ty which involves impartiality and non-attachment) all of which are said to be highly valued by the Thais who see themselves as possessing the most desirable attributes (Ayal, 1963:
47). While in Japan cultural values found expression in the ethical movements, in Thailand such expression was found in individuals' daily behaviour and actions. The most prominent virtues that influenced daily behaviour and actions of the Thais are the choei (an equivalent of uppekka) which encouraged non-involvement and calmness under all circumstances. Hence, the high tolerance for deviant behaviours, and sanuk (an equivalent of muditta emphasising enjoyment) - according to which life is something to be enjoyed here and now with little regard for future complications.
Within the context of such value system, the means employed to achieve one's karma are advised to be as sanuk as possible. Hence such sanuk actions aimed to achieve
karma are incompatible with productive economic activities as the latter activities were seldom sanuk or enjoyable but often hard and unpleasant (Ayal, 1963: 47).
The third and final economically inhibitive virtue within the Thai value system as identified by Ayal (1963), and which was deeply anchored in Buddhism, was the emphasis on individualism. This is clearly consistent with the uppekkha (non- involvement and non-attachment value within Buddhism) and explains the virtual absence of any organised social structures such as clubs, pressure groups and parties.
Structures that existed such as the government bureaucracy, the Buddhist churches and the family units were, as observed by Ayal, loosely organised. The closeness of Thai individualism to Buddhism was further evidenced by the Buddhists' belief that every individual would be rewarded according to his/her own deeds, thoughts and cravings and hence the following saying "Do good, receive good, do evil, receive evil." (Ayal, 1963:491)
While Ayal's study was conducted in the early 1960s reflecting on the immediate post-war period and hence the situation in the 1950s and 1960s, the subject of the relationships between value systems and/or culture and economy in the East and South East Asian regions continued to spark interest and receive great attention within the intellectual, research community in the subsequent decades up to the present period. For example O'Malley (1988)'s comparative study of the role played by culture in the economies of both the East Asian countries (focusing in particular on Japan, Republic of Korea, and Taiwan) and South East Asian countries (in particular Indonesia, Burma, Thailand, Malaysia and the Philippines) in the 1980s.
Interestingly and like Ayal two decades before, O'Malley (1988) advanced an argument that the East Asian countries' value systems or culture, influenced strongly by Confucianism, played a positive role in these countries' economic life. As a code of ethics and conduct and not a religion that emphasised an afterlife, Confucianism which culturally bound together the peoples of East Asian countries as well as Chinese people in spite of their separate histories and different socio-religious orientations, played an influential role in guiding social relationships. Like Ayal, O'Malley discovered that the culture of Confucianism placed an emphasis on hierarchical relationships within the society i.e. the superior-subordinate relations
whereby the duty of the latter is to show respect, loyalty and deference while the former is expected to provide proper moral example and to act in accordance with his/her status. This, he argues, created a sense of common understanding of mutual expectations between the superiors and the subordinates. This supports Ayal (1963)'s earlier findings with respect to the Confucian culture in Japan whereby amongst its core values are those that emphasise the need to show loyalty to political authorities and mutual obligations amongst people.
Within such cultural framework, O'Malley (1988), in seeking to understand the economic impact of this culture, focused specifically on its influence on the relationships between government and private business organisations. The government's role came to be understood as being to formulate and implement appropriate and conducive policies for development. The governments in East Asian countries, with the exception of Japan which already had democracy, were authoritarian and characterised by centralised bureaucracies which enabled them to execute their functions in exemplary manner as promoted by the Confucian value system. This was thus justified by the view that if the government runs the country properly, then the welfare of its people would be enhanced and improved. O'Malley (1988:333) observed that governments in East Asian countries were modelled on family units whereby the relationships are based on respect, support and common acknowledgement of mutual obligations. These are values that are at the centre of the Confucian culture (Chaibong, 1999: 42 and 45).
O'Malley however also discovered that not only were the governments in the three East Asian countries organised in community-like and family-like ways, but also private business organisations with an emphasis on team spirit and mutual respect.
Confucian values within business organisations, argues O'Malley, encouraged loyalty to the firm and mutual (even personal) sacrifices of time, emotion, and money for the common and collective good of the firm. These were further enhanced by the fact that employees of successful firms (i.e. both managers and labourers) were almost guaranteed life-long employment, predictable advances in salary and rank as well as comparatively small wage gap between employees both at the top and the bottom (O'Malley, 1988: 335). As far as the relationship with the government is concerned, the latter's role was to provide guidance and assistance in the form of research funds,
credit facilities and marketing-strategy capacity based on a longer and wider view without interfering with normal corporate/business activities. Hence, the realisation by both government and private companies that "the state needs the market and private enterprises needs the state; once both sides recognised this, co-operation was possible and high speed growth occurred"(Johnson, 1982 quoted in O'Malley,
1988:335).
Contrary to the findings in the East Asian region, O'Malley's research found that in Southeast Asian region, the value systems played no vital role in their economies which were largely characterised by slow growth and in some cases decades of stagnation. The major belief systems in these countries are religions (mainly Buddhism, Islam and Christianity), which place strong emphasis on an afterlife whereby one's good place in the next life is largely shaped by his/her performance in the current life. In Christian and Islamic religions, the important relationship is not between the superior and the subordinate person but rather between the person and God. Thus, a good handling of interpersonal relationships on earth is seen not as an end in itself but a means to an end (a good life in heaven). This is not so different from Buddhism which, as noticed from Ayal's work, stresses that relationships between people should be smooth so as to enhance an attainment of merit or karma.
Another element within the Southeast Asian values system different from the East Asian is that less importance is attached to family or extended family as a social unit in the society. The dead were not held in high regard but instead it was believed that ancestral status and the respect that goes with it should be earned (Ayal, 1963:339, taken from Wolters, 1982). Unlike Confucian culture, which idealises state administrators, both Buddhism and Christianity have their own separate and parallel hierarchies to those of the state. This, according to O'Malley (1988), may potentially cause conflicts and tensions between religious and secular administrations. Hence religion in Southeast Asia, unlike Confucianism in East Asia, provides no automatic support to the government.
The institutional framework in Southeast Asia is, according to O'Malley (1988), characterised by strong military, highly bureaucratised single-party states and a wide diversity of business organisations. The latter comprised private business concerns operating mainly within commerce, extraction and in production of bulk goods for