Why Economic Culture Matters

why_economic_culture_matters Why Economic Culture MattersA review of Becoming Europe: Economic Decline, Culture, and How America Can Avoid a European Futureir?t=thamtf-20&l=as2&o=1&a=1594036373 Why Economic Culture Matters by Samuel Gregg (New York: Encounter Books, 2013)

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It is not often that one finds refreshing nuance in books dealing with economy. Economics is not supposed to be about nuance. It usually presents itself in the cold black and white terms of mathematical models and statistical analyses. Perhaps that is why the discipline has been called the “dismal science” since its cold formulae seem bereft of life.

There is life, however, in Samuel Gregg’s new book, Becoming Europe: Economic Decline, Culture, and How America Can Avoid a European Futureir?t=thamtf-20&l=as2&o=1&a=1594036373 Why Economic Culture Matters. His work is indeed about economy, but he makes an effort to explain the “why” rather than the “what” behind the present crisis. He resists the temptation to simplify the challenges we face as a nation, and confronts head-on the European welfare state model that looms on the horizon.

Gregg’s central thesis is that America risks “becoming Europe” economically if it drifts further toward the dangerous models that are now imperiling the Old Continent and could later threaten us here. He outlines ways by which we can avoid this “European” future.

q?_encoding=UTF8&ASIN=1594036373&Format=_SL160_&ID=AsinImage&MarketPlace=US&ServiceVersion=20070822&WS=1&tag=thamtf-20 Why Economic Culture Mattersir?t=thamtf-20&l=as2&o=1&a=1594036373 Why Economic Culture MattersThe substance of his narrative is a meticulous examination of European economic life stretching all the way back to the Middle Ages. Gregg follows the rise of what he calls a corporatist dirigiste mentality that has long come to dominate the European economic landscape and has contributed to the formation of the Union’s modern welfare states. To demonstrate this, he supplies plenty of standard economic data.

However, there is also the refreshing nuance that comes when he steps outside the economic box. Gregg pays special attention to those cultural factors that many economists tend to neglect since they cannot be quantified. Culture is important, he contends. Markets follow culture; ignoring this factor is perilous.

Adding yet more nuance, Gregg admits that cultures are complex and untidy affairs that often defy scholarly analysis. The changeable priorities inside a culture strongly influence economy and give rise to institutional expressions. Like it or not, economies are embedded inside cultures and, while not all can be explained through its prism, the long and short of it is that “economic culture matters.”

Thus, Gregg’s description of the European economic crisis acquires depth by adding this cultural dimension. His text is not reduced to the standard citations of Smith, Hayek and Keynes but broadened with quotes from Tocqueville and Saint Thomas Aquinas.

Perhaps the most important conclusion to be taken from this book is that changing our economy is not a simple matter of changing policies, as if replacing a light bulb. Rather it involves those all-important factors of moral and cultural habits and attitudes that are not easily modified. It deals with overcoming bad statist habits. Above all, government intervention can never be considered a cure-all way to solve our problems.

As a solution, Gregg proposes that America would do well to apply the principle of subsidiarity. By this principle, a social unit should have recourse to a higher unit or authority only in those matters it is unable to handle properly on its own. In most cases, Gregg notes, “social and economic problems are more appropriately addressed by non-state forms of human associations.”

The good news is that the foundation for such an application is already there. The Acton Institute scholar calls for a return to an order that incorporates certain elements, not found in Europe, that still remain deeply ingrained in our nation’s psyche and rooted in its history. There is, for example, a national preference to use third sector civil and religious associations to resolve problems and for the practice of charity. Moreover, America still retains a culture of free enterprise, a strong rule of law, a high respect for property rights and other factors. The bad news is that all these elements are seriously eroded. They need to be revived and invigorated if a “European” future is to be avoided.

Becoming Europeir?t=thamtf-20&l=as2&o=1&a=1594036373 Why Economic Culture Matters is an important reminder that policy alone will not resolve our economic crisis. Refreshing nuance is needed. The unquantifiable moral dimension that was taken out of the economy must be put back in. Indeed, as Gregg concludes, “Life is about much more than maximizing utility.”