Deconstructing cultural codes

As I continue to do Conversations with Tyler, more people ask me about “the Tyler Cowen production function.”  Well, here is one piece of it I don’t think I’ve written about or talked about before.  I’m going to bring you there in slightly long-winded fashion, long-winded for a blog post that is.

I’ve long been convinced that “matters of culture” are central for understanding economic growth, but I’m also painfully aware these theories tend to lack rigor and even trying to define culture can waste people’s time for hours, with no satisfactory resolution.

So I thought I would tackle this problem sideways.  I figured the best way to understand culture was to try to understand or “crack” as many cultural codes as possible.  As many styles of art.  As many kinds of music.  As many complex novels, and complex classic books, and of course as many economic models as well.  Religions, and religious books.  Anthropological understandings.  I also learned two languages in my adult years, German and Spanish (the former better than the latter).  A bit later I realized that figuring out how an economic sector works — if only partially — was really not so different from cracking these other cultural codes.  For instance, once I spent three days on a boat (as keynote speaker), exclusively with people from a particular segment of the shipping trade.  It was like entering a whole new world and every moment of it was fascinating.

Eventually it seemed to me that problems of management were themselves a kind of cultural code, each one different of course.

And travel was the most potent form of this challenge, every new place a new culture to be unraveled and partially understood, and how much time was there to do that anyway?

It is very time-consuming — years-consuming — to invest in this skill of culture code cracking.  But I have found it highly useful, most of all for various practical ventures and also for dealing with people, and for trying to understand diverse points of view and also for trying to pass intellectual Turing tests.

I am not recommending this you at any particular margin, or at the margin I have invested in.  But if you ask me about the Tyler Cowen production function, every now and then I will tell you.

Addendum: It occurs to me that the number and diversity of cultural codes is increasing much faster than the ability of any individual to track them, much less master them.  In this regard, an understanding of matters cultural is always receding from us.


In the next installment it would be interesting to hear how this is actually helpful in dealing with people. That's a pretty practical application. In your videos you come across as only having one mode - "economist."

One of the most important benefits should be obvious: Tyler is more open-minded and willing to listen and learn from other people than I'd say 90% of the people in the world (and probably 99% of the commenters to MR). So not only does he learn more, he gets along with more people.

That doesn't mean he doesn't have opinions and even ideologies; he does and he makes them clear in his writing and talks. But he doesn't shut out other opinions.

'But he doesn't shut out other opinions.'

The belief of this statement's accuracy is one of Prof. Cowen's most valuable public assets.

There are some recent documents from a Fairfax court case that do not support that faith - but who believes what they read anyways?

Though one assumes that this carefully written paragraph in a longer statement is honest - 'These old grant agreements at George Mason University did not allow us to cause the university to hire certain professors, nor did they allow us to make decisions regarding the curricula or research that professors pursued. These agreements did allow us to have a say in recommending candidates who were considered for the faculty positions we supported. Once the candidates were proposed, the standard university hiring procedures began, and the faculty were free to approve or reject candidates (and they did approve some and reject others).'

(Want to guess whose name is not precisely uncommon in those old grant agreements?)

@clockwork_prior - yawn, mystery writing to drum up audience interest, a hoary tactic. Why not just face the fact you were fired, possibly for trying to steal GMU Nazi art (my likely guess, given your roots) and/or are incompetent? Besides it was nearly, what, 25 years ago? Time to move on (and out of your parents basement).

Good post. I learn something totally new and challenging on sites
I stumbleupon on a daily basis. It's always helpful to
read through content from other writers and practice a little something from their sites.

'try to understand or “crack” as many cultural codes as possible'

Experience, however .....

'For instance, once I spent three days on a boat (as keynote speaker), exclusively with people from a particular segment of the shipping trade.'

Ship, one assumes - cracking those codes can be tough, even with experience.

'In this regard, an understanding of matters cultural is always receding from us.'

It is called aging. though some people have a harder time with it than others.

"Ship, one assumes": or "tub".

I see that your definition of cultural code appears to be close to Romer's ideas. I think that culture is important in inluencing growth when it impacts on economic activity. For example, a culture that tends to place more value on following rules such as Japanese of Korean culture, will more easily achieve economic growth because it is easier for those societies to develop institutions such as rule of law and macroeconomic stability while cultures such as Latin American place low value on rules and order as well as on hard work. Latin America is perhaps the region of the world with the worst track record of development, while Africa is now in worse shape they had only 50 years since independence while LA had over 200 years of independent govenment.

It's all about trust. Without trust, you need the rule of law. Law exists in the minds of the people. Without it, there is no hope. That's the situation in LA.

With Trump, we have neither trust nor rule of law. Just a lot of angry tweets.

I am not sure what this post is saying.

I think northern cultures achieve better economic performance. I suspect this is because of harsh winters. For generations, thousands of years, people in northern cultures have had to delay gratification, meet seasonal deadlines, plan, work hard enough to have food set aside for the off-months, etc. Perhaps even certain genetic types prospered, such as the chronic worrier (see my family). Rules do become important.

In southern cultures winter never comes. Why the hurry? Authority figures are dismissed as useless sermonizers.

However, northern cultures also brought us Nazi Germany and Imperial Japan.

Also, I can't explain the Russians. They never amount to much.

Having pronounced seasonality certainly rewards large scale social organisation. Not entirely northern; see tropical hydrocultures with monsoon rains. Requires agriculture and food storage tech. Doesn't apply to Sami hunter-gatherers.

On the Russians - it is pretty simple - they were heading to developed nation status along with the other Eastern European countries but then they got slammed by communism. Remember even under communism they were pretty good engineers as their aeroplanes and rockets demonstrate. They are only thirty years or so from communism and the old communists are still in charge so they don't have a totally free society yet.

On your more general point about Northern Cultures or Races having lower discount factor I suspect it is more about disease than planning for the winter. After all even in warm climates it pays to save. But in warmer climates disease burdens are generally higher - like malaria and yellow fever. So cities and interacting in large groups results in a quick death. Look at the survival rates of Europeans in Africa in the 19C when they attempted to form settlements. In the north the winter kills off bugs so big cities can develop. It is in these big cities that you get rapid evolution due to the steep difference between survivals of richer people's children vs poorer peoples children. This was well documented in Gregory Clark's "A farewell to Alms" where he showed how richer people had a lot more surviving children than poorer people (as common sense would predict). So Northern People have literally been bred to be good workers in a capitalistic society. You can see this in the cult of work of our esteemed host - he doesn't do things (like drinking) which distract from his output. He cannot even imagine that other people might consider this crazy.

...says the man living in Thailand farming turkeys (gobble, gobble).

"and also for trying to pass intellectual Turing tests."

Tyler, I say this as someone who likes you and your blog, but you are one of the least self-aware people I know, and every time you talk about "passing a Turing test", this comes out more than ever. You need to take several steps back at this point.

@Tyler, do you approach the explorations of these cultural codes with any defined system? E.g. Based on interest, curiosity, things adjacent to those with which you are already familiar, etc.

Does your exploration of each follow your advice to "read in clusters"? Or have you found a mixed sampling to do the trick also?

+10 To Tyler. And -1 to me.

I didn't think he weighted cultural explanations of growth so highly. Nor that such beliefs were so integrated with his travel. I am impressed.

But then, I've been of the opinion that "culture" explains 80% of the variance for a long time.

The conservatives see everything in political terms. In a way, that makes sense - their economic view of the world is contrary to human nature. To bring about their economic vision would require a powerful, vast, and largely unresponsive administrative state, to which there is much resistance. Hence, they are perpetually frustrated ... and angry.

Laws and policies have consequences, among them the need for enforcement and an enforcer.

To them I say, "good luck with that".

+2. They've been angry for 3 decades now. In 2016, they found their demagogue and though they might or might not like him they want their anger to be acknowledged.

Didn't Boy George come out with his album "Culture Club" in response to some Washington Post / NY Times article from the early 1980s that claimed we are living in an age of culture clubs? A niche for everybody. Maybe it was just a coincidence but I think the the band was formed in response to this, kind of like the band "Alice In Chains" was formed in response to Alice Cooper wearing chains in some album he was promoting.

Bonus trivia: Alice Cooper - I'm Your Gun - had lyrics you won't find in today's feminized PC pop culture. ("...dress up like a nun")

Perhaps Tyler can put all the "Partial Understanding" of cultures in a new book - it would be great to have a comprehensive book on different cultures, their structure in terms of choices that each made and their consequences.
Only Tyler can come up with with such a book, that offends the least and open up discussion.

How about the culture of Silicon Valley? The amount of profits generated by Silicon valley is so vast the geographic area is sinking from the weight. So what do they produce in Silicon Valley that is so valuable? Not hardware, that's for sure. Steve Jobs envisioned Silicon Valley as the new manufacturing center of the country, and built several manufacturing facilities to produce Apple and Next products. The effort was a massive failure, as the culture of Silicon Valley was anathema to building stuff. Apple et al. went to China because they had little choice: don't blame Apple et al. for shifting jobs to China, blame the boy wonders in Silicon Valley who can't, you know, build stuff. This was revealed again recently when Silicon Valley gave up the effort to build a reliable car. I suppose one could describe the culture of Silicon Valley as a culture of ideas: all hat, no cattle. So what? To the extent Silicon Valley is the dominant influence on American business, it means more hat, no cattle. Thus, expect future cars to be more software and less of a car. Is that a good thing or a bad thing? It depends on the meaning of "car". To Google, it means another advertising platform, as Google converts car windshields into billboards.

I appreciate your comments on this blog but... software engineering is building, visualizing and refining the offering is a form of building, mechanical design, to the extent there is some of it in a small device like a PC or phone, is building, building and growing a business is clearly. I would not go as far as to say that the economy is much rewarding software craftsmanship but the craftsmanship has shifted to visualizing and refining the offering. Granted if your motto is "move fast; break things" and your office is on Hacker Way then your company is not representative of the culture.

It is to be expected that quality in the hardware, even as it increases, contributes a smaller fraction of the complete value of an offering when the economy shifts to valuing services and experiences. As for the hardware physical assembly task, the need for craftsmanship had to be designed out in order to minimize defects and increase consistency. Naturally it would lead to the need to move to a lower cost manufacturing country.

Errata: "craftsmanship had to be designed out" should be "craftsmanship has to be designed out". Craftsmanship was never a significant part of the offering.

if you cannot travel freely and you want to understand
other cultures
youtube is pretty good.

Not sure if MR covered the recent paper in Science demonstrating that fruit flies have (can have) culture. They didn't seem to have any trouble defining the term and did it clearly. TC use of the term seems very distant from any usable definition. How does one "crack" a culture? Is culture a population level thing, a group level thing, or an individual thing? He seems to confuse behaviors and beliefs with cultures. His belief that cultures are "central for economic growth" implies that cultures "act" over fairly short (years to decades) time periods, but any reasonable definition would require their persistence over multiple (3 at least) generations. Mark me down in the "not buying it" column.

I want to challenge the view that Tyler is getting a good insight into other countries by travelling there as a tourist. My view is that this leads to a very artificial view of a country - obviously the locals do not live like tourists in their own country. It is a bit like the old Economist Magazine fallacy where people would read articles in the Economist about a certain country and then fancy that they were actually informed. Certainly they were more informed than people who never read the economists but their actual knowledge of the country was very low. If you want to know how a country really works you need to spend time working their in my view. Just getting the necessary work permits can tell you a lot for instance.

Cultures are best identified by their values priorities. In the case of the US they are ranked 1. Comfort, 2. Convenience, 3. Entertainment, 4. Security. In the American culture the number one daily priority for an overwhelming portion of the population is parking the car as closely as possible to the door of the building to be entered. This is so important that the employee of the month is given a spot next to that reserved for the boss. It's a continuous effort by the HVAC industry to meet the demands for incredibly exact temperature, relative humidity and air quality in public and private buildings. The consumer society must be so painless that customers needn't be bothered to physically select their own food. Do those that deliver on-line groceries also have them delivered? Practically all Americans carry small electronic devices that are capable of amusing them when there are even a few seconds of boredom or just a lack of sensory stimulation. Americans are so worried about crime that they entrust their entire fortunes to institutions that barely exist in corporal form and fret about identification numbers assigned to them by faceless government agencies. This is what defines American culture.

"It occurs to me that the number and diversity of cultural codes is increasing much faster than the ability of any individual to track them, much less master them. In this regard, an understanding of matters cultural is always receding from us."

1. Well, that depends of just what one means by "understanding." Perhaps one can understand how culture works without having a detailed understanding and explication of each and every code. If not, then, yes, we're up against a version of the Tristram Shandy paradox:

Tristram Shandy, the hero of a novel by Laurence Sterne, writes his autobiography so conscientiously that it takes him one year to lay down the events of one day. If he is mortal he can never terminate; but if he lived forever then no part of his diary would remain unwritten, for to each day of his life a year devoted to that day's description would correspond.

2. Yes to the proliferation of codes. In the simplest cultures there is one code, perhaps two (men's things and women's things). How many codes were there in ancient Rome, 12th century Constantinople, or 17th century Edo?

I happened to be at a small town, Ohio, college commencement this weekend. It's a Christian college, where miracles were given their place in nursing studies. It all led up to an address, intelligent design mentioned in the speaker's introduction, which turned out to be something quite unexpected.

Imagine my delight at a speech about how small-r republican government requires
a deep belief in the equality of all citizens.

As the old saying goes, "wherever you go, there you are.""

The Andew Breitbart doctrine: “Politics is downstream from culture.”

So if we look an individual utility functions as a vector of weights on all types of consumption and values, then a cultural code is a 3D matrix of those weights, where there is cross weighting between individuals. Strong cultures have high correlations across the values weights in the individual utility function, but also in the across-individual weights. In other words I value the rule of law highly in my utililty function, but I also value everyone else's value for the rule of law highly in my utility function. This creates pressure for values alignment in strong cultures. This could admittedly be good or bad depending on the equilibria.

The weights in your utility function for others weights in their utility functions on values manifests even in free societies through elections, hiring and promotion, geographic preferences, charitable donation, granting of status, etc.

Reminds me of Sirach 39: 1-10


When you speak of the benefits of travel in allowing you to understand different cultures, and yet because of the endless growth and change that cultures undergo, “In this regard, an understanding of matters cultural is always receding from us,” I wonder if you were channeling, subconsciously or otherwise, Tennyson’s Ulysses:

"I am a part of all that I have met;
Yet all experience is an arch wherethro'
Gleams that untravell'd world whose margin fades
For ever and forever when I move. "


Which brings to mind the notion that not only does the margin of that gleaming arch ever recede, but that we are also caught in a current that takes us downstream, as Fitzgerald famously observed in the final line of _The Great Gatsby_: “So we beat on, boats against the current, borne back ceaselessly into the past.”

Now imagine a society withe 2 groups with very different individual value weights and cross-individual value weights. Such a society will exhibit chaotic behavior or perhaps possibly block-diagonal behavior in the 3D matrix of weights (isolated sub-societies). This seems to be observable in the real world.

How many of these codes would you consider yourself to have “cracked”? Do you think you have cracked the cultural codes of the English, German and Spanish speaking worlds?

This is interesting, thanks for sharing!

This makes me think of the value of a liberal arts education. Literature, history, foreign language--and if you study at a certain type of university, being on campus with lots of different kinds of people--all are pointing in this general direction.

Did the number of people who asked you about "the Tyler Cowen production function" go from zero to one?

Contrary to your experience, IMO globalization was reducing the diversity of cultural codes across industries and countries.

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