How to Succeed in Business by Really Trying

1.

The town of Kumasi, where I grew up, is the capital of Ghana’s Asante region, and its main commercial thoroughfare is called Kingsway Street. In the 1950s, if you wandered down it toward the railway yards at the center of town, the stores you passed sold processed foods, cloth, and household goods: and while there were always many Ghanaians, especially women, in the cloth trade, the other stores were largely owned by expatriates. First came Baboo’s Bazaar, which sold imported foods and was run by the eponymous Mr. Baboo—a charming and courteous Indian—with the help of his growing family. Mr. Baboo was active in the Rotary and could always be counted on to make a contribution to the various charitable projects that are among the diversions of Kumasi’s middle class. (I remember Mr. Baboo mostly because he always had a good stock of sweets and because he was always smiling.)

I can’t reconstruct the tour down the rest of the street, for not every store had sweets to anchor my memories. But I remember that we got rice from Irani Brothers; and that we often stopped in on various Lebanese and Syrian families, Muslim and Maronite, and even a philosophical Druze, named Mr. Hanni, who sold imported cloth, and who was always ready, as I grew older, for a conversation about the troubles of his native Lebanon.

This hodgepodge of Middle Eastern and Indian business families seemed as natural a part of our lives as the Muslims who visited the house to offer brass and wooden antiquities collected from around the region. It seemed, in fact, so natural that I don’t remember ever having wondered how it came about that these people had settled among us of their own free will to pursue their businesses so far from home.

The predilection for trade—whether among the Hausa petty traders, or among Indian or Levantine shop-keepers—is by no means something that had to come to Asante from outside. Asante women have always dominated the trade in food and cloth in the Central Market in Kumasi. These “market mammies,” often illiterate, keep thousands of dollars worth of business in their heads and have fed and clothed the city while governments have railed against them for refusing to sell their wares at the (preposterously low) official “control prices” of the Sixties and Seventies. But in our town, as in almost any multi-ethnic community, there was business specialization among nationalities; and the dominant role of these expatriates was as middlemen—people who bought goods from producers and wholesalers and sold them to consumers.

There were other “strangers” among us, too: in the barracks in the middle of town you could find many Northerners among the “other ranks,” privates and NCOs. If you go now to the military museum in Kumasi, the photographs of the heroes of the Gold Coast regiments that fought for the British Empire in Burma in the Second World War are mostly of NCOs with recognizably Northern names, and faces etched in a distinctive pattern of scars.

And then there was the occasional European—the Greek architect, the Irish doctor, the Scots engineer, some English barristers and judges, and a wildly international assortment of professors at the university, many of whom, unlike the colonial officials, remained after independence.

In a country with a few dozen languages and a wide range of native cultures and traditions, the foreigners—from Europe and the Middle East and Asia, from Nigeria and Upper Volta and Ivory Coast and Togo—only added to an already large range of human diversity. But what is striking, once your attention is drawn to it, is the vast differences in economic and social position of these various cultural groups.

Thomas Sowell’s new book offers a global survey—a “world view,” in the title’s donnish pun—of the ways in which such economic and social differences are determined by cultural differences. Sowell tells us in his preface:

The purpose of this book is not to offer some grand theory explaining cultural differences. Its goal is to demonstrate the reality, persistence, and consequences of cultural differences—contrary to many of today’s grand theories, based on the supposedly dominant role of “objective conditions,” “economic forces,” or “social structures.”

This book deliberately offers little in the way of direct policy prescription, for its underlying premise is that what is most needed is an understanding of existing realities.

This passage is unduly modest. There is a grand—or at any rate a grand-ish—theory here; and its consequences for policy are plain enough, even if they are not stated outright. But both Sowell’s theory and his policy prescription first require some explanation.

One issue, however, needs to be dealt with at once. This book is not about race. True, Sowell insists on using the word “race” in his title, his preface, and off and on throughout the book, to refer to what everybody (including Sowell himself) now normally calls an ethnic group. The only advantage, so far as I can see, is that the book gets a splendidly resonant nineteenth-century title: Race and Culture. The trouble is that in the late twentieth century the title is thoroughly misleading.

Sowell worries that “the word ‘race’ in the title of this book [may] lead to misunderstanding, or to quibbling…” And then, quoting himself in his earlier book Race and Economics (1975), he says that he is using the term

in the broad social sense in which it is applied in everyday life to designate ethnic groups of various sorts—by race, religion or nationality.

Permit me to quibble: fastidiousness about language is as much a shibboleth of my own tribe, philosophers, as a genial indifference to it is a totem of the hard-nosed economist. The last time the word “race” was used in English in “everyday life” to refer to people by “religion or nationality” was when my mother was a girl. Nobody now speaks seriously of the Catholic “race” or the French “race.” The word is used almost exclusively to refer to the purported major biological divisions of humanity.

During the twenty or so years since Race and Economics was written, many telling arguments have been made against using the term “race” to mean ethnicity. Consider two of the principal arguments. First, the human differences that matter for social life aren’t biological, and that is exactly what calling them “races” has usually implied since the development of race science in the nineteenth century. Second, the groups that are of sociological interest, the groups that have cultures, not only are not biologically homogeneous, they are not even of the right scale to be the races that the race scientists were after. It is not Asians, not even South Asians, but, for example, Gujaratis that have discrete cultural significance; it is not Negroes, not even Nigerians, but Ibos who have a distinct culture.

That Sowell ignores the force of both these arguments is particularly odd, since he fundamentally agrees with them. On the first, he provides a global survey of differences in performance on various tests that purport to measure intellectual aptitude or achievement. One conclusion, which he argues persuasively, is that there is not much reason to think most of the measured differences in “intelligence” or “aptitude” between ethnic groups in various societies are genetic. (The same point has recently been made by critics of Charles Murray’s The Bell Curve. But it is nice to have a bona fide conservative intellectual pronounce on the issue so firmly.)

On the second point, Sowell observes that when we are looking to culture to explain the success of certain groups, by which he means mainly economic success,¹ we should be sure to make fine enough distinctions.

People of Scottish ancestry have long been among the more prosperous groups in the United States, but people of the same ancestry in the Appalachian region have also constituted one of the most enduring pockets of poverty among white Americans. As long as our view is confined to American society, it may be plausible to believe that “objective conditions” in Appalachia, or the way people are “treated” there, accounts [sic] for the anomaly….

Yet, if the history of the Scots is viewed internationally, then it becomes clear that the subgroup which settled in Appalachia differed culturally from other Scots before either boarded the ships to cross the Atlantic.

He goes on to say that Appalachian citizens of Scottish descent derive from the more backward culture of those Scots who had settled in Northern Ireland before they came to America.

Not only does Sowell believe that the culture of certain groups is central to explaining why some of them succeed economically, he believes that cultural patterns are extremely resilient, surviving transfer from one environment—say, Gujarat in India—to another—say, Fiji or Kenya, both being places where Gujarati businesses have been successful. I’ll refer to his claim that cultural patterns tend to persist through migration as the “persistence thesis.”

No one could disagree with the claim that some cultural traits persist, and everyone will agree that not all of them do. But the real point of Sowell’s view emerges when he refers to the “persistence…of cultural differences—contrary to many of today’s grand theories…” (italics mine). The principal claim of his persistence thesis, then, is that cultural traits are more likely to survive through migration than most contemporary theories of social science would allow. As Sowell says: “Perhaps the best way to focus on the central theme of this book is by contrast with prevailing ‘social science…’ ” In assessing his book Sowell wants us to be aware of the ways that “today’s grand theories” neglect the importance, and the persistence, of culture.

Sowell makes a second important claim: that in shaping a minority’s prospects, the attitudes of people of other groups, and especially discriminatory attitudes, have a far smaller impact than is normally assumed. Here again he is implicitly referring to what he takes to be the prevailing view in social science today. Contrary to that view, Sowell argues that “internal, cultural patterns” transcend “the beliefs, biases, and decisions of others,” and provide the main explanation for a group’s economic success. Because the basic idea here is that it is the endogenous traits of the group rather than exogenous social forces that account for relative economic success, I shall call this second proposition the “endogeny thesis.” Together the two claims form Sowell’s grand-ish theory.

2.

Like most assertions about human social life in general, Sowell’s claims are about what tends to be so; they are not statements of exceptionless social laws. Rejecting them requires more than merely finding a number of counterexamples. But, so much granted, does the evidence he uses show what he says it does?

Here the book’s major weakness becomes evident. Despite nearly nine hundred footnotes, Sowell is extremely vague in defining who exactly holds the views that he ascribes to “social science,” and, as a result, about exactly which views he rejects. His central claims, which we are meant to understand as setting right an imbalance in the views of the social scientists he opposes, therefore remain obscure. We are left to ask: How long must a pattern persist to be an instance of his thesis? How stable must cultures be to conform to it?

Here Sowell seems at times to want to have his cake and eat it, too. Take his example of the Scots, from which I have quoted earlier. Sowell, as I’ve noted, attributes the relative economic and social failure of the Appalachian Scots to their Scots-Irish descent; they are descendants of Scots who settled in Ulster and then emigrated from there to the New World. We are meant to believe that they changed, losing somehow in Ulster the dynamism of Scotland, and that the inertia they acquired in Ulster persisted when they arrived in the New World. But why is this not better evidence for the mutability of culture than for its tenacity?

What is wrong with this particular case is not that Sowell’s account can’t be true.² What is wrong is that it is unclear why and how it supports the persistence thesis; and that is because the thesis itself is so uncertain.

Indeed Sowell gives plenty of examples of the way cultural patterns change. In the chapter called “Conquest and Culture,” he writes: “When Arabs transmitted the cultures of Asia, of Hellenistic Greece, and of Persia a millennium ago, they not only transformed those cultures, but were themselves transformed.” In “Race and History,” he offers an elegant survey of how geography shapes culture, concluding that the geographical isolation of “the Scottish highlanders, the Montagnards of Vietnam, the Kandyan Sinhalese in Sri Lanka…” produces “conspicuous cultural lags.” He speaks of “the cultural advantages of coastal peoples.” All these statements reflect a recognition of the ways in which environment—including the social environment of other peoples—can shape a culture, including the cultures of migrants.

In view of these examples, one must ask why Sowell insists so firmly that the key point of his book is the persistence of cultural patterns through migration. We find the answer when we turn from the theory he claims not to have to the policies he claims not to propose.

Very early in his book Sowell argues that once we acknowledge that the cultural patterns which account for group differences in the US often arrived with particular migrating groups, then “hopes for major social changes in a short time through government policy become less realistic.” I assume that this is a veiled reference to his well-known skepticism about affirmative action as a way of addressing economic inequality. Sowell’s argument on this issue starts from the premise that the relative successes and failures of groups are largely explained by longstanding cultural patterns, often originating elsewhere. He then relies on an unstated premise that these patterns are not susceptible to social intervention. He concludes that little can be done about the different patterns of ethnic success and failure that result.

Yet Sowell provides no evidence whatever for us to think that his unstated premise is true. For that matter, Sowell has very little to say about which cultural patterns produce economic success (other than familiar talk about “human capital”), and nothing at all to say about why it is that some groups acquire and transmit successful patterns of behavior and others do not. “It would,” he writes.

be enormously valuable to understand just why and how some people have seized the initiative at various periods of history and have led the technological, scientific, or medical advancement of the human race. Unfortunately, at the current stage of “social science,” it is a struggle merely to establish that some cultures are in fact more productive in various ways than others.

But far from there being a mystery here, common sense has a lot to say about why some groups are more productive than others. Sowell himself recognizes the common sense virtues of thrift and hard work.

A study of Korean businessmen in Atlanta showed that they worked an average of nearly four years—sometimes two jobs at a time—before accumulating enough money to open their first business, and that they worked an average of more than 60 hours a week in their stores or shops. In an earlier era, Lebanese businessmen in the United States were open an average of 16 to 18 hours a day. Similar hours were worked by the overseas Chinese in the Philippines, seven days a week. ³

If your aim is to encourage behavior of this sort in your children, there are obvious ways to do it. One of the most obvious is practiced by more than a few families in the US: require your children to earn pocket money by doing household chores and then insist that they save some of it. This is a cultural practice; the degree to which it is followed varies, I am sure, among ethnic groups, classes, and regions. And only a most ferocious opponent of the idea that culture has an impact on behavior—and I know no one so ferocious—would deny that such practices as this partially explain why different ethnic, class, and regional groups have different degrees of economic success. (Lawrence Harrison’s Who Prospers?, 1992, which covers much of the same territory as Sowell’s book, provides plenty of detailed suggestions about how to improve the economic and social prospects of groups and of nations.)⁴

What is curious about Sowell’s view that government or other external agencies can do nothing to help relatively poor ethnic groups is that he emphatically believes that policies backed by governments can harm the prospects of ethnic minorities that have been successful. In a great many cases, which he describes with much feeling, envious majorities, often with government complicity, have attacked minorities who act as middlemen in commercial life—Jews in Europe, Lebanese in West Africa, Chinese in Malaysia, Gujaratis in East Africa. They show clearly that groups can be damaged by prejudice and that government, and society, can make a difference.

3.

These difficulties might lead one to ask how central Sowell’s belief in the persistence of culture really is to his thinking. He travels around the world, reads history, and finds various admirable groups, often the very ones I have just mentioned. They are hard-working, better-off than their neighbors; their families stick together. There must, he apparently believes, be some larger persisting cultural patterns or tendencies that explain these groups’ economic success in so many places. But what is required to explain their successes is only that in these particular cases, some factors conducive to success have continued to have an effect. When a specific culture remains intact, its intactness can account for a migratory ethnic group’s success, even if there is no general tendency for cultural patterns to persist. Sowell’s general proposition that cultural patterns tend to persist when minority groups emigrate is beside the point.

But Sowell needs the persistence thesis to support his pessimism, his gloomy claim that “hopes for major change in a short time through government policy” are “less realistic.” Because he thinks that the relative economic positions of groups are the result of longstanding and deeply rooted cultural patterns, he doubts that we can change them here and now. When we read his accounts of Gujaratis, Jews, Chinese, and other emigrant groups, we can grant the relative success of minorities that act as commercial middlemen in different parts of the world. We can grant, too, that their success is the result of cultural traits of their ancestors (even though Sowell says hardly anything about what these might be). But Sowell wants us to grant more than this. For him, cultural persistence is important because he thinks it can also explain the relative failure of other minority groups; that failure is also presumably, the result of the persistence of ancestral cultures (whose failure-generating characteristics are not much described either).⁵ But if there is no general tendency of cultural traits to persist, then we must look case by case at particular groups to see what accounts for their failure. And the cause of that failure may not be any enduring cultural traits that are resistant to current social action, as Sowell’s persistence thesis would lead us to expect. The failure to achieve economic success may have such obvious causes as official and unofficial discrimination. In such cases, contrary to Sowell’s claim, there may well be hope for government policy.

It is worth noting in passing the irony of the publication in the same season of Race and Culture and The Bell Curve. Both espouse conservative politics, which they support with the claim that the differences between groups that account for relative success and failure are hardly susceptible to government intervention. Sowell rightly sees that you can drop the old Social Darwinist assumption that these differences are in the genes, and still argue against government intervention. (He’s just factually wrong about whether different government policies could change things.) Murray and Herrnstein say this, too. But their obsession with genetics suggests that, in their heart of hearts, they don’t really believe what they say.

And they’re wrong to insinuate that differences between groups that have a substantial genetic component can’t be eradicated. The success of Africans in frustrating European settlement in West Africa—the Guinea Coast was known as the “White Man’s Graveyard”—was, in part, a consequence of the Europeans’ lack of resistance of yellow fever and malaria. Part of this difference was genetic. But once the yellow fever vaccine and measures to eliminate malaria were developed, the genetic differences no longer had the same effect: Europeans now have lower mortality rates than Africans in West Africa.

If Sowell’s insistence that culture persists is tied to his pessimism about politics, his attachment to the endogeny thesis has, I think, a different source. In the chapter on “Migration and Culture,” Sowell argues that while immigrants create costs for the societies to which they come they usually bring great benefits as well. Such are his conclusions when he considers the contribution to the economic development of Latin America of non-Iberian European entrepreneurs (British capitalists, German farmers) and Chinese and Japanese indentured labor; or of Chinese in building the Malaysian economy. (They are, he points out, twice as productive in rubber-tapping as native Malays.)

Sowell does an especially good job of defending minorities who act as middlemen. He explains that the Lebanese were more successful than European middlemen in West Africa because they worked longer hours, and worked as families rather than as individuals. They got to know the local cultures better than Europeans (and thus knew better how to assess credit risks) and chose to begin as peddlers rather than borrow capital to rent or buy shops. Indeed he defends middlemen minorities from a variety of the charges that have been made against them: that they are clannish and condescending to locals; that their rates of credit are exploitative; that they fail to hire local labor; that they monopolize certain industries; that their real loyalties lie elsewhere. Their clannishness, he writes, is necessary if they are to keep the distinctive cultural patterns that allow them to prosper; their condescension is understandable, since they are economically more successful; local workers may really be less reliable than members of their own group and you cannot speak of a monopoly, he writes, where middlemen compete, even if all those competing are of a single group. Finally, the charges that successful minorities are disloyal are often simply false.

In these pages one sees that Sowell’s sympathy, indeed his passion, is for these doughty entrepreneurs and the spirit of capitalism that has taken them throughout the globe. He admires not only their courage and their thrift and the strength of their families, but also the openness to the world that has drawn them to so many places. Sowell’s stress on endogeny follows from this admiration. He wants us to see their success and acknowledge that it is peculiarly theirs—that it reflects their own virtues and not impersonal social forces or government programs that have driven them into what have become lucrative businesses.

But this strikes me as a moral muddle. There is no doubt that one reason Jews went into commerce and then into moneylending in Europe in the Middle Ages is that they were prohibited from doing other things, notably landowning. This prohibition was not their doing. But when particular Jews made a success in commerce and then in banking, this was their doing, even if the explanation of the fact that they were in banking at all had to do with the Catholic church’s changing attitudes to “usury.”⁶ Why does the fact that Jews were forced into banking make the Rothschilds’ successes at it any less admirable?

It is Sowell’s affection for capitalism that also accounts, I think, for the underlying theme of his book; and that affection also explains some of its intellectual oddities. One is that Sowell is so worried that capitalism might be blamed for something as obviously wicked as slavery that he argues both that New World slavery made little contribution to the growth of Britain’s industrial economy and that British abolition of slavery was, nevertheless, economically irrational.

On the general subject of slavery, Sowell’s account of the current state of scholarship is, to put it politely, one-sided; indeed, his view is contradicted by much of the best recent work. Anyone who has looked at British Capitalism and Caribbean Slavery or Slavery and the Rise of the Atlantic System,⁷ for example, will be surprised to find that Sowell claims that slavery “did not create any notable economic achievement.” “Without African slaves and the transatlantic slave trade,” Franklin Knight writes, “the potential economic value of the Americas could never have been realized, since neither Portugal nor Spain had the reserves of labor necessary to develop their new possessions.”⁸ According to the essay by P.K. O’Brien and Stanley L. Engerman in the same volume: “The development of an Atlantic economy is impossible to imagine without slavery and the slave trade.” This is part of their argument that export trade, in which the Atlantic economy was central in the eighteenth century, has been underestimated as a source of British economic growth at that time. It is hard to know what counts as an economic achievement if the opening of the Americas and the building of the first industrial economy do not.

Sowell does not cite these books, though he cites writings by some of the contributors to them. Nor does he attempt to meet the arguments of Barbara Solow that slavery “made more profits for investment, a larger national income for the Empire, and a pattern of trade which strengthened the comparative advantage of the home country in industrial commodities.”⁹

Sowell’s spotty use of current scholarship is his book’s least happy feature. Not only does he ignore important work on the relations of slavery to capitalism, he wants the reader to believe that mainstream social science perversely denies the significance of culture. But he is able to make this claim only by a tendentious interpretation of the sources he cites. In the first chapter, for example, Sowell objects to Orlando Patterson’s account of the way Chinese immigrants came to dominate the Jamaican retail trade system, in which Patterson attributes their success to factors peculiar to Jamaica.¹⁰ They had, Patterson argues, no competition when they set up retail shops in Jamaica; he concludes that their success can be explained “without having to resort to questionable notions about [their]…greater initiative or resourcefulness.”¹¹ So far, then, it is true that Patterson does not explain the success of the Chinese as a result of “culture.”

But a less tendentious reading of Patterson’s work might have noticed that other aspects of his account support Sowell’s claim that culture has an impact on economic success. For Patterson argues that considerations of status kept whites and Jews from taking part in the Jamaican retail trade; and he shows as well how the new middle-class “coloreds” kept out of it as well because they wanted to maintain a gap between themselves and the blacks. Patterson, like Sowell, holds that cultural patterns make a difference.

In fact, contemporary social science is increasingly drawn to explanations based on culture. Consider, for example, the enthusiastic reception of the work of my colleague Robert Putnam,¹² a political scientist who has suggested that current political patterns in Italy reflect forms of social life that are hundreds of years old. Or the widespread acceptance of Gary Becker’s idea of human capital—the socially transmitted knowledge and skills affecting productivity, which are widely understood to be at least partly dependent on cultural attitudes to such matters as education. (Unless, of course, Nobel laureates in economics don’t count as mainstream social scientists.) The monolith Sowell is attacking seems largely an artifact of an earlier era.

This is not the only way in which the book is a throwback. In The Spirit of the Laws, that charming compendium of cross-cultural commentary, Montesquieu wrote:

Many things govern men: climate, religion, the maxims of the government, examples of past things, mores, and manners; a general spirit is formed as a result.

And he goes on to warn us that one must be “careful not to change the general spirit of a nation.”

If the character is generally good, what difference do a few faults make?

One could constrain its women, make laws to correct their mores and limit their luxury, but who knows whether one would not lose a certain taste that would be the source of the nation’s wealth and a politeness that attracts foreigners to it?¹³

We can find here, in more elegant form, two elements of Sowell’s theory: persistent cultural patterns that reflect the national (or ethnic) history, and pessimism about deliberate attempts to improve the national (or ethnic) character. The two elements themselves form a “cultural pattern” older than the two and a half centuries since Montesquieu began the composition of The Spirit of the Laws.

Among the many social transformations that have occurred meanwhile many have been for the better; they have been associated with new cultural patterns as well as old ones: and some of the new patterns are the product of policy and of reason. (Think of the eradication of smallpox: the medical technology of vaccination is more than two centuries old. What is new is the remarkable international coordination of efforts to administer vaccinations in many different cultures.) History does not teach us that progress comes only when the state stands back and allows existing cultural patterns—or rather the groups that embody them—to contend with one another. Here in the United States, we must surely acknowledge (as Sowell does in passing) that the intervention of the national government in the interest of African Americans against Jim Crow was a formidable achievement. And there is scope, too, for optimism in some of the new identities created during the last few centuries, among them the attractive cosmopolitanism, with its “world view,” that Sowell shares with the author of Les Lettres Persanes.

Back in the 1950s, the cinema at the end of our street in Kumasi, the Odeon, brought us musicals from India, kung fu movies from Hong Kong, westerns from Hollywood. In those days before television, the Odeon was our periscope into a wider world. It was owned by a Lebanese family. Last time I was at home, I was reminded that the Odeon is no longer a cinema—cinema in Kumasi has been destroyed by the video clubs—but a church, one of those evangelical Protestant denominations that are spreading throughout Africa. I wonder what Max Weber would have said about this triumph of Protestantism over the Protestant ethic of the Muslims who built the Odeon.

But this small piece of history is an emblem of something else: the Odeon may have changed its function, in one sense, but it remains a point of connection between the local and the global. If I find myself sharing Sowell’s admiration for the minorities that act as middlemen, it is not so much because they brought us capitalism—Ghanaians entered world capitalism long before we entered the British Empire—as because they linked us so emphatically to a wider human experience.