Is there a Technology Frontier of Culture (and should we "Catch-Up")?

2008-08-02T13:08:00.000-07:00

Are some ways of living (read culture) better than others?

I am thinking more about the propensity of Westerners towards traveling, but I guess the discussion is as relevant in many other areas (e.g. the kind of governance).

Travel used to be a dreadful activity in India. May be it was because too much effort (and money) was required to arrange a smooth trip. Given these costs, a vacation to a Hill-Station or a South-India tour was something to boast about and something only "rich" could afford. Souvenirs (and photos) from these places used to serve as decorations in the drawing-rooms. This "conspicuous" consumption was important for equilibrium since it used to increase the value of such a vacation and hence motivate people to bear those costs.

In addition to this "i-am-one-of-the-few" feeling one gets, people used to get some VALUE out of travel (more for adventurous type and less for someone who doesn't like to travel).

Being "well-traveled" was not considered to be anything special. (Note: Being "foreign-returned" was something that could earn a premium, but again mostly because not many could do it).

But not anymore. It seems like with development, people have started liking travel.

What has changed now? People have gotten rich and costs of traveling has gone down. But none of this should have changed the "Value" they get from traveling to places.

Even if we believe in "Hierarchy of Needs" it should not have changed the value of people who were traveling earlier. No longer it is just for showing off, people like seeing different places.

In Western society travel is regarded as respectful activity. Someone who has been traveling a lot is not considered a mere gypsy. The same culture is becoming popular in developing world (especially India).

Here is the reason how this cultural transformation matters.

In differentiated products scenario, people often choose just one. Thinking that they like this one better than others. Now since people can not try all the products, their decision is based on the of how much "VALUE" all these products have for them. This works fine with computers, cars even cereals, where one can classify and compare the quantities of each product.

But now imagine, can you do that in "Marriage/ Finding a partner". Surely these days there are websites that try to classify each person, but realistically it is not possible. And since you can not try the products before you try it (specially in India), one's decision is almost always based on perception of how valuable these features are. These "Perceptions" matter a lot.

I guess I have digressed from the Travel example. How valuable is travel? I remember telling someone about my first Skiing experience and how I fell several time. He asked me why did you spent so much money on getting yourself hurt. What did you get in return?

I guess I should have reminded him of MasterCard ad-campaign (that experience was really price-less for me), but I did not. It made me think that how can we expect to have a "Common Set of Institutions" (or similar), when people don't want same things.

Is all this debate about "Washington Consensus" worth the effort?

Well what if we can change the perception of people.

For example, in last three years people have started liking (VALUING) environment more. Of course new "information" about how scarce this resource is has played an important role in this value going up. But what is the difference between this new "information" and an advertising campaign that tells the same.

The point is if advertising can affect these perceptions, the effect in behavior/ choices will follow. If adventure tour companies can some how make us believe that how cool it is to do bungee-jumping, people will be willing to pay a lot for that.

In industries with huge fixed costs and low marginal costs (e.g. movies), it makes more sense to sell a lot for same product rather than create many different products.

Modern institutions took a lot of efforts to build. Implementing the same institutions to another country will be much easier than designing a new one.

If only people could be persuaded to like them.

The sarcasm is meant to draw attention towards ethical issues involved in this race towards homogenization of preferences.

Should everyone like travel? Should people who have traveled a lot be treated with respect?

One of the basic assumption of economics is that we can rank our choices. Does it work with cultures or institutions as well?

If there are better institutions (and perceptions like respect for well traveled people), shouldn't other catch-up with them.

Is it just a matter of time before everyone starts liking the same things?

But then we can't have a scenario where everyone has excess to it all (exception discussed below). Because more exclusive it is, more pricier it is (remember everyone likes the same thing). And more pricier it is, more valuable it must be.

The only case when above is not going to hold if the supply is unconstrained. So what is in unconstrained supply and everyone SHOULD like it. How about air?

Well if that is the case, then recent cultural shift towards "green culture" should be classified as move towards the technology frontier. .

Rumblings of an Intellect

Is there a Technology Frontier of Culture (and should we "Catch-Up")?