Tribes: How Race, Religion and Identity Determine Success in the New Global Economy. By Joel Kotkin

BY WARREN COHEN

Winter/Spring 1994 (1348 words)

Obsessed by the interplay between nation-states, scholars and politicians have more or less ignored the tribal links that bind individuals. Now that the simplistic, bipolar Cold War perspective is defunct, it seems as though everyone has suddenly realized that the globe is rent with ethnic factionalism, religious fundamentalism, and racial hatred. To some, such strife seems to portend a dark era of intolerance, discrimination, and bloodshed leading to the splintering of civilizations into warring factions.

Joel Kotkin disagrees. A Senior Fellow at the Center for the New West and an International Fellow at the Pepperdine University School of Business and Management, Kotkin argues that networks of global tribes are poised to play the essential role in fueling future prosperity in the world economy. Kotkin defines a modern tribe as a highly mobile, mostly urbanized people which still clings to its ethnic and religious roots. It exhibits what the philosopher Martin Buber called a "vocation of uniqueness," a shared historical memory that keeps a culture distinct.

Kotkin claims that the history of modern society and commerce is actually the history of these global tribes - nomad traders or imperialists who spread innovation, entrepreneurialism, and wealth across borders. Tribes have mastered the rules of the game, inculcating economic success among their members by providing a strong ethnic identity a tradition of cooperation in business, cosmopolitan savvy, and a belief in scientific and material progress. This trend will continue as modern communications and travel further interconnect the world and the imperatives for nation-state groupings weaken in a global marketplace without any ideological challenges to capitalism. Says Kotkin, "it is likely such dispersed peoples - and their worldwide business and cultural networks - will increasingly shape the economic destiny of mankind" (p.4).

After a brief introduction, Kotkin devotes the rest of his book to an historical portrait of five model tribes. He profiles Jewish financiers, British imperialists, Japanese corporate executives, Chinese investors, and Indian traders and links the cultural attributes of these groups to their commercial achievements through time. What these seemingly dissimilar tribes share are values often deemed essential to prosperity in a modern capitalist world: "a belief in self-help, hard work, thrift, education and the family" (p. 9). Combined with these key traits is the importance of ethnic networking. One example is the credit associations formed by Asian-Americans to aid newly arrived immigrants in establishing small businesses. When members of these migrant ethnic groups live and work in various countries, economies tend to flourish. When these countries evict ethnic groups due to envy or intolerance, such as Spanish Jews in the 15th century or the Indians in East Africa in the 1970s, their economies suffer.

The most compelling part of Kotkin's argument is his novel and provocative thesis that the world benefits from retained cultural identities because of the potential links between such affiliations and future global affluence. Kotkin challenges social critics like Karl Marx, sociologist Daniel Bell, and scholar Francis Fukuyama who postulated that future societies would liberate human-kind from parochial and exclusive cultures and universalize human experience. Today, honesty about the powerful and lasting influence of ethnicity is vital in light of world tragedies such as the conflicts in the former Yugoslavia and Somalia, which cry out for new paradigms for the peaceful coexistence of peoples and clans. Social harmony certainly seems to be a necessary precursor to any kind of shared economic prosperity.

Instinct may suggest that culture plays some role in fostering economic gains. Consider the relative economic success of Asian-Americans in the United States, a phenomenon that has been the subject of recent public attention. For example, the comic strip Doonesbury last year satirized Caucasian parents who beg Asian-American neighbors not to make their children study so much. Statistics seem to bear out these anecdotal tales. Kotkin cites figures showing that Asian immigrants in the United States are two and one half times more likely than natives to hold postgraduate degrees. At famed research institutions, such as IBM's Yorktown Heights facility, Asians account for one in four researchers. At AT&T's Bell Labs, they comprise as many as two in five.

Yet upon deeper scrutiny, Kotkin's viewpoint seems less convincing. His argument would be more compelling if he could specifically isolate the relevant ethnic ingredients contributing to economic success, beyond the general mantras of "work hard, study hard and save." Kotkin avoids the corollary question about why certain groups have not succeeded. For example, Romanies, or "Gypsies," have been wanderers and outcasts for centuries. But why, in contrast to the Romanies, were the Jews gifted money-makers? Mexican families are characterized as strong, extended networks, but the Chinese have generated more wealth.

There is no single combination of cultural traits that constitutes a key to prosperity. This explains why members of Kotkin's exemplary tribes can have poor cousins. And since almost every immigrant ethnic or minority group can count successful business people among its ranks, this proves that even members of tribes whose cultures are broadly lacking in Kotkin's required values can achieve commercial success. Furthermore, two of Kotkin's successful tribes, Jews and Indians, have underdeveloped economies in their home countries. Kotkin explains that this is due to socialism, regulation, and protectionism by their respective governments, which tend to inhibit the initiative of otherwise ambitious ethnic groups. Even so, with such prodigious networks, both inside and outside the countries, one would expect to see entrepreneurial endeavors flourish.

Another issue that Kotkin fails to address adequately is whether ethnic bonds will remain strong in a changing world economy. In fact, global trends seem to sever rather than enhance ethnic networks. Investment capital now flows around the world at a rate well beyond the scope of any government regulation, reaching $1 trillion a day. Without any barriers to the exchange of money and with vastly improved telecommunications, ethnic groups have expanded avenues by which to gather information, find cooperative partners, and lure prospective customers. While a tightly knit family will always help a relative in need, in the global economy the lowest price wins. Kotkin cites an unintentionally telling quote from an Israeli diamond cutter: "Jews don't come here to do business because they're Jews but because we do it better and cheaper...There's no room for sentiment in business, even among Jews" (p.54).

Kotkin is also overly sanguine in his belief that tribes will enhance the future labor marketplace, writing that "the world has become a single market for labor and talent, a market perfectly suited for the development of new global tribes" (p.235). But whereas individuals have traditionally been the wanderers, today industries also migrate. Labor-intensive industries are likely to move to countries like China, India, and Ireland where they can find technically trained but unemployed populations willing to work for low wages. Such dramatic shifts in the world economy are likely to exacerbate, rather than reduce, tensions between competing economic groups.

Furthering this possibility is the mounting domination of world markets by Asian industries. Kotkin claims that Japan has more scientific researchers than does the European Economic Community And a potential economic network of China, Taiwan, Hong Kong, and Singapore would have combined foreign currency reserves two and one half times those of Japan. Kotkin writes, "From a position of almost total economic backwardness less than 150 years ago, Japanese, Chinese and Indians have now broken forever the Euro-American lock on posterity" (p.262). In contrast, the century of American hegemony is ending prematurely. Racial enmity is palpable and anti-immigration candidates campaign without apology in a land that boasts the Statue of Liberty. In Europe labor forces are aging, population growth is flat, and workers have the highest number of sick days among their global counterparts. Meanwhile, ultranationalist and exclusionary political movements are gaining strength in European parliaments, most dramatically at the local level. The slaughter in the Balkans ominously illustrates the limits of tolerance. Against such a backdrop of escalating ethnic violence and intolerance, the reader may find Kotkin's thesis of global tribes assisting in international economic salvation slightly unrealistic.

Copyright 1994, The Fletcher Forum of World Affairs. All rights reserved.