SANDERS: Romney’s ‘gaffes’ and the culture of economic development

ANALYSIS/OPINION:

Poor ol’ Mitt Romney. He forgot politicians are supposed to cater to the media. And when he spoke truth to power of the left-wing comme il faut Anglo-American journalist mob, they came down on him like the proverbial ton of bricks.

And so what were all those uncommon observations labeled “gaffes” — which might have been considered travel notes by a 19th-century visitor — setting off another fusillade in the boisterous presidential campaign?

Mr. Romney said our British cousins seemed to be making a hash of their Olympics preparations. By any criteria it was true — just as were the early stages of the 2002 Salt Lake City Winter Games, which he allegedly “rescued.” And who else would the Salt Lake worthies have chosen for the clean-up other than a successful Mormon entrepreneur? Not that the Olympics in Montreal, Athens and a half-dozen other places over the last half-century haven’t been total economic disasters. (You ain’t seen nothing yet — wait for the Russians’ Sochi Winter Olympics 2014!)

Even less arguable —if equally uncomfortable for his critics —was Mr. Romney’s suggestion the Palestinians might look to their Israeli neighbors for notions on how to build the economy of their hoped-for future state. That too was hardly earthshaking. In the early post-colonial days, before bilateral and multinational aid agency bureaucrats took over “development,” scholars assumed culture was indivisible from economic progress. Remember Max Weber’s iconic “The Protestant Ethic and the Spirit of Capitalism,” required reading for an earlier generation?

Maurice Zinkin, a Cambridge tripos, one of those young Brits sent out as a commissioner to govern the Empire before World War II — filling the role as local tax collector, judge and jury, militia commander and angel of mercy for millions of “natives” in his district — laid it out brilliantly. At an Institute for Pacific Relations Conference in Lucknow in October 1950, Zinkin, then head of Unilever-India (he went on to head it worldwide), described difficult cultural choices awaiting “emerging” post-colonial societies. If there was to be development paralleling the industrial West, those choices might be tough to make. Poor Indians and Pakistanis, he said, would, for example, have to give up borrowing to splurge a year’s income or more on weddings. But Zinkin’s commonplaces were soon replaced by top-down theories of “aid givers” with more money than common sense.

I suspect Treasury Secretary Timothy F. Geithner’s father at the Ford Foundation, who doled out for President Obama’s mother’s research in microfinance, was among them. Microfinance —the idea that tiny amounts of money might become a major development instrument if used properly —was born in East Pakistan (now Bangladesh) with a humble professor, Mohammed Yunus. Mr. Yunus developed a simple concept: A poor countrywoman raising no more than 30 cents at a clip could make an escape from abject subcontinental poverty with a small amount of credit. Mr. Yunus recognized a cultural nugget could absorb the risk, in this case, the community of village mothers and householders. The idea has spread with varying success throughout the Afro-Asian world, but only when it does not forsake Mr. Yunus’ “cultural” bias.

The billions wasted in government-to-government and U.N. aid — no better example, alas, than with the Palestinians — often have ignored cultural traditions. Whether it was the Quakers’ admonitions for simple living in colonial Pennsylvania, the Bombay Parsi exploitation (with British help) of the Northern blockade of Confederacy cotton, the Brooklyn Hasidim’s worldwide family diamond trading network, or the exploitation of the Mormon chain of missionary graduates, cultural factors dictate development.

My friend Soetan Sjahrir, a leader for Indonesian independence, only half-jokingly said a network of moneylenders competing successfully with Arab and Dutch banks in the old Netherlands East Indies arose because young men of his native Minangkabau’s matriarchy in West Sumatra had to emigrate to escape its constraints.

It is only by recognizing these “cultural” factors — or probably better still, permitting them to mutate — that real development takes place. Mr. Romney was only acknowledging a fact of life, ignored by now through several generations of aid-dispensing apparatchiks. They have rarely been successful except in feathering their own nests. (As they said in Hawaii about the missionaries, they came to do good, and stayed to do well.) And in many instances they have brought on additional misery, as with the Palestinians by ghetto-izing them, putting them on a permanent dole and feeding their bitterness by financing anti-Israeli indoctrination.

• Sol Sanders, a veteran international correspondent, writes weekly on the intersection of politics, business and economics. He can be reached at sol-sanders@cox.net and blogs at www.yeoldecrabb.wordpress.com.