Friday, November 17, 2006

Institutional variables and Economic Growth (II)

From time to time there has been allegations concerning the role of religious beliefs and cultural values, on economic growth. Religious beliefs are important because represent the moral approach to issues such as wealth accumulation, and a moral guideline to important untouchable assets like tradition, trust, authority, individual initiative and faith. Religious and cultural beliefs could be the energy flow any society needs to sustain the requirements of growth.. However, it could also mean a state of mind which keep individual static throughout time ,unable to decide any action because of lacking of rational instrument beyond God ´s wishes , to solve any of current global challenges .
Let take the global warming issue. What is the answer from the religious point of view?. Economist, scientist, journalist share a common perception about the necessity of giving key attention to its expected impact, such that to make economic growth sustainable. But Is just faith good enough to overcome the threat arising from global warming? . If it is not , because of the cost of waiting is too high, what is going to be the future role of religious values, if they are not inside the whole discussion? Maybe the religious point of view is the missing variable in the effort to reduce the global warming, although I do believe it is more a matter of economic incentives which are at this point already under way ,such that the invisible hand will start soon to show how it works in the global scale.
Clearly, religious beliefs can not be left out from the analysis because of its cultural impact. In the environment issue, If people do not care about God property (the environment)protection,there is a tough road to follow before any action start to take place.-
Cultural variables are also important for economic growth. Thrift, hard work, and willingness to take risks, are the essential fuel for the engine of growth. It allows innovation , creativity ,saving and investment. When people get the fish instead of the tools for fishing, it is the beginning of the state of mental laziness the first condition for leisure and passive behaviour .It follows that People loss its ability to decide on their own what it is the best for improving their living conditions. Therefore They get trapped on the State machinery of selling services, which it charge a fee for(corruption).
Cultural and religious beliefs are interdependent, besides each one influencing to one another. The critical question then is what is the magnitude of the cross effect they have upon each other? .If religion emphasizes the importance of linking faith to what anyone is able to do, rather than to what anyone can expect to happen, there will be a huge difference in terms of the attitude for getting more than just surviving level of living condition.
The second critical question is: what is the relationship between religious beliefs ,cultural values and poverty?. Is it that poverty stay longer in those areas with values which might become like a cultural constraint?. After all it was just at the end of the twentieth century that the Pope John Paul the Second ,settle down the controversy between capital and labour with Laborem Excercens, later reinforced by Sollicitudo Rei Sociallis which recognizes the individual right to pursue his own economic initiative as a condition to improve common welfare.
Previously to the Pope JP II clarification, Latin America witnessed sharp criticism to private firms even from religious point of view with the so called Liberalization Theology. On the other hand, more than forty years of State intervention, undermined the importance of wealth creation. It also prevailed a social mistrust about private firms , because of its maximization purpose supposedly against people welfare. Is it just coincidence that private firms in Latin America(Chileans ,Braziliens,and Mexicans) has been growing and getting more influence to generate wealth since that John Paul II blessed it ?.

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