Monday, September 6, 2010

Traditional Values vs Modern Nation States

This was written in reply to an article written by Danielle Ali Shah who is an Aussie expat living in Pakistan. She is a convert to Islam and writes frequently about the way of life in Pakistan. To read the article (link).

Interesting article. I am glad that you found the logic behind what makes pakistan so interesting, especially for pakistani’s living abroad.

I have been interested in comparatively studying religious\cultural mythology and modern systems and i have come to a borrowed conclusion which is similar to the article mentioned above. But i was looking into finance rather than the average day to day lives of people living in different countries.

 Financial systems in the west are overly regulated and centralized. And they are built on the concept of debt. Its all top-down thinking, a Harvard economist decides what policies suit the average person in a developed country. Top down thinking is notoriously risky although most ivy league economists would say that they are risk averse. They encourage people and businesses to take risks backed by debt. This is unraveling right now and long term viability of debt ridden western countries is risky, Greece and Dubai are a case in point.

The traditional system, which you defined as the “every man for himself” system is a lot more defensive and is
built on a bottom up thinking. The millions of small economic units (working men/women) decide what the shape of the whole economic system would be like. Traditionally all religions have endorsed that debt is bad or evil.

I think that religion or general traditional and cultural beliefs are stress tested by time. They are redundant and have evolved over thousands of years and are generally defensive in nature e.g modesty for men and women, debt, zakat etc. They are defensive against the worst case scenarios.

Modern systems on the other hand are pulled by prosperity and generally aren’t insured against worst case scenarios. The are optimized to get the best possible outcome. They also haven’t been stress tested by time and most of modern thinking has barely existed for a few hundred year. Even in these few years negative results are showing up e.g unstable demographics, climate change, unstable boom and bust economies etc.

What happened in Katrina in USA could be compared with the Kashmir earthquake of 2005 as evidence of this defensiveness against worst case scenarios. One country had an excellent system in place but failed. Another country did not have a system in place but had cultural values that were specifically tailored for such a situation. The reaction in Pakistan to the earthquake was breath taking when almost every single person in Pakistan contributed to an effort to save the survivors and the fact was not a single person was running or in charge of the rescue effort. It felt like the whole of Pakistan was traveling to Kashmir on bus, on car or on foot, traveling to save earth quake survivors all on their own.

Whats wrong with Pakistan is that it is a hybrid of both systems. The cultural day to day living is still traditional, whereas the economic system is modern (scientific) or overly regulated. The over regulation and taxation must end and government role must be reduced. We should definitely have a republican party here in Pakistan.

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