Inti Martnez-Alemn, Houghton College

Braiding Prosperity
By Inti Martnez-Alemn

Introduction There are numerous ways to define the word prosperity. Often, prosperity is used interchangeably with the word wealth, while many other times it is associated with the word success. In our modern world1, a nations prosperity is measured by how it achieves its goals, realizes its societal ideals, and/or obtains physical commoditiese.g., silos for food storage, mechanized means of transportation, highway systems, homes with running water, electricity, and telecommunications system, the use of a common currency, a competitive education system, etc. But, before creating a colossal country with stupendous infrastructure, the majorityand ideally, allof the countrys citizens should certainly have their basic needs met (i.e., access to clean water, physical nourishment, and protection from the elements). If this is the case, then one can say a society is prosperous. This essay intends to present the three basic strings necessary for braiding prosperity in a country engaged in the modern world.

Braiding Prosperity In order to create prosperity in a society it is necessary to find in this society the practice of a strong work ethic, a culture that fosters creativity and innovation, and the presence of a strong and fair state. These are the strings for the creation of prosperity in a modern nation.2

Hereinafter, a modern world will be used to describe the collection of nations that fit the four characteristics of modernization proposed by Peter Berger in 1977: the decline of small, traditional communities; expansion of personal choice; increased social diversity; orientation toward the future and an increased awareness of time (Macionis, 641-642). These nations ideals, more or less, are to become industrial and/or post-industrial, high-tech, competitive, free market-oriented and fully engaged with the global economyfollowing the example of the developed nations. The line for modernity may be difficult to draw, but surely does not include nations like North Korea. 2 A nation engaged in the modern world, as described above

Inti Martnez-Alemn, Houghton College The strings for creating prosperity are overarching and do not identify with one specific economic system or form of government. Most of my examples discuss how each of the strings for creating prosperity are used by individuals in a company or organization, in order to show that if a nation is substantially composed by these types of individuals, companies or organizations, prosperity can result in this nation.

A Strong Work Ethic Empirically, this first principle is easy to explain and understand. As Max Weber points out, individuals who are disciplined, organized, responsible, trustworthy, honest and perseverant, tend to be better off than those who are not.3 It is necessary for individuals in a society to practice a strong work ethic in order to become prosperous. In our modern world, someone who is not diligent, does not meet deadlines, and does not arrive to appointments on time, is usually not well regarded by his or her employer, co-workers, or customers. An employee who takes on dishonest practices, who cannot trust others or be trusted, and who cannot make a distinction between work and play, will not be productive or prosperous. A strong work ethic in most jobs in our service-based, postindustrial, world needs to be complemented by a high level of emotional intelligence, too.4 Since one of the chief goals of our modern world is to get things done in the most efficient and practical way possible, those who do not conform to this model, are, in theory and

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Found in Webers The Protestant Ethic and the Spirit of Capitalism Daniel Goleman, the author of Emotional Intelligence, popularized this term, which refers to human beings ability to be smart beyond the deductive and rational way. He and other promoters of emotional intelligence basically believe persons who are able to control their emotions (sympathy, empathy, modesty, anger, grief, happiness, patience, courage, repentance, delayed gratification, etc.); who can use their emotions at the appropriate time, with the correct persons, and to the right extent; who can relate well to others emotional states; and those who have good interpersonal skills, tend to be more successful at achieving their goals.

Inti Martnez-Alemn, Houghton College in practice, not prosperous. Nonetheless, in order for a society to become prosperous, practicing a strong work ethic, alone, is not enough.

A Culture of Creativity and Innovation Innovation, the valuable use of human talents and creativity, is crucial for the sustainability and progress of our modern world. A culture of creativity and innovation is one that encourages thinking outside the box: making clever associations between two or more apparently unrelated concepts, combining several technologies for the creation of one grand product, cooperating with other individuals to create a synergetic effect, and so on. In the competitive world that we live in, it is quite difficult to expect to become prosperous, while not adjusting to our ever-changing world. Employers expect more and more out of their employees. Employees must be several steps ahead of competitors by developing cutting-edge ideas. They should know how and where to find information that is helpful for the company. A good employee is time, cost and energy efficient. He or she knows how to identify and tackle niche markets. Employers want employees who are familiar with national and local laws pertaining to the business, and so on. An administrative assistant in a firm might have a very strong work ethic, but if he or she is not innovative, by thinking of ways to get the job done more efficiently (within the legal parameters), someone else might snatch the job away. In the Google Corporation headquarters, for example, employees are encouraged to feel and behave as if at home in the workplace. Googles philosophy does not require a suit. Googles culture is unlike any in corporate America, and it is not because of the ubiquitous lava lamps and large rubber balls. There is an emphasis on team achievements and pride in individual accomplishments that contribute to the companys overall success. Ideas are traded, tested and put into practice . Meetings that would

Inti Martnez-Alemn, Houghton College take hours elsewhere are frequently little more than a conversation in line for lunch . This highly communicative environment fosters productivity.5 In this case, we can see Google leaders using their creativity and imagination to foster even more creativity and imagination for the prosperity of their company. Business owners in the developed world are not alone in the field of innovation. The leaders of Almacenes xito from Colombia have learned that by working with the national culture and helping to satisfy the needs of their employees, their own business is much more productive than their competitors. Small loans, store discounts, refinancing, aid to afford healthcare and education, and other benefits and incentives, are given to employees in order to stimulate them and make them feel part of the company. It is in this large Colombian supermarket chain that 94% of its 41,000 employees felt happy to work.6 In 2005, the Great Place to Work Institute put Almacenes xito7 in third place in Colombia for its overall employee satisfaction. With this example, we learn that thinking outside the traditional employer-employee relationship modelby stimulating employees and helping them meet their needsemployees feel more attached to the company and better stimulated to work efficiently, thus raising productivity. Caring employers make caring employees. Fostering creativity and innovation, combined with the two other strings creates prosperity.

A Strong and Fair State My conception of a strong state has nothing to do with an authoritarian or totalitarian regime, or with a socialist country. Having a strong state in a country, as political economist

Google Corporate Information, Our Philosophy; available from http://www.google.com/corporate/tenthings.html; Internet; accessed 11 November 2006. 6 Almacenes xito, Por qu trabajar con nosotros; available from http://www.elempleo.com/sitios_empresariales/exito/trabajar.asp; Internet; accessed 10 November 2006. 7 Interestingly enough, the word xito means success, in Spanish.

Inti Martnez-Alemn, Houghton College Francis Fukuyama puts it, means having operational and efficient institutions such as law and order, education, and healthcare. These socioeconomic and political institutions may be managed privately, collectively, or by a combination of both. What really matters, at the end, is that these institutions exist and are working well. This is ultimately the responsibility of the state.8 With a strong and fair state in place, entrepreneurs enjoy economic freedom9; but if these entrepreneurs break the law, they are to face the consequences without any type of favoritism. A strong and fair state is one that balances prosperity with social justiceor economics with equity, as Robert Kuttner puts it.10 It treats all citizens with equal respect and, rather than violate, it enhances property rights. As Robert Bates suggests, by domesticating violenceusing violence not to seize or to destroy wealth but rather to safeguard and promote its creationa state develops and prospers.11 In our modern world, governments need to stimulate the economy instead of suffocate it. During the past couple decades the trend among modern nations has been the liberalization12 of their economies in order to partake of the globalization phenomenon. Conventional wisdom and much scholarship points to the conclusion that liberalizing a countrys economy is the best thing a government can do for its country. However, although liberalizing a countrys economy definitely stimulates the macroeconomy, it usually suffocates the people in the absence of a strong state.13 In virtually all respects, the wealthiest and most developed nations in the world

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Francis Fukuyama, State-Building (Ithaca: Cornell University Press, 2004). 3-23 Niclas Berggren, in his survey The Benefits of Economic Freedom, defines economic freedom as the degree to which a market economy is in place, where the central components are voluntary exchange, free competition, and protection of persons and property. 10 Robert Kuttner, The Economic Illusion (Boston: Houghton Mifflin, 1984). 11 Robert Bates, Prosperity and Violence (New York: W. W. Norton, 2001). 101-102 12 Defined as allowing economic freedom (as defined by Berggren) to exist 13 During the last several decades, Latin American countries have been prescribed strict economic policies by the International Monetary Fund (IMF) and the World Bank. Unlike the Asian Tigers (more below), nations like my home country, Honduras, have not enjoyed a prosperous economy, since there have not been strong socioeconomic institutions, which are the backbone for a free and successful market.

Inti Martnez-Alemn, Houghton College have started off with, and maintained, a strong state for the creation of prosperity. In short, a strong state is one that carries through with its goals and protects its citizens effectively; it stimulates socioeconomic development by the realization of effective institutions. If an economy is liberated without the presence of a strong state, the nation in reference can suffer from a lack of economic and social development, as promised by economic liberalization.14 Having a strong state does not necessitate the implementation of excessive tariffs or other trade barriers. Fukuyama explains that, in order to appreciate the importance of a strong state, it is necessary to understand the difference between the scope of state activities, which refers to the different functions and goals taken on by governments, and the strength of state power, or the ability of states to plan and execute policies and to enforce laws cleanly and transparently [my emphasis].15 An institution such as the rule of law is crucial for a society to prosper. Even the late Milton Friedman, dean of orthodox free market economists, recognized in 2001 that he was wrong when he prescribed privatization, privatization, privatization, alone, for countries making the transition from socialism. He acknowledged that compared to privatization, the rule of law is probably more basic.16 A nation has to know how to compete with foreign goods, services, practices, and values. Without a state to create and maintain socioeconomic and political institutions, the general population will be hurt economically and will succumb to the deluge of foreign goods, services, practices, and values. Before the Asian Tigers17 became wealthy and prosperous, they enforced strict state involvement in order to develop socioeconomic and political institutions, combined

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Fukuyama, 5 Ibid., 7 16 Ibid., 19 17 Viz., South Korea, Singapore, Hong Kong, Taiwan

Inti Martnez-Alemn, Houghton College with an emphasis on exports and savings.18 With an educated, healthy, working, and saving society, the Asian Tigers ensured that their goods, services, practices, and values could compete with their foreign counterparts. It was not until these criteria were met that the Tigers actually opened themselves in full force to the global economy. Without the existence of a strong state, the Tigers would not have been able to compete with other nations; the same is true of practically every developed nation. Having a strong state is necessary, but not sufficient, for the creation of prosperity. A government may implement the noblest economic policies in a country, but if the practice of a strong work ethic and a culture fostering creativity and innovation do not exist, then prosperity stifles.

Summary and Conclusion In this short essay, I have presented the three strings required for the creation of prosperity in our modern world: the practice of a strong work ethic, a culture of creativity and innovation, and the presence of a strong and fair state. Having only one of these strings, but not the others, does not foster long-term prosperity. Even when a countrys economy is liberated, a nation does not prosper unless a strong and fair state is present. A strong and fair state entails the creation and maintenance of efficient socioeconomic and political institution like law and order, healthcare and education. However, a strong and fair state, alone, is not enough for the creation of prosperity. The practice of a strong work ethic by members of a society, and a culture that inspires creativity and innovation are necessary, too. A discussion on the how-to for creating or instilling the prosperity-braiding strings can be reserved for a future project.

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Joseph Stiglitz & Shahid Yusuf, ed., The East Asian Miracle (New York: Oxford University Press, 2001)

Inti Martnez-Alemn, Houghton College If we want to see developing nations prosper, and developed nations maintain their status, these nations have to implement and maintain the strings I have presented. Without these strings, developed nations would have never become prosperous, nor will developing nations ever become prosperous. Economists like Niclas Berggren correctly suggest that it is under economic freedom that there is economic growth. However, economic growth does not imply sustained development or prosperity in a country. A government can liberalize a countrys economy, but if there is not a practice of a strong work ethic or a culture for creativity and innovation, then national long-term prosperity will not result. By the application of the strings I have presented, a society can become a prosperous societyor, as economist Lester Thurow puts it, a bold and self-confident societyin this modern world.19

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Lester Thurow, Fortune Favors the Bold, (New York: HarperCollins, 2003). 307

Inti Martnez-Alemn, Houghton College References

Bates, Robert. Prosperity and Violence, 101-102. New York: W. W. Norton, 2001. Berggren, Niclas. The Benefits Of Economic Freedom: A Survey. The Independent Review. 8.2 (2003). Fukuyama, Francis. State-Building, 3-23. Ithaca: Cornell University Press, 2004. Goleman, Daniel. Emotional Intelligence: Why it can matter more than IQ. New York: Bantam Books, 1995. Kuttner, Robert. The Economic Illusion. Boston: Houghton Mifflin, 1984. Macionis, John J. Sociology. New Jersey: Prentice Hall, 2005. Stiglitz, Joseph & Yusuf, Shahid, ed. The East Asian Miracle. New York: Oxford University Press, 2001 Thurow, Lester. Fortune Favors the Bold, 307. New York: HarperCollins, 2003. Weber, Max. The Protestant Ethic and the Spirit of Capitalism. Translated by Stephen Kalberg. Los Angeles: Roxbury, 2002. Almacenes xito. Por qu trabajar con nosotros. Available from http://www.elempleo.com/sitios_empresariales/exito/trabajar.asp. Internet; accessed 10 November 2006 Google Corporate Information. Our Philosophy. Available from http://www.google.com/corporate/tenthings.html. Internet; accessed 11 November 2006.