Asia’s Infinite Game

 

From the monthly magazine

Prospect

March 1997

 

 

The rise of the tiger economies has led to a heated debate about the role of Asian values in their success. Charles Hampden-Turner and Gerald Segal, two leading Asia scholars, disagree about whether such values exist.

 

 

 

15th January 1997

 DEAR GERRY,

 

For 12 years my Dutch colleague, Fons Trompenaars, and I have been looking at the business cultures of various nations. Over 30,000 managers in 53 countries have responded to a series of values' dilemmas we put to them, We found that east Asian cultures were virtually looking-glass lands: particular where we were universal, communitarian where we were individualist, diffuse where we were specific, and so on. I therefore noted with some surprise your contention that Asian values were a "myth.'

One wonders how much better east Asian economies must perform before experts such as yourself discover a touch of humility. The five fastest growing nations in the world in 1996 were east Asian-Vietnam, China, Malaysia, Singapore and Thailand. Since 1990 China has grown 136 per cent, Indonesia 124 per cent, Singapore 99.8 per cent. Eight of the top ten nations in growth since 1990 are east Asian. The UK was 31st with 18.5 per cent growth.

But are these nations poor, with low wages attracting mostly western manufacturing? Singapore has moved from 18th to fourth in GDP per capita since 1990, overtaking Britain its former colonial master, and the US. On its present trajectory it will overtake Switzerland and Japan around 2003 to become the world's wealthiest nation.

Japan has slowed down, a fact you savoured in a recent article. Since 1990 it grew only 26.8 per cent, its worst period since the early 1950s, yet even so it outgrew Britain and the US. Have we nothing to learn?

Value differences are subtle. East Asian cultures tend to value listening more than talking, so they learn from us much faster than we learn from them, and they talk about what we have taught them, since this is new, whereas their own cultural programming is deep and largely tacit.

China may have taken off like a rocket since it allowed businesses to compete, but we fool ourselves if we imagine that they have abandoned 4,000,years of communitarian traditions. They have discovered that competing improves co-operating, as yin harmonises with yang. This helps to explain why east Asian economies are "third wave' developers. At first, they saw in the west only the antithesis of what they believed. Some of them flirted with communism, the ideological opposite of western beliefs. More recently, with comparative economic growth rates becoming the equivalent of war, they have come to see that the values of east and west are complementary. They use Taoist thought to synthesise values, while we crudely "add values" which too rarely combine.

Singapore, for example, admits multinationals of which it approves, thereby building upon the values of western individualism. But it only admits activities which raise the knowledge intensity of the country, and which fit into existing clusters, using its $1billion cluster development fund. It also obliges all multinationals to sponsor joint training institutes. Clustering, of course, was first recognised by the business writer Michael Porter and is exemplified in Silicon Valley and elsewhere. But while clustering happens in the west it is consciously designed in east Asia.

It is the same for all the dilemmas mentioned here. East Asians have learned our rationalism, but by joining it with their traditions of reflection, they have created continuous improvement. They have adopted our narrow, legal-contractual system, but treat contract compliance as minimally acceptable performance. On top of contracts, they mount wa (harmony) and guanxi (enduring relationships), which use contracts like trampolines to give each partner infinitely higher performance than the contract stipulates. Will our pundits wake up before it is all over? Might you not agree with me that the reflections of an 18th century Scottish schoolmaster are not an infallible guide to Malaysia’s multimedia corridor?

Cheers,

CHARLES

 

 

16th January 1997

 DEAR CHARLES,

 

As a student of east Asia for more than 25 years, I am delighted that more people are coming to respect its enormous economic success. While you are simply wrong about Japanese growth in recent years we in the west can take pride (forget the humility) that our ideas about markets and freedom have made possible the striking economic success of several east Asian states. Our debate is not about what has happened, but why it has happened.

You ascribe east Asian success to Asian values, but you make an elementary mistake in confusing Asian values with values in Asia. The notion of Asian values suggests some set of beliefs that are unchanging and shared across a swathe of territory from Afghanistan to Japan. It is ludicrous to suggest that a Japanese stockbroker has more in common with an Afghan peasant than with a German working for Deutsche Bank in Tokyo. As Francis Fukuyama has argued so well, the modern Japanese economic system is far closer to that of modern Germany than it is to either 19th century Japan or modern Malaysia.

Ascribing economic success to unchanging Asian values also confuses the more important truth that success depends on good policies, only some of which are rooted in current values. Remember the days, not even 95 years ago, when Confucianism was said to be an important part of the explanation for China's economic failure. By stressing culture and values rather than good policies, you cannot explain why South Korea grew and North Korea is in crisis, or why China and Vietnam took so long to learn from their Asian neighbours.

Many of the policies that underpinned Asian growth are similar to those that produced economic growth in the Atlantic world a century earlier. We used to claim that 'Victorian values' or "the Protestant work ethic' explained success, but we now know better. We learned that values and policies must change as societies grow richer and identities become more plural. The values of an industrial society do not provide prosperity in a post-industrial society. Rich and free people eventually empower the half of their population that is females As a consequence "family values' change.

Your stress on immutable Asian values misses the fact that as east Asians grow rich, they grow free and their societies and identities become more complex, Witness democratisation and pluralisation in Japan, South Korea and Taiwan. Business leaders and government officials of these three countries know, even if Cambridge management gurus do not, that they need new values and policies if they are to compete with economies based more on inspiration than perspiration (to borrow from the economist Paul Krugman). So-called Asian values can cause unrest after a certain stage of development, as the striking South Koreans have just shown.

I an afraid it gets worse, Charles. If all you did with your ethnic chic was to misunderstand the basis of economic growth, then you would simply be wrong, but harmless. But by seeming to associate yourself with the myopic hubris in east Asia that resists political and economic reform, you comfort those who are hindering east Asia's future prosperity. You also mislead those in the west seeking solutions to the problems of a post-industrial economy. By looking back to our past for Asian values (read, Victorian values), one is led to subjugate women, restrain human rights, and stunt the ability to find the inspiration to prosper. Surely the reflections of the 5th century BC Chinese sage (Confucius) are even less relevant for post-industrial society than those of "an 18th century Scottish schoolmaster."

Yours in anticipation,

GERRY

 

 

22nd January 1997

 DEAR GERRY

 

You are having a fine old time ferociously boxing a phantom opponent. I am sorry if you have had bad encounters with ethno-chic advocates of Asian repression. Forgive me if I feel I am not even in the same boxing ring. I am still waiting for you to begin engaging my views. As the Chinese like to say: "Big noise on stairs. No one coming down."

I was not discussing "Asian values," still less "a set of beliefs that are unchanging and shared across a great swathe of territory." I am discussing value similarities among managers of tiger economies. We have posed a number of dilemmas to east Asian managers, including ones that pit confrontation against consensus, and we have received 250,000 responses, most of which could have falsified our hypotheses and some of which did. It is a method I recommend for those of pungent opinions such as yours.

Your strictures on "beliefs that are shared and unchanging suggest that 25 years in east Asia have not taught you that traditional Chinese values are about change not fixity, complementarity not identity. I Ching is the Book of Changes. It is your own mind-set which conceives of values as something akin to the Rock of Ages and the Prudential. Cultures influenced by Taoism see wealth creation in changing processes. You are right that east Asian values fail to conform to the way you define values. I suggest you change your definition.

Asian leaders are not anthropologists when they ask you to respect Asian values, this is simply a plea for you to consider how they think differently. East Asians have learned rapidly from us, but we have been much slower to learn from them. In part this stems the moral superiority you exemplify and in part from the fact that they tend to "liquify' values while we tend to reify them. Rocks clash. Waves mingle aesthetically.

Some of what South Korea has learned from the west is dysfunctional. It has been in the front line of hot and cold wars for nearly half a century. When we measure confrontation versus consensus South Korea scores with western nations, not with east Asian ones. For similar reasons Japanese employers fell out with their unions immediately after the US occupation, before reverting to Japanese patterns.

I agree that Protestant and Victorian values have nothing to do with east Asian success. But you are partly mistaken in your claim that we inspire while they perspire (like coolies?). Working smarter is part of their competitive advantage. A study of international automobile manufacturing by Arthur Andersen showed the Japanese still beat us easily in almost every measure. Most especially they implement 28.2 suggestions per employee per year. The UK scores 1.9. It is Fordism which reduce workforces to perspiring "hands."

So we come finally to democracy. Is our relationship in this debate "democratic" because we get to joust with one another in a space too short to air anything but disagreements-that-entertain? This is what I call a "Finite game." Would our relationship be more democratic if we listened to each other, agreed ways of testing our respective beliefs and constructed between us a larger consensus? I call this an "infinite game," and expand upon it in my book Mastering the Infinite Game (published by Capstone in May). East Asians prefer this latter path to democracy, the one in which each worker gets 28 ideas accepted by the company. I support both interpretations of democracy and I wish Singapore could tolerate out-and-out opposition. My guess is that they will learn to tolerate our shouting matches, while we will go on hectoring and miss entirely their arts of relationship and harmony. We will be the poorer in every sense.

Cheers,

CHARLES

 

 

24th January 1997

 DEAR CHARLES,

 

Nice try, but you walked straight back into the punch. Let us begin with the problem you are having in generalising about values. You seem happy to pick aphorisms from various parts of east Asia and then suggest that all these countries have the same values. But listen to Japanese or Koreans complaining about business practices in southeast Asia and you will know how sharp the contrasts are in the region. You ignore the huge differences between a country such as Japan, which is becoming a post-industrial society, and the still mainly poor-peasant economies of China and Vietnam.

The best evidence that my blows have struck home is your notion that "values are about change." Charles, you cannot have it both ways. Either there are values or there is change. Those who praise the value of change are usually known as pragmatists. You suggest I should change my definition of values in order to incorporate an absence of values, but I will not join you in chasing your tail. You need to tell me, in concrete terms, what constitutes a Chinese (or any other Asian) value. Unless you do so, we cannot, as you say we should, "test our respective beliefs."

There is a hint of an answer in your suggestion that Asians value complementarity not identity," but you could not be more wrong. Japanese are only learning to value complementarity. This is the country that used to tell us that they could not import foreign rice because Japanese digestive systems were unique. China is generations from the kind of openness that accepts complementarity. This is a country that can make European racism look tame. Some prominent Chinese authors feel able to say that "to screw foreigners is patriotic." There is no evidence of 'liquefied" values in South Korean labour relations. Where is all that "harmony" that you think is an Asian value?

Lest this discussion remain snagged on definitions, let me welcome your partial acceptance of my argument that the challenge for east Asias is whether they can do better at economic growth based on inspiration rather than perspiration. But I am worried that you equate inspiration with "working smarter." Of course it is necessary for workers in a car plant to think how they can do their job better. But now that profits depend more on software for robots or the management of corporate healthcare, east Asians need to worry about their inability to produce top management schools or their own Microsofts.

Because you have trouble seeing that the essence of growth is inspiration, you also have difficulty in seeing this very exchange of letters as part of a useful democratic process. You call it a "finite game" because it does not lead to consensus. I fear that you misunderstand both the joys and utility of criticism. If we are entertaining, readers will be animated to expand the range of debate. I am proud to play the infinite game--that unending process of debate where good ideas are superseded by even better ones.

All the best

GERRY

 

 

29th January 1997

 DEAR GERRY,

 

You do not listen too well. I already explained how and why Korea was different. Of course there are hundreds of cultural differences among east Asian cultures. Telling companies about these differences is how we make our living.

However, differences have magnitude and variations have themes. Confucius said in his Book of Music that even with different melodies you recognise the composers. Cultures are like melodies. Despite myriad variations all east Asian cultures think holistically rather than analytically (more in terms of knowledge than of profit) and all are much more communitarian than individualistic. One aspect of these themes is how people think of values. Cultures influenced by Taoism, Buddhism and Confucianism see values as opposites, capable of being harmonised. Values are in constant flux and change because the flow of opposites keeps shifting. For example, you must love a child and correct a child, but the proportions of loving and correcting are particular to each situation.

Yes, this way of thinking is circular, as is cybernetics, systems theory, much of biology and all of mechatronics," the fusion of electronics with mechanical engineering. You may call feedback loops "chasing my own tail," but these disciplines will survive, I assure you. Most of the world's peoples think in circles not straight lines.

In sub-atomic physics, the most advanced of our sciences, it is now impossible to advance without complementarity of paradigms. We have to assume that sub-atomic phenomena are both particle-like and wavelike, and that this is a reaction to how we intervened. Niels Bohr, the nobel laureate, has incorporated the Tao into his coat of arms.

Your statement, "Either there are values or there is change," amazes me. Is that what values are to you, a sheet-anchor which prevents movement? You are entitled to be shackled to tablets of stone with commandments written on them, but you are not entitled to impose this definition on east Asians or me.

As to Japan and rice, Japan consists of rather infertile rock with small, terraced paddies. Rice is, however, a "sacred zone" of culture, not unlike the Rockefeller Center when the Japanese wanted to buy it. Rice growing areas also host many cultural festivals. Since the work is seasonal, growers double as actors and tourist guides. Shinto religion is harvest celebrating. American rice is now imported but blended in, an ingenious solution.

Japan is weaker in computers and software because of 60,000 kanii (Chinese characters), many of which express the composite idea which makes you so irascible. But Japan has a 56 per cent world share of industrial robots and nearly 40 per cent of advanced machine tools.

In Conrad's Heart of Darkness, Marlow journeys down a snaking river into the heart of Africa. But there are two journeys. One is geographical the other spiritual. For Marlow has discovered the dark heart of white colonialism and its bigotries. This spiritual journey is absent in your letters. You seem to lack all awareness of what you bring to the encounter of east and west.

Cheers,

CHARLES

 

 

29th January 1997

 DEAR CHARLES

 

You seem determined not to be pinned down and your latest effort risks taking us into territory best described as "hippyish". I had been looking forward to a debate with the eminent Charles Hampden-Turner who wrote The Seven Cultures of Capitalism. Sadly, I have ended up talking to a Charles Hampden-Turner who thinks there is one culture of Asian capitalism. Or is it the Charles Hampden-Turner who thinks there is one Asian culture, infinitely variable, holistic and circular?

I am bemused by your notion that all scientific thought is circular not only because it is wrong, but because I am left wondering what happened to your Asia versus Atlantic distinction? I am especially amused by your assertion that east Asians do not think analytically and are more interested in knowledge than profit. I will try that out on the east Asian business leaders at the World Economic Forum in Davos next week. I expect them to say they are increasingly coming to value inspiration and creativity as a way to generate profit. But if you are correct, and the east Asians and you do not think analytically, how can anyone assess who is right?

All the best

GERRY

 

 

Return to Gerald Segal Page

Return to Pacific Asia Programme Page