I am continuing my work on cultural diversity, including my periodic trips to UNESCO. A central intellectual question for me is how national and regional feelings of identity can best be secured and strengthened, and in a manner consistent with existing instruments regulating the free trade of goods and services. I generally see the international flow of cultural ideas as leading to shifts in identity, and the creation of new identities, rather than destruction of identity. This view, of course, does not follow a priori. Rather extensive empirical work is required to trace the complex connections here. And certainly we can see some cases – Polynesia comes to mind most clearly – where it is hard to argue that outside influences have benefited the local cultural identity. That being said, when it comes to large and relatively prosperous polities, I am skeptical of predictions about cultural homogenization.
The hardest case here is probably Canada, which of course lies close to the United States geographically, economically, and in part linguistically as well. I recently had a fruitful visit to the University of Western Ontario. Although London Ontario is only a mid-sized town (325,000) it has an excellent selection of ethnic food. I also spent my last evening channel surfing the TV. I found an interesting program on Hasidic theology, stand-up comedians joking about the United States and Canada, NBA basketball, and minor league hockey. Whether NAFTA supports or damages this cultural diversity is surely a topic worthy of further debate.
It should come as no surprise that social scientists are looking into these issues more deeply. A recent NBER working paper, “International Trade and Cultural Identity,” by Eckhard Janeba, provides the first formal treatment I have seen of many of these issues (the paper costs $5 on-line). Janeba traces the different assumptions under which trade boosts or corrupts a nation’s identity. He is directing the attention of researchers to the issue of cultural consumption externalities, namely that people care about what their peers consume. I suspect that this notion of consumption externalities is the central missing piece of cultural economics. It helps explain why young people buy so much music, why most music bought is of recent vintage, and why someone might believe that trade and cultural identity could ever conflict.
I feel I have blogged about cultural diversity issues enough at VC, so I will be moving on to other topics. As I have done once before, I’ll issue an open invitation for topic requests, especially relating to economics and public policy. I won’t thank you all individually, but your input will be duly noted.
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