Bringing the holistic thinking of the East to bear on market failure in the West
Life is a journey of different cycles. Travelling last month with old university friends - an Indian from Zambia, two Americans, a Spaniard and two from France - made me realise that communication between East and West remains a gulf to be bridged, despite our common use of the English language and English education.
Do East and West think differently? The answer must be yes, if you define the East as the Asian continent and the West as Europe plus America. Globalisation has integrated thinking and promoted universal standards because many Asian intellectuals are Western-educated. Many social objectives, such as the pursuit of wealth, power, justice, global peace and happiness, are universal. But the reality is that the concepts of justice, faith, liberty, social status and values are very different.
The late French historian and philosopher Fernand Braudel classified the world into four contemporary civilisations - Western, Muslim, Far Eastern and African. To Braudel, civilisation, rather than culture, is defined by geography, society, economies and ways of thought. Within the Western world, there were three sub-groups - Europe, America and Soviet. He identified four civilisations outside Europe - China, India, Japan and the Maritime Far East that includes Southeast Asia and Korea.
The study of civilisations is important. In 1993, the American political scientist Samuel Huntington argued in his famous essay, and later book, The Clash of Civilisations, that there is a shifting balance of power between civilisations, particularly between Western universalism, Muslim militancy and Chinese assertion. Huntington believed the 'clashes of civilisations are the greatest threat to world peace, and an international order based on civilisations is the surest safeguard against world war'.
The irony is that, even as Europe struggles with its debt crisis, the whole world was uniformly cheering Spain and Italy in their football final broadcast in HDTV. Technology today has transcended cultures and civilisations, but deep national, ethnic and religious divisions lie under the surface.
It is always controversial to debate what is different between East and West, especially since Western intellectuals are beginning to question whether the West is in decline. Princeton political scientist Robert Keohane, in his recent review of the debate on American decline in the magazine Foreign Affairs, correctly asked: 'Will the instabilities in the global economy exposed by the 2008 financial crisis be corrected or merely papered over and thus left to cause potential havoc down the road?'
Analyses in the aftermath of the crisis suggest that there is a gradual but perceptible reappraisal of the basis of mainstream Western economic thinking. What went wrong that led economists, regulators and policymakers alike to fail to predict and manage the current crisis?