Cultural Diversity & Evolution
useful concepts for starting to understand culture and cultural differences
CULTURE, CORPORATIONS & EVOLUTION
As business analysts, we appreciate the critical role that corporate culture can play in the success or failure of a business. And we will come back to the idea of corporate culture later, but in this post I just want to introduce the concepts of culture and cultural evolution.
Corporations are one of the dominant forms of group competition in modern western societies so they play a key role in cultural evolution. So corporate culture does connect up with these broader concepts. But for today we are stepping back to the broader concepts, because cultures also compete just like companies do. So as we start to understand how cultures generally evolve, the same mechanisms and lessons will be useful for us in understanding how corporate cultures evolve.
EVERYTHING EVOLVES
Cultural evolution as a concept is so broad that one can’t grasp it directly. The best book on cultural evolution is Jon Henrich’s Secret of Our Success, and if you want to go deep on cultural evolution that is a wonderful source.
My own collision with cultural evolution started with trying to understand how my life was so much better than my grandfathers - either one of them. That’s a complicated question, but it boils down to why the west began experiencing real economic growth in the mid 1800’s. William Bernstein’s Birth of Plenty, or A Splendid Exchange both provide slightly different perspectives on economic growth kinked upward about 175 years ago and keeps going. It’s a puzzle I don’t think I will ever understand, but it’s as a puzzle I will never tire of because each bit of understanding of how we got to here will help me understand where we might be going.
I’d read a lot in economics on this growth puzzle, but my understanding felt like a dead thing - like many great economists. Matthew Ridley’s books are exceptional - but just felt like they were all missing something — they were all a sort of orthodox unorthodox, like Michael Lewis’ storytelling, where you feel like the hard truth lost a battle with easy narrative. In my experience one could tell when you got to the truth when it was bizarre and unexpected but also elegant.
Like if I told you Protestantism had a structural economic advantage because in it’s fight breaking free from the Catholic Church it insisted that believers read the bible themselves, meaning they had to be literate — men and women, meaning you had additional intellectual capital and more people with access to the store of information in books and sharing information through writing. But it wasn’t the added capacity but the way literacy extended economic networks so that more connections and combinations could be made and more traded, more ideas shared and more innovations developed.
And along came Henrich with bizarre observations like that which turned my perspective on its side. He published The WEIRDest People in the World in 2020, which was built on top of work he started around 2008 and that continues on. I remembered reading his early paper from around 2010 introducing the term WEIRD people, and I thought I understood it, but I didn’t.
The book is a monster because of the academic detail included, but the key insights are fairly simple. Cultural evolution in Europe brought the Medieval Roman Catholic Church into conflict with kinship networks, and the measures adopted by the church to undermine kinship networks had a host of unintended consequences. Logically, what also appealed to me were the ways in which the structure of Henrich’s analysis map onto Stuart Kauffman’s thought and Theory of the Adjacent Possible. Henrich described Church policies which acted as Darwinian pre-adaptations or affordances, and accomplished both the church’s goal of breaking down kinship networks as well as creating something new that, since it was new, no one could anticipate.
One of my favorite unintended consequences of church policy is private property. Property in Europe was generally owned by clans, but this was a problem for the Church because they couldn’t solicit donations for saving souls if those wanting to be saved didn’t have sole control of property. But once private property existed this combined with other factors to enable the creation of new networks and played an important role in incenting independent economic behavior. The church wasn’t trying to create new networks or individual incentives — they just wanted to be given property for saving souls.
WEIRD PEOPLE
In Henrich’s analysis, the new thing that emerges is WEIRD people: Western, Educated, Industrialized, Rich and Democratic. And WEIRD people share a set of five cultural traits which are unique to cultures where the catholic church achieved dominance by breaking down kinship networks (as shown in Henrich’s book):
If one lives in a culture with these kinship traits, you aren’t born with a family network you are embedded in - you have to create your network, and establish your nuclear family as its own economic entity. These forms of societies happens once in history, in one small set of cultures, and then these cultures end up setting off the competitive cycle that leads to modern economic growth. Henrich’s logic feels strangely reminiscent of the way eukaryotic cells happened once as a result of some strange circumstances a few billion years ago. All multi-cellular life today descended from that ancient merger. There are these narrow gates evolutionary systems pass through.
Like Kauffman’s very simple analysis that more agents trying more things creates new things that he formalized as his Thery of the Adjacent Possible, Henrich concludes that by breaking economic activity into more smaller entities (nuclear families) and moving them around (neolocal residence), the church unintentionally created a system with exponentially more economic entities and combinations of those entities than economies where kinship systems were never decimated.
It’s not quite that simple, but almost. Below are two different extracts from talks by Henrich on the WEIRDest People in the World. Each has a slightly different emphasis in what I extracted.
Henrich on Innovation
Intro to Henrich - WEIRD
Henrich synthesizes an enormous amount of information in his presentations, but the best part of his work is that he keeps finding ways to extend it and test each extension of his logic. He is following the evolutionary logic where the data leads him.
For us, as company analysts, there are lessons in the way he notes that subject areas just get in the way. Henrich is thinking in evolutionary terms, and we can learn from both seeing how he thinks and also in noticing that if one is really trying to understand how something evolves, you can’t restrict yourself to clean categories. Economics, religious studies, psychology and anthropology blend together.
CONNECTING TO COMPANY ANALYSIS
Narrowly speaking cultures and cultural evolution have nothing to do with company analysis.
But, at a macro level, cultures are competing in the largest country in Europe to see which cultural model will win. Cultures are competing in the Levant over the same thing and have been for a very long time. And those wars seem to have relevance to the global economy.
The misunderstandings and conflicts between cultures might not seem as intractable if we understood cultural evolution better, or we might just be able to analyze events more accurately by taking into account the presence or absence of WEIRD psychology.
Cultural evolution has nothing to do with company analysis if we assume that companies aren’t themselves embedded in cultures.
But corporations are a common form of group collaboration and competition around the world - and we all know that a Chinese Company is different than an American Company is different from a German company is different from a Turkish company or Brazilian company. They may all be companies but their legal rights and obligations differ by jurisdiction and their corporate cultures are inevitably informed and influenced by the broader society they exist within.
Evolutionary thinking has nothing to do with companies if they don’t compete and adapt.
But I think we all know that companies face competitive pressures and have to respond to them. Thinking in evolutionary terms, as Henrich is showing us, is just part of being a good analyst.
NO ONE SAID THIS WAS EASY
The analytical capabilities required to be a merely adequate company analyst are legion. Accounting and economics do not exist in isolation from evolution, anthropology and psychology any more than the capabilities of companies are also influenced by physics and biology.
The limits of companies are the limits of our knowledge in these areas and if the companies are doing their job, from an evolutionary perspective (per Kaufmann and Henrich) then they also invest in expanding our knowledge in all these areas.
The narrow critique is always that things don’t connect, when it is actually the narrow mind that can’t see the connections that are everywhere. The shape of the limited mind is not to even be able to see its own limits — harking back to the prior Dunning Kruger post.
CLOSING
As our technologies enable the creation of new forms of association and collaboration over networks with global scale and rapidly improving forms of algorithmic intelligence — we think it will be important to think in terms of group competition and cultural evolution, tracing the unexpected connections. As our culture’s technologies evolve and our cultures evolve we need to be able to think about how companies will evolve in response, or the role companies will play in driving that evolution.
Without an understanding of cultural evolution or any fluency in thinking in terms of evolving systems or processes, we will not be able to make sense of the world around us.