Income and values

Lifestyles are largely reflections of people’s values. The largest international study program in this respect is called World Values Surveys. This involves asking approx. 250 questions to people across the globe at regular intervals (the last involved approx. 92,000 respondents in 62 countries). These surveys have shown that the differences in typical values in cultures around the world can largely be summarized according to two criteria:

• Traditional versus rational/secular
• Survival versus self-expression

Inhabitants in poor countries tend to have traditional values and to be oriented towards survival – which mainly mean towards accumulation of material goods. An apartment, a fridge and something in it, for instance People here will often be highly nationalistic and religious, and they will have very clear ideas about what is good (”us”) and bad (”them”). They will generally have very low trust in other people, but will believe, on the other hand, that authorities such as politicians, scientists, doctors and the old should be respected. In these communities it is thought that women shouldn’t have too much responsibility apart from taking care of the home and breeding a lot of children. Homosexuality, divorce and abortion is not tolerated and often illegal. People in these societies are on average not very happy.

The richer countries typically have a more rational mindset and have mental and economic surplus that allows them to prioritize self expression. They have higher confidence in each other and higher tolerance towards homosexuals and people of different faith. Freedom to make choices is prioritized, but the trust in authorities limited. In fact, people often question or make laugh of anything that smells of authority. The inhabitants in such societies tend to be very happy, and the more freedom they have, the more profound is this happiness.

The graph below illustrates the clear relationship between income and where the countries are placed on the values matrix.

Survey of the relationship between average GDP per capita and the average position in the values matrix. Only a single country among 65 deviated from this clear pattern: The Dominican republic. Source: Modernization, Cultural Change and the persistence of Traditional Values, Inglehart and Baker, American Sociological Review, February, 2000.

If you study the graph closely you can deduct that the effect of higher income tends to come in two phases; at first people will get more rational and later they will get more inclined to pursue self realization. Actually, the tendency to become more rational peaks fairly quickly in most countries whereas the tendency to seek self expression keeps growing as income rise further. So even though people in rich countries generally think in more rational ways than the poor there always seem to be some interest in spirituality irrespective of income. For instance, doctrinaire or mainstream religion tends to decline in such countries, but is for many replaced with combinations of healing, health as a mission, fanatical environmentalism, and Indian gurus, etc. Research has also indicated that many people in rich countries who still call themselves religious will have assembled their own, personal form of spiritualism which may have elements from several different mainstream religions. This, by the way, is actually an example of a general trend in all permutations of intelligence, which tend to move towards larger diversity over time.

As people get richer they tend to move towards ever greater personal freedom. For instance, the obligation to take care of older generations is partly taken over by the state. Democracy relieves people of obligations towards tyrants and as churches are separated from the state people get freedom to chose what to believe. The cultural dominance of different values spheres are shown in the next graph.

This so-called Inglehart-Welzel Cultural Map of the World shows different styles of societies as they plot over the values matrix. The upper right corner include Switzerland, Scandinavia and Holland, which are the happiest and among the richest nations in the world. The opposite end of the spetre include Africa and parts of the Arab world. Inhabitants in those countries score very low in terms of happiness.

The Inglehart-Welzel Cultural Map show three socio-demographic areas where people are very rational: 1) the Confucian area (Japan, China and South Korea), 2) the Protestant Europe and 3) parts of Eastern Europe. As for self expression, the top scorers are Western Europe, Japan and the global English speaking area (largely former British Empire). The reasons that China and Eastern Europe don’t yet score so high in this respect is probably purely economic; they probably will as they get richer.

Signal colours and rainbows

Let’s take the step from general values to alternative models for how societies should be run. As I mentioned before, we in modern times experiences a variety of movements, from fascist and Nazis to socialists, communists, greens and religious fundamentalists. In spite of the fact that these movements are as different as one could possibly imagine, they do have two things in common. They first is that each of them mainly is about what one shouldn’t do, and the other is that they are all associated with a colour – red, brown, black, green. And shades of these colours, by the way. Social democrats are sometimes described as pink, and the American author Alex Steffen described in 2003 three colour variations for ecologists:

• ”Light green”, which are people who try to be environmentally responsible in their personal lifestyle.
• ”Dark green”: people who beleive that we have to limit, stop or reverse economic growth by making severe restrictions on markets and what people can do personally. These are also at times called “eco fascists” by their enemies.
• ”Bright green”; the people who beleive that economic growth generally lead to development and implementation of innovative green technologies, and that the solutions to environmental challenges generally are found in science and business.

Evil minds may also refer to a fourth category of green, which are the ”green washers”; people who talk green while actually polluting a lot.

However it is not all lifestyles in the modern ages that have had a signal colour – hippies, yuppies, nerds and libertarians actually don’t. There is actually a peculiar pattern in all of this, because whereas movements with signal colours are mainly about what people cannot do, the movements without colours are about what they can do. The hippie movement was largely about the freedom to dress (or undress) as you pleased, to listen to whatever music you desired, to skip normal work routines, and to generally ignore social norms. Similarly the yuppies were about breaking taboos on spending money and enjoying life. - and the nerds? They showed that you didn’t need to have and particular education; follow any specific career path or dress in any particular way in order to succeed in business. And finally, the libertarians were about freedom as a dominant lifestyle principle. So all in all, four lifestyles that endorsed new cultural expressions, new technologies, new work patterns, and new ways of doing business.

	Less freedom	Neutral	More freedom
Social behaviour	Fascists Communists Nazis Fundamentalists Dark green	Light green Bright green	Socialists Hippies Yuppies Nerds Libertarians
Economic freedom	Socialists Communists Dark green Fundamentalists	Fascists Nazis Light green Bright green Hippies	Yuppies Nerds Libertarians
Teknological development	Yuppies Nerds Libertarians	Light greens Hippies	Fascists Communists Nazis Light green Yuppies Nerds Liberalister

Overview over how different philosophies relate to freedom in social, economic and technological pursuits. Only the dark greens and religious fundamentalists are restrictive on all these fronts whereas only libertarians, nerds and yuppies favour more freedom on all pusuits.

As already mentioned, the restrictive movements are most common in poor societies, but also among the poor in richer communities. It is thus not surprising that all of Europe was ruled by totalitarian regimes when it was much poorer than today, or that religious fanatism typically evolve from societies that are - or recently have been - poor.

Growth and decline

Civilisations are permutations of intelligence, and as virtually all other forms of intelligence, they tend to get more diverse over time. This increased diversity is evident in booming societies. It is during boom times that we see the finance industry launch new, exotic and over-leveraged products and it is also here that people invest huge amounts in very far-fetched projects, or where artists go for the extremes. It was not a coincidence that it was during the global pre-2008 boom that banks lost track of their own exposure to “toxic assets”, a fourth of the worlds cranes were operating in Dubai and people paid millions for Jeff Koon’s vacuum cleaners or Damien Hirst’s medicine cabinets and stuffed animals.

But the opposite happens in recessions. The banks retreat to “plain vanilla” products, people only invest in projects where very fast payback can be expected, and art buyers shun the most extreme artists. In other words, the complexity is reduced, we go back towards basics and we reject what is new, different , exotic or provoking. This may include rejection of people that are different, from the bourgeoisie to, criminals, immigrants or people with different religions.

The tendency to seek simplicity is not only seen in cyclical contractions within a society, but also if a country is experiencing structural decline, or even relative decline vis-a-vis the rest of the world, as much of the Arab world has experienced for many centuries now. As this decline has accelerated over the last few decades the response has been a flight towards stricter forms of religion. Benjamin Friedman investigated in his interesting book The Moral Consequences of Economic Growth from 2005 how expansions and contractions had influenced political movements in the last couple of hundred years. The pattern was clear: Periods with economic expansion had been accompanied by movements towards openness, tolerance, mobility, fairness and democracy. For instance, it was during such periods that Britain developed university education, introduced women’s suffrage, Germany unified, America introduced civil rights, etc. On the other hand, it was during hard times that the same countries saw the growth of Ku Klux Klan, organized anti-Semitism and Nazism, repeal of free trade arrangements, etc.

During the next few decades many Western nations will struggle with fiscal financing problems due to aging and excessive entitlement levels and thus taxation and this will lead to relative decline and thus fear. To be more specific, people never will fear immigrants, crime, unemployment and terror. The likely result will be a movement away from freedom and towards more restrictive regimes – shades of socialism, fascism and dark green movements. Muslims, gypsies and the rich will be hunted and there will be more ”colours” and less ”rainbows”, and the winning colours will be red and brown.

What about green? This will remain a factor, but in a fearful society people will be more inclined to turn to dark green than the brighter version. Widespread rejection of genetic manipulation and nuclear power in Europe – as opposed to in Asia - are symptomatic.

Economic environment	Overall trend in society	Dominant social movements
Boom	Increased tendency towards risk taking and experimentation.	Libertarians Nerds Yuppies Hippies Bright green Light green
Contraction	Increased aversion against anything new, alien or risky	Socialists Fascists Nazis Kommunists Fundamentalists Dark greens

New lifestyles

While the West will experience relative decline, much of Asia and some other emerging markets will have the opposite trend. They will experience rapidly growing prosperity and will sense that they are now catching up with the West. The effect will be more experimentation, and more rainbows here.

We have already seen the first examples of this through the growing yuppie movements across almost all growing emerging markets. People here want luxury and they have no hesitations to flaunt it. But we are likely to see much more, whether it will be some form of Chinese hippies, implementation of the newest and most radical technologies, endorsement of more personal freedom or a growing number of nerdy entrepreneurs.

So what is the overall conclusion? It is this: the west will have more colours and these will mainly be red, brown and dark green. The successful emerging markets, on the other hand, have more bright green and more rainbows.