The Cultural Dimension of the Credit Crisis

다국어 초록 (Multilingual Abstract)

Culture has been consistently ignored in current search for the roots of the credit crisis. Cold data on the volume of Credit Default Swaps (CDS’s) or Collateral Debt Obligations (CDO’s) convey a harsh economic reality but little in terms of the cultural roots of the decisions that have lead to these ominous events. This article provided an attempt at exploring those cultural dimensions. China and the United States were taken as the focus players. The article explores cultural norms related to attitudes towards consumption; saving, investment and debt are explored. This is followed by an analysis of events and developments that relate to one aspect of those cultural attitudes or the other. China’s low consumption, high savings and high investment are viewed as a consequence of a strong Confucian cultural edict. American high consumption and low saving is projected as a possible consequence of the capitalist ideology. A few hypotheses were formulated in order to suggest each of the relationships. The final discussion relates the findings to a commonly voiced solution i.e. more consumption in China and more savings in the United States. And the article argues that the strong cultural roots of both events will make it difficult to adopt this course of action.