The Deep Historical Roots of Modern Culture: A Comparative Perspective

Abstract:
This paper presents evidence showing that there have been since antiquity two opposed types of institutional systems: one resembling central planning and present in ancient China, ancient Egypt, the Inca Empire and other territorial states, and another one with strong market institutions, protection of property rights present mostly in city-states, not just in the Mediterranean but throughout the world. Evidence is presented that these institutional differences dating back to the antiquity are shaped by special geographical conditions. These institutional differences can be seen to be at the root of the two cultural systems in today’s world: individualism and collectivism. These cultural differences have effects on economic performance and institutions in today’s world.
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