European descent, but Argentina’s and Uruguay’s
economic performance leaves much to be desired. Japan
and Singapore never had more than a sprinkling of
inhabitants of European descent, yet they are as
prosperous as many parts of Western Europe.
China, despite many imperfections in its economic and
political system, has been the most rapidly growing nation
of the past three decades. Chinese poverty until Mao
Zedong’s death had nothing to do with Chinese culture; it
was due to the disastrous way Mao organized the economy
and conducted politics. In the 1950s, he promoted the
Great Leap Forward, a drastic industrialization policy that
led to mass starvation and famine. In the 1960s, he
propagated the Cultural Revolution, which led to the mass
persecution of intellectuals and educated people—anyone
whose party loyalty might be doubted. This again led to
terror and a huge waste of the society’s talent and
resources. In the same way, current Chinese growth has
nothing to do with Chinese values or changes in Chinese
culture; it results from a process of economic
transformation unleashed by the reforms implemented by
Deng Xiaoping and his allies, who, after Mao Zedong’s
death, gradually abandoned socialist economic policies
and institutions, first in agriculture and then in industry.
Just like the geography hypothesis, the culture
hypothesis is also unhelpful for explaining other aspects of
the lay of the land around us today. There are of course
differences in beliefs, cultural attitudes, and values between
the United States and Latin America, but just like those that
exist between Nogales, Arizona, and Nogales, Sonora, or
those between South and North Korea, these differences
are a consequence of the two places’ different institutions
and institutional histories. Cultural factors that emphasize
how “Hispanic” or “Latin” culture molded the Spanish
Empire can’t explain the differences within Latin America—
for example, why Argentina and Chile are more prosperous
than Peru and Bolivia. Other types of cultural arguments—
for instance, those that stress contemporary indigenous
culture—fare equally badly. Argentina and Chile have few
indigenous people compared with Peru and Bolivia.
Though this is true, indigenous culture as an explanation
does not work, either. Colombia, Ecuador, and Peru have