A Cultural Approach Towards Economics




When globalization seems to challenge local certainties, people often rediscover their emotional, cultural and religious identities, and transnational communities, as well as communal pluralism, that have a significant economic impact on the global world. Nations are formed on brute force while civilizations are formed on ideas, concepts, models and their culture. Culture is not the prerogative of a single generation, but is embodied in, and shaped and adapted by, a succession of generations.

Nations formed out of brute force Civilisations born out of ideas


Culture is not only one of the most important elements of any society because of its intrinsic, aesthetic, unifying or other intangible values but it also affects a great deal of economic activity. Gambling, for instance, is a culture in the west and is a legal form of recreation in many countries and casinos are in some cases even run by the government. While in Eastern countries like India, the culture considers it to be a sin. Therefore, gambling is prohibited. Cultural economics is that branch of economics that studies the relation of culture to economic outcomes.

Cultural economics develops from how wants and tastes are formed in society. Here, “culture” is defined by shared beliefs and preferences of respective groups.


Historical Perspective:

This was different from the western concept of macro based industries with industrialization andays about micro enterprises with examples such as the neighbourhood ‘pansari’, the bullock cart driver, the barber, the farmer, who were all entrepreneurs in their own field.

This was different from the western concept of macro based industries with industrialization and military controlled industries which were centrally controlled. If we compare the economic ideas and concepts of modern day giant economies with those of

our ancient culture, it is not surprising to find similarities in them.

  • For example, our culture’s concept of shubh-labh indicates that prosperity and profit are not only prior but the very core of human endeavor and that social prosperity and business profit cannot grow in isolation.

  • The concept of daan-punya to offset the negative impact on society is centuries old. IIt sounds really similar to the modern carbon-credits.

  • Compared to the one-dimensional understanding of wealth in western societies, the Indian tradition identifies eight different types of “Lakshmi”. Clearly there is a wealth of wisdom which is yet to be tapped.

  • Colonization introduced the command and control structure into our economy. And even after independence, we continued the imported mindset to perpetuate the idea of state as a provider rather than revert to a model rooted in our ancient culture. The Mughals and the Britishers got to India and enriched their treasuries for centuries. India’s wealth and heritage has been subject to civilizational plunder since ages.

Importance of culture in Modern economies:



Beyond doubt, the Indian society has always been skeptical regarding development and

modernization. The society believed that development was the willful obliteration of history and culture which was sold as a bad idea in a nice package. As the conceptions changed, we steadily moved towards modern societies. Today, Modernity may be a vague term that can at best be described through long-winded sentences loaded with adjectives.


At the same time when globalization seems to challenge local certainties, people often rediscover their emotional, cultural and religious identities, and transnational communities, as well as communal pluralism, are having an economic, social and political impact on the global world. Some examples of India’s economic development due to its culture are as follows:

1. Indians and most people in neighbouring South Asian countries commonly speak more than one language daily, as a matter of routine. Their highly diverse expat, diaspora and migrant communities provide them not only with global access, but also with global sources of income.

2. India and other South Asian countries are among the largest recipients of monthly

transfers from their diaspora workers.

3. Due to their religious, ethnic and social diversity, more than 30 million Indians access

and transfer remittances from countries as various as Saudi Arabia, the UAE, Malaysia,

Singapore, the US, Canada, the UK and Australia.

4. Regional languages and minority religions have established themselves as global

community networks. This is as truer for the Tamils in Malaysia as for the Sikhs in

Canada. Such connections provide them with access to education and jobs, partly through

professional visa arrangements, and despite the limitations and constraints of our current

times. These communities have created their own formats, many of which have become

international actors, such the Global Tamil Forum and the World Sikh Organisation.


Besides the above mentioned achievements, there is much more which can be achieved through the combination of our cultural and economic values. Nowadays, even though our living experience entails dealing with cultural constructs in myriad forms, we tend to address its conservation and protection as an isolated entity without realizing the overall socio-economic impact. We tend to forget that traditional livelihoods are integral to socio-economic development of our country and need to be recognized for the meaning and values that they bring to the community at large. If we look at the west today, we can infer that there is plain simple misery for the majority of the population. India can do a lot more with its wealth of experience and culture. The long term sustainability of our civilization essentially rests in addressing the need of inculcating the economic values of our culture into our socio-economic structure, and by promoting small scale micro-based industries for the development of our economy. The target of establishing India as a ‘Vishwaguru’ can be achieved only if we promote and follow our own ancient cultural and economic values.

Written by Gaurav Bisaria

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