Is the Marlboro Man just a myth?
Maybe so, but according to a recent study, it could be a myth with meaning. Endemic to the American character is the notion of the frontier. By global standards, we are a relatively new country. Many Americans can trace their ancestry back to immigrant forbears, be they Scotch-Irish or Scandinavian. And the massive North American continent was settled by these farmer-entrepreneurs.
As a result, the West looms large in our national psyche. Americans celebrate innovation and entrepreneurship, with the iconic “startup-in-a-garage” a starting point for any discussion of new business. But sometimes these national myths are misleading, and the cultural lore built up around them are little more than just-so stories designed to entertain the listener, rather than really explain anything.
So it was interesting when two economics professors from UC-Berkeley examined global factors of innovation and individualism. They found that the US, UK, and Australia are the most individualist countries in the world, as well as the most innovative, as measured by numerous factors. Not surprisingly, countries that celebrate and reward innovation tend to have higher incomes than countries that require consensus and collectivism.
Culture matters. When the individual is encouraged to take risks and start something new, the economy tends to benefit, even if it is disruptive. Creative destruction creates wealth.
Douglas R. Tengdin, CFA
Chief Investment Officer
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