The relationship between capitalism and xenophobia. The values of the capitalist

Research Paper (undergraduate), 2014

43 Pages, Grade: 1,0



There has been much scholarly debate about the impact of capitalism on xenophobia. While it is widely accepted that capitalist economies create values which then in turn influence xeno­phobic attitudes, the direction of the relationship is contested: do capitalist values increase or decrease xenophobia? This debate is in large part not settled yet because previous studies on the subject have failed at providing comprehensive conceptualizations of and quantitative evidence on capitalist culture and values. To address this gap in the literature, I use the latest wave of the World Value Survey to inductively develop a set of capitalist values from individ­uals’ responses to questions on economic issues. Through this inductive approach, I identify four distinct values associated with capitalism: materialism, economic individualism, a belief in small government, and a capitalist work ethic. I then use OLS to assess the relationship between these four values and individuals’ attitudes toward immigrants as well as people of different race and religion. I find that materialism and capitalist work ethic increase hostility toward people different from oneself, whereas economic individualism decreases it. Belief in small government does not have a statistically significant impact on xenophobia. These find­ings have important implications for both the scholarly debate on the effects of capitalist cul­ture and the public discussion about economic reform.

Keywords: xenophobia, capitalism, culture, materialism, individualism, small government, work ethic

Aim and Scope

Numerous countries in Southeast Asia exhibit large numbers of Chinese immigrants: as of 2007, more than two million ethnic Chinese reside in the Philippines (Guanqun 2009), almost eight million in Indonesia (The Republic of China 2007), and some six million in Malaysia (No author 2011). Economically, these minorities have been doing very well, being admired and envied by the indigenous peoples for their business acumen and great wealth. At the same time, Chinese immigrants have repeatedly been subject to systematic violence by local popu­lations, especially during times of national economic crises. In a seminal study, Chernov (2003) argues that these patterns of anti-Chinese violence in Southeast Asia are caused by the presence of a pronounced economic nationalism, which in turn was brought about by South­east Asia’s post-colonial economic systems. These economic systems entail a strict division of labor, which not only reinforce, but can intensify ethnic divisions among populations.

Chernov’s (2003) study demonstrates that economic systems can have a powerful im­pact on individuals’ attitudes toward immigrants and minorities. One economic system that scholars have quite extensively focused on in this context is capitalism; this is hardly surpris­ing, considering that capitalism is the dominant economic system of the modern age (Pryor 2010). Within the scholarly debate on the impact of capitalism on attitudes toward people different from oneself, two competing schools of thought can be identified: one argues that capitalism as an economic system fosters competition among individuals for scarce resources such as money and jobs, which undermines integration and solidarity within society and thus ultimately increases xenophobia (Heitmeyer 2007a). The other asserts that xenophobia is an impediment to important features of capitalism such as free markets and commodity flows, which is why discrimination on grounds of race, sex, and the like is subsequently decreased in capitalist societies (Friedman 1962). While these two schools of thoughts stress different out­comes, they use a similar causal mechanism that connects economic systems and xenophobia: a change in individual value systems. More specifically, capitalism is not only an economic system but also a cultural system; as such, it infuses individuals with certain values, norms, and ideas that are necessary to keep the capitalist economy running (MacFarlane 1989; Bell 1996; Austin-Broos 2009; Scott 2012). And since the values within an individual’s belief sys­tem are all interrelated, these capitalist values can be expected to influence attitudes toward people different from oneself, either positively or negatively.

As insightful as the previous literature is in unraveling potential causal connections between capitalism and xenophobia, it suffers from three substantial limitations. First, the vast majority of research on the subject is purely theoretical and therefore does not provide empir­ical evidence on the relationship between economic systems and individuals’ attitudes toward people different from oneself. This lack of empirical evidence is a major reason why the de­bate between the two schools of thought briefly described above is to date not settled (Pitcher 2012). Second, the few studies that do empirically approach the subject have employed broad­brush aggregate data which is unable to provide insights into which exact values are affected by capitalism and how these particular values, in turn, are related to norms regarding xeno­phobia (Heitmeyer 2012). Third, previous research on the subject has implicitly assumed a coherent system of capitalist values that all influence xenophobia in a uniform direction. However, more general studies on capitalist culture have pointed out that such economies create values within a society that are somewhat contradictory (Bell 1996). Therefore, it might very well be possible that some of them influence xenophobia positively and others negative­ly, thus invalidating the assumption of a uniform effect. My aim in this study is to address these limitations by quantitatively analyzing the relationship between capitalism and xeno­phobia, using more fain-grained individual-level data instead of aggregate data. More specifi­cally, I utilize survey responses provided by the World Value Survey.

This study proceeds in several steps. First, I present a review of the literature on capi­talism and xenophobia, which reveals that previous studies have largely failed at providing conclusive empirical evidence on the relationship between these two phenomena. In particu­lar, existing research does not clarify which particular values are associated with capitalist economic systems and how exactly these values interact with xenophobic attitudes. In the next section, I utilize survey data provided by the World Value Survey to inductively develop a set of capitalist values from individuals’ responses to a broad range of questions regarding economic issues. Using factor analysis, I identify four values associated with capitalism: ma­terialism, economic individualism, a belief in small government, and a capitalist work ethic. Next, I lay out the research design of this study, that is, operationalize the related concepts and elaborate on the measures by which I evaluate them. In the following section, I discuss the findings yielded by this research design. I find that certain capitalist values are associated with higher levels of xenophobia, others with lower levels. In particular, materialism and capitalist work ethic increase hostility toward immigrants as well as people of a different race and religion, whereas economic individualism decreases it. Belief in small government does not have a statistically significant impact on xenophobia. A concluding section then summa­rizes the main findings of this study, connects them with the broader theoretical debate, and indicates possible directions for future research on the subject.

Capitalism and Xenophobia: The Literature

The debate about the merits and evils of capitalism is as old as the capitalist economy itself. Throughout history, critics of capitalism have associated numerous adverse effects with this type of economic system, including phenomena such as wage slavery (Persky 1998; Marx 2006a; Marx 2006b), imperialism (Brass 1999; Lenin 2006), environmental deterioration (Hugh 1976; Newell 2012; McMurty 2013), and poverty/inequality both nationally (Nelson 1995; Richard 2011) and globally (Rapley 2004; Mills 2009). Conversely, proponents of capi­talism have argued that this type of economic system fosters several positive developments, most importantly economic growth (Barro 1997; Wolf 2005; Meltzer 2012) and political free­dom (Friedman 1962; Hayek 1994; Parsons 2003).

Another potential consequence of capitalism is xenophobia, which is broadly defined as a deep-rooted, irrational hatred toward people different from oneself (Olowu 2008). Xeno­phobia is based on perceptions of an ingroup toward an outgroup; such group distinctions can manifest themselves along several possible fault lines, including gender, race, religion, class, sexual orientation, and so forth (Heitmeyer 2007b). Therefore, xenophobia is generally used as an umbrella term for different kinds of discrimination. Critics of capitalism have long ar­gued that this type of economic system both intensifies various existing xenophobic attitudes and itself breeds different types of hostility toward people different from oneself. For exam­ple, scholars concerned with issues of race have asserted that capitalism is causally and sys­tematically linked to the construction of race and racism. The theoretical argument in this strand of research is that capitalism’s organization of work and social space creates founda­tions on which those holding (and trying to hold on to) power erect or reconfigurate particular ethnocentrisms into xenophobia and organized violence (Tabb 1971; Wilson 1996; Marable 1999; Brodkin 2000; Leiman 2010). Similar arguments are found in the feminist literature, where it is often claimed that capitalism is in large part responsible for the existence of sexism in modern societies. The exploitation of women is seen as functional to capitalism by, for ex­ample, producing a class fraction of cheap labor and thus decreasing low-skilled wages (Gor­don 1996; Albee and Perry 1998; Mies 1999; Graham and Gibson 2006; Peterson 2012).

One of the most systematic and extensive analyses of the relationship between capital­ism and xenophobia is Disintegration Theory, which was developed by a group of German scholars commonly referred to as the Bielefeld School. This theory posits that most individu­als today are disintegrated from society, meaning that modern social institutions and groups have failed at ensuring their existential basics of social recognition and personal safety. As a result, solidarity among members of society declines and distrust in others increases. There­fore, Disintegration Theory explains the denigration and rejection of people with different personal backgrounds and of socially disadvantaged groups in terms of insufficient integrative efforts on the part of modern society (Mansel and Heitmeyer 2005; Heitmeyer 2007a; Kaletta 2008). One type of social institutions that is to a large degree responsible for these disintegra­tion processes are those associate with capitalist economies. Capitalism as an economic and cultural system relies on indirect governance through regulated competition to coordinate ac­tors. As a result, capitalism divides people across multiple dimensions, including divisions of labor and differences in class standing. Thus, both people at the bottom and the top of society become disintegrated from society: those at the bottom because their needs for economic se­curity and status recognition are not being met, and those at the top because of the constant fear that they might lose their societal privileges as a result of the continuous competition. In sum, Disintegration Theory asserts that individuals’ attitudes toward society, its members, and one’s own place within society are negatively affected by competitive capitalism, thus bring­ing together multiple existing theories on the relationship between capitalism and xenophobia (Mansel and Heitmeyer 2005; Heitmeyer 2007a).

A number of scholars have contested the view that capitalism fosters xenophobia; in­stead, they assert that this type of economic system eliminates existing sexual, racial, reli­gious, national, and other kinds of divisions. The logic behind this argument is that capitalist systems create progressive, anti-xenophobic values within a society in order to sustain them­selves (Lowe 1996; Ang 2001; Comaroff and Comaroff 2009; Pitcher 2009). More specifical­ly, capitalism as an economic system aims at and rests upon free markets and commodity flows as well as continuous economic growth and expansion. To ensure that these aims are being met, talent within all segments of society has to be tapped into; racism, sexism, and other types of capitalism pose an impediment to economic development and therefore have no place in capitalist culture. In other words, the capitalist does not care about one’s race, gender, religion, sexual orientation, and nationality; all that matters to the capitalist is what one brings to the table in terms of skills and resources that are deemed valuable on the market (Friedman 1962; Bonnett 2006; Liu and Mills 2006).

This brief review of the relevant literature demonstrates that it is possible to identify two basic strands of research on the relationship between capitalism and xenophobic attitudes: one asserts that the former increases the latter, the other argues that the opposite is the case. To date, this discussion is not settled, as illustrated by a recent book by Cudd and Holmo­strom (2011), in which the authors take different sides on the question of how capitalist eco­nomic systems affect the lives of the women within them. Several important things should be noted about previous studies on the subject. First, while the direction of the relationship is contested, scholars on both sides of the debate largely agree on the causal mechanism behind the relationship between capitalism and xenophobia: a change in individual value systems. Capitalist economic systems, in order to sustain themselves, create and diffuse certain values among the members of a society. These values, in turn, have a particular impact on xenopho­bic attitudes; some say a negative one, others say a positive one. In other words, as the values within an individual’s belief system are all interrelated, values regarding economic arrange­ments, i.e. capitalist values, can be expected to influence xenophobic attitudes.

Second, previous literature on the relationship between capitalism and xenophobia has been primarily theoretical and therefore has not provided much empirical evidence on the specific values that connect capitalist economic systems with xenophobic attitudes. The few studies that do empirically approach the subject have employed broad-brush aggregate data, which is less well suited than individual-level data to provide insights into relationships be­tween values and changing belief systems (Heitmeyer 2012). Third, previous studies on the subject have implicitly assumed that capitalist economies and the values created by them have a uniform effect on xenophobic attitudes, an assumption that seems unsustainable in light of the contradictory nature of capitalist culture (Bell 1996). Therefore, if we are to gain a deeper understanding of the relationship between capitalism and xenophobia, it is necessary to identi­fy all values associated with capitalist economies and then examine how each of them is indi­vidually related to attitudes toward people different from oneself.

Which Capitalist Values?

As the previous section has shown, no comprehensive discussion of capitalist values can be found in research on the relationship between capitalism and xenophobia. Scholars asserting that capitalist values increase xenophobia have primarily stressed capitalism’s competitive nature (Mansel and Heitmeyer 2005; Heitmeyer 2007a), whereas those arguing the opposite have predominantly focused on the imperative of efficiency and productivity inherent in capi­talist economies (Friedman 1962; Bonnett 2006; Liu and Mills 2006). However, given com­mon definitions of capitalism and capitalist culture (Bell 1996; Pryor 2010), both these con­ceptions do not exhaust all of the values that can and should be associated with capitalism. In other words, capitalism and its culture seem to be more complex than both sides of the debate generally suggest. Therefore, it may be helpful to turn our attention to areas of scholarly in­quiry other than the relationship between capitalism and xenophobia and examine whether they provide us with more comprehensive discussions and measures of capitalist values. I review three such areas in particular: studies on capitalist culture in general, public opinion research on economic arrangements and reform, and a recent body of literature that analyzes attitudes toward immigrants and foreign workers.

The most widely received work on capitalist culture in recent years is arguably Daniel Bell’s (1996) The Cultural Contradictions of Capitalism. In this seminal study, Bell argues that capitalism - and the culture it creates - harbors the seeds of its own downfall by creating a need for personal gratification. This need ultimately corrodes the work ethic that has made capitalism so successful in the first place. Thus, Bell seems to view materialism and a certain type of work ethic as the dominant features of capitalist culture, with the two being at odds with each other. Global Problems and the Culture of Capitalism by Richard Robbins (1999) provides a somewhat different account of capitalist culture. Robbins argues that capitalism encourages certain forms of behavior, the most crucial one being a fixation on perpetual eco­nomic growth. This fixation makes individuals unable to imagine cultural and economic alter­natives to capitalism and thus leaves them in a vicious cycle of excessive production and con­sumption. Richard Sennett (2006) provides yet another account of capitalist culture, in which he claims that its most important characteristic is fierce competition caused by an unhealthy obsession with individual success. Within capitalist cultures, the value of individuals is pri­marily determined by their professional achievements and economic status, which leads to a collective identity crisis among the less successful segments of society.

A less critical discussion of capitalist culture can be found in Modern Capitalist Cul­ture by Leslie White (2008), who argues that economics and politics are inseparable. In other words, democracy is caused by and simultaneously causes capitalism. Therefore, we should think of capitalist culture and democratic culture as one coherent phenomenon, which is pri­marily “characterized by a basic freedom and equality of persons” (White 2008, 25). This brief discussion of research on capitalist culture in general illustrates that such studies are not particularly useful for the purpose of this study for two reasons. First, each of the studies dis­cussed above entails a somewhat different account of capitalist culture, focusing on varying values, beliefs, and ideas disseminated by capitalism. Second, these studies are primarily the­oretical and do not provide much guidance on how to quantitatively approach capitalist val­ues. Therefore, this strand of research, while valuable in many ways, does not provide us with a comprehensive list of capitalist values as well as ways to measure them.

As for public opinion research on economic arrangements and reform, The American Ethos by Herbert McClosky and John Zaller (1984) has become the standard in the literature. McClosky and Zaller identify a number of values associated with modern capitalism, most importantly a Puritan work ethic, a desire for personal achievement and ambition, a pursuit of profit and self-interest, and a high regard of competition. The authors then go on to operation­alize these values and examine their prevalence in the United States through a variety of sur­veys, finding that Americans are “strongly committed to values associated with capitalist en­terprise” (McClosky and Zaller 1984, 128). A vast amount of research on the subject has been conducted since McClosky and Zaller’s seminal study. This strand of research, however, is only of limited value for the purpose of this study for three reasons. First, the majority of pub­lic opinion research on economic arrangements and reform is not comparative and instead focuses on specific countries or regimes, most prominently the United States (Peterson, Kozmetsky, and Albaum 1991; Schiller, Boycko, and Korobov 1991), post-Communist coun­tries (Mason 1995; Pop-Eleches and Tucker 2014), and transitional regimes (Bratton, Mattes, and Gyimah-Boadi 2004; Runst 2014). Second, with a few notable exceptions, studies on the subject equate attitudes toward capitalism with attitudes toward free markets and market eco­nomic principles, which are only one facet of capitalism. Third, it seems impossible to con­nect the data provided by these studies with measures of xenophobia.

A growing body of literature has been examining the determinants of attitudes toward immigrants and foreign workers. It would be far beyond the scope of this study to review this entire body; instead, I only focus on studies on the subject that appeared within the last three years. According to these studies, the causes behind attitudes toward immigrants can be clas­sified into five categories. First, certain socio-demographic factors have been associated with variations in attitudes toward immigrants, with belonging to an ethnic minority, living in an urban area, and having a higher education and income leading to greater tolerance of foreign workers (Paas and Halapuu 2012). Second, social interaction impacts attitudes toward immi­grants, meaning that individuals who have previously and frequently interacted with foreign workers tend to be more tolerant of them (Mansson and Dahlander 2011; Paas and Halapuu 2012). Third, certain characteristics of the immigrant community influence how it is per­ceived by the native population, with greater size and cultural dissimilarity causing negative perceptions (Checa Olmos and Garrido 2012; Murray and Marx 2013).

Fourth, negative attitudes toward immigrants are associated with certain other values and beliefs, most prominently a high degree of willingness to submit to authorities, an appre­ciation of cultural uniformity, and a competitive mindset (Cohrs and Stelzl 2010). Fifth, com­petition over scarce resources such as jobs and welfare resources increases hostility toward immigrants, which explains greater collective anti-immigrant sentiment during times of eco­nomic crisis (Checo Olmos and Garrido 2012; Esses, Brochu, and Dickson 2012; Murray and Marx 2013). As valuable as these studies are, they do not shed much light on the relationship between capitalism and xenophobia. There are two reasons for this. First, none of these stud­ies focuses on capitalist culture as the key independent variable in explaining attitudes toward immigrants. While certain values such as a competitive mindset have been associated with both capitalism and anti-immigrant attitudes, these values are not a comprehensive representa­tion of capitalist culture. Second, hostility toward immigrants is only one facet of xenophobic attitudes. To get a more complete picture of capitalism’s impact on xenophobia, fringe groups other than immigrants also have to be included in the analysis.


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The relationship between capitalism and xenophobia. The values of the capitalist
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Michael Neureiter (Author), 2014, The relationship between capitalism and xenophobia. The values of the capitalist, Munich, GRIN Verlag,


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