Volume 3, Number 89 TQE Home 30 November 2003

Institutions and Organizations

Dear Friends,

In forming its Iraqi policy, the Washington administration does not seem to know that "organization" is not the same as "institution." What is the difference? Well, the University of Colorado is an organization, but American education is an institution. The World Bank is an organization, but international banking is an institution. Get the idea? An organization is an administrative and functional structure, clearly bounded, while an institution is a significant practice within a culture, such as the institution of marriage. The governing council that the administration plans to form in Iraq will be an organization, but the Iraqi political system is an institution. Often the terms are used interchangeably, but the distinction I have made here is the one I will use in this Letter.

When Rafael Trujillo was dictator of the Dominican Republic (1930-1961), under him sat a Congress with two houses, identical to that of the United States. But what Trujillo said, the Congress did. A similar relationship existed in Mexico, during the period of the Institutional Revolutionary Party, or PRI (1929 to 2000). The Mexican Congress was technically independent, but in practice it followed the dictates of the PRI. The same for the Soviet Union, which — upon being "democratized" — introduced "loans-for-shares" auctions that turned over the principal industries to tycoons known as the Russian Mafia, who continued to operate them as the former government did. The recent arrest of one of those tycoons, Mikhail Khodorkovsky, is reminiscent of the old, high-handed tactics of the USSR.

The new president of Argentina, Nestor Kirchner, has declared that the police of Buenos Aires are corrupt and responsible for many kidnappings. Someone — presumably the police — called the President on his cell phone as he drove from B.A. to his home state, Patagonia, anonymously threatening his family with death, while showing that they knew the daily whereabouts of his children. The police of New York may be corrupt, but they would never behave like those of Buenos Aires. Corruption is easier to root out in New York than in Buenos Aires, because the American culture is different from the Argentine.

In each case the organizations, similar or identical to counterparts in the United States, behaved in a very different manner. The Dominican, Mexican, Russian, and Argentine experiences show how difficult it is to change a culture by changing a country's organizations. People adapt the new organizations so that the old culture survives in another bottle.

But our president plans to change the organizations in Iraq by military dictate from the United States, supposing that the institution will change along with them. In fact, he expects that the new organizations/institutions will spread to other countries in the Middle East. Dream on, Mr President!

To understand the time element in culture change, consider the centuries necessary to modify religious hatred in the West — which is far from completely eliminated even now. Religious differences used to cause bloodshed. At one time, many French believed that if the nation was not utterly Catholic, it would fall apart politically. Thus they carried out the Saint Bartholomew Day massacre of August 24, 1752, killing protestants who did not flee to Switzerland. Except perhaps in Northern Ireland, where today's problem is more nationalism than religion, mass killings are over in the West. They continue in Iraq, however, between Shiite and Sunni Muslims. In addition, Iraq contains many Kurds, who think of themselves as another nation, holding little in common with the Iraqis.

A reporter who had traveled much in Iraq understood the difficulty: "How could any people support a leader of such cruelty and megalomania [as Saddam]? Don't Iraqis, like other people, thirst for freedom? Maybe, but political freedom is such a foreign concept that most Iraqis have no context in which to thirst for it. The contours of debate within Iraq are so narrow that there is no meaningful way to discuss negative feelings about Mr. Hussein. Indeed, the language of Iraqi politics has been so degraded that it provides no framework for opposition, let alone for what might be imagined as an alternative (New York Times, 4/4/03)."

An occupied nation today is expected to adopt the culture of the occupiers, or else (as in eighteenth-century France) it is believed the world will not function properly. Washington expects Iraqis to absorb the laws of contract, debt repayment, and the sanctity of private property, which all together constitute the "Rule of Law." Whether in law courts or police, or government office, Iraqis would thus adopt the organizations of democracy, ostensibly for their own benefit but actually for the protection of American interests in the Middle East.

The Economist, 11/15/03 reports: "In Washington on November 6th George Bush made an excellent speech in which he said that Arabs were no less capable than other people of enjoying democracy and that helping them to do so should and would be part of American policy for decades to come... On the other hand, the Arabs' British and French colonizers seldom took the view that Arabs were fit for democracy. It is less than a dozen years since France quietly encouraged Algeria's army to cancel an election the Islamist opposition was poised to win in the former French colony."

Which was right? My view is somewhere in between: Bush's position — that Arabs are capable of electing their own government — is the one to which they will finally arrive, maybe a century or so from now, but they will do so of their own accord after much trial and error. That is, provided we do not spoil it by insisting on the American seal of approval.

The European powers who held mandates in the Middle East looked down on the Arabs with contempt (all except T.E. Lawrence). They presumed the day of liberation would never come, and they might have to oversee the Middle East indefinitely, as "the white man's burden."

What do you believe? Please write me at tqe-comment, followed by @quaker.org.

Sincerely your friend,

Jack Powelson

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Readers' Comments

Excellent distinction between organizations and institutions, e.g. Jack Powelson is an institution; TQE is an organization.

— Norval Reece, Princeton (NJ) Friends Meeting.

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A very good letter. I especially appreciate the references to cultural differences and the very slow process of cultural change. It seems to be very difficult for people, even Friends, to see through their own cultural conditioning and bias. There is a veil between cultures that is sometimes too thick to penetrate.

— Janet Minshall, Anneewakee Creek Friends Worship Group, Douglasvillle (GA).

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Nicely done... Boy, that last TQE really brought out the dogma!! I want to tell you Jack, that what I treasure most about TQE, and to some extent my relationship with you as well, is that it causes me to look at my assumptions. Many times I didn't realize they were there! Sometimes I look at them and accept them as assumptions, and sometimes I look at them aghast at my own hubris, or ignorance, or "liberal" political correctness (in the colloquial, not the classic, sense of liberal).

— Valerie Ireland, Boulder (CO) Meeting of Friends.

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Jack, this is definitely one of the best TQEs yet. clear, important, and highly relevant. This kind of clarification could go a long way in helping simple minded idealists understand the difficulties in Iraq.

— Carol Conzelman, Cochabamba, Bolivia.

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Hello — I was told that marriage is an institution, but who wants to live in an institution? (yok! yok!).

— Maurice Boyd, Friends Meeting of Washington

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Your TQE 89 about the Iraqi situation is right on the mark (as usual), and your distinction between "institution" and "organization" very insightful. With few exceptions, the Middle Eastern countries are not secular, and the dominant "institutions" are controlled by mullahs or clerics. Sooner or later, we will have to come to terms with them (as the Saudi Royal family has done in order to keep their "organization" intact). Let's hope we can do so on terms that are reasonable for the West. Can the present Administration bring themselves to do so? I doubt it.

Like good wine or good Calvados, you have only improved with time. May you continue to "age" for many more years.

— Tom Selldorff, Weston, MA

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I wonder if you do not too readily accept the US administration's claim that it desires to bring "democracy and freedom" to the Middle East. Has not this phrase become no more than jargon meaning 'facilitation of economic and strategic opportunities favoring the USA'?

— Stephen Petter, Bristol & Frenchay Monthly Meeting, Britain YM.

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I strongly agree with your conclusions about Iraq.

Markets generally are institutions. There is a common cultural expectation between buyer and seller about the product. Most "preferences" are culturally formed (not determined, we do think some). Advertising, though not determinative, plays a role in creating culture change. The economics profession is an institution. It has a culture and vocabulary that suggests questions to ask and limits our ability to answer others.

— Baird Brown, Central Philadelphia (PA) Meeting

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Finally, we agree on something. I have been amazed at the political lack of sophistication in understanding the differences in cultures and the time it takes to create what you call institutions. It would seem that understanding the current institutions would be the place to start to create change. I am sad that this does not seem to be part of our foreign policy.

— Barbara Seidel, Gwynedd Meeting, Lansdale, PA

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I am so pleased to see The Quaker Economist because while I applaud Friends efforts to bring peace and justice in the world, and have actively supported these efforts myself, I regret that many times it is clear that good people don't really understand economics. It is very important that we be as true to these truths as it is to want to love others. Good luck.

— Jean Lowe, Virginia.

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Here's a couplet my mother taught me. Whoever knows what it adds to, please let me know, and I'll give you an A. — Jack.

                      A tuppence, a twapence,
                      A groat and three ha'pence,
                      A penny, a penny,
                      And an odd bobine.

(Must be said with a Scottish accent).