Sustainable Development and A Culture-Integrated Theory of International Trade

Prof. Kensei Hiwaki
Tokyo International University

It goes without saying that sustainable development of the global community (simply, “Sustainable Development”) requires a drastically new approach to international trade. Here, we adopt a shorthand definition of Sustainable Development, viz., a long-term process of balanced socioeconomic development compatible with conservation and enhancement of the global environment. So far, modern economists at different times have asserted various elements and aspects of trading societies as important causes of international trade. They have separately chosen comparative costs, factor endowments, scale advantage, technology, industrial policy and so on. Whether static or dynamic, these partial approaches assumed explicitly or implicitly the necessity of free market competition among trading entities and with- in the respective trading societies. To be sure, international trade under the prevailing short-run free competition tends inevitably to exploit anything easily obtainable or surmountable and any humans lacking strong voice or power.
Fig. 2: Optimal Development Path
Fig. 2: Optimal Development Path (ODP)

This implies that international trade, especially under the market fundamentalism (“Market”), favors the rich and the strong among individuals, firms and societies at the cost of the rest. It also implies that such international trade under the Market (representing the short-term, competitive, outward-looking and flow- oriented ethos) tends to devastate the all-encompassing culture (“Culture”) and the global environment broadly defined (“Environment”). Here, the Culture represents the long-term, cooperative, inward-looking and stock-oriented ethos, and the Environment, also long-term stock-oriented, consists of the natural, cultural, humanitarian and peaceful environments [ Hiwaki, 2001]. In view of a cultural tendency toward peace and order, as well as of a general human desire for a peaceful global environment, a culture of peace is an essential ingredient of both the Culture and the Environment. Moreover, it is a truism that a global culture of peace serves as foundation for Sustainable Development.

One important assumption in this article is that a continuous enhancement of both the Culture and the Environment, respectively referring to the “national common good” and the “global common good”, is essential to the pursuit both of a global peace and Sustainable Development. Another important assumption is that a continuous growth of society-general orientation to the future is essential to Sustainable Development, as well as to a balanced socioeconomic development of a society. On these assumptions and others, I will argue for a long-term integral approach to international trade (a “Culture-integrated theory of international trade) on the basis of my theoretical framework for Sustainable Development [Hiwaki, 1998a].

In essence, the present approach, by favoring the general and long-term human benefits, emphasizes the process of “mutually maturing interaction” of all trading societies, which provides a favorable impetus to a balanced socioeconomic development and Sustainable Development. The main ideas and key concepts used in this article include sustainable development, culture of peace, new age of enlightenment, trend preference rate, trend interest rate, optimal development path, interest theory of development, culture-integrated theory of international trade, mutually maturing interaction and multi-media communication.


In the on-going process of Market-driven globalization, governments look for growing national employment and economic activities, firms for growing sales and profits, consumers for growing abundance and convenience, and economists for growing competition and efficiency. For these purposes, international trade plays a highly important role. A worldwide expansion of international trade normally increases the world’s total employment, production, sales, profits, material abundance and convenience. It also con- tributes to a growing global market and possibly an efficient allocation of resources, simultaneously strengthening the economist’s conviction of a long-cherished idea. This idea emphasizes the short-term, flow-biased, free market competition for efficient allocation and economic growth.

Indeed, the Market-driven globalization, which is almost totally flow-biased and very much favoring the rich and the strong, has given a top priority to the short-term benefits at the cost of the long-term needs of peoples and societies. The short-term benefits are no doubt important for all humans, since we wish to be fed, clothed and sheltered comfortably in our daily lives. Achieving a good balance between the short-term and long-term needs is, however, much more important to humankind who has a relatively large brain and long expected life among mammals, needing to satisfy mental, intellectual and aesthetic desires, along with short-term and long-term material needs.

Fig. 3: ODP for Interest Theory
Fig. 3: ODP for Interest Theory
For international trade to be an essential human activity, it must cater to such compounded human needs and desires both in the short term and the long term. It must also have a function favorable to Sustainable Development, which guarantees a balanced human development, as well as human welfare of all the present and future generations. Various vested interests, however, block governments, firms, consumers and even economic thinkers from changing the prevailing short-term-biased thought and practice of international trade. As far as a large majority of the of Development present-day economists are concerned, their vested interests constitute the modern economic thought and the resultant body of theories and tools. Such economic thought, theories and tools contain the dogmas of human nature (self-interest), market (invisible hand), and free competition (natural liberty).

Typical present day economists usually resort to partial and short-term approaches, on the convenient assumption of “other things being constant”, not only to the theoretical exercises of complicated economic issues but also to the more practical exercises of policy formulations. Naturally, other things are always changing in various ways, but such economists tend to dismiss the contradiction, often, by a deceptive argument that the assumption can approximate the reality in a “very short” run. They also make it a custom to assert the “golden rule” of free market competition, without condemning the prevailing unfair competition (“level-ground” competition) between and among grossly disparate trading entities. By the “golden rule”, they argue particularly for an efficient allocation of resources and an expansion of economic activities, often shutting their eyes to the ill effects on income distribution. Such economists tend to uphold “competition” and “efficiency” generally, despite the obvious theoretical implications limited to a very short-term situation.

The general human needs and orientations usually require a long-term treatment, as well as an integral approach, which relate to the necessity of enhancing the Culture and the Environment. For accommodation of lasting human needs, therefore, a drastically new stock-respecting approach to international trade is called for. Such an approach is indispensable, in view of the dogmatic development of the prevailing economic theories that pay little attention to the lasting needs of peoples and societies under different historical and cultural processes corresponding to their respective interactions with the Environment. Indeed, the prevailing trade theories have not only tolerated but also encouraged the growing lopsided economic disparities among different individuals and societies. Furthermore, they have contributed to the rapid deterioration of the Environment, not to mention the devastation of the society-specific Cultures. In other words, such trade theories have thrust humans toward mutual animosity and devastation.

In my previous article, “The Enrichment of Culture: A Culture-Enhancing Theory of Flourishing Employment” [The Bi-Monthly Journal of the BWW Society, November/December 2001], I pointed out a fundamental flaw of market as a serious paradox. “Market tends to degrade the value of Culture and eventually obliterates the long-accumulated cultural foundation that is essential for market activities to continue and expand.” On that occasion, I also suggested that such a paradox of market indicated, “possibly, a fatal flaw of the modern economics that relies heavily upon a free and competitive market.” Furthermore, the economic discipline seems to have, over the last two hundred years, degenerated not only into a “purely- bred” discipline on the sole basis of the politico-economic thought of the developed nations, but also into a “short-term-biased” discipline on the narrow basis of the flow-oriented and technocratic approaches.

Our present discussion, therefore, serves as an attempt to aim at rectifying such biases of the economic discipline. For this purpose I will introduce a long-term integral approach to a continuous society-economy (set-subset) interaction for a balanced socioeconomic development [ Hiwaki, 1998a], as well as a Culture-enriching approach to international trade [ Hiwaki, 2000]. The present discussion also serves for our editorial theme “The New Age of Enlightenment”. In my own view, this new enlightenment encourages an emancipation of all individuals and societies from the politico-economic dogmas that encourage self-interested, short-term and material-biased lifestyles. Such emancipation requires an acceleration of human development broadly defined to nurture long-term broad perspectives and future-oriented ways of mutually enriching individual and social lives. Human development, here, means a continuous process relevant to cultivation of human abilities, sentiments and values for more long-term, constructive and harmonious human endeavors and achievements.

The New Age of Enlightenment goes hand in hand with the Age of Sustainable Development, since the fundamental principle for a balanced socioeconomic development encourages a well-balanced human development. A growing society-general orientation to the future, essential for a balanced socioeconomic development, tends to encourage a rapid and continuous process of human development. Also, an enhancement of general future orientation tends to accelerate saving and investment over time for a greater gross value-added, as well as for an increasing stock of human capital broadly defined (in the following section). Furthermore, such a growing future orientation tends to enhance both the Culture and the Environment over time. This enhancement process of general future orientation, therefore, tends to lead to a “virtuous” circle of human development, socioeconomic development and Culture-and-Environment enhancement, paving the way for Sustainable Development.


In this section, we will briefly discuss the bare essentials of the theoretical framework for Sustainable Development. I will first take up the basic assumptions, concepts and expressions relevant to our theoretical approach. Secondly, I will illustrate a long-term interaction between the value aspect and the real aspect of a society for a balanced socioeconomic development. Thirdly, our discussion will concentrate on the value aspect to present a diagrammatic explanation of our two-way Optimal Development Path (ODP). Based on the ODP, I will refer finally to an “interest theory of development” [ Hiwaki, 1998b] that is most relevant to our Culture-enriching approach to international trade. This theoretical framework

asserts, among other things, that a continuous enhancement of society-general orientation to the future is essential for a balanced socioeconomic development and, hence, for Sustainable Development.

Figs. 4-1, 4-2, 4-3

1. Basic Assumptions and Important Concepts The framework for Sustainable Development bases itself on the assumption that a long-term integral approach to socioeconomic phenomena of a society is indispensable for the study of current and long-term future needs of the people and society. Accordingly, the framework includes a long-term societal time preference rate (Trend Preference Rate or T) for accommodating the long-term interactions among the historical, cultural, political, economic, psychological, institutional and technological phenomena, to mention only major ones. In our theoretical framework, a “long- term” means a long enough duration of

time for a change in the existing value system.

A change in the society-general value system is assumed to correspond roughly to a change of T in our theoretical framework. In other words, a compounded force arising from the long-term interactions of various socioeconomic phenomena may result in a change of the society-general value system, which, in turn, changes T to reveal the society’s changing will and choices about the future. A decline of T, for instance, implies a strengthened society-general orientation to the future. Such a change of the Trend Preference Rate (T), reflecting a stimulation of societal future orientation, speaks for the society’s positive will for a balanced socioeconomic development.

Also assumed here is that such general orientation to the future have the precedence over a less general, economy-specific orientation to the future. The latter is revealed by a decline of the long-term real interest rate or the Trend Interest Rate (r). Thus, the economy-specific future orientation tends to move, albeit a lesser degree, with the society-general future orientation. This indicates our lead-lag assumption, meaning that T leads r in their relationship as expressed in the form of ratio (T/r). This ratio, constituting the “value aspect” of our theoretical framework, represents a long-term interaction between the society-general values and the economy-specific ones in our dynamic setting.

The value aspect interacts mutually with the “real aspect” which consists of various ratios of long-term macroeconomic variables, such as the consumption propensity (C/V), the saving propensity (S/V), the investment propensity (I/V), the labor-income share (W/V) and the capital-income share (R/V). Our long-term value-added (V) includes all the productive and positive activities, both paid and unpaid pecuniarily, that may be calculated by market prices, shadow prices or psychic prices. Our consumption (C) includes all consumption expenditures other than for human-capital formation. This means to exclude expenditures for formal education, training, self-learning and health-enhancing activities relevant both to mental and physical health.

Our long-term investment (I) includes such broad human-capital formation, as well as hard and soft investments in plant, social infrastructure and residential facilities, to mention a few major items. Moreover, our investment embodies the dynamic functions of transforming our long-term saving (S) into both human and physical capitals, relating the present socioeconomic activities to those of the future, and equilibrating the aggregate demand and supply over time. Our long-term labor income (W) indicates the income accruing to “simple” labor (different between and among societies) that embodies only the standard-minimum skills of reading, writing and calculating, obtainable by all people within a society. In contrast, our long-term capital income (R) refers to all the incomes accruing to the “effective” human capital and the other capitals.

Our concept of “effective” human capital, being different from a usual definition of human capital, covers a wide variety of human capacity, that is over and above the minimum skills embodied in our “simple” labor. Our “effective” human capital encompasses vocational and professional skills, intelligence, wisdom, courage, ingenuity, creativity, imagination, insights, foresight, benevolence, public concerns, self-control, long-term perspectives, linguistic and other culture-related abilities, to mention only major elements. Thus, it is presumed “effective” not only in the activities specific to the usual meaning of production but also all the other positive activities, including consumption, waste management, health-keeping, self-learning, inter-personal relations, political participation, voluntary activities, self-actualization and so on.

2. Value-Real Interactions for Socioeconomic Development The basic construct of our framework can now be summarily expressed in an interactive relationship between the value aspect and the real aspect of a society. In other words, our theoretical postulation reflects all the activities necessary for a balanced socioeconomic development, which relate both to the value-aspect and real- aspect developments. These dynamic activities take place both within their respective aspects and between the two aspects. The left-hand terms of the following two equations show the value aspect, and the right-hand terms the real aspect.

(1) T/r = A/V (A representing C and W) (2) T/r = 1 - (B/V) (B representing S, I and R).

Assuming A/V+B/V=1, Equation (2) may summarily represent the above two equations. Thus, the following expression in Fig. 1 can be used to illustrate a dynamic process of value-real interactions for a balanced socioeconomic development. Given the lead-lag assumption between the Trend Preference Rate (T) and the Trend Interest Rate (r), the general societal will and choices about the future (T) have the precedence over the corresponding economy-specific will and choices about the future (r), as mentioned above. Now, an overall interaction between the value aspect and real aspect indicates a “virtuous” circle of balanced socioeconomic development. An initial enhancement of the society-general orientation to the future leads to a decline of the Trend Preference Rate (T). This change in the society-general value system improves the economy-specific future orientation and provides a downward pressure to the Trend Interest Rate (r) over time, as shown by Arrow 1. The same decline of T encourages over time a growth of the saving (I), the investment (I) and the capital income (R), almost simultaneously, as shown by Arrow 2. The growing S, I and R, together, expand the gross value-added (V), as shown by Arrow 3. They also increase the capital stock of the society over time and give a downward pressure to the Trend Interest Rate (r), as indicated by Arrow 4. The declining interest rate, in turn, induces a decline of the Trend Preference Rate (T), as shown by Arrow 5.

The expanding gross value-added (V), on the one hand, feeds back to the saving (S), the investment (I) and the capital income (R), as shown by Arrow 6. It also increases the capital stock and enhances the economic future orientation, resulting in a further decline of the Trend Interest Rate (not shown in the diagram). On the other hand, the expanding V encourages the societal optimism and the general orientation to the future, as shown by Arrow 7. This brings back to the starting point for a new circle. All the depicted and implicit interactions show a continuous and dynamic “virtuous” circle. This virtuous circle provides a compound synergistic effect to a balanced socioeconomic development. When such a development process becomes a general phenomenon in the global community, it turns into a dynamic process toward Sustainable Development.

3. Value Aspect and Optimal Development Path In accordance with the above framework for a balanced socioeconomic development, we now concentrate our discussion on the value aspect (T/r) to deal with our Optimal Development Path (ODP). Based on the above-illustrated long-term interaction between the value aspect and the real aspect, we can now depict a normative process of socioeconomic development as an extra long-term schedule of the society’s value aspect. On the basis of our lead-lag assumption, therefore, we can derive a bow-like curve from a very long-term interaction of the two variables (T and r) , as shown in Fig. 2.

The leading variable (T) is now shown on the vertical axis, and the lagging variable (r) on the horizontal axis. The bow-like curve connecting Point F (the socioeconomic hell), Point D (the Growth-Maturation turning point) and Point O (the socioeconomic heaven) is our normative path of socioeconomic development or the Optimal Development Path (ODP). The ODP, being a two-way path of positive and negative processes, indicates a “general theory of development”. In our theoretical framework, therefore, the Trend Interest Rate (T), representing the society-general orientation to the future, is the most important determinant of a balanced socioeconomic development.

Our positive development consists of the Growth Process (F-D) and the Maturation Process (D-O), while our negative development includes the Retrogression Process (O-D) and the Breakdown Process (D-F). Our Optimal Development Path represents, rather loosely, a generalized form of the normative development path. Put differently, it is not meant the unique one of universal applicability in the strict sense of mathematical optimality. Each society is assumed to have its own bow-like ODP that broadly reflects a differentiated history, culture, economy, polity and so on. The shape of such ODP may change somewhat over time, perhaps, with some long-term external influence on the society’s value system.

4. ODP and Interest Theory of Development The above concept of Optimal Development Path (ODP) embodies an “interest theory of development” [ Hiwaki, 1998b]. The phenomenon of interest, regardless of negative, positive and intermediate meanings having been attached to it by the past philosophers, theologians, administrators, financiers and economists, seems to represent an important historical undercurrent of human beings who have always faced the limited availability of usable resources. Such an undercurrent is the very continuity of human life itself or the affirmative human interest in the future. Without such motivation and positivism about the future life, one dares not trade the present income (purchasing power “in the hand”) with the equivalent future income (purchasing power “in the bush”).

Any individual humans who expect to go on living in the future generally hope for a life better in the future than otherwise. In my view, therefore, the most fundamental reason for the universal phenomenon of interest (regardless of calling it “interest” or not) is the general human desire for a better life or a more comfortable life in the future, given the world of overarching limitations. Accordingly, the universal phenomenon of interest, particularly of long-term phenomenon, can speak broadly for an essential socioeconomic premium and incentive for the very continuity and enrichment of human societies (or for a balanced socioeconomic development).

In economics from the classical school to the post-Keynesian school, theorization of the interest phenomenon has been one of the major academic endeavors, though often limited to a rather short-term phenomenon of interest. As for the secular (very long-term) phenomenon of interest, it is worth noting that David Ricardo, Karl Marx and John Maynard Keynes, despite their different approaches, all reached the same conclusion. “The rate of interest will fall over time and approach zero, because returns to added capital diminish at a faster rate than can be offset by improving technology” [Landreth, 1976]. Our theoretically derived ODP, depicting a secular schedule of the Trend Interest Rate (r), also supports their arguments for the declining secular interest rate.

As seen in Fig. 3, any point on the ODP, representing a specific r-value (Trend Interest Rate) measured by the horizontal axis, indicates a long-term economic rate of real interest or an “ideal capitalist rate of long-term interest” at the given process of development. Also, the corresponding point on the 45-degree

r a y, representing a T-value (Trend Preference Rate) measured again horizontally, indicates the corresponding social rate of real interest or an “ideal socialist rate of long-term interest”. A c c o r d i n g l y, the depicted horizontal distances, such as a-b, a-c and b-c, represent respectively a social rate of interest (SRI), an economic rate of interest (ERI) and a socioeconomic premium for development (SPD), and likewise for the distances a’-b’, a’-c’ and b’-c’, and also for the distances a ” - b ” , a”-c” and b”-c”, to show only a few examples.

Here, the socioeconomic premium for development (SPD) represents the gap between the society-general and the economy-specific orientations to the future. In other words, the gap shows the difference of future orientations between the society (set) and the economy (sub-set). This represents largely the difference in psychological attitudes toward the risk of a further socioeconomic development, for the future holds a variety of uncertainty and unknown. As the general public seeks a more rapid development, a greater burden is placed on economic activities. Being a subset different from the other subsets of the society, the economy may face more uncertainty and unknown than the whole society that is an integral entity. This risk factor tends to constrain the economy-specific orientation to the future relative to the society-general one, so that the former lags behind the latter.

Viewed mathematically, a decline of the Trend Preference Rate (T) provides both for a decline of the Trend Interest Tate (r) and a complementary decline of the long-term propensity to consume (C/V). Alternatively, the society paves the way for a balanced socioeconomic development by increasing the share of capital income, saving and investment in the growing gross value-added. The economy tending to be more conservative about the future than the whole society in the positive process of socioeconomic development, the society-general initiative for a future development provides a necessary incentive for the relevant economic risk-taking.

As inferred from Fig. 3, the socioeconomic premium for development (SPD) tends to increase in the Growth Process (F-D) and decrease in the Maturation Process (D-O). The rising SPD in the Growth Process implies that this process demands an increasing economic incentive to match the increasing risks in a future development. In other words, the incentive in the form of SPD must adequately compensate for such risks. The diminishing SPD in the Maturation Process, on the other hand, implies that this process can manage the development risks with a decreasing economic incentive. It is, perhaps, owing to the intellectual and spiritual maturing of the general public and also owing to the growing general endeavors for the enhancement of the Culture and the Environment.

Viewed differently, a growing economic role for a socioeconomic development in the Growth Process, by the irony of circumstances, leads to a growing economic alienation from the prevailing general value system and social order, as well as from the elusive general will and interests about the future. Such alienation, meaning an additional risk, may require an increasing incentive that compensates for such risk-taking, among others. As to the Maturation Process, a growing number of economic entities (producers, consumers and government agencies inclusive) attempt gradually to catch up and recognize the changing values of the general public and endeavor to reflect them in their economic activities. According to the changing value system, they now try to enhance both the Culture and the Environment, as well as to promote a global culture of peace. In an atmosphere of growing harmonization of the economy-specific and the society-general wills and interests about the future, therefore, a decreasing economic incentive in the form of SPD tends to compensate for the development risks in the Maturation Process.


Now, we will deal briefly with the essentials relevant to a long-term Culture-enriching approach to inter-national trade, basing mainly on the above “interest theory of development”. This theoretical exposition emphasizes a dynamic role of international trade for the worldwide Culture-to-Culture interactions, which amount to a “mutually maturing interaction” in terms of the society-specific ODPs. Such dynamic interaction, in turn, calls for a positive, long-term and future-oriented interaction of consumers, producers and governments in international trade. This sort of trade interaction also functions as multi-media communication of demands and supplies of traded goods and services. We will also discuss briefly major implications of our Culture-integrated theory of international trade to Sustainable Development.

1. Culture-Integrated Theory of International Trade In order to facilitate the discussion of a long-term integral approach to international trade, we will now assume three sample societies for simplicity, namely, Societies X, Y and Z with their respectively characterized ODPs, as shown in Fig. 4 (1, 2 and 3). Society X is assumed to be already at the Growth-Maturation turning point (x), Society Y at a high point of the Growth Process (y), and Society Z near the beginning of the Growth Process (z). To begin with, these sample societies show relative differences by the shapes of and by the development positions on, their respective ODPs. The diverse characteristics may reflect each society’s unique history, value system, disposition, attitude, creativity, education, skill, technology, factor endowment, scale advantage, location, climate, polity, policy, institution, risk, orientation to the future and so on. Such diverse features of each society, by interacting one another within a society, may deepen the uniqueness of each Culture.

Based on our interpretation of the Optimal Development Path (ODP) in Fig. 3, the sample societies face their different realities relevant to the social rate of interest (SRI), the economic rate of interest (ERI) and the socioeconomic premium for development (SPD). Generally speaking, the ERI tends to vary among societies, reflecting the differences as mentioned above. Accordingly, the SPD that amounts to the dif

ference between the ERI and the SRI may vary widely among these societies and represent their respective socioeconomic priorities in time and space at the given positions on their respective ODPs. The different characteristics and priorities of the respective societies may constitute both causes and results of their different ERIs and SPDs over time. With such differences, these societies interact through the mutuality-oriented (not self-centered) and Culture-respecting (not Market-centered) international trade, to the consequence of more pronounced and pervasive differences. Such interaction, in turn, enriches their respective cultural foundations to expand and up-grade the activities of international trade.

For generalization, we may think of numerous societies with their respective ODPs and at their respective positions on the ODPs. Then, our generalized approach to international trade asserts that all societies can trade one another on the basis of their ODP-integrated cultural differences. Also, it asserts that these compounding characteristics can lend continuity and dynamics to international trade. This generalization synthesizes broadly the existing theories of international trade into our Culture-integrated theory that, in essence, relates trading activities generally to the varying value aspects of all societies. In our theory, therefore, all the societies trade with one another according to the respective cultural characteristics that

correspond to their respective positions on the ODPs.

The above can be stated on the basis that each differentiated Culture relates generally to the specific his-tory, location, climate, value, polity and other characteristics of each society in our long-term integral theory of international trade. Put differently, the uniqueness of each society largely corresponds to the uniqueness of the Culture, which represents the unique “national common good”. Our Culture-enriching approach, therefore, requires a Culture-respecting fair competition (not a “level- ground” competition). Also, it requires a continuous enhancement of the Environment as the “global common good” in order to expand and upgrade international trade continuously. It goes without saying that a culture of peace, an important element both of the Culture and the Environment, must prevail for the stability and continuity of international trade.

2. International Trade as Mutually-Maturing Interaction The above discussion of Culture-enriching approach emphasizes that international trade originates in and thrives on the world’s cultural diversity. Viewed in this manner, we may come to a better understanding of the reality that almost all societies in the world are trading among themselves in one way or another, on the basis of Culture-oriented capabilities for production and Culture-bound needs and tastes for consumption. Indeed, numerous societies traded with one another before the modern age and, for that matter, much before the modern trade theories being postulated on the new bases of self-interest, competition and free market.

Such modern explanations of trade may sound rational in the light of private property, individualism, and efficiency. Emphasizing the importance of free and competitive market (Market) for the short-run efficiency of allocation, the modern explanations, however, largely neglects the importance of historically and geographically differentiated Cultures that serve as the most fundamental basis for international trade. As a result, this emphasis has distorted human attitudes toward slighting the Culture and the Environment. To rectify the traditionally biased view, our integral approach argues for the following. The Market (with the short-term, competitive, outward-looking and flow-oriented ethos) and the Culture (with the long-term, cooperative, inward-looking and stock-oriented ethos), both being indispensable human heritage, have to be harmonized and mobilized for human comfort, health and welfare, as well as for fairness, individuality and independence.

Now that the importance of differentiated Cultures and of their pervasive interactions through international trade has been asserted, we can speak more positively of the prospect of Sustainable Development. Given the differentiated Cultures leading to international trade, the trade-induced interactions among the Cultures can now be regarded as an important vehicle to nurture proper respect to all the society-specific Cultures. For the continuous enrichment of the respective Cultures, on the basis of long-term orientation to the future, offers the expanding and upgrading opportunities not only for international trade, but also for well-balanced human development, socioeconomic development and Environment enhancement.

In other words, the Culture-to-Culture interaction through international trade stimulates one another among the different Cultures to promote their respective and mutual processes of socioeconomic development. Such interaction now amounts to a “mutually maturing interaction” in terms of their respective ODPs. Through such positive interaction, all societies can influence one another to quicken their respective processes of balanced socioeconomic development, so that they can move far more quickly toward and into their respective Maturation Processes to achieve a wholesome development of the global com-

munity. This is the process of “mutually maturing interaction” of all trading societies, which may accelerate the global process of socioeconomic activities toward Sustainable Development.

3. International Trade as Multi-Media Communication On the assumption that all consumers in the trading societies are the eventual beneficiaries of expanded and upgraded international trade, the more enlightened consumers of Society X, for example, can start demonstrating their demands for the Culture-and-Environment-favoring goods and services in the inter-national market. They can also directly interact with their counterparts in Societies Y and Z with computer support to exchange information about internationally traded materials, goods and services, and to cooperate for the cause of Sustainable Development. Through such “grassroots” demonstrations and interactions for the sake of more appropriate consumer behavior, such enlightened consumers also can positively influence internally and externally the thought and behavior of the less enlightened ones for enhancement of their respective Cultures, as well as of the Environment. Further, as they grow in number, the enlightened consumers can guide the behavior of producers by their enlightened demands for goods and services. Such demand may encourage domestic and foreign producers to pay proper respects to the Culture and the Environment.

Then, the consumer-to-consumer and the consumer-to-producer interactions in international and domes-tic markets may encourage or discourage the demand and supply of goods and services, depending on their favorable or unfavorable impacts on the Culture and the Environment. Put differently, international trade in the computer age can work as a worldwide network of multi-media communication for appropriate ideas and conduct relevant to Sustainable Development that in essence represents a continuous enhancement of the Culture and the Environment. It can also give a strong impetus to a “virtuous” circle of balanced human development and socioeconomic development, ushering in the New Age of Enlightenment.

Such multi-media communication as a function of international trade can take a long stride when sup-ported by the favorable endeavors of local, national, international and transnational governments, as well as by the cooperation of enlightened shareholders of multinational and global corporations. One possible consequence of the Culture-enriching international trade, given such a favorable turn of events, is an accelerated and widespread recognition that a continuous enhancement of the Culture and Environment is indispensable to the present and future needs of all peoples and societies. A second consequence may mean a worldwide and whole-hearted endeavor for the cultivation in all people of enhanced thought frame (or enhanced individual and collective scopes of thought both in time and space). This, for instance, may lead to a general understanding that the enrichment of each and all Cultures provides a growing opportunity not only for international trade, but also for a balanced human development favor-able for Sustainable Development.

A third is a likelihood of closer inter-governmental cooperation and stronger transnational leadership to enhance the balance between the short-term and long-term socioeconomic activities according to an appropriate balance between the short-term and long-term needs of all peoples. Also, this likelihood may provide an impetus to multinational and global corporations for adjusting to the Culture-respecting fair competition and the Culture-enriching employment and international trade. Furthermore, the closer inter-governmental cooperation and stronger transnational leadership may lead to a creation of appropriate global governance system for a better coordination of endeavors for enhancing the Culture and the Environment. All these are, no doubt, conducive to the cause of Sustainable Development.


Our long-term Culture-enriching approach to international trade has some far-reaching implications, by contributing to a new trend of thought for international trade and to a new transnational politico-economic environment for well-balanced socioeconomic development. Our new approach that emphasizes the process of “mutually maturing interaction” differs clearly from the classical and neo-classical emphasis on free and competitive market for short-term efficiency and economic expansion without a proper consideration of future social costs and maladies. Such emphasis favors only the rich and the powerful among individuals, firms and nations for perpetuation of their control over the world. Our proposition stresses global human enrichment and solidarity in pursuit for Sustainable Development and for perpetuation of general welfare over the present and future generations.

Going much beyond the traditional assertion of short-term mutual benefits and inter-dependence of economies without paying heed to the contagion of “win-or-lose” competition and “life-or-death” income disparity, our Culture-and-Environment embracing approach to international trade works for the common and lasting benefit to all individuals and societies. These general benefits, no doubt, arise from the enhancement of the Culture and the Environment, as well as from a thriving international trade. Further, our Culture-integrated theory of international trade warns against the unwise choice of adhering to an inhuman dogma of market fundamentalism. Such dogma ignores the earnest human wish for global peace and divides all peoples into the “haves” and the “have-nots”, to the inevitable consequence of accelerated security costs and compounding social maladies. Our integral approach stresses long-term dynamic interactions among the ever-flourishing Cultures to strengthen the very foundation for an upgraded trade expansion. It also has implications for the development and enlightenment of all peoples and societies.

Put differently, our Culture-enriching approach to international trade can suggest a continuous enhancement of general lifestyles through the long-term process of “mutually maturing interaction”, which nurtures among individuals and peoples a culture of peace, as well as a growing orientation to the future and long-term perspectives. Thus, our Culture-enriching approach induces a “virtuous” circle of well-balanced human development and lifestyles in the global community for the New Age of Enlightenment. All in all, our Culture-integrated theory of international trade, leading to the processes of “mutually maturing interaction” among differentiated Cultures and of multi-media communication among trade beneficiaries, can pave the way to the Age of Sustainable Development.

References Hiwaki, K. (1998a); Sustainable Development: framework for a General Theory; Human Systems Management, Vol.17, No.4, (pp.267-279)

Hiwaki, K. (1998b); Development Theory of Interest or Interest Theory of Development?; Proceedings of 15th International Congress on Cybernetics, Namur, Belgium, (pp.598-603)

Hiwaki, K. (1999); Culture of Peace and Long-run Theory of Employment; Culture of Peace: Survival Strategy and Action Program for the Third Millennium (Edited by George E. Lasker and Vladimir Lomeiko), I.I.A.S., (pp.143-148)

Hiwaki, K. (2000); A Long-Run Approach to International Trade for Sustainable Development; Sustainable Development and Global Community (Edited by George E. Lasker and Kensei Hiwaki), I.I.A.S., (pp. 25-30)

Hiwaki, K. (2001); The Thriving of Culture: A Culture-Enhancing Theory of Flourishing Employment; Journal of The BWW Society, Vol. 1, No. 2 (pp. 1-14)

Landreth, H. (1976); History of Economic Theory - Scope, Method and Content; Houghton Mifflin Company.

Dr. Kensei Hiwaki is Professor Economics at Tokyo International University, and also serves as a Member of the Editorial Advisory Board of both the BWW Society and Bibliotheque: World Wide. In conjunction with his participation with the BWW Society, Professor Hiwaki is Founder and Chairman of the Committee for Cultural Enrichment and Diversity.

Professor Hiwaki has put forth academic economic theories documenting that Market Forces and Cultural Enrichment can work together, not only to their mutual benefit, but to the lasting benefit of developed and underdeveloped nations and highly varied cultures throughout the world.

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