Updated: Mar 6
An economically free nation is almost bound to become individualistic, while an economically enslaved nation is bound to become collectivistic.
In an economically free nation, people feel empowered to make their decisions and call dumb things dumb. They have no reason not to call superstitions and old traditions stupid if that is what they think. An individualistic society is very unlikely to suffer from social stupidities like child marriage and dowry. They don't have to worry about angering old people who want to impose their customs. They don't have to bow down to the group. It allows people to think for themselves and grow morally. Thus, individualism is constitution to moral growth.
Collectivism is a result of economic slavery. People who are taxed a lot and are imposed upon with a myriad of regulations are bound to become collectivistic. Since economic opportunities are limited, they appease their group to get academic and professional favors. They give up their dissentive opinions and agree to their group's norms. This eventually leads them to engage in some really stupid behaviors, which they try to rationalize as meaningful. This is why collectivistic nations tend to have customs and traditions that would look crazy and immoral to an unbiased outsider. As we can guess, collectivism is bound to make people immoral since people don't think for themselves. They have to agree first and keep their dissenting opinion to themselves if they want to survive. They live in group units, not individual units. And morality can not be expected from groups, for groups are not people. Accountability and responsibility are both individual traits, not group traits. This is the same reason why we can't expect morality from corporations; they are artificial persons. A group is also an artificial person.
I had an opportunity to observe an individualistic nation descent onto a collectivistic one. I had gone to college in the United States, which used to be an individualistic nation. I observed group identity taking precedence over individual identity. There were ethnic and religious groups on campus that students joined to seek academic and professional favors. These groups helped their members get job opportunities and blocked outsiders. Soon, they became biased for their own members and against members of other groups. Even when their group's behavior was outrightly disgusting, members would tacitly agreed so they could continue their membership. I remember a girl from Baptist Student Union who did not like her group, because they were rude to foreigners and non-churchians. But she had no other place to go. Almost everyone I knew belonged to a group because they knew they wouldn't get anywhere without affiliating with a group. Most jobs were filled via referrals. A BSU girl was bound to refer her BSU friend. An RUF girl was bound to refer her RUF friends. A frat boy was bound to refer his frat brothers. A BSA (Black Student Association) boy was bound to refer his BSA brothers. This was the incentive for individuals to join a group. Jobs led to better networks, which led to better jobs, which led to even better networks. An independent like I was bound to be perpetually behind, which was the case. From a naive perspective, I could be called stupid for not using all the available resources and networks. I did the right thing though. I stayed independent and witnessed group behavior take precedence over individual behavior, which led to a moral decline; group polarization and groupthink turned them into mentally-ill extremists. Chances are, my peers still live in herds and sacrifice their moral calling to acquire material gains.
Therefore, I don't think that individualism and collectivism are intrinsically different cultural values. They are results of two different kinds of economic planning. A free economy creates free-thinking individuals. Free-thinking individuals develop morally. A top-down centrally controlled economy creates scarcity. Scarcity fuels herd mentality, which makes people immoral and stupid.