Showing posts with label tiger moms. Show all posts
Showing posts with label tiger moms. Show all posts

Saturday, 2 June 2012

Is Mark Zuckerberg richer than Mr Darcy?


This picture of Mark Zuckerberg’s wedding with Priscilla Chan was one of the few truly heart warming images from the last few weeks. This picture was so heart-warming because I learnt something new: I didn’t know Zuckerberg’s girlfriend was Asian. This knowledge re-framed the Zuckerberg wedding for me, as a fellow Asian. This isn’t just another wedding photo any more. It is now the picture of every Tiger Mom’s most fervent dream coming true. Dennis and Yvonne Chan, ex-refugee immigrants who ran a Chinese takeaway in Boston, must be so happy with their multi-billionaire son-in-law. How nice for them!

As my heart warmed to the Chan family’s good fortune, I started slipping into an authentic Tiger Mom mindset, and some more tough-minded thoughts took shape. A good Tiger Mom would do some rigorous competitive benchmarking. She would ask herself, “Mark Zuckerberg is a nice boy, but is he really rich enough for Priscilla? Is he as rich as Mrs. Bennet's son-in-law, Mr. Darcy? You know, the one they want to marry Elizabeth off to?”

It turns out Mrs Chan need not have worried, her son-in-law compares very well with Mrs Bennet’s son-in-law. Jane Austen tells us that Mr Darcy had an income of ten thousand pounds per year, in 1810, in England. Converted into today’s money, that is about $600,000 per year. That is a tidy income, but feels distinctly imaginable, more affluent-professional than masters-of-the-universe, certainly not the kind of money that animates the Occupy Wall Street movement. A self respecting Tiger Mom would wish more for her children.

So, is that game, set and match to Mrs Chan? Was Mr Darcy really no better off than assorted corporate vice presidents? Mr Darcy owned half of Derbyshire and employed a vast domestic staff, but he couldn’t buy an asprin, or watch the World Cup finals on HDTV. Can one really compare his situation to ours? To whatever extent comparisons are possible, it seems like our living standards have improved so much that millions of upper middle class professionals enjoy a quality of life that is equivalent to that of the most privileged landed aristocrats just two hundred years ago, which is a comforting thought in these troubled times.

Mrs. Bennet’s partisans might argue that relative income matters more than absolute income. This is reasonable. Behavioural economics and evolutionary biology suggest that people care more about status than about absolute living standards. Mr Darcy was high status, certainly higher status than the armies of contemporary upper middle class professionals who share his living standards. But how does his relative income or status compare with Mark Zuckerberg?

The American academic James Heldman tells us that Mr Darcy’s income of 10,000 pounds per year was 300 times the per capita income in his day. The per capita income in today’s America is $48,000, so a contemporary Mr Darcy would make approximately $15 million per annum, which is starting to feel appropriately rarified. Mark Zuckerberg’s fortune is at least $10 billion. If that earns risk free returns of 2% p.a., that is an income of $200 million, which is an order of magnitude more than what our contemporary Mr Darcy makes.

James Heldman also refers to the economic historian G.E. Mingay, who estimates that there were only 400 families among the landed gentry of England with an income in the range of 5,000 to 50,000 pounds per annum, with the average being about 10,000. To keep things simple, lets say that puts Mr Darcy in at about the 200th richest man in his England. Mark Zuckerberg is the 14th richest person in his America, trumping Mr Darcy once again, without any fiddly adjustments for the larger population in today’s America. However one looks at the numbers, our contemporary Tiger Mom Mrs. Chan has outperformed the proto-Tiger Mom Mrs. Bennet.

At this point, the top performing Tiger Mom in the jungle would need to pause, offer the other Tiger Moms a cup of tea, and initiate a conversation about how money doesn’t really matter, that there are many qualitative things like character and compatiability that make a marriage successful. This blog would like to join the Tiger Moms in drinking a cup of tea. This blog would also like to wish all happiness to the newlyweds Mark and Priscilla. May they play many Limca Cuts.



Monday, 31 January 2011

Tiger Mothers and OPEC



Amy Chua's fifteen minutes of fame are almost over. The Tiger Mother story has played itself out as a news item. Yet, after having read the Economist, Elizabeth Kolbert in the New Yorker, David Brooks in the NYT, Larry Summers in the WSJ, The Guardian, Slate and probably a dozen other stories about The Battle Hymn of the Tiger Mother, I feel like the mainstream media are missing the central point, the reason why Tiger Mothers are both so heartening and so scary.

By now, most blog readers probably know the outlines of Ms Chua's story. Her book, Battle Hymn of the Tiger Mother, is supposedly a memoir about raising children on a strict regimen of no TV, no video games, no play dates and no sleepovers. The time that was freed up was reinvested in music practice and homework. Her regimen worked. Her daughters, now 18 and 15, grew into music prodigies with straight A grades.

Amy Chua spiced up this unsurprising story with the provocative claim that Chinese mothers are superior to Western ones; that her experience is evidence of this superiority. By mischievously framing the question in racial, or geopolitical, terms, she twanged a bunch of recessionary anxieties about Western decline and the rise of China. She has been rewarded for this cynicism with a firestorm of media commentary, and a place on both Amazon and New York Times bestseller lists. The racial and geopolitical sub-text is so deliciously juicy that it has drawn most of the media attention.

However, to me, the Chinese angle is irrelevant. I grew up among the Tamil Brahmins of Mylapore, a culture which is chock-a-block with Tiger Mothers. This also kills the theory that Tiger Mothers are somehow products of the immigrant experience.

This isn't about Asian values either. Slackistan, a new movie I'm itching to watch, should illustrate this point. It is about the indolent lassitude of privileged young Pakistanis; Asian setting, no Tiger Moms in sight.

American Jews are pushy parents, according to stereotype. In this, they are no different from other Western families who want to provide well for their children. Spotting Western Tiger Parents from a wide range of cultures is as easy as watching tennis on TV. Venus and Serena Williams' dad Richard, or Andy Murray's mom Judy, or Martina Hingis' mom Melanie - Tiger Parents all. Every race, religion and ethnicity can and does embrace the Protestant work ethic, in the right circumstances.

Those right circumstances are defined by incentives. Tiger parenting happens when parents respond to incentives. If good grades open up a credible path to a better life, parents will push their children to get good grades. The bigger the gap between the parent's life and the promised life for the children, in terms of either tangible income or status, the harder the parent will push the children.

Slightly less obvious, the same dynamic works with parents further up the food chain. These are parents in high-status positions, who are not wealthy enough to pass the same status on to the next generation. Senior civil servants, army officers or tenured university professors like Amy Chua, who are rich in status but not in wealth, might push their children even harder than the aspiring middle class. One of the clearest results in behavioural economics is that the pain of losing something is far greater than the joy of gaining the same thing.

On the other hand, Bertram Wilberforce Wooster and members of the Drones Club were so completely secure in their privilege that swotting to better one's life made no sense. Ditto for George W Bush. Ditto also for Jawaharlal Nehru, who was never more than an average student through his Harrow and Cambridge years. Similarly, coal miners who can only imagine that their sons will also be coalminers are unlikely to become Tiger Dads who push their sons to straight As.

Looked at this way, Tiger Parents, and the middle-class bourgeois values they reflect, are fundamentally good. They inhabit worlds with social mobility. They inject even more mobility these worlds with their energy, ambition and enterprise. They make democracy and capitalism possible; if this feels like an over-claim please read Fareed Zakaria's The Future of Freedom, a book I loved and wholeheartedly endorse.

So ambition and hard work are good. But how much is too much?

The scary thing about Amy Chua is not her ambition, or her Chinese-ness (she is a second generation American, married to a Jew, whose parents emigrated from the Philippines). Her problem is extent. No TV or video games until homework and music practice are done? Fine. No dinner unless the "The Little White Donkey" is played perfectly? No way. But that, apparently, is what Amy Chua does.

I find the most intuitive way to understand this is with another Econ 101 concept: cartels.

Consider OPEC, the cartel of twelve countries which controls most of the world's crude oil. It is in the best interests of the group as a whole to maintain a high price for crude oil. Their oil ministers meet, agree on production quotas, limit supply, and drive up crude oil prices to profit-maximizing levels. However, it is in the best interests of each individual country to renege on the agreement, and produce more than the agreed quota of crude. The higher the price of crude, the stronger the individual country's incentive to renege (especially if it is a democracy heading into an election year). As more countries renege on their production quotas, the price of crude drops, and ideally the cartel breaks down in a flurry of bitterness, finger-pointing and name calling.

Cartels can also do good. Everybody benefits from low trade barriers. Each country has an incentive to "cheat" and raise protectionist walls for local political gains. Supra-national arrangements, like the WTO or the EEC, are all about making it harder for individual countries to cheat, and therefore making everyone better off. In general, cartels work if they have fewer participants, if cheating is easy to spot, and if punishments for cheating are severe.

The supply of homework hours is analogous to the supply of crude oil. All families would be better off if there were limits on pushy parenting; say, children have at least an hour of unstructured time every day. The problem is with enforcing a cartel to limit the supply of homework time. Lots of suppliers, no way to monitor cheating, no punishments for being caught... this cartel would break down in a flash. Tiger parents will immediately turn that hour of free time to homework, to get ahead of the competition.

One of the few things I love about Amy Chua's story is that for fifteen years she never told her peers how hard she pushed her kids. She fabricated medical reasons why her daughters couldn't go on play dates or sleepovers. Her peers had no way to know she was "cheating", and couldn't punish her with social ostracism. A lot of the vitriol being directed at her now is the finger-pointing and name-calling that happens when a cartel breaks. I'm sure a lot of the finger-pointers and name-callers are secretly vowing to double-down and push their children even harder. I don't think there is a happy and harmonious resolution to having Tiger Mothers in our midst.

Sport as a metaphor for life might work here. A sportsman needs to focus, play hard, and play to win, even when the opponent isn't playing the right way. Say the umpire doesn't call a chucker at cricket. As a batsman, you just mark your guard again and bat on. Say your opponent is calling your shots long at a club tennis match. You stop going for the lines and find another way to win. Playing their game is not an option. Letting them win is also not an option. I guess that is one way to deal with Tiger Parents, because for better and for worse, they are here to stay.