Money talks
Money talks

A couple of recent incidents triggered this article.

A friend was surprised that I still withdraw cash every month to manage my household expenses. He was perplexed about the reasons for using cash in a completely carded economy.

And then, the very next day, I suffered the ire of a teller when I landed up on his window with a bagful of 50 cents coins to load my prepaid card. Both, in different ways, made me a perfect example of a dinosaur that continues to remain in the “old economy”.

These incidents prompted me to think about changes in society’s attitudes to money and wealth.

As one ruminates on this topic, it’s important to distinguish between the cause and effect of these attitudes. A number of cross-cultural markers indicate the three fundamental underlying causes that are the reasons for our changing attitudes –

1# Cultural supremacy of the intellectual class is now rapidly changing in favour of the moneyed. Confucianism, Brahminism, Shintoism – religious and social constructs that feted intellectuals as the epitome of social mobility are now shifting in favour of those with money (or appearances thereof).

2# Demography is gravitating to both ends. Due to better life expectancy and delayed marriages, there is an exploding youth generation and an increasing aged population, along with a significant gap between them.

3# Centralized government controls is giving way to free market mechanisms. Across Asia, there is a slow movement towards what can be best described as free market socialism, away from strict central government control. This is letting lose a spirit of entrepreneurism.

These three causes of class, demography and free market, both independently and combined, result in a number of shifting attitudes to money in Asia.

Acting rich betters being rich. While being rich is important, it is not as important as looking rich. Ever notice that the first pay cheque goes into buying a Rolex or a Louis Vuitton? In worse conditions, go fake but play the part. As a reaffirmation of this cultural tension, in an affluent survey, the corporate designation / title was seen as more important then club memberships and home ownership for enhanced social status.

Ostentation gives way to being comfortable with wealth. China’s “New Aristocracy” is more at ease with its newfound wealth. Unlike the Russian oligarchs, these people tend to steer clear of vulgar displays of opulence. From another perspective, they are making their new money into old money – buying art, travelling widely, buying property and sending their children to private schools and universities in Britain or America.

Optimism trumps conservatism. Most youth in Asia are a generation of people not exposed to poverty or hardship unlike their parent’s generation. This makes them optimistic risk takers who are willing to take chances unlike their conservative parents. This is reflected in the growing number of affluent Chinese consumers who describe themselves as self-employed / freelancers (15% from virtually nil a decade ago).

Spending beats saving. To a generation that is not aware of poverty / hardship, spending comes easy (or so say their parents generation who save as much as 30% of their incomes for a ‘rainy day’ or a calamity). This has spawned the emergence of the “Bobo” (bourgeois bohemians) subculture. A Bobo is one who “demands the best from life, seeks products of exquisite taste and quality, and chooses products that display character”. In essence, a Bobo pursues money so that he/she can indulge in a form of materialism and vanity that was unheard-of in the past.

Materialism over philanthropy. With the absence of a safety net from the state, in Asia, it has always been understood that the individual fends for himself. Under this principle, the family comes first, the individual comes second, and charity comes a distant third. In these circles, a Traditionalist is a rather mirthful description of an entrepreneur who ‘claims’ that the money he had made was for society, not for himself.

Smart conquers correct. Ethics has a fluid definition in Asia. Smart ways of working around the bureaucracy are not seen as morally compromising. ‘Getting it done quickly’ takes precedence over ‘getting it done right’. In some ways, this is natural for transitioning economies with a high rate of growth? But, taken to an extreme, this can be construed as ‘trickery’. This line can be very thin and convenient!

Easy money surpasses working hard. The Chinese have a term for it – It’s called accidental money. Money through inheritance, gambling, risky and speculative investments – all of it falls under this term. While the earlier generation across Asia had a protestant work ethic, today’s generation prefers the easy money. And this has ramifications across a wide spectrum from job changes to returns expectations from investments.

Money as validation in contrast to money as necessity. This is a more nuanced tension. Our western counterparts have experienced continuous generations of consumption and have become more self-actualized towards money. However, Asians are still likely to be in their first or second generation of consumption, hence see this as a barometer of success and self-identity. Asia is about bigger, newer, more compared to the international LOHAS (Lifestyle of Health and Sustainability) trend. Is it any wonder that China will soon be the second largest luxury market in the world?

Family ‘face’ still overrules individual ambition. Respect for the extended family / community / local society runs deep in Asian societies. Hence while individual ambition is tolerated, it always has to be subsumed under the concept of ‘respect / face’ Point to note – gifting to family and close friends is almost a ritual birthright.

Continuing traditions of looking for a fair trade. While there is a generational and social change, equally some things never change – like the concept of hunting for a good bargain. This is largely coloured by the fact that you feel the other person or organization is always out to get a better deal (unless you are smart enough!). Not surprisingly, Asian investors tend to use informal friends/family networks and tend to distrust corporate intermediaries (and the fees they charge).

With all this change, what about those dinosaurs that continue to love the feel of cash in their hands? As Darwin correctly predicted, they are largely en route to being extinct.

As virtualization takes root, currency now has exciting forms, such as airline miles and Amazon’s parallel e-currency. Online games like Farmville and Temple Run have their own currency. Why, if you have an empty room in your home, Airbnb sees that as unused currency!

As one progressively gets further removed from hard money, society gets comfortable with the ‘notional’ (almost transient and ephemeral) idea of ‘e-money’. In the not-too-distant future, clicks, miles, points and rooms will buy you everyday groceries.

Every thing is currency and, at the same time, nothing is currency.

It is then that money truly becomes an illusion.

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