First, a friend was surprised that I still withdraw cash every month to manage my household expenses. He was perplexed on 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, felt I was a perfect example of a dinosaur that continues to remain in the “old economy”.
These incidents prompted the thinker about changes
in society’s attitudes to money and wealth.
As one ruminates on this topic, it 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.
1# 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 a affluent survey, the
corporate designation / title was seen as more important then club memberships
and home ownership for enhanced social status.
2# 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.
3# 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).
4# 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.
5# 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.
6# 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!
7# 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.
8# 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. Any wonder that China will soon be the second
largest luxury market in the world?
9# 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.
10# Continuing traditions of looking for a fair
trade. While there is a
generational and social change, equally something’s 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. Airline miles are seen as currency. Amazon has a 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.
This article originally appeared on http://www.ogilvydo.com/money-talks/
For a conversation on this topic, connect
with me at
LinkedIn: hk.linkedin.com/in/submayahai/
Twitter: @sub_maya_hai
Email: sub_maya_hai@yahoo.com
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