Category Archives: Daily Comment

Dating in the Times of Piketty – part II

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This is the second part of our musings on dating in a more unequal world. As we discussed in part I, we have a few relevant case studies, both historic (feudal Europe) and contemporary (countries with largely Western culture and relatively high inequality, say parts of Latin America). Still, both sets of cases do not fully reflect the situation developed Western nations are gliding into according to Piketty.

Let’s see what is different and what that means for us.
Different from feudal Europe:

  1. Agency of women. In contrast to Jane Austen’s times, women now have voting rights, full property rights, can marry and divorce as men can, and are active in politics and business. The first born daughter may well end up running the family business. (No need to smash the entail, Lord Grantham.) We also know that women, on average, tend to be more left leaning in politics than men. Summing up, this means on the one hand, that hypergamy will likely be an attractive option for both genders (see part I) and courtship patterns may change. Not only will we see groomed young women queuing and trying to prove their virtues to the Mr Darcys, we will also see groomed young men queuing and trying to prove their virtues to, say, Paris Hilton. On the other hand, women’s agency has shifted the political center to the left. This makes it more likely that the bottom 99 percent will oppose an unequal world and vote for a politician that can offer a credible route out of it. Finally, it will also mean that men and women overall have more occasion to meet and mix, at university and work, say.
  2. Wealth is mostly represented by capital, not land. Capital can grow; land only up to a limit. So overall, social mobility in Piketty-land should not be quite as restricted as in Austen-land.
  3. Internet, social media. Any return to inequality will be well documented and well known. The fact that Piketty stirred up the world in so short a time, even the fact that I can write and share this very blog, are witnesses to this change. The average people can see the rich people’s life style more easily, more completely and can choose to covet or to criticize it. Facebook is not exactly a paragon nexus of social mobility, but certainly more so than an Austenian ballroom. The fact that average yours truly is facebook friend with some royalty, as well as heir/esses gives reason for hope. Mrs Bennet’s duty is still valid, but got a little easier. The wealthy networks are more infiltratable.

Different from both feudal Europe and quasi-feudal contemporaries:

  1. Smaller families. This should, on average, make it a bit more difficult to spread inherited capital widely. There are simply fewer heirs and heiresses to marry off.
  2. Longevity. The overall life length is of relatively little interest. What matters is the length of productive life, which seems to expand only slowly or not at all. A longer productive life would give more opportunity to run business risks and thereby accumulate wealth; more opportunity for social mobility. Still, longevity alone already means a longer time span in which heirs need to stand on their own two feet, before cashing in.

Despite all these differences, our main prediction from part I remains. Marriage will be more important a means to access wealth than it is now. And wealth will therefore play a larger part in choosing our partner. The downside is, obviously, that loveless marriages are likely to become, once again, a distinct and accepted possibility.

If Piketty is Right – What Does That Mean For Dating?

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I assume by now you have read the buzz about Thomas Piketty’s recent book (for example here or here). There has been some debate about his results, but that seems to be settled. His main scary prediction is that most developed nations seem to be headed for a very unequal world, with few people owning most of the wealth and passing it on through inheritance, and most people owning relatively little and not having the chance to amass wealth through their own work.

Now, what does this mean for dating? In his book, Piketty painted a return to the (economic) world of Jane Austen. We won’t see a complete return to Jane Austen in the dating world, because gender roles have changed, and clear-cut male/female roles have blurred since then. But let’s go through the possible outcomes for an average person vs. a rich person, not distinguishing different impacts for men and women for now.

Average wo/man

You will face a world where your chance of getting rich through marrying the right person (a rich heir/ess) are much higher than today, and of getting rich by getting employed and working hard are lower than today. You still have a chance of getting rich through entrepreneurship, but the odds are probably not better than today.

In practice, this means that the skill of detecting rich heirs and infiltrating their networks successfully are now more highly valued; and the skills needed to succeed academically and professionally decline in relative value. At the same time, wealth of a partner may become more important relative to his/her other traits.

As a matter of case study, we could compare the dating arrangements in countries that currently have a fairly equal wealth distribution (say Northern Europe) with those that don’t (some Latin American countries). Let me confess that I, an average woman, have dated in both contexts. And what I have seen largely shows that rational human beings adapt to the distribution of wealth. ‘Marrying well’, ‘eligible bachelor’, ‘a catch’ – are all acceptable expressions to use in the unequal, but not so much in the more equal world. Family and friends share knowledge on wealth-related eligibility of young men, and this is clearly a highly ranked trait in the less equal world. Networking is proactive, and relationships are cultivated with people of influence (Austen would write ‘consequence’.) Academic and professional advancement is still fostered and valued, but also because it allows mixing in the right circles. In the more equal world, such considerations would be more criticized and sometimes consciously ruled out.

This is also reflected in the content of popular TV. Hypergamy (women marrying up) is a big theme in most Telenovelas, still prevalent in Sex and the City but not so much in Lindenstrasse or let alone Wallander. In the literature, Saint-Paul skilfully shows that hypergamy (women marrying up) increases as inequality increases.

Rich wo/man

You will likely face a longer queue of suitors (suitresses?) than nowadays. And many in that queue will have a (legitimate and rational) economic motivation as part of the package. If you want to sort out the suitor that is free of such concerns, you may need a more elaborate selection mechanism than nowadays. Think of Portia, the rich heiress in the ‘Merchant of Venice’. The correct suitor chose the leaden box over the gold and silver ones. Or of Turandot, who wanted to single out the smartest by a tough riddle. And then correctly married a refugee. Fighting through a hedge was good enough for Sleeping Beauty (and that example doesn’t really count because she married a social equal). From the male perspective, Cinderella‘s shoe as a selection mechanism may be hard to replicate. Natural beauty, on the other hand, seems to rain equally on all social classes. And some talents can be tested (Rapunzel‘s singing voice). Effectively, all hypergamous women and men in the fairy tales had to prove their true character through a complex action. Which is why some hard work will still pay off.

 

 

Mothers As Benign Dictators: 3 Economic Problems Solved By Motherhood

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We have been hearing a lot about things mothers worry about, problems they see and experience more than others. I would therefore like to dedicate this one minute read to three problems that true motherhood effectively solves.

1. Communal goods. Goods with more than one proprietor rarely work, see communism. A pasture that belongs to all shepherds of a town usually gets overused (economists call this the Tragedy of the Commons), and a kitchen in a student flatshare accumulates dirt or more. This is because one person can load the costs of his or her actions onto others without paying for them. Well, we only have interest in loading costs onto others if we don’t care for them too much. Mothers Care. Big time. Altruism undoes the Tragedy of the Commons because we care about others’ woes as much as our own.

2. Externalities. The process of being able to unload our costs onto others is called externality. It does not only happen with common goods, it also happens in pollution, excessively loud music etc. Externalities have been known to happen even between people who like each other. Like siblings, say. So called omniscient planners can detect and prevent externalities. Like, hm, mothers. They know. They see. They act. Turn down that blaster.

3. Natural Monopolies. A natural monopoly arises when it does not pay to have more than one provider of a good or service. There is then a risk that this sole provider charges too high a price or excludes people. I would reckon that in many families the car is such a natural monopoly, or the TV…or any asset that is too expensive to buy twice and sometimes hard to use by more than one person at once. In these cases too, mum can take a stand and manage access with fairness and altruism. Bloccupying the TV or car is not a sustainable strategy with most mums, my mum included….

In short, mothers can undo those problems that economic theory has found a so called ‘well meaning dictator’ can solve. The issue is that in the great wide world, well meaning dictators are a rare species. In our families however, we may know one or two.

World Women’s Day: 5 Things That Happen When Women Have the Upper Hand In Dating

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How can we find out what happens when women have the upper hand in dating? Does it ever happen? And what if? – One situation where women certainly have bargaining power is when men outnumber women. A high ratio of men to women means men compete for women and women can choose.

There are several situations where we find a high gender ratio: some countries (last week we discussed China), some immigrant communities, social groups and others.  Economists have studied several of these and have found 5 outcomes in the relationship world when women have the upper hand.

  1. There are more marriages. Groups where men outnumber women see their marriage rates go up, compared to groups with even gender ratios.
  2. Men earn more. As men have to make an effort to gain an edge over potential competitors for women, one area they excel in is income.
  3. Women tend to work less. Overall, fewer women choose to work outside the home. This suggests that, at least in the communities studied, many women had the latent wish to be homemakers.
  4. Couples earn more. Women, who choose to work, earn more on average than working women in gender-even societies. Combined with point 3, this means that women won’t get up for less than a certain salary any more.
  5. Children born in this environment are better off. After all the above, it’s an empirical fact that in societies where men compete for women, parents of young children earn more. Children grow up in wealthier households than in societies where women have less bargaining power.

In other words, based on robust evidence: bargaining power for women is a pretty good thing, for about everyone.

Why the Rise of Women Means They Marry Later

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Today The Economist discusses the conflicting views on marriage between younger and older Chinese generations. Younger women in particular appear to receive increasing pressure from their families to marry and marry young, while the women themselves would prefer to wait (and be choosier). The trend goes hand in hand with rising empowerment and better career prospects for women.

What’s happening? Three things are at play here (and were missed by The Economist.)

#1 Marriage is no longer an economic necessity for women. With women earning their own living, marriage becomes a nice-to-have, from formerly a must-have.  In this situation, not only is the urgency gone, but different factors govern women’s choices. This is the situation of the young women. While the older generation may still perceive a world of must-have marriages.

#2 Professional women have other things to do. As I pointed out here, many professional, attractive, intelligent women are single at a marry-able age, and those who marry, marry later than the population average. Science says they also have better things to do than the population average. If a date competes with work that is fulfilling, bodes success and a higher income – then the date better be at least as fulfilling, easy-to-present-to-others, and liquid. Of course work and relationships fulfill different needs – but they also compete for the same, scarce resource: time. Professional women have less time and higher demands for relationships, given their alternative options. Both together are likely to keep them single.

#3 In China in particular, women wait because they can. Already in the 1990s, scientists reported skewed sex ratios at birth in China. Now, the gap between the genders is a sizeable ‘gulf’.  In this situation, with more men competing for fewer women, the gentle gender determines the rule of the game. And that likely involves waiting for their best bet. On their terms.

5 Trends in Sexual Mores and What They Mean

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The Economist recently reported about shifts in sexual mores in Britain, but interestingly left out almost all economic interpretation and especially outlook. Let’s make up for it here.

  1. Both men and women are strongly and increasingly intolerant of marital infidelity. Wonderful. The boundary around the joint marital territory, and around the (property) rights acquired by marriage has just become firmer. In future, you will be more secure in your marriage and can trustfully invest in it.  Your Economist predicts (continuation in the) increase in marriage rates, and an increased willingness of spouses to give up things when they get married.
  2. Sexually transmitted infections do no longer rise among those below 24. The sharpest fall is among teenagers. (Teenage pregnancy has not been so rare since 1969.) The young crowd has gotten an updated message: your responsibility is no longer covered, no pun intended, by using a condom alone. There are a lot of nasty things you can catch in spite of using one. Your Economist predicts a continuation of this trend until teenage pregnancy is virtually unmeasurable.
  3. STI do increase in all older age groups. Well, the older crowd is still living the old message: use a condom and all is fine. A pity the article does not say which STI’s increase. Your Economist guesses it’s Syphilis, Chlamydia, Herpes and any other little bug that laughs at condoms. Not HIV. Your Economist predicts that the older crowd will eventually either learn from the young crowd or read the news more intently (like this article) and then also embark on a healthier lifestyle.
  4. Couples have slightly less sex (now than in 2000). The Economist quotes scientists that blame the recession. Your Economist blames the on-going rise in labor productivity. People work harder, whether in the private or public sectors. This is especially true in countries with regressive demographics. My retired uncle complains he can no longer have drinks with his former colleagues because ‘what three people used to do is now being done by one’. I’m sure the same colleagues’ spouses have similar issues of finding time and leisure.
  5. Tolerance for diversity (especially gay relationships) has increased. Well, knowledge has increased. Most people know gay people, and know when people are gay. There is no longer a need to hide or mislabel the relationship. Openness begets openness in what seems an exponential relationship. And personal evidence is too strong an antidote for myths.

Do you know why you trust whom you trust?

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Why do we trust whom we trust? Why do we refuse to trust sometimes? Experience (with the persons in questions) is a big part of it, but not always. And what does this mean for our relationships?

One source of trust is us belonging to a group (or tribe, or nation). Some inter-disciplinary researchers have established that we tend to be altruistic within these groups, and less so between the groups. This is called ‘parochial’. On average, we tend to make choices of benefit to our group (even when conflicting with the choice that benefits all groups), out of a sense of duty. People perceive that they got something from their nation or group, so have a duty to give back.

There are some benefits of organizing our trust in this way. It is more ‘efficient’ in the short term; agreements are easier to enforce in a group with limited membership.

But when you are looking for your significant other, parochialism isn’t the smartest thing. It segments the world. Selecting your best possible mate just within your segment won’t likely find you the best possible mate in the world.

Who tells the truth, husbands or wives?

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Scientists who collect survey data talk to a lot of people and ask them a lot of questions. That includes a lot of husbands and wives. Sometimes they ask the same question to both, but in separate meetings. For example about what the couple own, how they spend their time, how many kids they have and how many more they want.

What is reassuring is that husbands and wives give mostly the same answers. For nearly any question, 100% of husbands and wives agree on what is going on (says some recent research on this).

On some questions however, husbands and wives disagree more. Some of these are on opinions, like ‘how big do you want your family to be?’ It’s quite possible that couples do not agree. Or maybe they don’t talk much about it. But others are about clear facts, as in: do you use contraception? In the cited research, men tended to paint a more socially popular picture than their wives, on questions related to family planning and sexual health.

Hm. Maybe due to context. Or maybe not.

What can be done? Well, the effect was actually more marked in areas where women had lower status relative to men. Areas with more equity between men and women showed more consistency.

Support in marriage = success in business

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Haven’t we guessed it. A woman’s courage and success in business likely depend on the supportiveness of her husband. A husband that respects a woman’s personal ownership of things, and income, and decisions…. and that cooperatively supports her efforts, likely has a wife that invests (herself) more, takes more risks and is ultimately more successful.

In the same context, and provided with the same opportunities, women with and without supportive husbands can perform strikingly differently. This smart paper shows some preliminary evidence in that direction.

Inspired by these findings, dear lady daters, add to your list of criteria: he has to respect your decisions (and time, and property..), bargain fairly and help with your career goals.

Can you have a career and a happy family?

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Today, dear readers, you get a reflective one. Not much evidence except anecdotal, but lots of reflection to make up for it.

Honest, do you know a hugely successful person that also has a home life you would want to emulate?

I used to have such role models in the past (e.g. an MD with four kids), but as I move up the ranks myself, MDs become less of a role model, and CEOs more so. Also, upon closer inspection, those four kids were not all as well adjusted as their mum. And as far as managers go…I seem to be seeing more childless, single and divorced people than at other hierarchy levels. Or people with a lifelong distance relationship; one CEO sees her partner once a month and considers that a relationship. Another variant is living together ‘for the kids’ but dropping the wedding band and normal marital interactions between the spouses; until the kids are grown and a divorce is less painful.

What is this? Does a parents’ high powered career zap the life out of couple communication? Does a job encroach so much upon spare time that people end up married to their job? Or is my perception not representative?

And what about the children’s growth path? Again, if you look at the anecdotes, successful parents often raise less successful kids. Warren Buffett’s daughter runs a (daddy-financed?) philanthropy, and his son is a farmer. Not that there’s anything wrong with farming. And Paris Hilton…well. The Clintons and maybe Mitt Romney seem to be an exception. Bill Gates’ kids are too young to tell.

Readers, this is one for you. Please share your observations via the comment function.