Monthly Archives: May 2014

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.

Love and Work

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I wanted to write a post that matches a seasonal date and picked 1st of May, which is the day of work (or labor) in many countries. And just as I am looking for an inspiration to write about Love and Work, a domestic discussion dawns upon me that is right on theme. Best Husband is not thrilled at yours truly working too much in the office and too little at home. He’s got a point: contrary to the mainstream, he really shoulders the bulk, some 90%, of our housework. He has also, for an extended time, been a stay-at-home-dad.

So what would a wise Economist advice? Who should do what in the home, and how much? Here are three points that should guide your decision:

  1. Comparative advantage. Old theory, still true. Who of you is comparatively faster and better at household chores (compared to other tasks that are waiting, such as childcare and work outside the house) should do more of them (and less of the other tasks). Putting all tasks on the table together may aid the negotiation.
  2. If you want more kids, make sure the woman doesn’t do too much. An Australian study (Craig and Siminski, Soc Pol 2010) found that the higher the workload of wives in a household, the less likely the household was to decide for a second child.
  3. Absolute workload matters more than relative share of husband vs wife. In the study mentioned above, the relative share showed no effect on fertility decisions. It doesn’t matter to the wife if the husband alleviates her load, or if hired help does. (Actually, the latter should be more popular, because the wife may want to spend her newfound leisure with her husband..rather than see him work.)