Review – Crazy Rich Asians

Crazy Rich Asians

by Kevin Kwan, published 2014

On its surface, Crazy Rich Asians is a sordid story of dysfunction and social positioning within mega-wealthy sorta-nobility Chinese families originating in Singapore. It’s full of flashy outfits and the shocking shopping trips that put them in the characters wardrobes; over-the-top square footage and fully-furnished living arrangements in a part of the world known for nearly inhumane density and some of the highest real estate prices in the world; petty gossip like only those with too much time and money on their hands can engage in; oh, and wonderful, wonderful sounding food. For those reasons, it’s an entertaining read.

But just below the surface (not too far, mind you… these issues are philosophically auxiliary as far as I can tell, not intentionally contemplative like a work of classic literature) lie a series of family-planning and wealth-planning puzzles for the observant reader to consider. In no particular order, and with very minor spoilers, these puzzles are explored more below.

The first puzzle has to do with identity. When one of the main characters finds out that the early story of their family’s history is a fabrication, they are thrown into psychological turmoil and shock, their sense of self seemingly obliterated in a moments revelation. It begs the question “Who are you?” One answer is, you are your history, a series of factual contexts and accumulated decisions made up to any point in time at which you exist. Another answer is, you are whatever you believe you are– if you can convince yourself you are, than you are. This question is important for a few reasons. The first is that the way our brains function on a psychological level may require us to have certain beliefs about ourselves to maintain psychological integrity and thus enable us for other modes of action in the external world. We may be able to “constantly reinvent ourselves”, but only within a narrow band of experience or possibility, beyond that we are driven at a hardware level into anxiety and distress. Another reason this question is important is because it sheds light on how arbitrary our identities can be. If we can operate quite competently and confidently with a certain view of ourselves and our role in the world, even if this viewpoint is built on falsehoods, it suggests that what is important in terms of forming an identity is consistency of story, not accuracy. If someone can convince you you are the rightful king, maybe you are. If you come from a noble family but you’re told you’re a lout, maybe you will be. Where does one find “self” in all of this?

Related to this puzzle is parental relationships and the question, “Do you really want to know everything about your parents?” Each one of us is born into a world our parents have already been living for some time. We don’t know all the choices and ideas they had prior to our arrival and often we receive a filtered list of such information sporadically throughout our lives. We don’t have the ability to query our parents’ true thinking at any given moment and without becoming paranoid and running background checks or doing some sleuthing on them, we’re mostly in a position to accept what they tell us about themselves unless we receive some kind of alarmingly contradictory information that would lead us to question it. Similar to finding out your life might have been a lie, do we want to know who our parents really are? We presume they share the good about themselves with us, do we really want to hear about more of their foibles?

The second puzzle is about intergenerational wealth building. The narrative focuses on Singaporean Chinese families of stupendous wealth. Most of this wealth seems to be owned and controlled by surviving matriarchs whose heyday was the 1930s and 1940s (Gen1). The descendants (Gen2) and their children (Gen 3) appear to be idlers. Sure, some of them have “jobs” and other preoccupations, but none of them have to work and none seem to be contributing anything productive to the family wealth, which appears to be managed professionally by outsiders.

Why don’t rich families prepare future generations to manage their wealth responsibly? When the matriarch dies, what will keep the professional managers loyal, and what will give the surviving descendants the ability to manage these obligations without undue risk? Money is clearly important to these families, as they could give it away or have less of it but they don’t. But there doesn’t appear to be a meaningful attempt to teach the succeeding generations how to contribute to its growth and management.

Related to this is the question of what is the value of fantastic wealth? Although they think of themselves quite highly, the families depicted don’t seem to be better at much of anything that doesn’t involve buying things. In terms of character they have the same flaws and struggles as everyone else. If this wealth can’t make you a better person, or, put another way, you don’t use it to enable greater self-actualization, of what use is it? Ironically, wealth in this story is depicted as not creating conditions by which those who possess it can elevate themselves, but simultaneously it explores the ways wealth changes a person in terms of tastes and behaviors. Here we see not how a person’s values change, but the ways in which their ability to express those values do. If you don’t use it to become a better version of yourself, and you don’t learn how to manage and control it, what logical benefits does wealth offer you?

The final puzzle of the story is the puzzle of permanent capital. As none of the major characters and their families seem to contribute to the generation of their wealth, and none seem capable of doing so, where the wealth comes from and how it manages to persist, especially as it is being consumed at such enormous rates, is a bit of a mystery. Of course, in this story we can only see the families whose wealth has persisted across multiple generations despite all of the above-mentioned conditions and despite the changes in social and economic circumstances over decades. What we can not see are the families whose wealth ran aground over this period, because they won’t factor into a narrative about those who have great wealth except as a tale of warning which never seems to be told. It is amateurish and perhaps speaks to the intelligence or values of the intended reader but the author never provides even a small hint as to where the wealth comes from (oh sure, some new money families introduced here and there are the Such and Suchs of plastics, or the So and Sos of tech).

Though friends with government officials and even extant royalty, the primary families are disclaimed as not being of purely aristocratic extraction or otherwise connected directly to a government-based wealth extraction mechanism. But from where else could such voluminous and seemingly interminable wealth emanate from, especially without influence or concern of the family? If such a source exists in the market (a contradiction in terms at the very least), how is it undiscovered by other market participants and thus immune to competitive factors? How is it financed?

In studying great exceptions there is an honest temptation to find some kind of exploitable rule. But I think it’s ultimately a fool’s errand, because you’re essentially looking at a highly improbable stack of luck and trying to figure out how to emulate something that is amazing that it even exists at all.

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Review – Before The Dawn

Before the Dawn: Recovering the Lost History of Our Ancestors

by Nicholas Wade, published 2006

Evolution and history are not two distinct processes, with one following another like the change between royal dynasties. Rather, evolution and history overlap, with the historical period being overlaid on a still continuing process of evolutionary change. (pg. 272)

Something I always used to wonder about when reading history was the recurring theme of barbarian invasions of “civilized” societies striking from the frontiers. Why were there separate civilized and barbarian populations? And where did all these barbarians keep coming from, given that the explanation invariably given for their invasion was that they themselves were being invaded/pressured by other barbarians on their frontier? (Was it barbarians all the way down?) I purchased Wade’s “Before the Dawn” to try to better understand the debate about “race” — which is one chapter of twelve in the book — and ended up with a much better understanding of this perennial personal historical quandary, the book having offered a framework for understanding early human history and migration patterns and the way evolution played the keyboard simultaneously.

The most descriptive word that comes to mind when I think of this book is “sweeping”, which is both its strength and its weakness. This is very much a strategic book examining large trends that took place over vast geographic expanses and long periods of time, rather than a tactical examination of the various microphenomena involved, although there’s some of that, too. Concerning itself with the evolutionary changes which led to the splitting of the human and chimpanzee genetic lines 5 million years ago, and then the ensuing genetic changes and speciation of the pre-modern human genetic lines between 5 million and 50,000 years ago and then finally sorting out the geographic expansion and social and likely genetic transformation of modern human beings from 50,000 years ago to the present, the author surveys key findings and scientific developments since Darwin’s writings that have helped to piece together the early history of humanity. And while it’s supposed to be an introduction written for the knowledgeable layman, Wade nonetheless covers so much ground, so many academic controversies, so many studies and theories and oddly-named regions and eras and behavioral developments — the world’s scientific community seems to have an unresolved dilemma when it comes to naming things — that it is sometimes hard to keep up and remain focused on the broad narrative of which these items are a part.

The book has 12 chapters, simply named, which serve as essential themes explored:

  1. Genetics & Genesis
  2. Metamorphosis
  3. First Words
  4. Eden
  5. Exodus
  6. Stasis
  7. Settlement
  8. Sociality
  9. Race
  10. Language
  11. History
  12. Evolution

It’s a testament to either the astounding volume of detail in this book, or the limits of my own cognitive abilities, or both, that having just finished this book last night after picking it up just over a week ago, I couldn’t reliably tell you which parts of the story fit in each section, so I won’t bother trying to summarize it all here. Instead, I thought I’d mention just a few pieces that I found especially interesting.

First, the “out of Africa” moment. I didn’t realize that this was not one moment, with one group of people. It happened many times with many different groups of people who, according to the historical record, went many different ways from there, some traveling around the coasts and then into the interior of Asia (and eventually outlying islands and over the land bridge to North America and South America), others migrating through Southern and Northern Europe. Wade argues that they were strong mariners due to the navigation and spread throughout the south Pacific archipelago, but why weren’t they navigating the coasts of North Africa and the Mediterranean and transiting out of Africa directly into Southern Europe? Meanwhile, numerous other pre-modern humans such as the Neanderthals (Europe) and Homo erectus (Asia) had already left Africa thousands of years before and fully populated the regions they were migrating into. But there was little discussion or exploration of how these other human species managed this, or why they might’ve been the firsts. Geologic history plays an important role here as well, and the multiple ice ages which occurred during these migration waves not only may have been drivers of evolutionary change which then led to social and migratory change, but they also dictated where various migrations could reasonably be achieved and increased the chance of tension and conflict between previous inhabitants and new arrivals in environs experiencing increased ecological scarcity.

Another important idea in the book, which for the present appears to be a hypothesis with a disputed body of evidence behind it, is that we might be able to peer deeper and more accurately into the historical record by means of the interplay between language and genetic diversification. The idea seems to be that every time a distinct genetic population splits off from an existing group, they tend to modify their language as well. Understanding where and how various language splits occurred might allow scientists to pinpoint new genetic branch timelines and vice versa, all the way back to the “original mother tongue” of the first “out of Africans”. One extremely speculative hope is that this original human language might even be reasonably reconstructed. Proto-Esperanto?

A third item I wanted to highlight isn’t interesting so much as it is entertaining, what I consider to be a bit of comical proledom. In a discussion of the relationship between last names and shared genealogy in Britain, Wade states,

Commoners acquired surnames between AD 1250 and 1350, apparently for the convenience of feudal record keepers who needed to differentiate between tenant farmers with the same first names. The surnames were not highly original. They tended to be a person’s profession (Smith, Butcher), or a patronymic (Johnson, Peterson), or derived from some landscape feature (Hill, Bush).

He goes on to give an example where it turned out that two Brits with the same last name, one a CEO and one an academic, actually did have a shared lineage originating to a common ancestor in a particular region of Northern England/Southern Scotland of whose geography the surname was descriptive, and who lived in that area according to official records. I got a chortle out of the way the elites of yore chose to humanize and differentiate amongst their tax cattle simply to aid their own tax farming, and that they didn’t bother to come up with anything more illustrious than tacking on terminology for slight changes in elevation on the land the peasants originated from, etc. It’s also interesting to think of how many people today have “commoner” last names (which group of ancestors, then, was reproductively more successful, the commoner or the elite?!) and how the market economy has allowed the sons of so many peasants to accumulate so much wealth!

A fourth item worth mentioning is the issue of “race”. It appears from this reading that “race” is a real and scientific phenomenon, though the implications of race are not well-know and are likely far different from what both “supporters” and “critics” of the concept currently think they can extrapolate from it. I’d like to learn more about race, and I think there will be more race-related scientific discoveries in the near future as this area of genetics is more thoroughly explored, but I would say I have less confidence in current race debates and their conclusions than I might have going into this book.

I’ll probably keep this one on the shelf and come back to some of the questions raised as I explore more books on the subject of genetics and evolution, pre-modern history, archaeology, economic history, etc. But I was less engaged with this book than I had hoped to be and I do hope there is a better organized, updated treatment of the subject I can read and discuss with my children in the future.

From Zonghli

We arrived in Taipei around 1030pm last night, which was on time despite an hour delay in departure time. We were picked up by an extended family member and stayed overnight at their town home in Zonghli city, a suburb outside of Taipei (approx 80km?) And another 40km from the airport.

I found out this development was constructed 30 years ago. There is another development across the way in the process of finishing up construction. There are 6 floors and each floor is to be sold for $5M NTD. At 3200 NTD/100USD, this is about $150K for a floor of 5-6 bedrooms. A similar size townhome across the street rents for $1000USD equivalent per month. So this is about an 8% gross income rate. I have no idea what utilities and taxes cost.

I would call the urban design aesthetic in this area “eclectic”. American fans of the “walkable city” would be aghast, mopeds and small cars seem to dominate the traffic planning mindset.

Despite little sleep on the 13h flight and going to bed around midnight on the top (3rd) floor in humid 80 degree weather we awoke around 6am, well ahead of our planned 7am alarm. A short walk into the town proper for some steamed pork bun and potstickers for breakfast. Also tried soy congee and fried youtiao. I got a few looks from some of the patronage trying to figure out what I was doing in their breakfast spot at 7am.

Heading into Taipei to check in to our AirBnB and take a food tour.

For me it is challenging to “observe without judgment”. I find myself looking around at everything trying to “make sense of it” when it’s a bit soon for such reflections. Still, I think one way for describing the concept of culture is to say that if you are in a new place and it isn’t immediately obvious to you why things are the way they are as you observe them, you are bearing witness to different culture at work.

Also, my first Chinglish sighting!

Video – Hugh Hendry Visits The Milken Institute

Hugh Hendry interviewed in a panel discussion at the 2012 Milken Institute Global Conference

Major take-aways from the interview:

  • Global economy is “grossly distorted” by two fixed exchange regimes: the Euro (similar to the gold standard of the 1920s) and the Dollar-Renminbi
  • China is attempting to play the role of the “bridge”, just as Germany did in the 1920s, to help the global economy spend its way into recovery
  • Two types of leverage: operational and financial; Germany is a country w/ operational leverage; Golden Rule of Operational Leverage, “Never, never countenance having financial leverage”, this explains Germany’s financial prudence and why they’ll reject a transfer union
  • Transfer of economic rent in Europe; redistribution of rents within Europe, the trade is short the financial sector, long the export sector
  • Heading toward Euro parity w/ the dollar, if not lower; results in profound economic advantage especially for businesses with operational leverage
  • “The thing I fear” is confiscation: of client’s assets, my assets; we are 1 year away from true nationalization of French banks
  • Theme of US being supplanted as global leader, especially by Chinese, is overwrought
  • Why US will not be easily overtaken: when US had its “China moment”, it was on a gold standard…
    • implication, as an entrepreneur, you had one chance– get it right or you’re finished
    • today is a world of mercantilism, money-printing, the  entrepreneur has been devalued because you get a 2nd, 3rd, 4th chance
    • when the US had its emergence on a hard money system, it built foundations which are “rock solid”
    • today, this robust society has restructured debt, restructured the cost of labor, has cleared property at market levels
    • additionally, “God has intervened”, w/ progress in shale oil extraction technology; US paying $2, Europe $10, Asians $14-18
  • Dollar is only going to go one way, higher; this is like early 1980/82
  • “I haven’t finished Atlas Shrugged, I can’t finish it”: it’s too depressing; it reads like non-fiction, she’s describing the world of today
  • The short sale ban was an attack on free thought; people have died in wars for the privilege to stand up and say “The Emperor has no clothes”; banned short selling because truth is unpalatable to political class; the scale and magnitude of the problem is greater than their ability to respond
  • We are single digit years away from a most profound market-clearing moment, on the order of 1932 or 1982, where you don’t need smarts, you just need to be long
  • Hard-landing scenario in Asia combined w/ recession in Europe would result in “bottoming” process, at which point all you need is courage to go long