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Musings Report #21 5-22-15 What Is the Minimum Investment Needed to Achieve Social Mobility?
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For those who are new to the Musings reports: they are basically a glimpse into my notebook,the unfiltered swamp where I organize future themes, sort through the dozens of stories and links submitted by readers, refine my own research and start connecting dots which appear later in the blog or in my books. As always, I hope the Musings spark new appraisals and insights. Thank you for supporting the site and for inviting me into your circle of correspondents.
What Is the Minimum Investment Needed to Achieve Social Mobility?
In last week's Musings, I concluded:
“What we're really discussing is a way of living that places a premium on independent thinking, maintaining very low fixed costs, establishing a healthy honesty with oneself and one's associates and customers, the ability to make realistic assessments of oneself, one's successes, failures and errors, and a focus on challenges, opportunities, risks, adaptability, flexibility and experimentation, all with a goal of building one's own human, social and physical capital--the foundations not just of well-being but any meaningful measure of wealth."
Long-time correspondent Bart D. (Australia) posed a profound question: what is the minimum investment (in fixed lifestyle costs) needed to ensure one's children have social mobility, i.e. a cultural/social passport to upper-middle class opportunities?
Here is Bart's framing of the question:
"What I struggle with though is how to achieve very low fixed costs without creating undesirable side-effects. My parents were brilliant at it, and I’ve done the best I can to emulate them... but the basics of life and social success require a certain minimum annual investment that is fairly large."
I replied that while I don't see this question as having a definitive answer, I think it is worth exploring on multiple levels
1. When we speak of social success/mobility, one minimum is having access to those in the managerial/professional/entrepreneurial classes. Those living on "the wrong side of the tracks" (in impoverished neighborhoods) are already at an extreme disadvantage compared to those living in desirable neighborhoods. So social mobility requires enough investment to live in proximity to those with the means to provide portals to opportunity.
2. As Bart noted, there is a generational aspect to this question, and I see it breaking into two distinct parts:
2A. Previous generations enjoyed much lower fixed costs. (By fixed costs, I mean monthly expenses that are not discretionary: housing, healthcare, education, telephony, food, etc.)
As I have written before, a very small sum deducted from my father's paycheck paid for basic hospitalization/ healthcare coverage for his 4 kids and wife, and housing was cheap, either to buy or rent. University tuition at state colleges was also cheap. I was able to pay own tuition, fees and books and was self-supporting from 19, paying for my own rent, auto, utilities, food, etc. (in the early to mid-1970s) with a relatively low-wage part-time job (25-30 hours a week). No young person can pay rent, auto expenses, food, health insurance and tuition/books out of a part-time job today.
2B. Expectations were lower, and more could be accomplished by young people with little to no parental support (like myself and my siblings) by trial and error (mostly error of course). In other words, the economy and society were more flexible and forgiving; there were more second and third chances. Employers were generally more willing to give a young person a chance, partly because of the social milieu and partly due to the abundance of entry-level jobs.
3. Though the mainstream focuses almost exclusively on a college diploma (preferably issued by an Ivy League university), this is not the only ticket needed for mobility. A wide range of human and cultural capital is needed to breach the barriers to upper-middle class opportunity.
4. As correspondent Kevin K. has observed, the real ticket to social success/mobility is having parents and grandparents who are Ivy League alumni, members of exclusive clubs, and otherwise well-connected to wealthy movers and shakers. We all know how this works in the real world: the young (not so accomplished) law student exits law school and is immediately offered a paid internship by his father's associate/fraternity pal, etc. If the firm posts a job opening, it's for PR purposes--the son of the insider already has the job. The golden lad will have to mess up big-time to be ejected from the inside track.
5. For those without an inside track, high social/cultural skills are an essential foundation. When students from under-privileged neighborhoods enter Ivy League schools, they report missing the significance of all the cultural references--to classical music, artists, inventors, writers, historians, etc.--that are background cultural knowledge for kids who attended prep school. Children who grow up in households with few books, news magazines, art and music enrichment classes, sketchbooks and pens/paints, access to musical instruments, etc., are impoverished in ways that cannot be captured by standardized tests of math and language.
A young person can set out to acquire all this cultural capital, but it takes an especially courageous young person to seek out and enter institutions that breathe privilege: museums, opera, symphony, academic lectures, etc.
Familiarity with these worlds is not something that can be acquired just by reading; they must be experienced, and so it seems to me that anyone hoping to give their children maximum opportunities must provide them with a variety of experiential capital in the fields that signify upper-middle class status: the arts, music, fine cuisine, etc., and experience in the institutions that anchor this cultural capital.
Much of this cultural capital is only available in urban zones, and this places rural populations at a disadvantage. But parents who insist on art and music lessons, second language study and other experiential capital can compensate for the geographical distance from institutions.
I personally place great stock in learning to play an instrument and in the hands-on practice of art, tradecraft, gardening and cooking. Studies have found that playing music activates different neural pathways than reading or math. The same must be true of making art, tending animals and gardens, cooking and crafts.
There is a fine line between teaching self-discipline and turning something that should be fun into something onerous. The difference seems to be the parents' engagement in the lessons and the learning, and their own enthusiasm for the subject.
6. The value of this cultural capital is not just in understanding the references tossed around in circles of the over-educated; it's also the foundation of self-confidence, of feeling the equal of anyone else rather than feeling inferior.
7. This is the value of team sports and similar group activities; even shy children (count me in that group) gain familarity with group dynamics that are critical to navigating adulthood.
8. The value of the practical arts--gardening, cooking, caring for animals, crafts and tradecrafts--is both in the practical skills gained and in the self-confidence nurtured by acquiring a wide spectrum of experiences and basic skills. We naturally avoid what we fear and do not understand, and so the widest possible exposure to the nuts and bolts of our world--housing, transport, food, etc.--is a critical form of cultural capital.
9. Travel is of course a key signifier of upper-middle class status. One of the first things people will boast about (subtly or not so subtly, depending on their insecurity and personality) in the company of strangers is foreign travel. The significance is mostly financial: foreign travel is costly and requires dedicated blocks of free time.
But setting aside the cost factor, travel is a form of experiential capital that cannot be overlooked. The impoverished rarely get beyond the borders of their impoverishment, while the children of the upper-middle class are always jetting about, either with their family or with groups or exchange programs.
Though we never traveled overseas at all as children, our family went camping, and this low-cost travel created many wonderful experiences and opportunities for practical training (starting a camp fire, setting up a tent, fishing, etc). Even camping requires a reliable vehicle, of course, and so while it is inexpensive it still requires the fixed costs of owning, insuring and maintaining a car.
There is no way to summarize such a rich topic in such a short exploration, but it seems to me that the most critical element of cultural capital is building the self-confidence and self-discipline needed to feel equal to anyone else and to tackle new subjects and skills.
There is almost no end to the skills that round out a young person's experiential capital (I would add learning to ride a 90cc motorcycle and fixing an Internet network problem). Though no parent can cram the entire spectrum into their offspring's short childhoods, the keys seem to be a variety of experiential capital that gives the child the confidence to learn and master new fields on their own.
How much money does this take? That is a topic for another Musings, but creativity and cost are always on a see-saw: those with lots of money have little need for creative solutions, while those with little money must seek ways to build cultural and social capital that cost very little. If the immigrant experience teaches us anything, it's that generations of impoverished people arrived on these shores with little to no money, but somehow managed to instill the values that gave their offspring social mobility.
The Internet offers everyone seeking social mobility great leverage--if they have the confidence to pursue the opportunities that can be turned up with modestly diligent research.
Summary of the Blog This Past Week
Our Crazy-Making Economy's Endgame: Festering Frustration Seeking an Outlet 5/22/15
When the Current Housing Bubble Finally Bursts 5/21/15
Our Social Depression 5/20/15
Stocks and Bonds Are Due for a Generational Crash of 75% 5/19/15
The Self-Employed Middle Class Hardly Exists Anymore 5/18/15
Best Thing That Happened To Me This Week
BBQ'd Vietnamese-style chicken, sausage and fresh corn with our brother-in-law and friends. (Oh, and consuming a few IPA brews...)
Market Musings: Checking in on Gold
Like many of you, I track gold along with the stock indices, U.S. dollar, oil, natural gas and copper.
Many observers have been waiting for gold to establish a definitive low and begin a constructive advance. Are we there yet? Here is a weekly chart of gold I've marked up with a few notes.
If gold manages to exceed $1,280, it will break a long-term downtrend line. If it falls below $1,160, that would be a bearish break of a trendline of higher lows.
MACD is constructively working its way up to the neutral line, positively diverging from the multi-year downtrend line.
Gold could consolidate within these two trendlines for months. A sustained rise above the 50-week moving average (around $1,233) would be positive, but the real tell will be a sustained move above $1,280 that isn't quickly reversed.
Should gold drop below $1,160 and stay below for some time, more pain might be in store. Patience is a virtue when pondering long-term trends.
From Left Field
How America became the most powerful country on Earth, in 11 maps (via Maoxian) -- quick history lesson in exceptionalism...
Sony Music's contract with Spotify - labels skimming most of the streaming-music income...
China: Getting into the Market (NHK video)-- stock bubble inflating, the pop will shake global markets....
Millions of Barrels of Oil Are About to Vanish (via Joel M.) -- Millions of barrels of untapped oil that U.S. shale drillers discovered during the boom years are about to disappear from their inventories.
A city where everyone works and the salary is 1200 euros
Poor Little Rich Women -- posh Manhattan moms...
collaborative economy honeycomb (chart) -- quick study of explosive growth of tech start-ups...
Housing Recovery - Real Or Memorex -- excellent charts...
How Are Human Rights and Financial Transparency Connected? -- calls out rigged global development stats and models...
Health Insurers Seek Hefty Rate Boosts - ACA chickens coming home to roost....
Why economists need a new understanding of human behaviour -- simplistic economic models set up catastrophe...
The rise and fall of China’s civil-rights lawyers says much about the Communist Party’s approach to the rule of law (via Maoxian) -- so much for economic liberalism leading to political liberalism...
'Rise of the Robots’ and ‘Shadow Work’ -- two new books reviewed, worth reading...
"He who loses wealth loses much; he who loses a friend loses more; but he that loses his courage loses all." Miguel de Cervantes
Thanks for reading--
charles |
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