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Affluent Christian Investor | August 19, 2017

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Why China’s “Little Emperors” Face Neuroticism

Ten years ago, I wrote about the possible consequences of China’s one child policy (published in Asia Times Online, Financial Times, and Singapore Times). All of it seems to have held the test of times – and recent evidence strengthens the points raised then:

What can be the point of reference to predict consequences of China’s current childbearing pattern, adjusted over the last decades to one-kid or you’re-out-of-your-apartment policy? To make any reliable analyses, one needs at least two points, so as to draw a straight line as a first approximation.

Fortunately for observers, though unfortunately for those who had to adjust to such social engineering, there is not much new under the sun. There has been a government in the past who passed similar regulations. The year was 1726. The place, Austria.

The Viennese court, under anti-Semitic pressures, fearing a large increase in Jewish population – a fear that by itself suggests that the Jewish birth rate at the time was relatively high – introduced a regulation. Only the eldest son of a Jewish family could marry. The younger boys could not.

This regulation introduced into the Austrian empire, including Bohemia, Moravia, parts of what became later Germany, and Alsace, led to the instant migration of young Jewish generation to Eastern Europe, to Poland, to Rumania. Whereas within the Austrian Empire the Jewish birth rates dropped, in Eastern Europe they did not.

How did Jewish parents, who stayed, adapt to the regulation? As one would expect: they had fewer children, invested more in their education and health, and probably spoiled them much more than would have otherwise been the case.

One can speculate that this regulation was the origins of the myth of the neurotic Jewish mothers, and the by now tradition of driving Jewish kids to excellence – true, occasionally, to “neurotic excellence”, and in “neurotic endeavors”. No surprise that since I wrote these paragraphs, the Chinese term adopted to describe the behavior of kids in the 100 million one-child families is that of “little emperors”.

Will the Chinese mothers and kids react in a similar fashion? At least this point of reference suggests a positive answer. Thus one unintended consequence of the one-child regulation will be prosperity driven by kids who will grow up to be very ambitious entrepreneurs – though loners. And since loners do not create companies, the drive may likely be channeled to intellectual endeavors, rather than business ones.

Indeed, recent research by Lisa Cameron at Monash University suggests that the only kids in China are less likely to become business entrepreneurs, and tend not to trust outsiders. What else can be expected when drawing this parallel between the present and distant history?

 

A version of this article originally appeared on Asia Times Online.

Reuven Brenner holds the Repap Chair at McGill’s Desautels Faculty of Management, serves on the Board of the McGill Pension Fund and is member of its investment committee.

He worked with Bank of America, Knowledge Universe, EEN, Bell Canada, Repap Enterprises and with investors in Canada, Mexico, the US and Europe. He has been involved in the private equity markets as partner in Match Strategic Partners, has been investing in start-ups across Canada, as part of an “angel group,” and also created his own start-up, “e-mortal.com.” He has also been serving on boards of companies and institutions.

He was expert witness in cases covering anti-trust, bankruptcy and financial matters. In other spheres, Quebec’s government asked him in 1995 to be member of a commission whose mandate was to examine all aspects of Quebec’s possible separation. He was also asked to testify before US Congressional Commissions and Canada’s Senate’s Banking and Finance Committee, and worked with Poland’s central bank during the recent crisis.

His recent books are A World of Chance (2008) and Force of Finance (2002). His regular columns appeared in Forbes, The Wall Street Journal, Asia Times and other financial press around of the world. Forbes’ journalists put two of his earlier books in their all time recommended list, and Forbes Global dedicated a cover story, titled “Leapfrogging,” to his works and endeavors. Brenner also received the Killam Award (1992), the Royal Society elected him as “Fellow”(1999), and he received a Fulbright Fellowship Grant (1976).

Brenner was born in Rumania and immigrated to Israel in 1962. He served in the Israeli army between 1966-69, during the Six-Day War, and again during the 1973 Yom Kippur War. The Fulbright fellowship brought him in 1977 to Chicago, after completing his PhD at the Hebrew University and working at the Bank of Israel, where he received the First Prize from Israeli banks (for work with Saul Bronfeld, designing indexed securities). He lives in Canada since 1980. He is fluent in English, French, Hebrew and Hungarian.

 

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