Redistribute wealth? No, redistribute respect.

Friday, December 27, 2013

Redistribute wealth? No, redistribute respect.

Author: Noah Smith

“It is said that heaven does not create one man above or below another man.”
– Yukichi Fukuzawa
I’ve always been a communist revolutionary at heart. Inequalities between human beings have always annoyed me, and I have the strong desire to see them eliminated. In American society, we generally discuss three kinds of “equality”: 1) “equality of outcome”, usually meaning equality of wealth or income, 2) “equality of opportunity”, and 3) “equal rights” under the law. The first is typically supported by true communists and socialists, and some liberals; the second by centrist liberals; and the third by libertarians and conservatives. The arguments between proponents of the three types of equality are voluminous and endless. And I think all three are important.But I find that there is something missing from this list. I’ve come to realize that there is another important dimension of equality that I care about. Maybe more than any of the others. It’s equality of respect.
I had this realization (as with so many others) while living in Japan. I first noticed it when I was sitting in a “kaiten-zushi” restaurant, watching some cooks chop fish. It was robotic, repetitive work, about as difficult – and about as well-paid – as flipping burgers. But my Japanese friend referred to one of those cooks as “sushi-ya-san”, meaning “Mr. Sushi Chef”. She used the honorific reflexively, not patronizingly or sarcastically. The respect for this low-paid, low-skilled worker was reflexive, automatic. I suddenly wondered if we could get Americans to start calling burger-flippers “sir”. The thought made me laugh.
There are other ways in which the customs of Japanese society work to encourage equal respect. Japan is not a particularly “equal” country in terms of income; its Gini coefficient is higher than that of most European countries’. But conspicuous displays of wealth are rare. Rich people live in secluded apartments and houses concealed by high stone walls, instead of in the palatial mansions preferred by wealthy Americans. No one discusses how much money anyone makes. Flashy cars exist, but are rare, and are more likely to be sported by yakuza gangsters than corporate lawyers or young investment bankers. People insist (wrongly, but tellingly) that “there is no poverty in Japan”. Displays of wealth are a major taboo, as are displays of poverty; begging is extremely rare).
Now, this may change over time. Japanese culture is not static and immutable, as many wrongly believe; the country’s relatively high inequality is only a couple of decades old, and many Japanese people fret about their country turning into a “society of winners and losers“. But Japan taught me that respect doesn’t have to be all about money.
I feel like the America I grew up in could learn a thing or two from Japan in this regard. I don’t know if the word “loser” was a common insult before the 1980s, but in recent decades it has become ubiquitous. People who work in the service industry almost always seem ashamed when they tell me what they do for a living. Low-skilled workers are treated in a peremptory way, constantly reminded that they are “losers”. Americans wear T-shirts that say “Second place is the first loser“, and “Winning isn’t everything; it’s the only thing.
I have the vague sense that things used to be different in America. We’ve never called fry cooks “-san”, but (as someone pointed out to me on Twitter the other day) we have an even more egalitarian tradition: calling everyone by their first names. The American style of respect is to treat everyone like “one of the guys” (including women), no matter how rich or poor they are. In the 1920 novel Main Street, which I read recently, this attitude of deliberate informal egalitarianism is referred to as “democracy”. Nor does this usage seem tongue-in-cheek; when Andrew Jackson opened the White House lawn to the common people for an inauguration party in 1828, it was hailed as the beginning of a new era of “Jacksonian democracy”.
Today when we think of “democracy”, we think of formal institutions like elections, constitutions, and rights under the law. But it seems that our forebears also conceived of “democracy” as an attitude of equal respect for all people regardless of social station. Equal respect could thus be seen as one of America’s “founding virtues”. And it’s not hard to imagine that when the writers of the Declaration of Independence wrote that “all men are created equal” – that cryptic, endlessly-debated phrase – what they meant was not equality of ability, but as deserving of equal respect by society.
I have little hard evidence that America has taken a turn away from this founding virtue. But I definitely have that feeling.
It’s tempting to blame conservatives, libertarians, and the business community for the erosion of equality of respect; in the 1980s, Americans were told that our economic dominance could only be maintained by becoming a “hypercompetitive society“. There was definitely an attitude that only the threat of becoming “losers” would motivate Americans to work hard. Liberals who advocatecooperation over competition are, of course, derided by the Right. And libertarians were the biggest cheerleaders for the wave of deregulation and globalization that widened inequality of wealth and income for the American middle class, and sent the share of the top 1% soaring into the stratosphere.
But I think American liberals have also made the mistake of focusing too much on income and wealth as the measures of success. Every chart and graph we see about America’s increase in “inequality” is about either money, or the likelihood of getting money. Sure, disparities of wealth are distasteful. Sure, money is one thing that confers social status. But by focusing on it obsessively, I think liberals are helping to cement its paramount importance as the end-all and be-all of social outcomes.
This is bad because it cements an American attitude of crass materialism, but it’s also bad because it ignores achievable types of social equality while questing after the unattainable. Societies can be more or less equal in terms of wealth and income, but only to a degree; as Vilfredo Pareto observed, and as studies have later confirmed, every society on Earth has wealth and income distributions that follow some kind of power law, where a small fraction earn and command much more money than the vast majority. You can make the cure flatter, but never close to flat.
Whether we’re questing after a narrow money-based vision of equality or callously celebrating the “competitiveness” created by material inequality, we Americans seem to have mostly forgotten about equality of respect. This is bad not just because I personally dislike it, but because in a developed country like ours, respect is a big part of what makes people happy. In fact, I suspect that our turn away from egalitarianism is one factor behind our bifurcation into a class society.
I want this to change. I want to move back toward a society where the hard work of an unskilled laborer is considered worthwhile in social interactions, regardless of how many dollars it brings home. I want to move back toward a society where being a good parent or a friendly neighbor earns as much respect as making a hundred million dollars on Wall Street.
In other words, I want our “democracy” back. We need to redistribute respect.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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