Letter to my daughter on modern economies
Modern-day aristocrats can monetise their legacies by attracting large followings on social media
Dear daughter, this column is for you. I am sorry that I hissed when you asked for a US$29 Posie K liquid lipstick + lip liner duo by Kylie Jenner (shipping not included). I am sorry for spewing obscenities and calling you a chump.
If I could explain. First, I was taken aback by the news that an 18-year-old had developed her own line, Kylie Lip Kit, or that you found no reason to doubt the testimonials on her Instagram fan page.
I was also upset that this junior sister in the reality-TV Kardashian clan did not have to pay anything to get your custom. She did not have to take out an ad, which supports jobs and spreads the wealth, because you and your friends choose to follow her around on social media. This is an illustration of the effects of technology on inequality.
In the modern knowledge economy, there is something called a “winner-take-all” phenomenon that has been attributed to hi-tech innovation. Smart and talented people – whether Lady Gaga or a McKinsey financial consultant – can sell their talents far and wide through high-speed networks and digital dissemination. In this way, the rich get richer.
This phenomenon is occurring simultaneously with declining social mobility. Widening wealth gaps mean those who start off ahead often finish ahead, in part because wealthy parents can invest heavily in their offspring’s education and networks. And also because, according to the economist Greg Mankiw, children inherit their parents’ success genes. This is obvious almost immediately, as they hit the ground running even as toddlers, elbowing themselves into the best pre-schools. Fifteen years later, they’re at Harvard.
It could be worse. Imagine if hierarchies were so entrenched that the wealthy did not have to push their kids, that their children could just coast through with “gentlemen’s Cs”, then still get to be the boss. If a rich kid works hard and is talented, we should accept whatever contributions he or she can make to society or economies. It would be bad principle, and wasteful, to eschew their talents.
On the other hand, there are cases where children can trade on their family’s brand name, and thereby displace more talented individuals. This is when the brutality of meritocracy gives way to the banality of aristocracy.
Perhaps you recall that time when the news was on at grandma’s house, and grandma was straining to hear a voice-over, because the anchor’s voice was so wispy and squeaky; and then how she gasped when the report concluded, “This is Chelsea Clinton reporting…” This daughter of a former US president reportedly got US$600,000 a year to work for NBC News. And sweetie, to put it in terms you’ll understand – she sucked.
Let me give you another example. Last year I was flipping through a glossy magazine when my eyes lighted upon an odd-looking male model. His head was disproportionately large for his body, and his legs like little stumps – how did he get this modelling gig, I wondered? The explanation was found in an inscription on the page. He was Andrew Lauren, son of the company’s founder, Ralph Lauren, and he was advertising the fashion company’s Purple Label.
Purple is a “royal colour” going back to ancient times, when countries were run by those who inherited the job. Porphyrogenitus – literally “born in the purple” – was an ancient Byzantine title for the emperor’s son.
These days aristocracies are advanced by our obsessions with the offspring of the glitterati. And thanks to digital technologies, modern-day aristocrats can monetise their legacies by attracting large followings on social media. Little Harper Beckham, daughter of football star David, already has countless followers on social media, and according to the magazine Elle, is designing her own clothes line at the age of four. Her older brother, still in his teens, is photographing fashion layouts for Burberry.
Not being a member of a modern dynasty, or born with a brand name, you will never have the power to spin cash out of trash. But you do have some power as a consumer. In this age of rising inequality, please ask yourself whether you want to give your custom away to those who didn’t really earn it?
Cathy Holcombe is a Hong Kong-based financial writer