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> Spending more on health, education, and retirement is thinking long-term. Is that a cause or an effect of being wealthy? Probably an effect. You can't choose

> Spending more on health, education, and retirement is thinking long-term. Is that a cause or an effect of being wealthy? Probably an effect. You can't choose to invest long-term if you can't afford it.

nopinsight 9y ago
There are many poor people in developing countries who sacrifice a lot of things and save every bit they can to invest in the education of their children. This phenomenon is very pronounced in China and several countries with Confucius influence. Families with this kind of mindset are unlikely to stay poor for more than 1-2 generations. (This is probably one reason why hundreds of millions in China arose from poverty to middle-class in a single generation, although I do not see many economists in the West discussing it in the context of China's rise.) --- "Zhang Yang, a bright 18-year old from a rural town in Anhui province in China was accepted to study at a prestigious traditional medicine college in Hefei. But the news was too much for his father Zhang Jiasheng. Zhang's father was partly paralysed after he suffered a stroke two years ago and could no longer work. He feared the family, already in debt to pay for medicines, would not be able to afford his son's tuition fees. As his son headed home to celebrate his success, Zhang Jiasheng killed himself by swallowing pesticide. Zhang's case is an extreme. But East Asian families are spending more and more of their money on securing their children the best possible education. In richer Asian countries such as South Korea and emerging countries like China, "education fever" is forcing families to make choices, sometimes dramatic ones, to afford the bills. There are families selling their apartments to raise the funds to send their children to study overseas. --- Extreme Spending ... It is not just middle-class families. Workers also want their children to do better than themselves and see education as the only means of ensuring social mobility. Some go deep into debt. "Families are spending less on other things. There are many cases of rural parents not buying healthcare that their doctors urge on them... Part of the reason is that they would rather spend the money on their children's education," said Mr Kipnis. " From http://www.bbc.com/news/business-24537487 http://www.bbc.com/news/business-24537487
- vilmosi 9y ago
  > Families with this kind of mindset are unlikely to stay poor for more than 1-2 generations. (This is probably one reason why hundreds of millions in China arose from poverty to middle-class in a single generation, although I do not see many economists in the West discussing it in the context of China's rise.) What? China's economic boom has little to do with their view on education. They "simply" moved from farmers in extreme poverty to 6 day/12h shifts factory workers in poverty. I don't dispute it's relatively better for everyone, but it's hardly something to aspire to (particularly since other countries made the transition ages ago, so it's not even replicable unless we're talking about a really poor country that now has to compete with China too). The BBC article has a much more negative spin about this than you portray. It even suggests it can be detrimental to the country. The real reason some cultures obsess about education is because there are severe and very real penalties if you fail some exam in middle school. Finally, this is direct contradiction with your parent comment. Are poor people poor because they don't invest in the future or are they more likely to? Because if all you're saying is that poor people who invest long-term will not stay poor, that's almost a tautology.
  - nopinsight 9y ago
    I said "one reason why...". I am aware that there are other forces at work for China's rise. However, if you look at many other countries on the verge of industrialization, for example some in Latin America or Southeast Asia, the rise has not been nearly as rapid and they tend to get stuck at the middle-income level (and sometimes worse). Why has the industrialization of East Asia been so much faster and go further than in most other regions of the world? Japan, South Korea, Taiwan, ..., and likely China. Also look at their PISA scores [1] (or other international exams). I believe that one major factor is the emphasis of education in the culture. If you have other explanations, I'd like to hear. [1] https://en.wikipedia.org/wiki/Pisa https://en.wikipedia.org/wiki/Pisa > The real reason some cultures obsess about education is because there are severe and very real penalties if you fail some exam in middle school. The penetration of cultural emphasis on education is much deeper and broader than that. It starts almost from birth, and often before, and at all levels of society. Many people there pick partners using strong filters on educational level and institutions attended. High-achieving students are admired, not bullied, for example. The real reasons go back thousands of years. Check out Confucius philosophy and Chinese imperial examinations. [2][3] [2] https://en.wikipedia.org/wiki/Confucianism https://en.wikipedia.org/wiki/Confucianism [3] https://en.wikipedia.org/wiki/Imperial_examination https://en.wikipedia.org/wiki/Imperial_examination > if all you're saying is that poor people who invest long-term will not stay poor, that's almost a tautology. I said that because you claimed that investing long-term is probably the effect of being well-off. Note: I agree there are drawbacks to extreme emphasis on education. But it is a good predictor of long-term material successes of a community and a country.

nopinsight 9y ago

There are many poor people in developing countries who sacrifice a lot of things and save every bit they can to invest in the education of their children. This phenomenon is very pronounced in China and several countries with Confucius influence. Families with this kind of mindset are unlikely to stay poor for more than 1-2 generations. (This is probably one reason why hundreds of millions in China arose from poverty to middle-class in a single generation, although I do not see many economists in the West discussing it in the context of China's rise.) --- "Zhang Yang, a bright 18-year old from a rural town in Anhui province in China was accepted to study at a prestigious traditional medicine college in Hefei. But the news was too much for his father Zhang Jiasheng. Zhang's father was partly paralysed after he suffered a stroke two years ago and could no longer work. He feared the family, already in debt to pay for medicines, would not be able to afford his son's tuition fees. As his son headed home to celebrate his success, Zhang Jiasheng killed himself by swallowing pesticide. Zhang's case is an extreme. But East Asian families are spending more and more of their money on securing their children the best possible education. In richer Asian countries such as South Korea and emerging countries like China, "education fever" is forcing families to make choices, sometimes dramatic ones, to afford the bills. There are families selling their apartments to raise the funds to send their children to study overseas. --- Extreme Spending ... It is not just middle-class families. Workers also want their children to do better than themselves and see education as the only means of ensuring social mobility. Some go deep into debt. "Families are spending less on other things. There are many cases of rural parents not buying healthcare that their doctors urge on them... Part of the reason is that they would rather spend the money on their children's education," said Mr Kipnis. " From http://www.bbc.com/news/business-24537487 http://www.bbc.com/news/business-24537487

vilmosi 9y ago
> Families with this kind of mindset are unlikely to stay poor for more than 1-2 generations. (This is probably one reason why hundreds of millions in China arose from poverty to middle-class in a single generation, although I do not see many economists in the West discussing it in the context of China's rise.) What? China's economic boom has little to do with their view on education. They "simply" moved from farmers in extreme poverty to 6 day/12h shifts factory workers in poverty. I don't dispute it's relatively better for everyone, but it's hardly something to aspire to (particularly since other countries made the transition ages ago, so it's not even replicable unless we're talking about a really poor country that now has to compete with China too). The BBC article has a much more negative spin about this than you portray. It even suggests it can be detrimental to the country. The real reason some cultures obsess about education is because there are severe and very real penalties if you fail some exam in middle school. Finally, this is direct contradiction with your parent comment. Are poor people poor because they don't invest in the future or are they more likely to? Because if all you're saying is that poor people who invest long-term will not stay poor, that's almost a tautology.
- nopinsight 9y ago
  I said "one reason why...". I am aware that there are other forces at work for China's rise. However, if you look at many other countries on the verge of industrialization, for example some in Latin America or Southeast Asia, the rise has not been nearly as rapid and they tend to get stuck at the middle-income level (and sometimes worse). Why has the industrialization of East Asia been so much faster and go further than in most other regions of the world? Japan, South Korea, Taiwan, ..., and likely China. Also look at their PISA scores [1] (or other international exams). I believe that one major factor is the emphasis of education in the culture. If you have other explanations, I'd like to hear. [1] https://en.wikipedia.org/wiki/Pisa https://en.wikipedia.org/wiki/Pisa > The real reason some cultures obsess about education is because there are severe and very real penalties if you fail some exam in middle school. The penetration of cultural emphasis on education is much deeper and broader than that. It starts almost from birth, and often before, and at all levels of society. Many people there pick partners using strong filters on educational level and institutions attended. High-achieving students are admired, not bullied, for example. The real reasons go back thousands of years. Check out Confucius philosophy and Chinese imperial examinations. [2][3] [2] https://en.wikipedia.org/wiki/Confucianism https://en.wikipedia.org/wiki/Confucianism [3] https://en.wikipedia.org/wiki/Imperial_examination https://en.wikipedia.org/wiki/Imperial_examination > if all you're saying is that poor people who invest long-term will not stay poor, that's almost a tautology. I said that because you claimed that investing long-term is probably the effect of being well-off. Note: I agree there are drawbacks to extreme emphasis on education. But it is a good predictor of long-term material successes of a community and a country.