11 ms·

It's not (just) that most Americans feel these jobs aren't worth their time. There is a very strong individualist streak in American culture and a very strong t

by sidlls 8y ago

It's not (just) that most Americans feel these jobs aren't worth their time. There is a very strong individualist streak in American culture and a very strong taboo against lending friends or family members money for any reason. There are plenty of American families who have relations who could easily help bootstrap a profitable small business in the way described here. It just doesn't happen that way very often. Instead the typical means to wealth is inheritance or luck of birth providing access to investment capital (not loans) and business connections. For every WhatsApp there's a dozen or more Microsofts and Facebooks (Gates and Zuckerberg both benefitted from the immense social and financial capital their families could provide).

sumeetjain 8y ago
> There is a very strong individualist streak in American culture and a very strong taboo against lending friends or family members money I think the individualist streak in American culture is better shown by people being unwilling to seek help from friends/family. I might call an unwillingness to help others (assuming one can afford to do so) selfishness -- not individualism. But what I have seen in American is, as you said, individualism: People are prideful and want to create wealth without help. An interesting clarification: People will more readily accept help from strangers -- e.g. a Kickstarter campaign, bank loan, or VC investment doesn't diminish one's pride in the way that the same support from someone's parents might. There's talk elsewhere in this article's comments here about the "killer feature" that these Indian Americans have. I would argue that the true killer feature is not even access to zero-interest capital. It's a culture that actively fights against pride and individualism. There are surely tradeoffs, but it's hard to deny the power that can come from children and adults alike all looking to family for help... and seeing that help not as something which diminishes their power but rather as something that bolsters it.
- 80386 8y ago
  > I think the individualist streak in American culture is better shown by people being unwilling to seek help from friends/family. And our families are, cross-culturally, unusually small. I talk to my parents every few weeks. Not so much my aunts and uncles. I have a few cousins who I see every fifth Christmas or so, and anyone more distant than that may as well be unrelated. This seems to be common within American culture, but it leads to weak social networks - unless you go to the right college and can network there.
  - telchar 8y ago
    I think dispersion plays into this. I could hardly live farther from my aunts/uncles/cousins if I tried (living within this country) and the same could be said for a large number of them. It's a lot harder to stay in touch at a distance. I guess given social media you might say it's easier to stay in touch when close.
    - deleted 8y ago
      [deleted]
- iguy 8y ago
  I think it's much deeper than "individualist streak in American culture". Western Europe in the last 1000 years or so has been a very unusual place... one aspect of which is having nuclear families not extended ones. Because (crudely speaking) the catholic church wished to diminish alternative power structures, such as clans. This led to an unusually open society, which had many benefits... with generally higher levels of trust among strangers. But it has some costs, too. Like not having tight connections for bootstrapping motels in a foreign land.
  - techstrategist 8y ago
    I never connected the decline of extended families to the church, but that sounds fascinating. Any recommended reading?
    - iguy 8y ago
      I'm struggling to think of a good source right now, sorry. But a link I've posted before looking the other way, at how the other half of the Roman empire turned out: https://www.theamericanconservative.com/articles/cousin-marriage-conundrum/ https://www.theamericanconservative.com/articles/cousin-marr... also more recent discussion https://marginalrevolution.com/marginalrevolution/2018/01/marrying-cousin-bad-democracy.html https://marginalrevolution.com/marginalrevolution/2018/01/ma...
    - tathougies 8y ago
      It's because it's not. Literally all the cultures in which Catholicism thrives are those in which the extended family is paramount. My very large very Catholic very Indian family actively rails against the individualism of secular American culture. As do my Philipino friends who also have very close families. As do my Hispanic family and friends who also have very close families. As do my African friends who also have close extended families. Literally the biggest group embracing individualism from my perspective are secular white people and mainstream protestants.
      - iguy 8y ago
- chc 8y ago
  > I think the individualist streak in American culture is better shown by people being unwilling to seek help from friends/family. I might call an unwillingness to help others (assuming one can afford to do so) selfishness -- not individualism. It's not just practicing individualism, but insisting on it. People don't help others partly because they tell themselves that the person needs to make their own way. It is ultimately a justification for selfishness, but the justification is individualism. And I suspect many people who would otherwise not be too proud to ask for help still won't because they perceive that this is a prominent idea in American culture. > An interesting clarification: People will more readily accept help from strangers -- e.g. a Kickstarter campaign, bank loan, or VC investment doesn't diminish one's pride in the way that the same support from someone's parents might. I think that goes back to the same point. Those routes are branded as entrepreneurship, which is like +10 individualism points. If I asked my rich uncle for a loan, he (and many other people) would perceive this as dependency and therefore vaguely shameful. If I took out a bank loan, even though it's technically the same action, those same people would perceive it as an admirable show of entrepreneurial initiative.
  - danenania 8y ago
    While I completely see your point about the negative side of individualism, I think this attitude is also partly based on a very culturally healthy distaste for nepotism. When you ask your rich uncle for a loan, it's hard for both him and you to really know whether it's being given because he believes in you, or because there is perceived to be an obligation. And where there is an obligation to give loans/favors just based on familial ties, it's a slippery slope to a culture of nepotism and corruption where your name matters more than your skills and accomplishments. I'm not saying that relatives shouldn't help each other, but perhaps it's not such a bad thing that people seek out other avenues first in non-emergency situations. It's a delicate balance to be sure.
- MisterTea 8y ago
  > There's talk elsewhere in this article's comments here about the "killer feature" that these Indian Americans have. I would argue that the true killer feature is not even access to zero-interest capital. It's a culture that actively fights against pride and individualism. I think the true killer app is family cooperation as a unit in conjunction with a deep network of relatives. My father built his business with the help of his parents, his aunt, and two other cousins who lent him money. Without their help, he couldn't have built the business as fast and as big as he did. His brother also worked for him a bit as well as some of the cousins when he was building his first shop. My mother helped him and once she had me and my brother stayed at home and took care fo the home front even though she had a masters degree. And it appears his generation along with my mothers was the last hurrah of big family ties and help as everyone in my generation up and left. I have no cousins, uncles or aunts who are close. They all did their own thing, went to school and moved away. I see them from time to time, maybe once or twice a year and that's it. Hell, even my mother has all sorts of stories about how here massive Irish family (grandma was one of 12 kids) pulled together to help each other with everything. Contrast that with my Guyanese friend who has a seemingly never ending supply of helpful family members all in the same neighborhood. His father built himself a small real estate empire of about a dozen rental properties and most of his generation are college educated. His father started out doing handyman and light construction work with his brothers. They all chipped in and worked. Some even had a day job and came to the properties at night to work on them. One by one they fixed and flipped homes using money and labor they pooled together. Then they started buying, fixing and renting. They acted as a small family army, cooperatively building each others future. The American family has been here long enough to thin and die whereas these foreign families are still "fresh" to America and working hard to make a good life. But they too will one day suffer the same fate. Subsequent generations won't have to work as hard as they are already comfortable. Little by little they will spread out, move away, and their once mighty army is no more. From my perspective as a true 3rd gen American (all G-Grandparents came from Europe around the same time) is that by the third generation, there are no more cultural roots. And family is culture so family dissolves as well. My mother and father were the last to really care and my father was very meh about his Polish heritage. My mother was adamant, keeping traditions alive for as long as possible but the local family thinned out as the rest moved away. She is probably the last to really care about family and cultural roots which bound the early immigrants, and their children.
- 01100011 8y ago
  Agreed. Generally my American friends and family never ask for money to fund good ideas. The people asking for money are people who are asking me to throw money at things that won't produce more money(i.e. they don't have a plan for spending it wisely, have shown poor financial judgement in the past, etc). My friend and his wife just had one of their cars stop working and they both need cars to make money. They are in debt and need to work. There's no way my friend will ask, but I will probably find a way to help them. My niece has no problem hitting up my parents for money for her latest crazy investment scheme after demonstrating several poor choices and a lack of business and financial judgement.
- protomyth 8y ago
  > There is a very strong individualist streak in American culture and a very strong taboo against lending friends or family members money for any reason. I agree with the individualist streak, but the second part is pretty much untrue of anyone I've met in the upper plain states. Helping to bootstrap you friends and family is part of the culture.
- derefr 8y ago
  > a Kickstarter campaign, bank loan, or VC investment doesn't diminish one's pride in the way that the same support from someone's parents might. I don't think it's about pride at all. I think it's about face (something most Americans don't even have a word for, but which is very relevant in this case.) Americans don't want to give face to anyone, ever. They don't want anyone to have social power over them. When an individual loans you money—or, even worse, gifts you money—you're giving them a ton of face in exchange. Americans find that idea horrifying. It's like signing up for indentured servitude, except—since it's a social rather than legal obligation—you can't even get out of it by declaring bankruptcy! (See: the way "favours" are portrayed in The Godfather movies, for an image of the American mindset on what owing someone a favour / being in someone's debt is like.) Bank loans and VC investments are better precisely because they're legal rather than social obligations, so you can get out of them (or, say, sell them off to someone else along with the business.) And Kickstarter is better because no single individual is responsible for enough of the loan to actually attain much social-obligatory power over you in exchange. You're maybe beholden to your Kickstarter backers as a class, but you aren't scared to talk to any individual one of them for thought of what they might ask of you.
  - Izkata 8y ago
    > See: the way "favours" are portrayed in The Godfather movies, for an image of the American mindset on what owing someone a favour / being in someone's debt is like. Maybe not that extreme, but yeah, it's too easy to get guilted into something because you've become socially indebted by something large. It's not even about being able to get out of it, like you mention afterwards with a legal exchange, it's about the exchange being forced to continue out of a mixture of guilt, politeness, and social pressure in general, simply because you don't want to accidentally kill the personal relationship.
  - cannonedhamster 8y ago
    More to the point, you can never get out of the debt you incur, no matter what you do for the rest of your life. It's not just about the debt one incurs, it's about the one providing the debt and what they expect, lifelong admiration, respect, and deference. I've had insane requests and expectations demanded by family members for really small "gifts" before. Because of that I'd say that the social interest costs are too high for many Americans to be able to accept anything.
siruncledrew 8y ago
Jeff Bezos also got a loan from his parents. Having parents with disposable capital in the >$50k range is definitely not something the majority of American families can provide. https://medium.com/@timconneally/companies-started-by-loans-from-the-founder-s-parents-4cf8f596c03a https://medium.com/@timconneally/companies-started-by-loans-...
- TangoTrotFox 8y ago
  "When he was 17, Musk left college and moved to his mother’s home country, Canada, later obtaining passports for his mother, brother and sister to join him there. His father did not wish him well, Musk recalls. “He said rather contentiously that I’d be back in three months, that I’m never going to make it, that I’m never going to make anything of myself. He called me an idiot all the time. That’s the tip of the iceberg, by the way.” After Musk became successful, his father even took credit for helping him – to such a degree that it’s listed as fact in Elon’s Wikipedia entry. “One thing he claims is he gave us a whole bunch of money to start, my brother and I, to start up our first company [Zip2, which provided online city guides to newspapers]. This is not true,” Musk says. “He was irrelevant. He paid nothing for college. My brother and I paid for college through scholarships, loans and working two jobs simultaneously. The funding we raised for our first company came from a small group of random angel investors in Silicon Valley.”" https://www.rollingstone.com/culture/culture-features/elon-musk-the-architect-of-tomorrow-120850/ https://www.rollingstone.com/culture/culture-features/elon-m...
- spunker540 8y ago
  To be fair, with Jeff Bezos and his parents it wasn't a loan but purchased equity that is now worth billions.
- fipple 8y ago
  Most families don’t have $50k to invest in their kids’ business, but there are at least 10 million such families for each Gates/Zuckerberg/Bezos etc.
alexhutcheson 8y ago
There are good reasons that many people avoid lending money to (or even doing business with) close friends and relatives. If the venture doesn't succeed, and the friend is unable to repay the loan, it can create animosity and bitterness that wreck the relationship. Even if things go well, it can create an uncomfortable power dynamic that makes the relationship less pleasant and friendly.
- emodendroket 8y ago
  I also think a middle-class family is in the "sweet spot" where they have a lot to lose from offering a loan as opposed to either not having a lot to lose in the first place or being so well-off that they can easily just write off a bad investment.
  - StillBored 8y ago
    I think both of your are correct, but to add another problem, its that there is sort of the understanding that a family member isn't going to try and get your house/car/whatever taken away to pay off the debt. So, family loans are often viewed more as gifts. I'm not going to give a family member 1/2 my life savings as a gift until it becomes an inheritance, unless I really believe in the business and am getting some kind of equity stake/collateral in return i'm not going to be making a "loan". Plus, its one thing to "invest" in someone buying an asset, like a house/motel/gas station/CNC mill/whatever, vs loaning someone money to start a graphics art business where the money is going to basically pay "salary" and once its spent there isn't anything left to sell when the business fails. Although, the one common thing I've seen a couple times, is an uncle/whatever paying for a college or a trade (like nursing) school under the "teach a man to fish" theory.
- sidlls 8y ago
  To some (admittedly fuzzy) degree what you describe is a symptom of what I describe, not a causal reason for the taboo or individualistic tendency to exist.
- azernik 8y ago
  I grew up in a community that was just coming out of this phase (the combined Israeli and Persian Jewish communities of LA). I think you're interpreting "relations" in a way too close to the "relatives" of the (relatively atomized) White American society. Informal immigrant aid networks are generally wider than "close friends and relatives" - they extend to distant cousins and friends-of-friends. For example, in this article the relevant quote is “If you are a Patel, lease a hotel” - Patels being a relatively broad caste, and a surname representing about 10% of all Indian-Americans, not a "family" in the American sense. For a concrete example of how this works in the Middle Eastern Jewish community, and historically in the Ashkenazi immigrant Jewish community: Instead of "hey uncle, I hear you have $50K lying around, could you loan me some?" it's "hello second cousin once removed, my uncle got me in touch with you - I hear you've got $50K lying around?" You're generally a step or two removed from the direct source of money. The act of the intermediary is a one-time intervention and said interaction is usually closed out with a direct thanks or a gift or both, rather than being an ongoing professional relationship. If the venture doesn't succeed you'll have an awkward relationship with the two-hops-removed acquaintance, and the one-hop-removed intermediary will know about it and be less likely to recommend you to others for credit, but real social consequences that extend to direct friends and relatives are reserved for those who are considered to have acted maliciously or irresponsibly (e.g. if it's clear you've blown the money on hookers and blackjack, you and possibly your children will be ostracized). Search for "credit" in this article on immigrant enclaves for some examples of communities with these kinds of social structures: https://pdfs.semanticscholar.org/433f/567bd158d95f0c2611489d8294ab64b9a376.pdf https://pdfs.semanticscholar.org/433f/567bd158d95f0c2611489d... (This also mentions different informal lending structures than the ones that I'm familiar with personally - instances in Korean and Latino communities of "lending circles" i.e. collective lending among peers, rather than from individual community eminences.)
emodendroket 8y ago
I don't really think one paragraph follows from the other. You say Americans are uniquely unwilling to pool their financial resources to family members, then cite examples of that happening.
- sidlls 8y ago
  No, I say they're unwilling to in the way described, and cite examples of how specifically it usually works.
skookumchuck 8y ago
> Instead the typical means to wealth is inheritance or luck of birth providing access to investment capital The typical means to wealth is spending below one's means and investing the rest. https://www.nytimes.com/2018/09/01/style/fire-financial-independence-retire-early.html https://www.nytimes.com/2018/09/01/style/fire-financial-inde... And there's the book "The Millionaire Next Door" which shows that 85% of American millionaires are self-made, usually through spending below one's means and investing the rest.
- ummonk 8y ago
  Are those actual early millionaires or just retirees with retirement savings?
  - skookumchuck 8y ago
    Early millionaires. The article makes it pretty clear.
    - ummonk 8y ago
      No, I mean the data on 85% of millioniares. It probably captures mostly retirees. As for the article, the people in it seem to need to continue living a frugal lifestyle after early retirement, so they aren't exactly wealthy. Financially independent, yes, but not wealthy.
      - skookumchuck 8y ago
        The article is about retiring at 30 as a millionaire, and yes that requires living a frugal lifestyle. But if you're willing to work longer, far less frugality is needed. The book is pretty cheap (!) and well worth a read if you're interested it becoming financially independent. There are lots of financial advice books, this is one of the better ones, and the advice is straightforward. It doesn't involve learning option trading or real estate hacks.
reaperducer 8y ago
a very strong taboo against lending friends or family members money for any reason. This is true. I think we got it from the British. Hamlet: Act 1, scene 3: "Neither a borrower nor a lender be, For loan oft loses both itself and friend, And borrowing dulls the edge of husbandry"
deleted 8y ago
[deleted]
mrep 8y ago
> There is a very strong individualist streak in American culture and a very strong taboo against lending friends or family members money For friends and extended family, I agree. However, most people I know have borrowed from their parents for things like their first car or the downpayment on their first house if they need to. Is that not normal?
- whatshisface 8y ago
  In including "circumstances of birth," the parent is implicitly making a division between friends/near family and immediate blood family. Americans usually are willing to help out their direct descendants, often willing to help out their parents and grandparents, and rarely if ever willing to loan money to a nephew or college buddy (more than $50). The reasoning behind this is that business relationships can become incredibly sour, and "never seeing them again" is a pressure release that exists among strangers in New York but not among close family or best friends.
logfromblammo 8y ago
If I ever loaned my family money, I'd make them sign a secured, transferable note and then sell it off as quickly as possible. I'd rather extend a monetary gift without any expectation of repayment. Any money-related issue is bound to sour relations with your family sooner or later. Business partners that fall out can go their separate ways, but when your sister-in-law cheats her siblings out of their shares of the estate--because she opened the account for her Mom, and it was a joint account, just in case something happened to her--that brews some resentment. Loans make you involved in the borrower's business, and when things so bad, you need to be able to exercise all your options. Your lazy brother-in-law probably isn't going to prioritize making the loan payment to you over buying a new snowblower, or whatever other toy. Your sleazy brother-in-law might just default, claim your loan was actually a gift, and all but dare you to sue him. So it isn't just that there is a taboo against lending, but there is an insufficiently strong tradition of honoring personal commitments and sacrificing of one's self for the sake of the family.
- skookumchuck 8y ago
  The way to make loans to family and friends is straightforward. Make a small loan. If they pay it back, then loan larger amounts. If they don't pay it back, you have the perfect excuse to never loan them any more.
vram22 8y ago
>It's not (just) that most Americans feel these jobs aren't worth their time. There is a very strong individualist streak in American culture and a very strong taboo against lending friends or family members money for any reason. Interesting. Never heard of this before. Why do you think it is so (the taboo)? (I read some replies to your comment below, just want to see if you think something different).
Timmah 8y ago
Another important difference is the free-labor-from-your-kids benefit. From what it appears, Indian families are more cohesive and their kids are less rebellious (at least 1st generation). I'm aware there are also American children who work in their parents small businesses, but I think they are more likely to demand compensation.
brightball 8y ago
> taboo against lending friends or family members money for any reason. It's less taboo than years of hearing stories of ended family relationships where money was loaned and then abused, mishandled, wasted, etc without any intention of paying it back. I've heard these types of stories my entire life.
- erikpukinskis 8y ago
  Yeah, money is the number one reason marriages break up, and I have seen the same happen to siblings.
Shivetya 8y ago
I would have put it more at not about lending them money but the strong desire to strike out on their own. plus throw in sibling rivalry where culture tends to put self first and family second. there are communities within the US which still lean family first but they are not common in the cities
skookumchuck 8y ago
I believe Gates started Microsoft with a $5000 loan from his parents. Not that "immense".
- dman 8y ago
  $23,420.63 in todays dollars. [http://www.in2013dollars.com/1975-dollars-in-2018?amount=5000 http://www.in2013dollars.com/1975-dollars-in-2018?amount=500...]
  - skookumchuck 8y ago
    I.e. the price of a modest new car. Hardly "immense".
    - st26 8y ago
      My parents bought a car for me to drive back when I was a teen. It cost $900, not $25,000.
      - skookumchuck 8y ago
        I wrote "new" car.
      - skookumchuck 8y ago
        The average price of a new car in 1975 was $4,960. http://www.autonews.com/article/19960626/ANA/606260830/1975-car-prices-brought-sticker-shock-then-rebates http://www.autonews.com/article/19960626/ANA/606260830/1975-...
- argv_empty 8y ago
  What valuation do you give his mother's influence over the board at IBM?
  - skookumchuck 8y ago
    It's unknowable. But keep in mind that Microsoft was already established and very successful at the time, and Gates was a very astute and aggressive businessman. IBM went to Digital Research first, and Gary Kildall suggested they check with Microsoft. Microsoft was the biggest player in microcomputer software at the time. Why wouldn't they check? And how much credence would IBM give a mom (who had little knowledge of computers and software) who suggested checking out her son? Lastly, the accounts of her advising IBM to use her son's company are not verifiable. IBM went to Gary Kildall first.
Spooky23 8y ago
Americans want less risk, and fiscal policy drives consolidation. Hotels aren’t a Business that requires immigrant labor because it’s undesirable —- it’s a business that needs capital and SMB are starved of capital. Many Americans come from a cultural background where there is shame involved in talking about money and doing business with family, and prefer dealing with institutions.
- la6470 8y ago
  What is American??? There are many kind of Americans some of them are Indian Americans
- la6470 8y ago
  These people in TFA are also Americans - not white Americans but Indian Americans
erikpukinskis 8y ago
> There are plenty of American families who have relations who could easily help bootstrap a profitable small business in the way described here The problem is a lot of those business aren’t vetted. How do you know if anyone’s going to eat at Uncle Ned’s crab shack? These motels are more like new franchises than a startup. They’ve already been partly de-risked.

by sidlls 8y ago

sumeetjain 8y ago

> There is a very strong individualist streak in American culture and a very strong taboo against lending friends or family members money I think the individualist streak in American culture is better shown by people being unwilling to seek help from friends/family. I might call an unwillingness to help others (assuming one can afford to do so) selfishness -- not individualism. But what I have seen in American is, as you said, individualism: People are prideful and want to create wealth without help. An interesting clarification: People will more readily accept help from strangers -- e.g. a Kickstarter campaign, bank loan, or VC investment doesn't diminish one's pride in the way that the same support from someone's parents might. There's talk elsewhere in this article's comments here about the "killer feature" that these Indian Americans have. I would argue that the true killer feature is not even access to zero-interest capital. It's a culture that actively fights against pride and individualism. There are surely tradeoffs, but it's hard to deny the power that can come from children and adults alike all looking to family for help... and seeing that help not as something which diminishes their power but rather as something that bolsters it.

80386 8y ago
> I think the individualist streak in American culture is better shown by people being unwilling to seek help from friends/family. And our families are, cross-culturally, unusually small. I talk to my parents every few weeks. Not so much my aunts and uncles. I have a few cousins who I see every fifth Christmas or so, and anyone more distant than that may as well be unrelated. This seems to be common within American culture, but it leads to weak social networks - unless you go to the right college and can network there.
- telchar 8y ago
  I think dispersion plays into this. I could hardly live farther from my aunts/uncles/cousins if I tried (living within this country) and the same could be said for a large number of them. It's a lot harder to stay in touch at a distance. I guess given social media you might say it's easier to stay in touch when close.
  - deleted 8y ago
    [deleted]
iguy 8y ago
I think it's much deeper than "individualist streak in American culture". Western Europe in the last 1000 years or so has been a very unusual place... one aspect of which is having nuclear families not extended ones. Because (crudely speaking) the catholic church wished to diminish alternative power structures, such as clans. This led to an unusually open society, which had many benefits... with generally higher levels of trust among strangers. But it has some costs, too. Like not having tight connections for bootstrapping motels in a foreign land.
- techstrategist 8y ago
  I never connected the decline of extended families to the church, but that sounds fascinating. Any recommended reading?
  - iguy 8y ago
    I'm struggling to think of a good source right now, sorry. But a link I've posted before looking the other way, at how the other half of the Roman empire turned out: https://www.theamericanconservative.com/articles/cousin-marriage-conundrum/ https://www.theamericanconservative.com/articles/cousin-marr... also more recent discussion https://marginalrevolution.com/marginalrevolution/2018/01/marrying-cousin-bad-democracy.html https://marginalrevolution.com/marginalrevolution/2018/01/ma...
  - tathougies 8y ago
    It's because it's not. Literally all the cultures in which Catholicism thrives are those in which the extended family is paramount. My very large very Catholic very Indian family actively rails against the individualism of secular American culture. As do my Philipino friends who also have very close families. As do my Hispanic family and friends who also have very close families. As do my African friends who also have close extended families. Literally the biggest group embracing individualism from my perspective are secular white people and mainstream protestants.
    - iguy 8y ago
chc 8y ago
> I think the individualist streak in American culture is better shown by people being unwilling to seek help from friends/family. I might call an unwillingness to help others (assuming one can afford to do so) selfishness -- not individualism. It's not just practicing individualism, but insisting on it. People don't help others partly because they tell themselves that the person needs to make their own way. It is ultimately a justification for selfishness, but the justification is individualism. And I suspect many people who would otherwise not be too proud to ask for help still won't because they perceive that this is a prominent idea in American culture. > An interesting clarification: People will more readily accept help from strangers -- e.g. a Kickstarter campaign, bank loan, or VC investment doesn't diminish one's pride in the way that the same support from someone's parents might. I think that goes back to the same point. Those routes are branded as entrepreneurship, which is like +10 individualism points. If I asked my rich uncle for a loan, he (and many other people) would perceive this as dependency and therefore vaguely shameful. If I took out a bank loan, even though it's technically the same action, those same people would perceive it as an admirable show of entrepreneurial initiative.
- danenania 8y ago
  While I completely see your point about the negative side of individualism, I think this attitude is also partly based on a very culturally healthy distaste for nepotism. When you ask your rich uncle for a loan, it's hard for both him and you to really know whether it's being given because he believes in you, or because there is perceived to be an obligation. And where there is an obligation to give loans/favors just based on familial ties, it's a slippery slope to a culture of nepotism and corruption where your name matters more than your skills and accomplishments. I'm not saying that relatives shouldn't help each other, but perhaps it's not such a bad thing that people seek out other avenues first in non-emergency situations. It's a delicate balance to be sure.
MisterTea 8y ago
> There's talk elsewhere in this article's comments here about the "killer feature" that these Indian Americans have. I would argue that the true killer feature is not even access to zero-interest capital. It's a culture that actively fights against pride and individualism. I think the true killer app is family cooperation as a unit in conjunction with a deep network of relatives. My father built his business with the help of his parents, his aunt, and two other cousins who lent him money. Without their help, he couldn't have built the business as fast and as big as he did. His brother also worked for him a bit as well as some of the cousins when he was building his first shop. My mother helped him and once she had me and my brother stayed at home and took care fo the home front even though she had a masters degree. And it appears his generation along with my mothers was the last hurrah of big family ties and help as everyone in my generation up and left. I have no cousins, uncles or aunts who are close. They all did their own thing, went to school and moved away. I see them from time to time, maybe once or twice a year and that's it. Hell, even my mother has all sorts of stories about how here massive Irish family (grandma was one of 12 kids) pulled together to help each other with everything. Contrast that with my Guyanese friend who has a seemingly never ending supply of helpful family members all in the same neighborhood. His father built himself a small real estate empire of about a dozen rental properties and most of his generation are college educated. His father started out doing handyman and light construction work with his brothers. They all chipped in and worked. Some even had a day job and came to the properties at night to work on them. One by one they fixed and flipped homes using money and labor they pooled together. Then they started buying, fixing and renting. They acted as a small family army, cooperatively building each others future. The American family has been here long enough to thin and die whereas these foreign families are still "fresh" to America and working hard to make a good life. But they too will one day suffer the same fate. Subsequent generations won't have to work as hard as they are already comfortable. Little by little they will spread out, move away, and their once mighty army is no more. From my perspective as a true 3rd gen American (all G-Grandparents came from Europe around the same time) is that by the third generation, there are no more cultural roots. And family is culture so family dissolves as well. My mother and father were the last to really care and my father was very meh about his Polish heritage. My mother was adamant, keeping traditions alive for as long as possible but the local family thinned out as the rest moved away. She is probably the last to really care about family and cultural roots which bound the early immigrants, and their children.
01100011 8y ago
Agreed. Generally my American friends and family never ask for money to fund good ideas. The people asking for money are people who are asking me to throw money at things that won't produce more money(i.e. they don't have a plan for spending it wisely, have shown poor financial judgement in the past, etc). My friend and his wife just had one of their cars stop working and they both need cars to make money. They are in debt and need to work. There's no way my friend will ask, but I will probably find a way to help them. My niece has no problem hitting up my parents for money for her latest crazy investment scheme after demonstrating several poor choices and a lack of business and financial judgement.
protomyth 8y ago
> There is a very strong individualist streak in American culture and a very strong taboo against lending friends or family members money for any reason. I agree with the individualist streak, but the second part is pretty much untrue of anyone I've met in the upper plain states. Helping to bootstrap you friends and family is part of the culture.
derefr 8y ago
> a Kickstarter campaign, bank loan, or VC investment doesn't diminish one's pride in the way that the same support from someone's parents might. I don't think it's about pride at all. I think it's about face (something most Americans don't even have a word for, but which is very relevant in this case.) Americans don't want to give face to anyone, ever. They don't want anyone to have social power over them. When an individual loans you money—or, even worse, gifts you money—you're giving them a ton of face in exchange. Americans find that idea horrifying. It's like signing up for indentured servitude, except—since it's a social rather than legal obligation—you can't even get out of it by declaring bankruptcy! (See: the way "favours" are portrayed in The Godfather movies, for an image of the American mindset on what owing someone a favour / being in someone's debt is like.) Bank loans and VC investments are better precisely because they're legal rather than social obligations, so you can get out of them (or, say, sell them off to someone else along with the business.) And Kickstarter is better because no single individual is responsible for enough of the loan to actually attain much social-obligatory power over you in exchange. You're maybe beholden to your Kickstarter backers as a class, but you aren't scared to talk to any individual one of them for thought of what they might ask of you.
- Izkata 8y ago
  > See: the way "favours" are portrayed in The Godfather movies, for an image of the American mindset on what owing someone a favour / being in someone's debt is like. Maybe not that extreme, but yeah, it's too easy to get guilted into something because you've become socially indebted by something large. It's not even about being able to get out of it, like you mention afterwards with a legal exchange, it's about the exchange being forced to continue out of a mixture of guilt, politeness, and social pressure in general, simply because you don't want to accidentally kill the personal relationship.
- cannonedhamster 8y ago
  More to the point, you can never get out of the debt you incur, no matter what you do for the rest of your life. It's not just about the debt one incurs, it's about the one providing the debt and what they expect, lifelong admiration, respect, and deference. I've had insane requests and expectations demanded by family members for really small "gifts" before. Because of that I'd say that the social interest costs are too high for many Americans to be able to accept anything.

siruncledrew 8y ago

Jeff Bezos also got a loan from his parents. Having parents with disposable capital in the >$50k range is definitely not something the majority of American families can provide. https://medium.com/@timconneally/companies-started-by-loans-from-the-founder-s-parents-4cf8f596c03a https://medium.com/@timconneally/companies-started-by-loans-...

TangoTrotFox 8y ago
"When he was 17, Musk left college and moved to his mother’s home country, Canada, later obtaining passports for his mother, brother and sister to join him there. His father did not wish him well, Musk recalls. “He said rather contentiously that I’d be back in three months, that I’m never going to make it, that I’m never going to make anything of myself. He called me an idiot all the time. That’s the tip of the iceberg, by the way.” After Musk became successful, his father even took credit for helping him – to such a degree that it’s listed as fact in Elon’s Wikipedia entry. “One thing he claims is he gave us a whole bunch of money to start, my brother and I, to start up our first company [Zip2, which provided online city guides to newspapers]. This is not true,” Musk says. “He was irrelevant. He paid nothing for college. My brother and I paid for college through scholarships, loans and working two jobs simultaneously. The funding we raised for our first company came from a small group of random angel investors in Silicon Valley.”" https://www.rollingstone.com/culture/culture-features/elon-musk-the-architect-of-tomorrow-120850/ https://www.rollingstone.com/culture/culture-features/elon-m...
spunker540 8y ago
To be fair, with Jeff Bezos and his parents it wasn't a loan but purchased equity that is now worth billions.
fipple 8y ago
Most families don’t have $50k to invest in their kids’ business, but there are at least 10 million such families for each Gates/Zuckerberg/Bezos etc.

alexhutcheson 8y ago

There are good reasons that many people avoid lending money to (or even doing business with) close friends and relatives. If the venture doesn't succeed, and the friend is unable to repay the loan, it can create animosity and bitterness that wreck the relationship. Even if things go well, it can create an uncomfortable power dynamic that makes the relationship less pleasant and friendly.

emodendroket 8y ago
I also think a middle-class family is in the "sweet spot" where they have a lot to lose from offering a loan as opposed to either not having a lot to lose in the first place or being so well-off that they can easily just write off a bad investment.
- StillBored 8y ago
  I think both of your are correct, but to add another problem, its that there is sort of the understanding that a family member isn't going to try and get your house/car/whatever taken away to pay off the debt. So, family loans are often viewed more as gifts. I'm not going to give a family member 1/2 my life savings as a gift until it becomes an inheritance, unless I really believe in the business and am getting some kind of equity stake/collateral in return i'm not going to be making a "loan". Plus, its one thing to "invest" in someone buying an asset, like a house/motel/gas station/CNC mill/whatever, vs loaning someone money to start a graphics art business where the money is going to basically pay "salary" and once its spent there isn't anything left to sell when the business fails. Although, the one common thing I've seen a couple times, is an uncle/whatever paying for a college or a trade (like nursing) school under the "teach a man to fish" theory.
sidlls 8y ago
To some (admittedly fuzzy) degree what you describe is a symptom of what I describe, not a causal reason for the taboo or individualistic tendency to exist.
azernik 8y ago
I grew up in a community that was just coming out of this phase (the combined Israeli and Persian Jewish communities of LA). I think you're interpreting "relations" in a way too close to the "relatives" of the (relatively atomized) White American society. Informal immigrant aid networks are generally wider than "close friends and relatives" - they extend to distant cousins and friends-of-friends. For example, in this article the relevant quote is “If you are a Patel, lease a hotel” - Patels being a relatively broad caste, and a surname representing about 10% of all Indian-Americans, not a "family" in the American sense. For a concrete example of how this works in the Middle Eastern Jewish community, and historically in the Ashkenazi immigrant Jewish community: Instead of "hey uncle, I hear you have $50K lying around, could you loan me some?" it's "hello second cousin once removed, my uncle got me in touch with you - I hear you've got $50K lying around?" You're generally a step or two removed from the direct source of money. The act of the intermediary is a one-time intervention and said interaction is usually closed out with a direct thanks or a gift or both, rather than being an ongoing professional relationship. If the venture doesn't succeed you'll have an awkward relationship with the two-hops-removed acquaintance, and the one-hop-removed intermediary will know about it and be less likely to recommend you to others for credit, but real social consequences that extend to direct friends and relatives are reserved for those who are considered to have acted maliciously or irresponsibly (e.g. if it's clear you've blown the money on hookers and blackjack, you and possibly your children will be ostracized). Search for "credit" in this article on immigrant enclaves for some examples of communities with these kinds of social structures: https://pdfs.semanticscholar.org/433f/567bd158d95f0c2611489d8294ab64b9a376.pdf https://pdfs.semanticscholar.org/433f/567bd158d95f0c2611489d... (This also mentions different informal lending structures than the ones that I'm familiar with personally - instances in Korean and Latino communities of "lending circles" i.e. collective lending among peers, rather than from individual community eminences.)

emodendroket 8y ago

I don't really think one paragraph follows from the other. You say Americans are uniquely unwilling to pool their financial resources to family members, then cite examples of that happening.

sidlls 8y ago
No, I say they're unwilling to in the way described, and cite examples of how specifically it usually works.

skookumchuck 8y ago

> Instead the typical means to wealth is inheritance or luck of birth providing access to investment capital The typical means to wealth is spending below one's means and investing the rest. https://www.nytimes.com/2018/09/01/style/fire-financial-independence-retire-early.html https://www.nytimes.com/2018/09/01/style/fire-financial-inde... And there's the book "The Millionaire Next Door" which shows that 85% of American millionaires are self-made, usually through spending below one's means and investing the rest.

ummonk 8y ago
Are those actual early millionaires or just retirees with retirement savings?
- skookumchuck 8y ago
  Early millionaires. The article makes it pretty clear.
  - ummonk 8y ago
    No, I mean the data on 85% of millioniares. It probably captures mostly retirees. As for the article, the people in it seem to need to continue living a frugal lifestyle after early retirement, so they aren't exactly wealthy. Financially independent, yes, but not wealthy.
    - skookumchuck 8y ago
      The article is about retiring at 30 as a millionaire, and yes that requires living a frugal lifestyle. But if you're willing to work longer, far less frugality is needed. The book is pretty cheap (!) and well worth a read if you're interested it becoming financially independent. There are lots of financial advice books, this is one of the better ones, and the advice is straightforward. It doesn't involve learning option trading or real estate hacks.

reaperducer 8y ago

a very strong taboo against lending friends or family members money for any reason. This is true. I think we got it from the British. Hamlet: Act 1, scene 3: "Neither a borrower nor a lender be, For loan oft loses both itself and friend, And borrowing dulls the edge of husbandry"

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mrep 8y ago

> There is a very strong individualist streak in American culture and a very strong taboo against lending friends or family members money For friends and extended family, I agree. However, most people I know have borrowed from their parents for things like their first car or the downpayment on their first house if they need to. Is that not normal?

whatshisface 8y ago
In including "circumstances of birth," the parent is implicitly making a division between friends/near family and immediate blood family. Americans usually are willing to help out their direct descendants, often willing to help out their parents and grandparents, and rarely if ever willing to loan money to a nephew or college buddy (more than $50). The reasoning behind this is that business relationships can become incredibly sour, and "never seeing them again" is a pressure release that exists among strangers in New York but not among close family or best friends.

logfromblammo 8y ago

If I ever loaned my family money, I'd make them sign a secured, transferable note and then sell it off as quickly as possible. I'd rather extend a monetary gift without any expectation of repayment. Any money-related issue is bound to sour relations with your family sooner or later. Business partners that fall out can go their separate ways, but when your sister-in-law cheats her siblings out of their shares of the estate--because she opened the account for her Mom, and it was a joint account, just in case something happened to her--that brews some resentment. Loans make you involved in the borrower's business, and when things so bad, you need to be able to exercise all your options. Your lazy brother-in-law probably isn't going to prioritize making the loan payment to you over buying a new snowblower, or whatever other toy. Your sleazy brother-in-law might just default, claim your loan was actually a gift, and all but dare you to sue him. So it isn't just that there is a taboo against lending, but there is an insufficiently strong tradition of honoring personal commitments and sacrificing of one's self for the sake of the family.

skookumchuck 8y ago
The way to make loans to family and friends is straightforward. Make a small loan. If they pay it back, then loan larger amounts. If they don't pay it back, you have the perfect excuse to never loan them any more.

vram22 8y ago

>It's not (just) that most Americans feel these jobs aren't worth their time. There is a very strong individualist streak in American culture and a very strong taboo against lending friends or family members money for any reason. Interesting. Never heard of this before. Why do you think it is so (the taboo)? (I read some replies to your comment below, just want to see if you think something different).

Timmah 8y ago

Another important difference is the free-labor-from-your-kids benefit. From what it appears, Indian families are more cohesive and their kids are less rebellious (at least 1st generation). I'm aware there are also American children who work in their parents small businesses, but I think they are more likely to demand compensation.

brightball 8y ago

> taboo against lending friends or family members money for any reason. It's less taboo than years of hearing stories of ended family relationships where money was loaned and then abused, mishandled, wasted, etc without any intention of paying it back. I've heard these types of stories my entire life.

erikpukinskis 8y ago
Yeah, money is the number one reason marriages break up, and I have seen the same happen to siblings.

Shivetya 8y ago

I would have put it more at not about lending them money but the strong desire to strike out on their own. plus throw in sibling rivalry where culture tends to put self first and family second. there are communities within the US which still lean family first but they are not common in the cities

skookumchuck 8y ago

I believe Gates started Microsoft with a $5000 loan from his parents. Not that "immense".

dman 8y ago
$23,420.63 in todays dollars. [http://www.in2013dollars.com/1975-dollars-in-2018?amount=5000 http://www.in2013dollars.com/1975-dollars-in-2018?amount=500...]
- skookumchuck 8y ago
  I.e. the price of a modest new car. Hardly "immense".
  - st26 8y ago
    My parents bought a car for me to drive back when I was a teen. It cost $900, not $25,000.
    - skookumchuck 8y ago
      I wrote "new" car.
    - skookumchuck 8y ago
      The average price of a new car in 1975 was $4,960. http://www.autonews.com/article/19960626/ANA/606260830/1975-car-prices-brought-sticker-shock-then-rebates http://www.autonews.com/article/19960626/ANA/606260830/1975-...
argv_empty 8y ago
What valuation do you give his mother's influence over the board at IBM?
- skookumchuck 8y ago
  It's unknowable. But keep in mind that Microsoft was already established and very successful at the time, and Gates was a very astute and aggressive businessman. IBM went to Digital Research first, and Gary Kildall suggested they check with Microsoft. Microsoft was the biggest player in microcomputer software at the time. Why wouldn't they check? And how much credence would IBM give a mom (who had little knowledge of computers and software) who suggested checking out her son? Lastly, the accounts of her advising IBM to use her son's company are not verifiable. IBM went to Gary Kildall first.

Spooky23 8y ago

Americans want less risk, and fiscal policy drives consolidation. Hotels aren’t a Business that requires immigrant labor because it’s undesirable —- it’s a business that needs capital and SMB are starved of capital. Many Americans come from a cultural background where there is shame involved in talking about money and doing business with family, and prefer dealing with institutions.

la6470 8y ago
What is American??? There are many kind of Americans some of them are Indian Americans
la6470 8y ago
These people in TFA are also Americans - not white Americans but Indian Americans

erikpukinskis 8y ago

> There are plenty of American families who have relations who could easily help bootstrap a profitable small business in the way described here The problem is a lot of those business aren’t vetted. How do you know if anyone’s going to eat at Uncle Ned’s crab shack? These motels are more like new franchises than a startup. They’ve already been partly de-risked.