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Tocqueville Letter to a Chinese “Little Emperor”: It’s Nice to Be the King, but Not Always Easy

In his latest piece, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, imagines writing to a privileged child of the “new” China, comparing such a child’s coming-of-age with his own, in booming post-World War 2 France.
He goes on to discuss “the curse of early money,” and the pitfall it can cause for friendships and for personal development.
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Tocqueville’s Sicart: Letter to a Chinese “Little Emperor”: It’s Nice to Be the King, but Not Always Easy

I recently published a “Letter to My Grandson” which, by our readership standards, was a huge success with the parents and grand-parents of “twenty-somethings.” However, it elicited no response from young readers, which prompted my friendly editor Carey Horwitz to suggest that I should break that letter into small pieces and broadcast it as thirty separate “tweets.”
Nevertheless, I know many parents of Chinese youths and, building on a variety of anecdotes, I decided to press my luck and write this letter to a Chinese “Little Emperor.”
* * * *
Dear Jun,
You are part of a privileged generation of single children in China who have been so lavished with love and care by their parents and grandparents that they are often referred to as “the little emperors.”  While it is nice to be treated as “the sun around which the household revolves,” many elders complain, as one kindergarten director did in an interview:

Kids these days are spoiled rotten.  They have no social skills.  They expect instant gratification.  They’re attended to hand and foot by adults so protective that if the child as much as stumbles, the whole family will curse the ground.  (Fortune, October 4, 2004)

Obviously, many young Chinese are hard-working, ethical, and respectful. But perceptions count and generalizations tend to shape public opinions.
Fortunately, let me reassure you, complaints against the young are not new.  As early as the fifth century B.C., the Greek philosopher Socrates is reported to have complained:

Our young people like luxury, have bad manners, disregard authority, and have no respect for their elders.

Pretty much every generation since then has had similar grievances against the young, so it does not mean that your generation is necessarily worse than any one before it, including mine.

Stories Apart but Parallel

As an introduction to this letter, I would like to draw a (necessarily partial) parallel between the experiences of my generation in Europe and yours in China.
I was born in France too late to remember World War II, which ended in 1945 and had been a very painful experience for my parents, especially following the lean economic years of the Great Depression.  My father was called into the French army three times before later having to migrate to the south of France, supposedly a “free zone” unoccupied by the German army.  Eventually, my parents had to hide in a small town in the French Alps.  Families were torn apart, food was in short supply, and work was difficult to procure.
After the war, however, there was an economic boom.  It was needed to reconstruct the French economy (as well as those in most of Western Europe), and was largely financed by the American Marshall Plan.  To me and most of my friends – who carried few memories of wartime hardships, let alone the Great Depression – life seemed easy.  Most of the French people who, during the war, had either sided with the General de Gaulle’s government-in-exile or joined the Resistance, were offered the best jobs and official positions; they tended to do business with each other, within their circle of former comrades-in-arms.  Not all of them became billionaires (a word that did not yet exist), but most attained a very comfortable lifestyle.
Since they were all busy making the most of the economic boom, they worked very hard and had relatively less time to raise their children.  To compensate, they poured a lot of money into showering them with presents and luxuries that they had not been able to offer them during the war years.
My parents were wise enough not to spoil me quite as much as were some of my friends, but I remember a comfortable life, with cooks and nannies, ample pocket money, nice vacations, and lavish parties at my parents’ and their friends’ homes.
With such examples and experiences, no matter how hard one’s parents are working, a child cannot help but get the impression that their achievements have come easily.  He or she sees only one side of the coin, assuming that equal or greater success and enjoyment will come at no pain and with no great effort.  I was no exception.
While it happened against a different backdrop, your experience has not been that dissimilar.  Thanks to reforms inspired or forced through after 1978, but particularly after Deng’s Southern Tour (1992), China has experienced a historically unprecedented economic boom that basically covers your entire memory span.  Before that, however, China had experienced wars, infighting, famine, and the traumatic Cultural Revolution – all episodes that must have been extremely painful for your parents, but that you probably remember dimly at best.
So, when the country’s entrepreneurial spirits were released, your parents – like mine in the 1950s and 1960s – took advantage of the newly available opportunities.  Their successes may have seemed to come easily, but they surely necessitated much hard work and sacrifice.  The other side of the coin is that they probably spoiled you with all the things they could not afford when they were young, only partly compensating for the time they could not spare.
I am sure that many details of our experiences differ.  But basically, we belong to two generations that have had it easy and probably have a tendency to underestimate the hard work that our parents have had to put in, and the obstacles they have had to surmount, to be able to lead the lives that they (and we) now enjoy.  Our parallel stories, and my subsequent observations as adviser to three generations of wealthy families, give me an excuse to offer you some advice.

The Curse of Early Money

My own experience dealing with the children and grandchildren of my clients is that, while starting in life with ample money is an obvious advantage, it can also create obstacles to both achievement and fulfillment.
I will deal with fulfillment later; but in terms of deadening achievement, as measured by talent and motivation, I am not the only one to feel this way.  Turn-of-the-century steel baron Andrew Carnegie enunciated a “conjecture” that bears his name and is studied in universities to this day:

The parent who leaves his son enormous wealth generally deadens the talents and energies of the son, and tempts him to lead a less useful and less worthy life than he otherwise would.

Carnegie, the son of poor Scottish immigrants, built an enormous fortune and sold his Carnegie Steel Company for $480 million in 1901, which equates to $310 billion in today’s dollars.  According to celebritynetworth.com, this makes him the world’s 4th richest man of all time in inflation-adjusted dollars, ahead of such modern-day contenders as Bill Gates, Carlos Slim, Warren Buffet, and Jack Ma.  Convinced, like many American self-made billionaires, of the harmful effects of inheritance, Carnegie gave away or bequeathed the majority of his fortune to charity.
But early money does more than dull the motivation to work hard toward a goal:  In my observation, it also gives us the illusion that we are working very hard when others may actually see us as somewhat lackadaisical.
I did not quite finish my father’s story.  Shortly after I graduated from business school, his business fell victim to a fraud.  He used most of his personal savings to clean the business of its debts and closed it – proud but much poorer.  At that time he told me, “I am glad I gave you expensive tastes, because now you will have to work hard to afford these tastes.”
That was a perceptive analysis.  On a fairly good starting salary in New York, I, along with my new wife, could afford none of the luxuries to which we had become accustomed.  So, my father and Andrew Carnegie were correct:  We worked as hard as we could until we were able to afford our tastes – and probably a lot harder than if we had had the means to do so up front.
On the other hand, starting without a fortune brought me satisfactions that I had not imagined.  Every step of growing comfort to which we ascended became a very tangible reward for our effort and a milestone of our progress.
The myth that philosophers like to propagate – that the rich are necessarily unhappy in life – is grossly exaggerated.  Wealth is actually quite enjoyable.  But I have known a good number of inheritors, and what I have observed is that they usually are denied one immense pleasure: to finally afford some expensive goal after long dreaming about it.  The succession of such rewards constitutes one of the greatest joys of one’s lifetime, and you are denied that when, from the start, you can get instant satisfaction of all your desires.  A life without progression winds up being repetitive, dull, and unfulfilling.

Friendship and Money

Friendship is a very complex relationship; money does not make it any easier.  I am not even talking about fake friends: freeloaders or people who want to befriend you mostly in the hope of selling you something or of getting some benefit from your money, your power, or your connections.  I hope that you have enough common sense to recognize those people and keep them in their place, if not away from you altogether.
But large disparities in wealth also have a more insidious way of spoiling friendships.  Especially after a time, unless you pretend that you don’t have the money that you have (which is the path to an awkward life), there will be a natural tendency for others to feel that “you can well afford” any largesse of yours while any frugality might be seen as a sign of selfishness.  Keeping relationships true in the face of differences in wealth is a balancing act, requiring more effort than most people make before they can enjoy the reputedly “simple” pleasures of friendship.
Unless you decide to mix only with people exactly like you – not a very engrossing lifestyle choice, in my view – you will have to recognize that less wealthy friends can express their generosity in ways not measurable in money: time, personal attention, etc.  And, which is sometimes even more difficult, you may have to convince your friends that this difference in measurement is perfectly acceptable, and that they don’t have to keep an accounting of your respective levels of spending to match your generosity.
One thing is certain, however:  If you surround yourself with people attracted mostly by your lavish lifestyle, you may never know who your real friends are.

Dreams of Riches

Albert Einstein reminded us, “Not everything that can be counted counts, and not everything that counts can be counted.”  Yet it seems that our modern societies only know how to measure success in monetary terms – even for great artists or scientists, whose value to humanity is beyond such measurement.
What is even more dangerous is that, with the rapid flowering of major technologies in the last 30 years (from PCs in the 1980s to the Internet, biotech, and social networks), today’s generation of young adults is under the impression that all you need is an idea, some capital, and a quick IPO to become an almost instant billionaire.
In fact, despite a few very visible examples, most start-ups fail in the first two or three years.  It would also be wise to reflect upon the fact that most of the highly successful entrepreneurs did not succeed because they had easy access to family capital.  Rather, they had to struggle to raise the money needed for their first venture, which was part of their education as entrepreneurs.
Beyond that, even if a quick IPO makes you rich fast, you may be successful by today’s standards, which are entirely measured by income or assets, but you may not have built a legacy, such as an enduring business with products, customers, and employees – a legacy that will remain as testimony to your life’s work.
Bill Gates used to call his senior executives “volunteers.”  As early Microsoft shareholders, most were already worth more than a hundred million dollars back then, but still came to work every day, motivated by greater things than making a fortune.
One of my favorite books, The Hungry Spirit (Broadway Books, 1999), by former oil company executive, professor at the London Business School, and famous social thinker Charles Handy, starts thus:

In Africa, they say that there are two hungers, the lesser hunger and the greater hunger.  The lesser hunger is for the things that sustain life, the goods and services, and the money to pay for them, that we all need.  The greater hunger is for an answer to the question “why,” for some understanding of what life is for.

Handy suggests that once we have “enough,” which may be entirely different for each of us, the real question posed by the greater hunger becomes, “What would I like to be remembered for?”
The problem is that if your parents made a fortune, you can only improve on it marginally:  Even if you tripled the existing family fortune, for example, you would not necessarily feel three times richer or more successful.  The thunder from your achievement would already have been stolen by the achievements of the previous generation.
I believe that the solution to your generation’s predicament is to find a life avocation where your fulfillment and success will be measured in terms different from those of the generation that preceded you.  I am not arguing for a life of deprivation; there is no good reason why success cannot be achieved alongside wealth.  I am only hoping that your generation can find meaning and sources of satisfaction in a life mission that goes beyond purely quantitative measures.
Interestingly, I have received signals from members of your parents’ generation in the last few years that they are now thinking of ways in which they can give back to society some of the wealth it has allowed them to accumulate.  Maybe by finding a totally different career path and achieving a totally different type of success from them, you can contribute to that goal and at the same time initiate a rapprochement between generations.
My wishes accompany you in that search, and in the happiness and fulfillment it will bring you.
François Sicart

 

This article reflects the views of the author as of the date or dates cited and may change at any time. The information should not be construed as investment advice. No representation is made concerning the accuracy of cited data, nor is there any guarantee that any

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François Sicart

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