Hacker News Reader

Comment by forthwall | Hacker News Reader

This article seems to establish that kinship leads to the failure of wage growth and ultimately wealth, people will hide their wages because people will ask for money. This seems like the issue rather is is that wealth accumulation in sub-saharan africa is limited to a small subset of population, I don't think this wealth tax by family members exists when you have a larger group of individuals making more money.

You can observe this in the US, and presumably in the rest of the world, when wealth is concentrated to individuals, your family will probably ask you for money. The difference is here, there is less income inequality and more people have the ability to make more money.

I do like the look into funeral culture, but I don't think this assumption that kinship and family-peity is the cause of the lack of economic mobilty.

View on HN

The difference is that it's pretty acceptable for you to reject family requests for money, it doesn't make you a pariah and being a pariah doesn't carry the same consequences when non-family institutions govern society.

The article spends a lot of time belaboring this point: you don't have to do what your family asks you to do in developed countries. On the other hand, becoming outcast from your family in a kinship-dominated society means you have nowhere else to turn to which is enormous pressure.

The article's description of kinship sounds a bit like family based governance and taxation. Only with say a western government their enforcers will happily imprison anyone not giving what the government ("kin") says is owed, and those who resist being violently dragged jailed typically find a fate even worse.

The western version then of being a pariah for not paying up is violence rather than ostracization and shame. Of course until you get rich enough that you can corrupt the government itself.

> with say a western government their enforcers will happily imprison anyone not giving what the government ("kin") says is owed

Big difference between taxation and patronage is when the rules are known. You generally know ex ante what you should owe in taxes. With patronage, if you have a windfall, the rules adjust to require you give it away.

in a kinship-dominated society means you have nowhere else to turn to which is enormous pressure.

Also enormous abuse.

Lots of people lament loss of family ties in western society.

But they completely ignore amount of abuse that comes with power of:

„you have no one else to turn to, stay with your family, we will beat you, rob you, but family is important”.

Corinne Hofmann is a Swiss woman who married a Kenyan Samburu warrior named Lketinga Leparmorijo and had a daughter. She opens a shop but they lose money because Lemalian gives too much credit to friends and neighbors, and because they have to pay bribes to the mini-chief. Lemalian argues that this is no problem because she has more money in Switzerland. The mini-chief demands that Carola hires his teenage nephew as a shop assistant. She has to accept this although she does not need him and he does not work hard. After some time, when he is just drinking beer and not working, she fires him. Later he returns and attacks her. A local judge rules that she has to pay two goats for firing him, but the boy's family has to pay her five goats to compensate for the attack.

Ghana's GINI index is only a couple points higher than the US (43 vs 41), and the same as Mexico.

I don't think wealth inequality explains this at all. But what rigid social institutions of any kind tend do is inhibit mobility. Moreover, kinship groups like this tend to lock-in relative wealth by lineage--the wealthiest family of a kin group from 3 generations ago will be much more likely (relative to other cultures) to be the wealthiest family 3 generations from now. Greater mobility means productivity increases faster, which raises absolute wealth for everybody even if relative wealth disparities across the entire population remain constant.

> even if relative wealth disparities remain constant.

Relative wealth disparity increases as absolute wealth increases because below a minimum level of income people starve. IE you can’t make 1/10th the median wage in a subsistence economy long term you just die. But a homeless person can survive for decades in the US on ~500$ a month.

Does this effect have a name? I wonder how you'd adust for it in a modified GINI metric.

> IE you can’t make 1/10th the median wage in a subsistence economy long term you just die. But a homeless person can survive for decades in the US on ~500$ a month.

There are two things I'd like to know more about for this:

1. Is the homeless person doing their survival in an area with a markedly lower median wage than the median wage their income is being measured against? (i.e. is "1/10 the median wage" an illusion created by including foreign communities in the 'median wage'?)

2. Is the homeless person's low income measured by excluding their income from in-kind handouts ("someone kind bought me a sandwich") and foraging ("I found a pizza in the dumpster")?

2) This was more a hypothetical argument than an analysis of a specific individual. Humans survived before electricity let alone AC. They can’t survive without food. What’s the minimum someone can meet the basic needs for survival paying market rates?

But the argument still stands if you want to raise the minimum in the US to 1,000$/month to account for hidden value and require shelter. 8 people sharing a 2BR apartment is very much a thing.

I don't think social factors are not necessarily a nonfactor, more that this article claims that income equality within kinship groups is a forcing function for lack of economic growth. My claim is that the inequality that these countries face not just between each other within the nation but in our globalized economies, access to resources, capital and labor and thus the downstream effects of smaller markets, less need for labor will lead to less growth. I think you can have economic growth with kinship society if more people within the kinship have greater access to wealth growing, the issue here is that there's limited resources and the kinship society exists as an effect of less resources than the other-way around

> the wealthiest family of a kin group from 3 generations ago will be much more likely (relative to other cultures) to be the wealthiest family 3 generations from now.

I am not sure if this claim is true as well, wealth generally does stay within family lineages across cultures, generally people losing their wealth or even gaining it is an outlier. See any landed gentry in Europe, Asia

Actually; you can see this in America, as income continues to be more concentrated, and more unequal, economic productivity for an individual does go down as there's less opportunity to accrue wealth as before.

> I am not sure if this claim is true as well, wealth generally does stay within family lineages across cultures, generally people losing their wealth or even gaining it is an outlier. See any landed gentry in Europe, Asia

Your examples tend to prove the effect of kinship structures, which were much stronger historically across all cultures, especially outside NW Europe (where nuclear family dynamics go back millennia, which some people argue is not merely coincidental with the emergence of the Enlightenment and the Industrial Revolution).

The relevant question isn't whether wealth stickiness exists, but the magnitude of the effect and how it changes.

Kinship groups can absolutely be useful and beneficial, but as a rigid social institution it can also take on a life of its own, as for any social institution. We can't have meaningful discussions about this stuff without understanding magnitudes and context, otherwise its too easy to cynically equivocate.

I think author's point is that wealth drives investment which drives economic growth. In the case of lavish funerals - warranted in kinship societies - the wealth is spent on relatively unproductive investments bearing high opportunity cost. The corollary and author's secondary point is the ineffective resource allocation e.g. through nepotism.

My main (oversimplified!) takeaway from the article is that kinship societies prioritize inherently local processes that inhibit global processes. For example, they prefer keeping internal cohesion through ritual celebration rather than maximizing economic upside through education and specialization. This makes sense - the latter requires a higher degree of trust and stability. Increasing the degree of trust and stability seems to be an evolutionary process. I found Jared Diamond's Guns, Germs, and Steel [1] to give some amazing insights about this.

[1] https://www.goodreads.com/book/show/1842.Guns_Germs_and_Stee...

Guns, Germs, and Steel is a famously awful book.

Anyway, another lens to look at kinship relationships through is as a resilience strategy to volatile conditions. Any given stress (drought, job losses, etc) are unlikely to affect everyone equally, so the network functions as a safety net under many conditions.

Venture capital applies a similar strategy in the other direction if you squint a bit. It's impossible to predict who will succeed a priori, so the capital is spread to many different bets simultaneously in the hope that the successes outweigh the failures over time. Many of the "rituals" in the VC ecosystem (ghost hiring, puffery, fad chasing, etc) aren't particularly useful for any individual company's success, but I don't think many people here on HN are going to argue it's not economically effective as a whole.

This is the most insightful comment in this thread. Unfortunately Oks decided to use a clickbait title that made people jump to conclusions.

Sure, wealth accumulation is limited to a subset of the population there, but this is true everywhere. The reasoning error here is thinking in terms of absolute incomes across the group, rather than the relative incomes of the members.

Yes, people in the US make more money, on average, than the average Ghanaian, but the relative incomes of a family are just as disparate as those of Ghanaians. If someone in the US gets a better job, the whole family doesn't suddenly also get better jobs.

This is why the kinship system is so economically counterproductive: The collective expectation effectively levels everyone down; any individual who begins to accumulate wealth faces pressure to redistribute it across the group. Nobody can grow their fortune, because that requires both having some fortune initially and being able to make investments that compound it. If the kinship group makes sure your fortune can't increase, any compounding you manage to do doesn't matter, because the initial capital always stays small.

It seems this only matters in economic systems with compound interest, like capitalism.

In gift economies, all these distinctions are meaningless. The bounty of a funeral would be a direct representation of the deceased's popularity (likely established through their generosity) as well as their family's ability to convice people to e.g. spend time making s beautiful coffin, bring food, play music.

The economies mentioned in the article are capitalist economies.

Yes, the State economy is capitalist, but the family groups are clearly operating under some kind of Communism. The article itself mentions it - "nothing you own is actually yours, everything is owned by the family." Thus wealth accumulation not really being possible, a hallmark of a communistic economy.

This is my experience with extremely rural areas or tightly knit / kinship / indigenous cultures as well. They happen to live on territory within a given State that's inevitably capitalist because the entire world is, but take a closer look and you'll realize it's almost an entirely different country within the village. A local example to me: everyone assumes the tribal leaders of Taiwanese indigenous towns are super wealthy landowners because their name is on every lot and house in the village. The reality: the villages own everything in common, and when government officials show up asking who owns what, the villages don't really know how to answer, so the government official then asks "ok well who's the leader?" And then getting that answer, just puts that name down for everything.

Edit: oh I see what you mean, right now, people are using cash to pay for e.g. the DJ. Yes, probably true because it's literally costing them money. My point there was that it's possible that an older tradition from a pre capitalist system that worked fine then is not compatible with how capitalism works. Many things aren't.

> My point there was that it's possible that an older tradition from a pre capitalist system that worked fine then is not compatible with how capitalism works. Many things aren't.

Oh, yes, agreed there. I can imagine that these communities were very insular in the past, so there wasn't really anything to own that wasn't what they could immediately see and touch around the village. Then again, there wouldn't be a need for this ritualistic spending back then, so the spending seems to be a direct reaction to capitalism arriving to these societies.

A herd of goats and an apple orchard both exhibit exponential growth in production, to the limits of the supporting land (which admittedly may be reached rather quickly). Indeed this is the origin of interest: I lend you my goats for a season and expect to get back a larger herd. The argument that non-capitalist economies can't have exponential growth from investment is a non-starter.

Good thing nobody made that argument! My argument was that you can't hide goats.

> to the limits of the supporting land

Exactly, under capitalism, "limit to growth" means "maladapted." Only things that grow forever are considered successful under capitalism, even if that growth is to the detriment of humans, society, the environment, laborers...

Whereas outside of capitalism, things may grow, to an extent, and then achieve homeostasis.

This "tradition" isn't possible without refrigeration technology to delay the burial. It is a modern aberration.

> economic systems with compound interest

You mean like reality? The power law exists. Runaway growth is natural. Or would you claim that planets and stars are secretly capitalists?

This is stretching a metaphor way beyond anything plausible. Fusion in a sun is a positive feedback loop therefore... Compound interest is natural?

It's not even a good metaphor since a star is mostly a stable system. The better metaphor for human economic systems is life itself, and in life, positive feedback loops lead to things like ecosystem killing algae blooms or cancer.

Infinite growth through positive feedback loop is natural, exponential decay is natural (radioactive decay), but the thing that supports life best is homeostasis. In which case this culture's tendency to prevent wealth hoarding is actually long term the better solution than capitalist endless wealth accumulation.

This is mostly just capitalist normativism. In reality capitalism is young. Describing it as a natural order of things is like a kid born in 2002 calling TSA in airports a fundamental reality, after all, you can't have airports without TSA!

Strong extended kinship ties are associated with less economic prosperity all over the world, it just in Africa but Pakistan, the Middle East, etc.

There is a plausible argument that it’s causal. Europe had weaker kinship ties—for various reasons, including the Catholic church’s ban on cousin marriage—back in the middle ages, before Europe began pulling away from the rest of the world in terms of GDP per capita. Even within the U.S., communities with weak kinship ties (e.g. Northeastern Anglo-Protestants) are more economically successful than communities with stronger kinship ties and clan structures (e.g. Appalachians).

Arguably, more atomized societies with weak kinship ties foster the development of civil institutions and governments to compensate for the social structural functions that would otherwise be performed by kinship networks.

> There is a plausible argument that it’s causal. Europe had weaker kinship ties—for various reason

Explain China[1] and its steep ascent, blowing past all European countries, and soon - the USA.

1. Or India, to a lesser extent. There's a lot of recency bias when it comes to economic outcomes, as if we're at the end of history. I'm guessing at least one 19th century British industrialist/gentleman probably praised their Anglo-Saxon heritage and the Protestant (Anglican) faith as necessary ingredients to national wealth, as opposed to the fallen Catholic empires of Spain and Portugal, or the heathens in Africa, the Indo-Pacific, the Middle and far East.

> Explain China[1] and its steep ascent, blowing past all European countries, and soon - the USA

The communist party broke down traditional family structures, and replaced kinship ties with the state. To the point of massive intervention in family formation itself, through the one child policy.

It’s not about Anglo-Protestantism per se, but about a general progression towards atomized societies with weak family bonds. Multiple different cultural changes pushed in that same direction. Protestantism was one, but before that so was the Catholic Church: https://news.harvard.edu/gazette/story/2019/11/roman-catholi....

> China and its steep ascent, blowing past all European countries, and soon - the USA.

China's GDP (PPP) is somewhere around $30k, depending on whose numbers you like, which does beat such lighthouses of Western capitalism as Albania ($25k) and Ukraina ($20k but they also have a good excuse), but isn't in any obvious danger of "blowing past" the likes of Serbia ($35k) and Bulgaria ($45k), much less the USA ($90k).

Oh, my bad - I didn't realize there were so many super-powers in Europe that the US considers peer adversaries. I suppose this century will belong to the Serbians then! The Big Mac index is what truly determines a country's trajectory.

I'm kind of astonished that you think this, there are lots of studies about intergenerational economic mobility in the USA compared to other places.

https://www.chicagofed.org/research/content-areas/mobility/i... for instance.

https://www.mdpi.com/1660-4601/17/4/1179

Anecdotally, I can also attest to it. I know lots of "finally successful" folks who end up spending their wealth keeping their siblings and extended family afloat. There's no real safety net for them in the USA.

> This seems like the issue rather is is that wealth accumulation in sub-saharan africa is limited to a small subset of population

At one time I lived in a predominantly black community in mosside Manchester UK. I witnessed these kinship based rules often in daily life and even overheard conversations by and about those members of the community who succeeded, left and didn't 'pay back their obligations'.

This was deeply striking at the time and until I read this article I've never seen anyone highlight it. But it's something I think about often.

So I don't agree that this doesn't happen in the rest of the world. It's a cultural thing not a capitalism thing.

Reply on news.ycombinator.com