on financial security

Recently I have moved out of google inc and joined jd.com. This afforded me some precious opportunity to experience both oriental and occidental cultures in depths. One thing I started thinking about is which side is the future of humanity. This is a pretty heavy topic that I cannot be completely unbiased on given my ethnic upbringing. Today I would like instead to elaborate on a small sliver of the subject, namely financial security.

There was a recent film that came out called “crazy rich asians”, as I learned on NPR. I haven’t bothered watching it. But the title caught my attention. Why are Asians known to be filthy rich? There was a story about a Beijing retiree who got hospitalized for pneumonia during the smog winter season, whose medical bill eventually cost the family all their wealth, including 2 apartment homes they owned, and all savings. By American standards, that family is already pretty well-off, at least a middle class family. On the other hands, most Americans don’t have much savings, and yet seem to live a reasonably happy life of 80 years. In China, life insurance is recently gaining popularity, because employers rarely offer coverage. From that extreme story, it seems medical bill can easily consumes a middle income family’s entire saving. The social safety net is fragile, even though normal hospital visit is much cheaper than the US.

Is US a socialist country then? By no means. But US does have better environment and much lower popularity density, even in money hubs like the Bay Area. The living space generally feels less oppressive. Financially hospital bills can usually be forgiven, unlike college loans. There are probably fewer superbugs than in China. That made up for the net worth difference with Chinese middle class.

Living in a financially stressed environment is not just bad for personal satisfaction, it affects people’s ability to do honest work. Recently NYU is giving all its junior and senior medical school students free tuition, saving each student about 200k total. I think a big ¬†motivation is that medical students have to carry their debt into too many of their productive years, usually something like age 40, before they can breathe freely like other professions. This naturally leads to prioritizing money over satisfaction from their actual job. Corruptible behaviors easily result, such as getting paid to use certain drugs, a practice that’s common in both US and China, and being ultra-conservative (to the point of being useless) in diagnosis to avoid lawsuits. The latter is arguably universal rational behavior, but having peer doctors who went through financial distress can only make one even more cautious. After all doctors should aim for both precision and recall.

Providing a social safety net is not easy, even in a country like US. Cultural tradition plays another important role in how much one values money. In more advanced cultures like China or Jewish societies, people have grown used to the importance of money as a universal measure of success and safety, so that all biological resources tend to be devoted to its accumulation. In other words, the threshold for reaching a psychologically safe level of net-worth or income is much higher than other societies. The social cost of this is obvious: people require hoarding a much larger portion of the collective wealth in order to function properly in their roles. Such momenta can catapult certain exceptional individuals into the rank of billionaires, at which point their rudimentary yet critical functions as individual contributors in labor production inevitably get replaced by management or other leveraging roles. Thus it is very rare to find highly paid individual contributing software engineers or scientist in China. Outside google it is also rare even in the US, but I at least know quite a few individuals. All of this hierarchical spiral of productivity death is attributable to how society distracts its members from money. Christianity, academic pursuit, etc all played important roles in this distractive effort. Equally important is the ability of the society to grant its members the free will to pursue a subject of true interest, rather than based on planned economic need. Of course not all career paths should be equally profitable, but there should be a sufficient variety of them each of sufficient quantity, that can meet basic living standards free from existential worry. This is currently absent in China, and arguably also in the US, such as liberal arts majors. Perhaps the ultimate direction is for everyone to have leisure for two careers, one making serious money, another for pure personal interest. Those who truly excel at the latter should be rewarded to pursue one exclusively, while the amount of time allowed to spend on the latter should not be pro-rated by the profit it generates.

About aquazorcarson

math PhD at Stanford, studying probability
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