Hong Kong is where ‘old money’ can learn from ‘new money’
One of the anecdotes in E.M. Forster’s
involves whether it would be better to rent to a family rising from humble beginnings or a family of noble background fallen on difficult times.
As economic, social and legal environments change, different traits will present greater fitness. The “innerworldly asceticism” of Max Weber’s Protestant ethic, which is often associated with successful entrepreneurs in the Global North, has found its counterpart in a Confucian ethic and a Catholic ethic that don’t retreat from the world but focus on change, progress and overcoming.
With that in mind, one might ask whether what is colloquially known as “old money” – the business families of Japan, North America and Europe that rose during the 1900s – has anything to learn from the “new rich” of the developing world.
In my experience of working with family businesses from both the Global North and the Global South, I would summarise the differences as relating to blood, government and frontiers.
One of the starkest differentiating factors is openness to legacy-building along bloodlines. Old money families, however eager to send offspring to certain educational institutions, are not keen to bestow unearned riches upon their children.
The new rich of the Global South tend not to have such qualms. Privileges are to be passed down without reticence as the royals of 1700s and 1800s Europe did. While that can be problematic, it also points to opportunities old money is missing.
Who better to run the family business than someone trained from early childhood for the job by the most competent person there is for that role, namely the CEO, who passes on his or her informal knowledge as well as personal connections? And if the best person for the job happens to be part of the family, why hold it against them?
Second, government. For perhaps the same reasons that nepotism is looked down upon in the Global North, so are government connections. School ties, university friendships and family linkages are important but not flaunted. In the Global South, not only are government contracts openly sought but government linkages, political connections and other advantages are sought as simply “business”. Old money might wish to take a leaf out of new money’s book and fight without the white gloves.
This is not an invitation to corruption or the like, but a plea for treating all business opportunities seriously.
Third, frontiers. New money tends to aggressively seek new markets. Businesses in the Global South are simply used to dealing with the issues faced in frontier markets. It is understood that demand will be met one way or another – and one’s personal feelings about it will not make a difference.
Hong Kong, being a hub for both old and new money, could be the place where brainstorming on how old money can reinvent its approach takes place.