How Minorities Succeed
Some groups prosper, others don’t. But to blame capitalism, inequality or exploitation misses the mark.
Sean Jacobs, Hip Hop Republican, 5 August 2014
Having worked as a young professional in the South Pacific I’ve often been impressed at the commercial success of some minority groups. It’s clear some groups have, under far from ideal economic and political conditions, managed to build success and wealth from virtually nothing. In some cases this has happened in just under a generation.
In the late 1800s the British began shipping Indians to work as indentured labourers on Fiji’s sugar cane plantations. Life in these early years was tough – near suffocating humidity and grinding hours don’t suggest comfortable conditions or a bright future. But today the Indo-Fijian presence is visible in nearly all parts of the economy, from shop-fronts and taxis to the boardrooms of Fiji’s largest companies.
In neighbouring Papua New Guinea the circumstances of the Chinese population are slightly different but their patterns of economic success are similar. Rather than appearing in front-end services the Papua New Guinean-Chinese have generally enjoyed success in trade stores, gambling and real estate.
In both cases the first generation have worked hard so the next can prosper. Financial, medical or mathematical skills – obtained through formal education – ease the career path of minorities into respective professions as accountants, doctors or engineers. Affording formal education has been difficult but elements of thrift, sacrifice and wise expenditure have ensured opportunities remain within reach.
Over time the disparities between successful minorities and the rest of the population appear stark. But when examined broadly these trends are hardly new. Thomas Sowell, for example, who spent fifteen years researching and writing his trilogy on racial and cultural issues, ‘was struck again and again with how common huge disparities in income and wealth have been for centuries, in countries around the world.’
This is not just confined to the developing world. Today in the United States, for example, Japanese-Americans and Chinese-Americans enjoy incomes above the national average. As Edna Bonacich and John Modell point out in The Economic Basis of Ethnic Solidarity the first Japanese-Americans arrived on America’s West Coast in the late 1800s ‘virtually penniless.’ Within a decade, however, they rapidly immersed into entrepreneurial activity by forming trade-stores and farms. Other well-known global examples of strong minority business performance include the Lebanese in West Africa, the Chinese in South East Asia and Jews in Eastern Europe.
There are often two easy assumptions to make of this minority success. The first is that their wealth has arrived through exploitation. For example, Chinese businesses in the South Pacific countries of Tonga and the Solomon Islands are the first to be targeted when social tensions emerge. In more extreme terms Idi Amin’s purge of Uganda’s Pakistani and Indian minorities in the early 1970s was based on similar resentments and perceptions of inequality.
The second assumption is that capitalism propels these groups to do well while systematically keeping others down. In this sense capitalism is a ‘dirty word’ and viewed as an unequal game riddled with invisible ‘ceilings’ rather than a mechanism for mobility.
But the key question to ask is – what enables these groups to do well? Here there are many explanations pivoting around attitudes, priorities and behaviours that ultimately have little to do with race, income or background. In the early 1900s Max Weber, for example, suggested in his influential work The Protestant Work Ethic and the Spirit of Capitalism that elements of frugality, diligence and hard work were the source of commercial success against the rigid customs of Catholicism. Others like Margaret Thatcher have balanced these values with attitudes of ‘curiosity, imagination, ingenuity, application and risk-taking’ that ‘render a society more rather than less enterprising.’
It’s also noticeable that privilege features sparingly in the stories of minority success. These groups appear not only to reject their circumstances but adapt swiftly to their humble starts and encounters of discrimination. Exploitation or a lack of ‘access’ has, ironically, been harnessed to refine the pursuit of excellence in work, studies or business formation.
Unsurprisingly these attributes make capitalism a great deal more appealing. ‘To me,’ says wealth adviser Dennis Kimbro, ‘capitalism is not a dirty word, but it means that everything is for sale.’ Creating value, either through business formation or pursuing education, has enabled successful minorities to ultimately push through any perceived boundaries. If individuals are interested in wealth creation and upward mobility these traits are not only worthy of emulation but entirely possible.
Hey Sean, Kev (Leong) here – found your blog via Facebook. Great post btw. I just have one query: I think your premises are correct, though I just wonder to what extent is there selection bias when isolating the stories of successful minority migrant communities, if I can put them that way?
What I mean is, is that successful migrants are easy to spot (since they’re different to the rest of the community); also, the majority hears these success stories and makes assumptions about the wealth of the rest of the migrant community. This has been, in my opinion, the basis of resentment of say Chinese minorities in SE Asia. Everyone assumes all Chinese in SE Asia are rich, when the reality is that successful outliers are skewing the average, if that makes sense.
The upshot of my argument is that if there is bias in case studies of the sort I’m outlining above, then we may be drawing wrong conclusions from these case studies, if that makes sense.
Anyway I only pose this for argument’s sake though; I agree broadly with the premises of your article re: assumptions of exploitation and the ‘evils’ of capitalism. I think a more persuasive argument, in vogue with the current development economics literature, is that migrant communities brought with them more superior money-making ‘technology’ and used that to create wealth (that technology being running trade-stores, or access to capital not available to locals, or perhaps even values of thrift and or education like you outline above).
Thanks Kev. Appreciate your thoughts.
Obviously these attitudes, values and priorities don’t guarantee success – there are many poor minorities. But as a general rule I feel you’re much better off following what appears to have worked.
Good point re technology. I would say education and ideas could be classed as ‘money-making technology.’ And these things don’t always require formal education.