Gold, Gresham's Law & the Dong - Culture and the (Monetary) Value of Things
From: Dien Nguyen
Date: Fri, May 6, 2011 at 6:15 AM
To: Vietnam Studies Group <vsg@u.washington.edu>
This is quite interesting for an economics illiterate such as myself.
Nguyen Dien
Independent Researcher
Canberra
Gold, Gresham's Law & the Dong
Posted Wednesday, May 04, 2011 -
The Daily Reckoning
What happens when people actively shun their official currency…?
Governments are often tempted to live beyond their means. Today, that means national debts and quantitative easing. But a few hundred years ago, it meant debasing coinage.
Silver and gold coins would be 'clipped' - with a tiny quantity of their metal shaved off the edge every time they passed through government hands - or they would be minted with a lower precious metal content than their face value stated. This would enable the monetary authorities to produce more coins for the same amount of bullion, increasing the government's spending power in the marketplace.
The net result was that coins with identical face values did not necessarily hold the same commodity value. And this often led to a rather interesting phenomenon. When people knew there were both 'good' and 'bad' coins floating around, they tended to spend the bad and hang onto the good. Before long, all the good money disappeared into hoards. The only money in circulation was bad money.
This is known as Gresham's Law, named after the sixteenth century financier Sir Thomas Gresham. In its most simple form, Gresham's Law is often stated as "bad money drives out good money", and it's no mere historical curiosity. Gresham's Law is alive and kicking today in many countries all around the world.
Vietnam provides a textbook example. Vietnam's economy uses three different forms of money today. There is the official currency, the Vietnamese Dong. There is also the US Dollar, which Vietnamese people tend to trust a bit more. And then, there is gold.
Gold is a big deal in Vietnam. The average Vietnamese spends more of each unit of income on gold than anyone else on Earth. Total gold buying amounted to 3.1% of GDP last year. (By comparison, private gold purchases amounted to 2.5% of India's GDP, while China's were a mere 0.4%.)
All told, an estimated 500 tonnes of gold - over $24 billion worth - is hoarded away in Vietnam, reckons Huynh Trung Khanh, deputy chairman of the Vietnam Gold Business Council. It's hidden in mattresses and buried in the garden. But gold is not just a store of value in Vietnam. It is also used as a medium of exchange. Which is why, in the day-to-day sense, it also functions as money.
In Vietnam you can put gold in a bank and earn interest. People quote house prices in gold, and pay for them with tael gold bars - each bar weighing approximately 1.2 troy ounces. This makes sense when you consider that Vietnam is a largely cash society. A single property can cost up to 4 billion Vietnamese Dong. That's a lot of paper to count and check.
But if the Vietnamese love their gold, the same cannot be said of the country's central bank. In recent years the State Bank of Vietnam (SBV) has issued several Decrees and Circulars whose combined effect - whether by accident or design - has been to undermine gold's official monetary role:
June 2008 - Gold imports banned (though smuggling continues);
March 2010 - All gold trading floors closed;
October 2010 - SBV issues Circular 22, banning banks from dealing with manufacturers and traders of gold bars;
May 2011 - SBV bans all gold lending activity.
The latest Decree is an attempt to end the practice of banks paying interest on gold (presumably in the hope that people will substitute their gold for paper). Up to now, banks have offered interest on physical gold deposits. They sell the metal on, lend the proceeds as Dong loans and buy an equivalent amount of gold forward from an international bullion bank.
This has been a profitable activity for the banks because domestic interest rates have tended to be high enough to cover both the forward rate and the rate they were paying the depositor. Essentially it was a carry trade; borrow gold (from depositors) cheaply, lend at a higher rate.
As of May 1, however, banks will be forbidden to undertake any gold lending activities. And from May 2013 they will have to stop paying interest on gold deposits.
This latter measure may largely be moot by then. As you might expect, with the lending channel blocked, there's no money in it anymore. Gold deposit rates have already fallen sharply.
So why all the rule changes? Well, the authorities see gold as a "bad influence" - a destabilizing factor in an already messy economic picture.
Consider the following problems afflicting Vietnam:
1) A Large and Growing Trade Deficit - The trade deficit in 2010 was around 12% of GDP. Even worse, it grew wider in the first four months of the year.
2) Rising Inflation - Latest figures from Vietnam's General Statistics Office show CPI inflation at a whopping 17.5%, despite a supposedly tight monetary policy.
3) A Falling Currency - The Dong has been devalued six times since June 2008. Most recently was February 11 this year, when it fell 8.5%.
Sound at all familiar? The way the central bank sees it, the propensity of the Vietnamese to buy gold also makes these problems worse. Gold imports exacerbate the trade deficit (it has no domestic mine output). Buying gold thus weakens the Dong, which puts upward pressure on inflation. Gold (and indeed Dollar) ownership also undermines the SBV's monetary policy, since its interest rates only apply to the Dong.
But you can hardly blame the Vietnamese people for buying and hoarding gold. Not when you remember that Viet inflation is running at 17.5%. In this regard, gold ownership is a direct consequence of economic conditions. The only way the SBV could provide Vietnamese with an incentive to save in Dong would be to raise the nominal interest higher than inflation, and thus provide a decent real rate of return. But this would mean rates of around 20% at least. Not only would this hit the domestic economy hard, it would almost certainly cause the Dong to appreciate, which would make the trade deficit even worse.
Unable, therefore, to directly incentivize people to hold paper money, the authorities have resorted instead to marginally disrupting gold's monetary function. But this won't work. People will still prefer to hold gold because the Dong is failing to fulfill one of the core functions of money. It is a terrible store of value.
That is why the Vietnamese continue to hoard "good" money (gold) while passing the bad stuff around. Just as Gresham's Law predicts.
Vietnam is stuck in an inflation-devaluation cycle. Ordinary people do not trust its paper currency, and sell it for something better. This reduces its value against other currencies. It also reduces its value against goods and services, which takes the form of rising consumer prices. All of which serves to make the Dong even less popular…
Could this vicious cycle ever strike the US Dollar, British Pound, or the Euro? Maybe it's already begun. Gold and silver prices have risen strongly over the last decade in all those currencies, and especially versus the Dollar so far in 2011. This tells us that many Westerners - just like the Vietnamese - are keen to swap their paper for metal.
If the Dollar and its paper cousins continue to leak value, savers will increasingly prefer "good money" like gold and silver. After all, it's Gresham's Law.
Regards,
Ben Traynor For Daily Reckoning Australia
----------
From: Thomas Jandl
Date: Fri, May 6, 2011 at 8:44 AM
To: Vietnam Studies Group <vsg@u.washington.edu>
Good article. One additional problem, though. Gold has no real use value in itself. It's worth only what people feel it's worth on the market. So gold will always go up (in bad economic times) and come down again. And when it comes down, many people who hoarded it instead of the bad money -- and many, many Vietnamese -- will suddenly be much poorer than they thought they were.
Since people spend money based on how wealthy they feel (the net wealth effect), this will depress spending. (The net wealth effect means that we go on an expensive vacation because our retirement account is in good shape, although that money is really irrelevant for us today and is fictitiuous stock market value that is subject to change.)
When that happens and the average Vietnamese reduces spending, inflation will tame itself, and there will be an impact on the trade deficit. In this sense, the market takes care of things. But there will be tears, because the market doesn't take care of the losers very well. _________________________________
Thomas Jandl
School of International Service
American University
----------
From: Balazs Szalontai
Date: Fri, May 6, 2011 at 9:01 AM
To: Vietnam Studies Group <vsg@u.washington.edu>
Theoretically, yes. In practice, the picture may need some further modification. In January 1998, during the Asian financial crisis, thousands of altruistic South Korean citizens went to the banks to donate gold in a government-inspired nationwide campaign to raise dollars. Their action was certainly based on the assumption that gold was worth on the market, but because they suddenly flooded the gold market, the international price of gold went down, rather than up. Capitalist markets have no heart, indeed. You get duly punished for you good deed.:))
------------------------
From: JKirkpatrick
Date: Sat, May 14, 2011 at 11:18 AM
To: Vietnam Studies Group <vsg@u.washington.edu>
In my view, the realities of gold markets don't stop Indians with money buying up gold and turning it into jewelry, which enhances its value because of the cultural factor: gold jewelry in south Asia has the highest prestige--it's a social status marker, whereas gold coins or bullion in the bank can't mark status because nobody can see it, and the hoarder doesn't want his or her raw holdings known to authorities anyway. For villagers, it's their capital. Because of gold's status value there, I would argue that it pays the villager to convert what he or she can to gold--jewelry or coins-- because there is always a demand for it. So it does function as a currency, it can be used to secure debt, it can be loaned at the highest interest rates.
Gold is the star of many a wedding--with the bride laden with so much gold jewelry that she can hardly stand upright as she has to walk around the sacred fire. This is the status declaration moment--the other moments are what women wear to others' weddings, child births, etc.
Recently the rich people of India reached the point where buying gold wasn't as satisfactory as a few decades ago-- with enough status, one devoted one's work to making financial capital , as in buying up industries, commodities, or labor--but still the gold price is always higher in India or Pakistan than it is here , and the price fluctuates less than here or elsewhere over time.
I'm not sure about VN or other southeast Asian countries, like Indonesia or Malaysia . The Thais seem to like gold jewelry a lot, but I have no idea if their sentiments and practices about it are close to India's. They are prolific with the gold leaf on Buddha images and pagodas.
Joanna Kirkpatrick
Film rev. ed.
Visual Anthropology
----------
From: Thomas Jandl
Date: Sat, May 14, 2011 at 12:25 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
No doubt, Joanna. But that is not the point of the original article about hoarding gold and what that does to the value of money.
You could argue that a Picasso should be worth ten bucks, some canvas and some paint. Of course, jewelry (applying skill) and similar alterations can change the value of a material.
----------
From: JKirkpatrick
Date: Sat, May 14, 2011 at 12:58 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
Hoarding gold is obviously a culturally variable relative situation in various of its aspects,
not a universal.
ONE of the points made earlier was that gold cannot serve as a currency--in India it often can and does.
----------
From: Jim Cobbe
Date: Sat, May 14, 2011 at 2:18 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
I think the disagreement here is purely semantic. 'Currency' is usually reserved for a money that is serving as a medium of exchange; gold obviously performs the money function of store of value, and frequently of unit of account, but very rarely nowadays of medium of exchange -- it is too 'heavy,' think how little gold one would need to buy an egg. So I doubt there is any substantive disagreement here.
On a related issue, I was told a few years ago by Hanoi residents that in real estate transactions between private parties (e.g. one family selling a house to another), the price would typically be quoted and agreed in taels of gold, but settlement would be in US dollars cash [requiring additional negotiation and agreement on the date and source for the price of gold, generally in VN Dong, and exchange rate of VND to dollars, in addition to settlement date.] Can anyone comment on whether that is currently accurate, or does wider possession of bank accounts mean that transactions are commonly priced and settled by bank transfer now?
--
Jim Cobbe
Department of Economics
The Florida State University
Tallahassee FL 32306-2180 USA
----------
From: Nhu Miller
Date: Sat, May 14, 2011 at 3:39 PM
To: jcobbe@fsu.edu, Vietnam Studies Group <vsg@u.washington.edu>
It is still the custom to use cây, l?ng, or lu?ng in buying and selling
houses, at least in non-commercial real estate. This is then priced
in regular currency and paid in ca$h. It's like having the solar
and lunar calendar when calculating dates. Vietnamese often
cite both as validation, just to be on the safe side.
T.T. Nhu
Berkeley, California
--
Nhu
----------
From: Frank Proschan
Date: Sun, May 15, 2011 at 3:04 AM
To: Vietnam Studies Group
For Khmu from Laos living in the U.S., marriage negotiations are carried out in terms of how many water buffalo, how many cows, how many silver bracelets, etc. the groom's family should provide, then - since water buffalo are hard to come by in a northern California suburb - everything is translated into dollars. Or, if the groom's family isn't able to provide the entire amount, how many years he should live under the father-in-law's roof to repay the indebtedness. But the negotiations should be carried out in terms of traditional units of value (water buffalo, bronze drums, etc.) and never in terms of dollars. There's nevertheless total liquidity and convertibility between these several forms of stored value, even if the exchange rate may also be subject to negotiation.
Frank Proschan
37 place Jeanne d'Arc
75013 Paris
FRANCE
----------
From: Michael Digregorio
Date: Sun, May 15, 2011 at 5:03 AM
To: Frank Proschan <frank.proschan@yahoo.com>, Vietnam Studies Group <vsg@u.washington.edu>
Frank,
When I was an economics student 20 plus years ago, I was lucky to have a professor who was inquisitive and a bit devilish. He had his classes read reports from the first IMF missions sent out to create National Accounts Statistics in what were then called underdeveloped countries. My favorite was the poor soul who had to develop a national accounts system for Papua - he had to calculate the value of stones, cowries, hornbill feathers..... of course my Prof. was trying to teach us that value (and hence "the economy") is essentially a cultural construct.
Mike
----------
From: Balazs Szalontai
Date: Sun, May 15, 2011 at 5:17 AM
To: Vietnam Studies Group <vsg@u.washington.edu>
Quite so. A prize Bombay cat for which an American collector would gladly pay a hefty price would hardly find a customer in Mongolia even at the price of a hamburger, since most Mongolian people have little love for any kind of cat, and even less so for a black one.:)
----------
From: Melanie Beresford
Date: Sun, May 15, 2011 at 5:52 AM
To: Vietnam Studies Group <vsg@u.washington.edu>
Of course value is a cultural construct, in the same way that the value of shares in General Motors or Exxon is a cultural construct. The statement is utterly meaningless unless you are going to tell me on what basis the dollar value of a water buffalo is negotiated in a northern California suburb. Is it the cost of bringing such a beast to California? is it the going price back home in Laos? Are brides commodities whose value can be measured in dollars? What is the exchange rate? Quite frankly, supply and demand have got to come into it somewhere - even if it is at second remove.
As for the Mongolians and the cats. It is quite clear that if there is no demand, the price will approach zero. You can tell that from any first year diagram.
cheers,
Melanie
Melanie Beresford
Associate Dean Research, Associate Professor in Economics
Faculty of Business & Economics
Macquarie University, NSW 2109, Australia
----------
From: Balazs Szalontai
Date: Sun, May 15, 2011 at 6:09 AM
To: Vietnam Studies Group <vsg@u.washington.edu>
If the value of cats is determined by their economic usefulness, then there should be a demand for such professional mice-catchers (officially: small mammal control workers) in Mongolia where rodenticide by extensive poisoning used to be widely practised but has been gradually abandoned lately. Still, culture seems to have overriden economics:))
----------
From: Chung Nguyen
Date: Sun, May 15, 2011 at 9:20 AM
To: Vietnam Studies Group <vsg@u.washington.edu>
Let me pose a different question which shows how much cultural values determine customs. In Vietnam and China (I'm not sure re: the cases of Japan, Korea, Laos, Cambodia, Thailand, etc.), the groom family for the most part pays for the wedding whereas in America (I'm not sure re: the cases of UK, France, Italy, Spain, etc.) the bride side foots the bill. The Vietnamese reasoning is most likely because his family gains a new member in terms of labor contribution, prestige, future benefits, etc. What's the reasoning for the American case? Certainly not because they are happy to get rid of one :)?
Chung Nguyen
UMASS Boston
----------
From: JKirkpatrick
Date: Sun, May 15, 2011 at 1:42 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
Thanks, Chung, for the chuckle.
For some time within the American bourgeoisie, the husband
supported the wife, and her labor was housekeeping and
childbirth, for which it would have been infra dig. to apply an
exchange value. (The very idea that women should be paid in cash
for their wifely household labors, first bruited by the early
feminists here, is still simply unthinkable.) The husband's side
was supposed to provide the house and the family income. Also,
let us not overlook that the father of the bride 'gives her'
away. In this case there was no bride price. However if the two
families were both very rich, various monetary negotiations might
ensue before the marriage because somewhere in the historical
background, the dowry idea was still in the clouds. Later, of
course, the law stepped in with pre-nuptial signed agreements in
case of divorce or separation.
In my grandmother's time, not very rich people still held the
idea that a woman would provide something in the way of a dowry
with such material objects as clothing, household utensils, hand
made bedding, and inherited furniture. Girls and women kept a
bridal chest of goodies to bestow at marriage. The 'bride's
father pays' marriage concept, far as I recall, was mostly
observed by white Roman Catholics and Protestants. I have no idea
what Latinos, Cajuns in Louisiana, African-Americans in the
south, and other citizens practiced with respect to marriage
exchanges. However, I suspect that in the USA, at least until the
marriage industry took over and it became homogenised and
commercialised, practices were flexible and variable.
I'm not sure about the origins of this custom (UK?), but I doubt
if Puritan marriages were burdened with such liabilities. The
whole thing suggests to me the after effects of economic growth
via industrialisation. Then there was, and still is, the gender
difference: men superior to women, rubbed in by the father of the
bride having to fork over the marriage expenses. Oh yes, we've
come a long way baby, but working women's incomes are still about
1/3d or more less than men's for the same work.
Perhaps someone on the list might know more about all this.
My 2 cents.
Joanna K.
VA
----------
From: Thomas Jandl
Date: Sun, May 15, 2011 at 6:19 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
Here is from today's NY Times, perfect fit for the early discussion, before the digressions:
In the article "Suddenly, Gold Isn't Looking So Solid," Gary Brinson, scholar and strategist, is cited as saying that commodities may not even be an investment asset class, because they don't produce any cash flow or earnings or dividends. "A bar of gold is just a bar of gold, [Brinson said]. It doesn't do anything. There's a market for it, sure, just as there is for, say, a work of fine art, and if you buy and sell at the right price, you'll make a profit. But if there's no cash flow, no dividend, no earnings, how do you calculate its intrinsic worth? Answer: You can't. It's not that kind of assett."
This goes right back to the early stages of this debate, before we muddled it with cultural values. Brinson just says it better than I did (the "intrinsic value" aspect I diodn't get across.)
The Vietnamese lust for gold causes bad money to displace good money, and that's a problem. And there is no redeeming (economic) value in it, because gold has only a market value, but no intrinsic one.
Thomas Jandl
American University
----------
From: JKirkpatrick
Date: Sun, May 15, 2011 at 7:30 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
About intrinsic value lacking in gold: if various social factors cause gold to rise in price, it does have temporary intrinsic value because it can be sold at a profit, like an equity stock. Stock prices also rise and fall, and so do their dividends. So if they have intrinsic value, it's not fixed although they always have some unless a company goes bust.
However gold is not the only commodity around. Oil companies like CVX or BP --all pay dividends.
Then there is the futures market. That is where precious metals do heavy trading and big profits can be realised as long as demand spirals upward--maybe not for gold, but certainly in metals needed by industry. China's needs for more of these is raising their prices, creating a nifty market for speculators.
So I can't take the idea of intrinsic value all that seriously. Capitalism and markets are based on boom and bust.
Joanna K.
----------
From: Thomas Jandl
Date: Sun, May 15, 2011 at 7:38 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
But that's what this discusses. An oil COMPANY has a value beyond the speculative, because they pay dividends, they have inventory, you can calculate a use value.
Gold, art and all other commodities, as the article says, have a market value, but no intrinsic value. You hold a Picasso and get nothing. If you have a museum, the MUSEUM makes a profit thanks to the Picasso. But the Picasso itself has a market value, but no intrinsic value that comes from its "work."
Futures markets and similar are casinos -- you bet on the future value of something. No use value at all.
----------
From: Melanie Beresford
Date: Sun, May 15, 2011 at 11:18 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
Surely Thomas, you are talking about the difference between the value of investment goods and consumption goods? I could get a lot of use value out of owning a Picasso (though I can't afford one), so it has your 'instrinsic' value.
Oil, on the other hand, does not 'work', people work to get it, process it and use it. Whether it has any value at all depends on those people and their needs. There have been cultures on this earth for whom oil had no value whatsoever - intrinsic or otherwise..
Melanie
----------
From: Jim Cobbe
Date: Mon, May 16, 2011 at 5:21 AM
To: Vietnam Studies Group <vsg@u.washington.edu>
This discussion is unlikely to ever come to an end, because gold -- like some other items, e.g. cattle in much of Africa -- is both an asset (in gold's case, even though it provides only use value, no monetisable earnings), and a commodity that has uses as an intermediate product or input into the production of other things -- lots of electronic components are dependent on gold or gold-plated connections to work well, and there are other industrial uses where its properties of extreme conductivity and malleability make it valuable. Other precious metals like silver and platinum are similar -- they are potential assets because they are 'valuable,' can be used in beautiful jewelry or other artifacts, but also have important industrial uses (not so long ago, the main use of silver was in photographic film). The difficulty with the market value of assets like gold that do not generate earnings except psychically to the owner is that the current price -- what people are willing to pay for it that generates the market equilibrium -- is determined either by expectations of the future price (which is how bubbles arise, people expecting rising prices to go on rising, although they obviously can't for ever), or at the floor by the demand generated by the 'real' (i.e. as industrial input) uses. We've known about bubbles for centuries (surely we've all heard of the tulip mania in the Netherlands) but unfortunately they still happen, as the US has recently been demonstrating. Gold may well be in one at the moment.
A brief comment on dowry versus bridewealth: I'm not an anthropologist, but I thought two important factors were (a) whether bride joined husband's family/lineage or vice-versa, and (b) the cultural issue of whether or not adult females worked beyond the house. In Southern Africa, where traditionally women and children were responsible for crop production, after full payment of bride-price the wife resides with the husband's household and the children 'belong' to the husband and his lineage (but before the completion of payment of the agreed bride price, according to customary law the wife is 'not yet married,' and any children 'belong' to her and her lineage), when women began to become more educated and work as teachers, nurses, etc, the bride-price tended to correlate with education (and thus the bride's expected market earnings ....)
Jim Cobbe
Professor of Economics
Florida State University
From: Thomas Jandl
Date: Sun, May 15, 2011 at 5:25 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
I have changed the thread because we have digressed quite some. And I just can't leave a discussion about value of a commodity to the anthropologists alone :)
Do cultural values really determine the value of a commodity, a product, an item? I suggest the answer simply depends on the angle from which one views the question.
Someone mentioned the value of a bride. Great example. Why do Indians pay dowry? The materialist explanation is that a girl was worth less, so in order to take one into the family, feed her, clothe her and all that, one needs to be compensated. Cultural values determine the "price" of a girl, or the value of a bride. (The exact monetary amount then is determined by supply and demand, ability to pay.)
This finds its continuation in selective abortion. With ultrasound, families can determine the sex of a fetus in time to have her aborted, thus avoiding the inconvenience and cost of rearing a girl. That, of course, has pushed the gender distribution way out of whack, and there is a marked shortage of girls now in many parts of India. As a result, families cannot find brides easily any more, and more and more ads show that make it clear that no dowry is required for a suitable bride, in stunning contravention of cultural norms, especially in high castes.
A bold prediction: If birth trends continue, we will soon see dowry (probably by another name) being offered by the groom's family. With the professed bias of a political economist, I thus challenge the anthropologists' account and claim: scarcity drives price, with cultural values only an intermediate variable.
I expect vigorous opposition.
Best,
Thomas Jandl
American University
----------
From: Balazs Szalontai
Date: Sun, May 15, 2011 at 5:38 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
You asked for it, you get what you deserve.:) In South Korea, such a scarcity did occur because of the (now prohibited) ultrasound-assisted selective abortions. Did bride prices go up? Not necessarily. A substantial number of smart, bossy and often unscrupulous Korean men started to import wives from Vietnam and the Philippines at what were, by Korean standards, below-market prices, and in exchange they often demanded such a subordination that present-day Korean ladies would be far less willing to tolerate than their predecessors. QED, Confucian male chauvinist pigs got once more (undeserved) chance.:))
----------
From: Tai, Hue-Tam Ho
Date: Sun, May 15, 2011 at 6:00 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
Hmmm.
Brides have dowries; grooms' families give bridewealth to the brides' families. In some cultures, the dowries may be retained by the brides and passed on to their children as they see fit (this is the case of Vietnam); often, the dowry takes the form of jewelry. In other cultures, the dowry becomes the possession of the groom's family (it appears to be the case in India--Joanna would know more about this)
In Vietnam, a man who could not afford bridewealth would live with their wifes' family for a number of years in compensation for the lack of bridewealth (I'd put in the Vietnamese term if I had the proper keyboard).
Hue-Tam Ho Tai
Kenneth T. Young Professor
of Sino-Vietnamese History
----------
From: Melanie Beresford
Date: Sun, May 15, 2011 at 6:13 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
Thomas, the reverse of the dowry is the bride price which is extensively used in other parts of Asia. It basically seems to mean that brides are a valuable addition to the husband's family's labour force. In the west we have until very recently used the dowry which is actually the price of a husband! Even when I was a kid there were informal remnants of dowry, though I think that with women's greater income earning power (outside of the family), the practice has pretty much disappeared.
Did these cultural practices arise due to a disproportion in the population? Did women so outnumber men in places like India and Europe, that dowry became the means of offloading girls onto another family? Was there always such a shortage of women in China or Papua New Guinea that bride price became entrenched. I doubt that you can reduce the valuation of women/men to a simple ratio of males and females in the population. You'd have to ask first of all why women were so little valued as family workers in places like India and Europe that they had to purchase a husband, whereas in other places families had to be compensated for the loss of a daughter's labour.
I'd be glad to hear from the anthropologists on this one!
cheers,
Melanie
--
Melanie Beresford
Associate Dean Research, Associate Professor in Economics
Faculty of Business & Economics
Macquarie University, NSW 2109, Australia
----------
From: Melanie Beresford
Date: Sun, May 15, 2011 at 6:23 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
The Chinese have also been importing women from, among other places, Vietnam. I would be curious to see whether Indians begin doing the same. At the moment they probably cannot, due to the fact that the brides' familes would have to pay for an Indian husband, rather than get paid by a Chinese one.
cheers,
Melanie
----------
From: Nhu Miller
Date: Sun, May 15, 2011 at 6:23 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
tr?ng cay si = a prospective son-in-law plants a cay si in the garden
while performing the filial duties of a son in law and in that way proves
his worth. This is an excellent way of finding out the character of the
future in-law. One of my nieces in Ha noi had a prospective husband
who did this for 18 years before the family accepted him. It can take a
while.
T.T. Nhu
Berkeley, California
--
Nhu
----------
From: Thomas Jandl
Date: Sun, May 15, 2011 at 6:27 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
Melanie,
I have read many an argument along the lines I made before about any number of arrangments -- societies where hunting is the predominant source of nutrition has one set of norms, where it is more agricultural and coastal fishing (more emphasis on female labor) have another. The Indo-Gangetic plains had a very peculiar environment -- relatively densely populated early on with ample water but scarce land (so an added worker brings little extra benefit -- which responds to your argument), and so on and so forth.
To evaluate the impact of material conditions on social norms, one has to look at the society in question and the prevailing conditions in quite some detail. My prediction stands: Birth trends remaining what they are, we will see dowry offered for brides by the groom's family soon. (Same in China.)
Thomas Jandl
American University
----------
From: Melanie Beresford
Date: Sun, May 15, 2011 at 6:28 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
I've never heard of a two-way exchange before! On the other hand, I think that a 'dowry' which remains the property of the bride is not actually a dowry. It is simply the property she brings into the marriage. The bride price paid off by working in the wife's family's household reminds me very much of traditional forms of debt service all over southeast Asia (and indeed elsewhere).
Melanie
----------
From: Melanie Beresford
Date: Sun, May 15, 2011 at 6:43 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
Thomas, if it is offered for a bride it is, by definition, not a dowry.
China already has bride price (husband's family pays for wife) and always has.
I agree that something will have to give in the Indian dowry system, simply because families need children to carry on. I suppose, however, that it a partial or short-term solution could more easily involve the emigration of Indian males than shifting to bride price.
cheers,
Melanie
----------
From: Thomas Jandl
Date: Sun, May 15, 2011 at 6:52 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
That strikes me as just another way of dealing with scracity -- increase the supply, in this case through imports.
----------
From: JKirkpatrick
Date: Sun, May 15, 2011 at 6:54 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
Ah yes-but anthropologically speaking, what, after all, determines scarcity? eh?
My view is that scarcity is both a condition of resources as well as of culture. Economists can always find scarcity, because resource scarcity will always be around, given the continuing extrapolation of populations in relation to resources.
However, the value of spouses, of either sex, is so variable that reckoning it only on the basis of scarcity seems limited.
I'm reminded of the practice among several Himalayan groups of polyandry--multiple husband-brothers for one single bride. Or, the common (and claimed 'sunna') practice of marrying first cousins among Muslims in various countries. Both cousin marriage, and polyandry, had to do with ensuring the non-division of property, landed or otherwise. Under Hindu and Muslim laws in strongly patriarchal areas, land had to be divided among sons after a father retired or died, leading to increasingly smaller, unworkable parcels. In land-scarce patriarchal Himalayan regions, polyandry worked to prevent this.
However, another means to prevent it would have been to designate the eldest son as heir. So polyandry wasn't reasonably the only option. However, cultural values operated to retain this as the only option. It figures, scarcity-wise, that the Himalayan areas today--polyandry or monogamy/polygyny--are large exporters of male migrants to the Gulf states in search of employment. Globalisation and other factors have caused land to be less of a subsistence value than it once was.
Another practice of interest so far as preserving property and social status goes, would be the old custom of the Nambudiri Brahmins of Kerala. Only their eldest daughter would be married off to another Nambudiri. The remaining daughters were required to remain unmarried in the family homestead, for life. The unmarried sons had recourse for sex to the matrilineal Nayars, anciently a lower and martial caste , as temporary mates. Any offspring belonged to the Nayar woman. By now there might be some record or memoirs of such Nambudiri daughters, but I've not seen any. What a fate. The cultural rationale viewed their marriage practice as protecting the ritual purity of their caste--which in Kerala was the highest. (Reminds one of sibling incest marriage among the ancient Egyptian and Inka kings--also for the purpose of maintaining the highest status. Only siblings were social equals.) This system IMO was eventually doomed to fail because of infertility of the one married couple, a situation that has been rising slowly in south Asia.
The remedies in 'one-child per urban mother' China, lately, are to use brokers to recruit brides from SE Asia: Vietnam, Singapore, Laos, Cambodia. As for the impending shortage in India of potential brides because of feticide, I agree that this problem might arise soon in India's future if the male-female ratio continues to be skewed toward males.
But I suspect they will resort to similar means as the Chinese. so as not to be forced to pay bride price.
Cheers,
Joanna K.
VA
----------
From: Tai, Hue-Tam Ho
Date: Sun, May 15, 2011 at 7:02 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
Dear Nhu:
If you can imagine the diacritics, the term I'm thinking of is "o re." O as in "to reside" and re as in "son-in-law."
In your niece's case, was it really a matter of the groom compensating for lack of bride price or rather the bride's family being unhappy with the marriage and thus not recognizing it until very long after the wedding?
----------
From: Janet Hoskins
Date: Sun, May 15, 2011 at 7:07 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
The groom who works to be accepted by his wife's family is what anthropologists call "bride service". It is also called "kawin masuk" (entering marriage) in the Malay/Indonesian world, where a groom enters the bride's household and works for her family to finally earn the right to claim her as his wife.
Dowry is not the mirror image of bridewealth. Bridewealth is paid by the groom's family to the bride's family as a corporate group (usually a lineage in patrilineal systems) to compensate them for losing her. Dowry (in Europe and in India) usually goes to the new household (ie. the bride and groom), not the family of the bride. This seems also to be the case in Vietnam.
The classic anthropological analysis of the two systems is Bridewealth and Dowry by Jack Goody and S.J. Tambiah, published by the Cambridge Papers in Social Anthropology.
Contrary to the arguments put forward by Thomas Jandi and others, neither of these is directly related to sex ratios of men vs. women or "scarcity": Polygynous societies (where one man can have many wives) do not have an "oversupply" of women. Men in these societies marry later (after 25), and can accumulate multiple wives if they become rich. Women marry earlier (at puberty, about 14-15 in many societies) and since they are often widowed at a relatively early age, they tend to also have multiple husbands (in succession) while men may have multiple wives (simultaneously) to mark their achievement of wealth and status. These wives are "trophy wives", which is a concept that is not unfamiliar to many Americans.
Kinship and marriage are complicated cultural institutions which cannot be easily reduced to economic models of scarcity.
Janet Hoskins
Professor of Anthropology
University of Southern California
----------
From: JKirkpatrick
Date: Sun, May 15, 2011 at 7:16 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
Actually, in India among Hindus the term for dowry is daaj, and
the husband's gifts to the bride, in the form of jewelry usually,
is strii daan. As I recall, gifts from her father and other
relatives at marriage also become part of her strii daan.
(I speak here of north India--unknown to me what the Tamilian and
other south Indian terms are.) Dowry goes to the family of the
husband as he participates jointly in their wealth, until the
family wealth becomes divided. Strii daan is hers forever,
unless some unscrupulous mate or the inlaws force her to give it
over, contrary to custom.
The terrible practice of bride burning (murder) for lack of
dowry, or due to post-wedding claims by inlaws for more dowry, is
banned-- but not entirely eradicated. This is, of course, totally
contrary to any of the Hindu customary law codes.
Joanna K.
VA
----------
From: JKirkpatrick
Date: Sun, May 15, 2011 at 7:31 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
Nhu--please, what is a cay si?
Joanna
----------
From: Tai, Hue-Tam Ho
Date: Sun, May 15, 2011 at 7:37 PM
To: Vietnam Studies Group <vsg@u.washington.edu>
Trong cay si: It's an informal phrase, nearly slang. It means "planting a passion tree."
------------------------
From: Jeffrey Race
Date: Mon, May 16, 2011 at 12:58 AM
To: Vietnam Studies Group <vsg@u.washington.edu>
My (Sino-Thai) wife's worth is far above rubies,
but I paid her parents only $5,000 for her; a
stunning bargain I've never regretted.
Jeffrey Race
----------
From: Ben Quick
Date: Mon, May 16, 2011 at 9:21 AM
To: Vietnam Studies Group <vsg@u.washington.edu>
In the States, all of this business seems far more related to class.
It is true that traditionally the wife's family--assuming an upper
middle class status--has paid for wedding expenses. I suppose the
rational is the husband, at least in well-to-do conservative families,
is expected to repay the wife by serving as primary breadwinner. With
so many social changes, including same-sex marriage, the fact that
more American women are graduating with advanced degrees than american
men, etc, etc, any semblance of a dowry or bride price is relegated to
certain isolated pockets of the Bible Belt. Though wages and political
power have yet to catch up with educational levels, it's only a matter
of time. As for my long-defunct marriage--a $75 check to Washington
County, OR was all it took to seal the deal. :)
Ben Quick
University of Arizona