Ethnicity

Prosperity

The formation of capital underpins the growth of prosperity. When people form capital, they refrain from consumption and set a portion of [Page 829]their earnings aside; by investing that portion today, they seek to secure higher levels of consumption tomorrow. When the gains from the investment outweigh the losses from the initial sacrifice, then the result is an increase in welfare for the individual and economic growth for the society.

When we speak of investment, we are speaking of capital formation. Families play a major role in capital formation and, in particular, in the formation of human capital. They do so by structuring relationships between generations such that the older generation, rather than consuming all its income, instead devotes a portion of its resources to the younger, who in turn will prosper and, while doing so, offer support to those who had previously invested in them.

This intergenerational flow of funds underpins two forms of capital formation, and ethnic groups play a major role in both. One is education, another migration. The two are closely related, of course, as by educating their children, parents seek to prepare them to compete in urban labor markets.

To illustrate, consider Victor Uchendu, a noted anthropologist, who writes of his childhood in eastern Nigeria. Uchendu recalls the pride he felt as a child as his academic abilities became apparent. He writes, too, of the sacrifices his parents made to pay for his schooling and of the contributions collected by his community to send him for further education abroad. Each step of the way—from village school room, to secondary school, and thence to the university—opened up a broader range of opportunities. Uchendu also writes of the burden of his success; for those who made it possible then looked to him for leadership, hoping that he, as an “Ibo son abroad,” would facilitate their own transition from villager to a member of the global community.

The pressures placed on Uchendu find their parallel in other upwardly mobile communities. The Kikuyu of Kenya, the Chinese of Malaysia, the Jews in Europe, and the Bengali in India: These and other ethnic groups have pursued a strategy of collective improvement, based on the transfer of resources between generations and the formation of human capital.

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