tim's experiment

I have not been a great fan of John Tsang’s budgets: turgid hymns to prodence whose inability to predict the future even a year ahead have become legendary. Still we must recognise merit where merit appears, and Mr Tsang’s announcement that he was a member of the middle classes caused more hilarity chez Hamlett than any previous FS has managed.

The claim is of course absurd. Mr Tsang, if you count his fringe benefits and pension rights, must be wallowing in something over half a million dollars a month, But his explanation was interesting. He thought he was middle class, apparently, because he had the classic symptoms of middle class status: the willingness to watch French films and a taste for coffee. This is interesting but betrays a fundamental flaw in Mr Tsang’s reasoning. There are, after all, two boundaries to the Middle Class. There is the one you cross when you enter it from the bottom and the one you cross when you exit it upwards. Or, in due course, when your fortunes decline, the one you later cross downwards.

A variety of definitions have been offered based simply on money. For example, you can consider the bottom 25 per cent of income recipients as the grassroots, the top 25 per cent as the toffs, and the middle class as the 50 per cent left between these two extremes. None of these statistical interpretations is any help to Mr Tsang, who is certainly, if income is the sole criteria, firmly in the upper ranks.

If you look at it as a matter of culture and habits, the Continental films and Starbucks coffee criteria are probably a pretty good stab at the bottom boundary. No horny-handed worker is going to waste his scarce leisure on films with subtitles, or his hard-earned cash on luxurious lattes. One could offer other tests: pedigree pets, a German car, a private doctor or an overseas education for the kids. This is an entertaining game. But it does not help Mr Tsang because his problem is not that he is a grassroot, but that he is an expensive orchid.

In traditional Hong Kong, according to C Northcote Parkinson, the point at which a businessman became a blossom was clearly marked. As his business grew he would stay for years in the hovel from which he started it – the squatter hut or the cockloft over the shop – until he passed the Hound Barrier. At this point he would move into a detached house in Kowloon Tong with a high wall and a guard dog.  We can bring this observation up to date by adding to the high wall and guard dog a large illegal basement. This progress can be contrasted with the less clear situation in Western countries, where people generally upgrade their lifestyle gradually as they get richer.

For modern circumstances it is difficult to find as crisp an indicator that a person has passed out of the middle classes and gone on to higher things. But not impossible. Clearly when a person starts owning real property in Hong Kong which he has no intention of living in then the person concerned has moved into what the rest of us must regard as the financial stratosphere. Mr Tsang is apparently the proprietor of enough property to furnish a small village. As this seems to be true of everyone else in the ruling circle we must expect that their efforts to rein in property prices will be … well, prudent.