Understanding the Trust Fund Baby

The Talk, Part II
Sigmund Freud Sigmund Freud
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We are talking about the complex process through which infants and children are transformed from little beasts into responsible adults. More particularly, we are talking about how that process often goes wrong and never goes perfectly.

In “Civilization and Its Discontents,” for example, Sigmund Freud proposed a…, well, a “Freudian” take on the issue. Freud pointed out that the notion that we should be happy “is not included in the plan of Creation.” Instead, psychoanalytic theory posited a continuing struggle between the “pleasure principle” (the part of us that cares only about our own desires) and the real-​world conditions that thwart us at every turn.

If we successfully reach adulthood, the “reality principle” causes us to recognize that we must accommodate ourselves to the needs and desires of others, not just of ourselves. True happiness, argues Freud, is unachievable, but we can at least avoid the suffering that arises from constantly trying to assert our own primacy. Freud’s ideas, notwithstanding the psychoanalytical jargon, are not terribly different from those of Epicurus and the hedonists.

Freud extrapolated the conflict between the pleasure and reality principles to the level of human civilization itself. Just as pleasure and reality face off inside each individual, so too do they face off in the relationship between individuals and the societies they inhabit. Successful adults “sublimate” their worst instincts into religion, art, and other socially desirable activities, while unsuccessful ones create havoc by insisting on the fulfillment of their individual desires.

And it was at this point that Freud turned pessimistic, worrying that the price society exacts from us may be too high. Civilization, he worried, could be “a state of affairs which the individual will be unable to tolerate.” The history of the twentieth century seemed to bear him out, as humanity’s worst instincts exploded in two horrific world wars.

Writing a few years before Freud, Martin Buber didn’t bother with the developmental phase of adulthood, but only with the end goal. In his famous essay, I and Thou, Buber argued that all of human existence consists of one of two modes of interaction: the Ich-​Du (I-​Thou) relationship and the Ich-​Es (I-​It) relationship.

The Ich-​Du relationship represents the fullest expression of humanness, a mode of interaction in which each individual acknowledges the complete, holistic existence of the other, without any touch of self-​interest or objectification. The highest expression of the Ich-​Du relationship is the one with God, although we can also experience it with someone we love or respect very highly. (Or even sometimes with a complete stranger, since we can’t know if the stranger might be useful to us.)

The Ich-​Es relationship, by contrast, describes a mode of interaction characterized by self-​interest: what can this person (or object, or idea) do for me? Since, in Ich-​Es mode we are only interested in ourselves, Ich-​Es relationships are monologues, whereas Ich-​Du relationships are true dialogues.

Most of human existence is experienced in Ich-​Es mode, but, according to Buber, the best part of our lives is experienced in Ich-​Du mode. Unfortunately, the Ich-​Du relationship is not only rare for everyone, it simply doesn’t exist for individuals who have never outgrown their childish selfishness.

Whether or not we fully buy into the Freudian analysis or Buber’s philosophy — or even my own anecdotal observations laid out in part one of this series of posts — they all have one thing in common: the understanding of true adulthood as the moving away from an obsessive focus on ourselves to a mode of being that includes the interests of others.

I’ve gone into some detail about the human maturation process because I want to emphasize the important point that families with money face child-​rearing issues that are no different in kind from those faced by all families. The particulars are different, of course, but the particulars of raising children are always different for every family because each child and each parent is a distinct individual.

Whether a family is rich, poor or middle class, the challenge is to raise children who can flourish and be useful in a world in which the interests of others must always be considered. Thus, when we encounter a “trust fund baby,” we haven’t met someone who has been spoiled by money, but, rather, someone who is stuck in childish self-​absorption. Spending money on themselves is simply the class-​specific manifestation of that selfishness. We all know poor and middle income people who are equally selfish — it’s just that their narcissism is expressed in different ways.

In my next post, I will take a look at several of the characteristic ways in which affluent families can go wrong, resulting in the very trust-​fund-​baby outcome those families desperately wish to avoid.

Next up: The Talk, Part III

Greg Curtis

Gregory Curtis is the founder and Chairman of Greycourt & Co., Inc., a wealth management firm. He is the author of three investment books, including his most recent, Family Capital. He can be reached at . Please note that this post is intended to provide interested persons with an insight on the capital markets and is not intended to promote any manager or firm, nor does it intend to advertise their performance. All opinions expressed are those of Gregory Curtis and do not necessarily represent the views of Greycourt & Co., Inc., the wealth management firm with which he is associated. The information in this report is not intended to address the needs of any particular investor.

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