The Wednesday July 14th Detroit News carries an op-ed by NYT writer David Brooks who wants us to know there are two kinds of people in the business world. But Mr. Brooks, like so many in the educated class, has a hard time forming concepts in any hierarchy or at least doesn’t want us to. So he presents his case in the pictorial form of princes and grinds: (some of my comments in brackets)
“If you go to business conferences, you know that at lunch it is definitely better to be seated next to a prince than a grind. Princes, who can be male or female, are senior executives at major corporations.
They are almost always charming, smart and impressive. They’ve read interesting books. They’ve got well-rehearsed takes on the global situation. They can drop impressive names as they tell you about their visits to the White House, Moscow or Beijing. If you’re having lunch or dinner with a prince, you’re going to have a good time.
Grinds, on the other hand, tend to have started their own company or their own hedge fund. They’re often too awkward to work in a large organization and too intense to work for anybody but themselves.
Over lunch, they can be socially inert. You try to draw them out by probing for one or two subjects of interest to them. But as often as not, you find yourself playing conversational pingpong with a master of the monosyllabic response.”
So CEOs, COOs and CFOs are fun people to be around even though they don’t accomplish much worth talking about and the grinds who go from rags to riches by their own effort are dull, boring and culturally brain dead. But:
“Since the princes are nicer and more impressive,[speak for yourself brother-MN] it is easy to be seduced into the belief that they also are more trustworthy.
This is false.
During the past few years, for example, the princes at Citigroup, Bear Stearns, Goldman Sachs and Lehman Brothers behaved with incredible stupidity while the hedge fund loners often behaved with impressive restraint.
As Sebastian Mallaby shows in his superb book, “More Money Than God,” the smooth operators at the big banks were playing with other people’s money, so they borrowed up to 30 times their investors’ capital. The hedge fund guys usually had their own money in their fund, so they typically borrowed only one or two times their capital.
The social butterflies at the banks got swept up in the popular enthusiasms.[Created by whom?-MN) The contrarians at the hedge funds made money betting against them. The well-connected [to what?-MN] bankers knew they’d get bailed out if anything went wrong. The solitary hedge fund guys knew they were on their own and regarded their trades with paranoid anxiety.”
There are lots of equivocations and evasions in the above not the least of which is the notion that successful hedge fund ‘guys’ are driven not by knowledge, expertise, or experience but by “paranoid anxiety.” This article reveals an enormous lack of understanding of capitalism and economics.
Mr. Brooks treats most things as the given as if they were causeless. What are grinds? What causes them to come into existence? What are their requirements for survival? What conditions create princes?
Mr. Brooks’ choice of the image of ‘prince’ for CEOs is premised on the notion that CEOs don’t earn their fortunes just like princes don’t. Princes are born into their station in life and serve at the pleasure of the king. It is true that some CEOs of today would not survive in a laissez-faire economy. These are of course the James Taggerts and Orrin Boyles of business and it is their image that Mr. Brooks is attaching to all CEOs. In fact, he has all the facts he needs to infer that mixed economies don’t work and should be abolished but he won’t infer it:
“The princes can thrive while the government intervenes in the private sector. They’ve got the lobbyists and the connections. The grinds, needless to say, don’t.
Over the past decade, professionals — lawyers, regulators and legislators — have inserted themselves into more and more economic realms. The princes are perfectly at home amid these tax breaks, low-interest loans and public-private partnerships. The grinds try to stay far away and regard the interlocking network of corporate-government schmoozing with undisguised contempt.”
So why don’t you regard it with contempt and call for the end of such networks Mr. Brooks?
Alas, no matter how much evidence he sees and provides to us, it won’t penetrate this mindset:
“Princes can thrive in a period of slow, steady growth, but grinds need a certain sort of psychological atmosphere. They need a wide-open economy with plenty of creative destruction.[!!) They need an atmosphere of general confidence, so bankers will feel(?) secure enough to lend them money, so big companies will feel(?) brave enough to acquire their startups, so they themselves will feel(?) the time is ripe to take on their world and show their brilliance to all of humanity.”
This is plain contempt for the human mind. A ‘certain sort of psychological atmosphere’ is the knowledge that one is free to think and act on one’s thoughts. ‘Creative destruction’ is a snarky way to refer to invention. That all these grinds and their bankers engage in feelings instead of thought, reason and logic, is a direct slap at intelligence as such. Lastly, that producers produce in order to ‘show their brilliance to all of humanity’ is a smear of producers as such. It projects an image of an egomaniac gloating over his invention which will show the world how great he is.
In closing, Mr. Brooks offers no suggestions on how to ‘nurture’ grinds, just pessimism:
“It’s just that very few grinds are bringing new ideas to scale and hiring workers to enact their us-against-the-world schemes.[notice the adversarial context and productive effort as ‘schemes’-MN]
For jobs to recover, the grinds have to recover(!), but it’s hard to see how that will happen so long as households are still so leveraged, government debt is still so unnerving and the business climate is still so terrible for entrepreneurs.”
Translation: “Atlases, you’ll just have to heal your selves.”