The Betrayal of the Smart Sons
23 December 2009Having recently read a dyspeptic and grouchy, but eye-opening, look at the fix we’re in – 15 Signs American Society Is Coming Apart at the Seams, by David DeGraw – it occurred to me that there are all sorts of possible theories to explain what’s happened to American Civilization… its astonishing plummet from the richest, most confident and progressive nation in history to an irascible bunch of bickerers, trapped in a perpetual cycle of Culture War.
Why, especially, have Americans been losing their knack at creating new and better goods and services and winning at the agile game of market capitalism? This is a matter of no small import to the world as a whole, since it is precisely the engine of U.S. economic success that has – thereupon – driven the development of most of the rest of the world. While that engine has to learn to run leaner, more efficiently and more sustainably, its actual vigor and innovation are just as important, if the world is to see better days.
Alas, the engine is sputtering. Furthermore, none of the diagnoses that I’ve seen publicly bruited, so far, has seemed convincing. Most are either superficial (“we were led by fools!”), or myopic (“MY side is always right and so is every item on our wish list!”), or dreamy (“we should wake up and face the future again, as a nation of ambitious problem-solvers!”) (All right, that last example is the favorite wish-whine of yours truly.)
Time for a fair warning. I was raised, trained and apprenticed in the art of “what-if” generating… the craft of offering unusual outlooks. New-Perspectives-R-Us. Even knowing full well that most of them will be flawed at some level, people still pay me — sometimes a lot — to do this. To be interesting, even if I don’t turn out to be right.
Hence, some of my hypotheses, to explain America’s current funk, are iconoclastic. For example, I think that a big part of our problem may be rooted in a simplistic, insipid, illogical… and French… metaphor, the so-called “left-right political axis,” a dismally lobotomizing meme that some of the smartest people I know actually buy into, without ever being able to define it.
Spinning around in a different direction, last month I offered a relatively sunny theory about the rise and gentle decline of Pax Americana — suggesting that everything we’ve seen, including our trade and budget deficits, may have been intentionally mapped out by the greatest genius of the 20th Century, George Marshall, whose innovative counter-mercantilist trade patterns wound up propelling two-thirds of the people on this planet toward peaceful prosperity through one simple method — Americans buying trillions of dollars worth of crap we never needed.
Sound cheery? I can also do dark.
But let’s put aside all the optimistic and pessimistic scenarios, for now. This time, I want to get strange and cynical with a new theory that’s simple, creepy, and chillingly plausible. I don’t expect any modern person will agree that this is the real, underlying cause for all that’s been happening to our economy, across the last few decades.
Yet, I’ll bet any of the top thinkers from other centuries and civilizations would take a glance at America today and totally agree with the hypothesis!
“Yep, that’s it,” they would say. “Any nation that allowed such a thing to happen would deserve what it got.”
It is a theory about the sons and daughters of the rich.
Who’s Minding The Aristocracy? A Crackpot Explanation for the Decline of American Capitalism
Now and then, during my time at Caltech and JPL and across careers in science and the arts, I used to notice something that struck me as strange. While interacting in these endeavors with bright men and women who were colleagues and/or peer-competitors, all of us eagerly pursuing truth, I would every now and then pick up on something odd and unexpected. Through all the normal give and take, amid fascinating conversations that plumbed ideas at the fringe of the known, a hint would slip out revealing that… hey… this guy or that gal, in addition to being a skilled worker and dynamic innovator, also happened also to be rich!
Now let’s be clear; I’m not talking about the self-made billionaires I know — guys who started in the middle class before developing some cool concept that gave millions of people added value. Exemplifying Free Enterprise at its best, those fellows are proudly “first generation” self-made men. Indeed, several have declared that they will join Warren Buffett in leaving most of it to causes, making a better world. But we’re putting them aside. They’re not relevant here.
No, instead I’m talking about another kind of rich people. Folks who got wealthy the old fashioned way, by inheriting it.
And yet, despite being raised in affluence, these colleagues, friends or fellow scientists were not using their silver spoons to live it up or lord over others. Sure, they had some of the finer things. But they treated money as something that one can actually get enough of. More is always nice, of course! But one of the principal hallmarks of sanity – satiability – means a surfeit that’s doubled, and then redoubled, drops in importance. In its place, the central drive may even move on to other things. Like curiosity.
(This doesn’t impugn the tech billionaires. Past a certain point, is it cash that really matters to them? Or winning, again and again, at a cutthroat, innovative game? Most claim that money, itself, isn’t the motivator, anymore. It’s being — and doing — the best.)
In fact, when it came to the rich scientists and artists I knew, these colleagues nearly always seemed to be at pains to downplay the whole topic. It was never polite to go there. Often, to my puzzlement, they acted as if admitting their wealth would be like avowing to some mildly repulsive and irritating social disease.
I pondered this phenomenon over the years… I mean, beyond ratcheting up my respect for women and men who turn their back on luxury (though they often had boats or planes), in order to head for realms where the truly interesting stuff is going on. (BTW, some of them went into science fiction, too. I won’t tell who.)
These were people with options. Yet, they chose to go and prove themselves in fields where ability and quality are genuinely measurable, and where esteem generally ignores the number of digits in your income. You gotta respect that.
Still, I eventually got around to wondering — all right then, who is managing your family’s influence and power?
Who gets the treasured stock exchange seat? The Skull & Bones membership? The golf games with Illuminati board members? I even probed about this a couple of times, when I felt the friendship could stand it. Clues showed up, when I would accompany a friend to some family gathering, and met relatives. Soon, I observed enough to stoke a growing suspicion.
Who got the power and influence?
Dim-witted siblings. That’s who. The family dullards, who are not lured by adventures in science or innovation or the arts. The brother who, if left in charge of a restaurant or small business would run up the mortgage and leave it bankrupt, in months. The sister for whom preening and partying with Paris Hilton actually seems important. The kind who drift toward crony dealing, because genuine market competition might be way too challenging. Who will clasp their (reflex-genetically-inherited-by-all-of-us) notions of born-privilege, and justify them with mantras of smug superiority.
Look, I am really, really not interested in making enemies of any of these rich/spoiled/dumbasastone fellows, so in case any of them just happen to read this obscure blog, will you accept a pre-apology? Or assume I am talking about someone else? Thanks.
Nevertheless, seriously, don’t we all know what families are like? Typically, each one has its bright bulbs and dim ones. In fact, one of the ways that families work best is that the bright sons and daughters wind up taking care of everybody else. If there’s a shared business, they make sure the taxes get paid and the workers are happily creative and that customers remain content. They see too it that the whole thing doesn’t get leveraged too far to weather the next storm, and they refuse to let company officers vote themselves lavish bonuses, diminishing value that could be re-invested in growth. They use their prefrontal lobes to look ahead and invest not in wild ass get-rich-fast schemes, but in things that will enhance product or service, engendering more wealth — for everybody — down stream.
You see this in almost any family-run business. Sometimes, the other siblings resent it. Often, they know what’s good for them and help the smart-bro or wise-sis, however they can. (Heck, we saw it in “The Godfather,” right? Well, maybe that’s not such a great example, after all.)
Only here’s the point. An awful lot of American family businesses don’t get to benefit from this process. They lose the natural leader, for a reason that’s ultimately ironic — because the bright siblings may get a little too bright. Having been raised in some comfort and privilege, with all the education they could possibly want, lo and behold, they want – and get – a lot! Moreover, they look around for where exciting stuff is happening, and they soon come to recognize the places where human endeavor is really achieving important things, pushing back the envelope. Challenging the unknown, breaking molds, inventing the new, and unrolling the very blueprints of God.
Sure, sometimes these challenges can be found right there, in the family business. Making the products and services way-better. Terrific. Still, there is a natural human tendency for the smartest kids to wander off, away from all the privileges and assumptions, to prove they can make it on their own, perhaps even in a field where some of humanity’s top minds may acknowledge their talents and hard work with the greatest of all rewards… that nod of genuine respect.
It doesn’t have to be science, though that is where I found these refugees from the aristocracy, most often. It might also be the arts, or starting a new company from scratch, in a completely different field. Any way you look at it, this trend has to be viewed with admiration.
Alas, it may also be one of the principal reasons that American capitalism is going down the toilet. Because… who is left behind, minding the store? Oh. Yeah. I already answered that question.
Only now, squint and envision good old Fredo, put in charge of a big investment fund. Instead of a ma and pa grocery store, picture a prominent county bank that used to service mortgages carefully, combining intimate knowledge of local borrowers with a strong sense of community. That is, til frat-bro came back from a golf junket fizzing with excitement over hedge investments that he learned about from some sharpguy on the back nine. I mean, how else can you explain the fact that Wall Street is filled with fellows who actually think that vampiring companies with endlessly-churned commissions is doing them a favor and improving their bottom line?
Has anybody out there read The Hitchhiker’s Guide To The Galaxy? Remember the “Golgafrincham B Ark”? If you don’t, ask your nerdiest friend to lend you that passage.
Is That Really The Answer?
If you were to offer up any list of hypotheses to explain what has happened to American business and capitalistic enterprise, across the last 40 years, this one surely ranks among the most crackpotty-sounding. And I am not declaring it to be true. (I don’t believe all my own strange hypotheses — it’s simply my job to come up with an endless supply!)
Yet, doesn’t it belong somewhere on the table of notions to investigate? Note that the Standard Model — proclaiming that we’ve been half-ruined by moronic, short-sighted greed — does relate. I’m simply suggesting a process — one that is totally consistent with the facts — by which a large fraction of the mover-and-shaker slots in American finance might have become filled with greedy, short-sighted morons. Moreover, there are plenty of precedent-examples one can point at, from history, where it proved devastating for a nation or enterprise to be inherited by the wrong brother.
Nor is this explanation inherently leftist. (Though Karl Marx mentioned “inherent contradictions” leading to capitalism’s demise.) Indeed, it posits something decidedly non-lefty. Even far to the opposite direction.
It suggests that, if we are destined to return to the core human method of governance — the one that dominated 99% of civilizations and recorded eras — then at least aristocratism ought to be run by the BEST scions of the ruling class. Not its worst. They owe us that much, at least.
Consider, if this hypothesis has any validity at all, the profound awfulness of a well-intended betrayal. In these high families, the smarter brothers and sisters want to be part of a lively, enlightenment civilization and to prove they can make it on their own. Today, these brighter siblings vanish into science, the arts, etc, leaving their bonehead bros, who shouldn’t be trusted with a burnt match, holding great power.
And hence, the bright ones have committed a crime against the very thing they love.
Okay, maybe I should have saved this one for April Fool’s Day…
There. Forget all the convoluted analyses of Wall street and the Fed. The aristocracy was betrayed by its smartest scions. That’s it! Crackpotty or not, if this weird scenario does have any basis, then the cure is obvious.
Hunt down all the smart boys and girls who vanished into challenging and honest activities… science, teaching, research, the arts… and chase them BACK into the family business! Make them pick up their responsibilities to manage the inherited capital and influence well. Send the dullard brats off to sniff coke and chase models in Hollywood.
Yes, it sounds draconian, even deeply cruel. But this measure could rank second only to closing all the undergraduate business schools, as a way to save our economy and our civilization.
12 Responses to “The Betrayal of the Smart Sons”
December 23rd, 2009 at 6:39 pm
Followup… Russ Daggatt writes: “Fun piece. But I loved this Calvin Trillin op-ed from the New York Times which makes essentially the opposite point: That what brought Wall Street down was that all the smart guys started going there.”
http://www.nytimes.com/2009/10/14/opinion/14trillin.html
Actually, Russ, you have to read Trillin carefully, especially toward the end, the paragraph “Because there is…” in order to realize that he is essentially saying the same thing I am!
In the end, he still blames the dumb-as-a-stone, bottom-third types who held the REAL power, and who did not understand the inventions of the smart guys. The subtle point here is that the top-percentile guys who invented these swaps of nothing… they made a lot of money. But they were still hirelings, boffins. The BIG decisions were still made by imbeciles with inherited positions, who never understood what the boffins were saying.
It’s all still the fault of those who left such dopes at the helm.
December 23rd, 2009 at 7:13 pm
Excellent theory but I suspect that many of the brighter sparks went over to the dark side too.
Some of those minding the store are neatly referred to as the “jerks” in the Norms of Credit, piece by Steve Randy Waldmann, Interfluidity.
http://www.interfluidity.com/v2/410.html
Incidentally I heard on BBC news today of rumours to cut UK University courses from 3 to 2 years to save money.
http://news.bbc.co.uk/2/hi/uk_news/education/8429283.stm
December 25th, 2009 at 1:49 pm
The Europeans already have a baccalaureate degree that takes one year less than the American 4-year bachelors. After living in both London and Paris, I know how they tend to explain this… that American students are so ill-prepared that they require an entire year of remedial preparation.
This is a choice insult and many self-flagellating Yanks go along, nodding sadly that it must be so. But the facts don’t jibe.
In fact, the reason is simpler. European university students choose a specialized subject to study, upon entering University, and focus almost solely on that topic…much in the way that US students do, in graduate school. This reflects a tradition very different than in the US… where the bachelor’s degree is meant to produce well-rounded citizens, with arts majors required to take some science and vice versa.
In fact, the extra year consists almost entirely of “breadth requirements.”
If the Britis BA is being narrowed to 2 years, I shudder to imagine how it will be done.
December 25th, 2009 at 5:41 pm
TWO-YEAR DEGREES
Fast-track degrees are accelerated honours courses, announced in 2003, which have been tried in eight English universities.
Staffordshire, for example, has some 200 students – out of a total of 17,000 – taking two-year courses in accounting and finance, business management, English, geography and law.
Students do the same amount of work as on a three-year degree but use the summer vacation as extra terms.
Courses suit people such as mature students whose priority is obtaining a vocational qualification rather than having the full-blown undergraduate experience involving being away from home for the first time.
They save on fees and living expenses, though with less opportunity for paid work.
The government saves on the financial support students get in grants and loans (loans are repaid but over many years, and have to be funded in advance).
But they cause universities financial problems. They have had to provide a three-year syllabus in return for two years’ tuition fees and two-and-a-half years’ equivalent in Hefce funding.
There were organisational and infrastructure implications – such as extending the opening hours of student support and accommodation, library and information services.
Some academics who were resistant could be side-stepped in a pilot programme but their attitudes would have to be changed if it were to be expanded.
http://news.bbc.co.uk/2/hi/uk_news/education/8427546.stm
December 25th, 2009 at 10:55 pm
It is in keeping with European traditions, that identify people as specialized beings. “Boffins” or scientists are never encouraged to also take courses in politics or history or any of the other fields that lead to positions controlling policy. And policy people traditionally took great pride in knowing no science.
Of course, times change. When I lived there in the 1980s, a higher fraction of Americans went to University, now the higher fraction is in Europe.
December 26th, 2009 at 8:02 am
John Kenneth Galbraith on Democracy, Leadership, Commitment (1977 video from TV series). Education features strongly.
http://cdn-static.viddler.com/flash/publisher.swf?key=1820c83a&offsetTime=%22
December 26th, 2009 at 1:19 pm
>BTW, some of them went into science fiction, too. I won’t tell who.
George McFly?
December 27th, 2009 at 5:52 am
How the status quo can kill: the example of free trade | Thu, 12/24/2009 – 2:19pm — Tony Wikrent
“They don’t want to connect the dots, because they are part of the picture.”
Extract | Seems to me that people who have secured comfortable positions in “managerial class” and “creative class” occupations tend to support the President and an incrementalist approach to addressing the nation’s problems. They tend to be reflexively hostile to any sweeping changes, such as actually annihilating the health insurance companies, or actually doing away with the big financial houses like Goldman Sachs, Citigroup, and Morgan Chase. They seem to insist on solutions that rely as much as possible on market mechanisms, such as cap and trade to deal with climate change. They recoil in horror at the suggestion that “the system” itself is the problem. Generally, they appear to be economic neo-liberals, who have actually become acclimated to the results of the Reagan Revolution.
And there is one economic policy above all others that they believe in. Free trade.
You’ve probably heard about how free trade has hurt American workers. Maybe you don’t really believe it. Maybe you think that the benefits of free trade – cheaper goods, more choices – outweigh the costs. Maybe you don’t really feel like your job or livelihood is subject to overseas competition. But free trade does affect you. To tell the truth, free trade is probably killing you.
http://www.correntewire.com/how_status_quo_can_kill_example_free_trade
December 29th, 2009 at 8:58 am
More on the key role of Education in Employment and Trade Deficits
The manufacturing shibboleth
Dec 28th 2009, 16:12 by The Economist | WASHINGTON
I HAVE noticed an interesting line of argument developing on the American left—a reaction, I think, to America’s current predicament of high unemployment and lingering trade imbalances. It goes something like this: American used to manufacture things but it doesn’t any longer. When it did, worker wages grew rapidly, the middle class was strong, there were no trade deficits, and the economy was more stable. Now that it doesn’t, all these economic ills have befallen this once proud economy.
http://www.economist.com/blogs/freeexchange/2009/12/the_manufacturing_shibboleth
January 12th, 2010 at 1:29 am
Universities tell Gordon Brown: cuts will bring us to our knees
The Russell Group warns cuts to universities, like Cambridge, above, threaten to reduce a ‘gold standard’ system to one that is ’silver, bronze or worse’.
http://www.guardian.co.uk/education/2010/jan/11/universities-gordon-brown-cuts-recession
January 12th, 2010 at 2:36 pm
Interesting. Though the British system was smarmy and elitist to start with.
January 25th, 2010 at 10:05 pm
More Liberals coming, but are they the smart ones?
Freshmen Abandon Business
http://www.insidehighered.com/news/2010/01/21/freshmen#