#OWS 2: Hubris in the face of risk and a culture of entitlement
Insider view on the investment banking mayhem, take two. My friend Sean Park (read Park Paradigm) dropped this excellent comment / beautiful rant on my previous “how banking lost its way” post. Another guy who lived inside the belly of the beast. You may wonder what Algorithms have to do with #OccupyWallStreet. The answer is: everything. You don’t want them to rule your world. Here we go:
[Banking] went off the rails when a toxic combination of Industrial Age (ie Baby Boom) HS Varsity Quarterbacks and early Information Age nerds came together to dominate the ranks of wholesale finance.
The old jocks were clueless as to what their geek minions were really doing but it made lots (and lots and lots) of money and they had been groomed since youth to believe they were special so they just assumed the money was fairly earned as a result of their awesomeness. The quant nerds reveled in their new ability to get laid and their collective autism blinded them to the reality of the mess they were creating: all they saw was the beauty of the math. And the Ferrari. And the Spearmint Hippopotamus platinum girlfriend that finally recognized their true genius and charisma (unlike all those girls in high school.)
F@cking train wreck. As you know like you, I too left mainstream finance for the startup world and although it’s a gross oversimplification / generalization but I would posit that the single biggest difference between the two worlds is hubris in the face of risk and a culture of entitlement.
Ambition, energy levels, creativity, intelligence, egos, etc. all abound in both worlds, but hubris and a culture of entitlement are largely missing from the entrepreneurial genome.
Of course accomplices were needed to allow the bankers to take everything beyond the limits and then still not satisfied hit the nitroboost, and – while we’re in sweeping-generalisation-mode – lucky for them they had the baby boom generation who in the western democracies were perhaps the most selfish and self-satisfied generation in modern history, riding the demographic wave like Kelly Slater on the North Shore growing more and more convinced of their innate genius while spending the savings of their parents, their own (impressively produced) wealth and then their children’s and grandchildren’s (which is where the financial engineering really came in handy.)
In the process, the notion of personal responsibility was crushed like a bug to be replaced with a highly refined strain of personal entitlement. I’ve been very fortunate in my life – yes just plain lucky – starting with winning the ovarian lottery. But that doesn’t mean I haven’t worked incredibly hard to make the most of the good hand life dealt me. And so I believe that I have earned my good fortune fairly. But I sure as hell know that I wasn’t entitled to it and that serendipity and luck have played a part (in both directions good and bad.) That’s fucking life.
To conclude, the single worst legacy of the last 40 years isn’t the trashed global balance sheet in my opinion, but this insidious, cancerous belief that we are wizards and can eliminate chance, eliminate fortune and if we fail it is not because it is impossible to eliminate failure or risk but rather because we aren’t trying hard enough and just need to try harder. This culture of zero tolerance for risk or failure, this culture that dismisses serendipity as irrelevant, this culture of Newtonian certainty is killing us.
It gives us the abominations that are our legal, regulatory and tax codes that just get more and more and more complex (2600 pages just for Dodd-Frank, and that’s going to make things better? really? really???) and allows our societies to absolve themselves of self-sufficiency and personal responsibility because after all in this world you are entitled to have it all and if you don’t well it’s somebody’s fucking fault and can and should be fixed. The entrepreneurial world is impossible to remove from the greater human polity and so isn’t without original sin, but it is one of the last corners of our society where there is least a preponderance of self-sufficiency, personal responsibility and a tacit acknowledgement that things can go spectacularly right (or wrong) JUST BECAUSE and the best you can do is work hard to put yourself in the best position to take advantage when the stars align in your favor through no fault of your own.
Having just come back from Paddy Cosgrave’s f.ounders and mingled with some of the best entrepreneurs, I have to say that (a) healthy respect of the part that luck played, (b) tolerance for failure and (c) appreciation for how hard it is to make it all work well were palpable. I am still concerned that we equate success with greatness and should always remind ourselves that it’s not just about getting there, but that how you get there matters a whole lot more.