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Blackstone CEO Stephen Schwarzman supports Donald Trump. Other Wall Street billionaires are ready to follow suit. Palo Alto is also not without its Maga magnates. What explains your choice? Own interest? To some extent, no doubt. But it’s not that their alternative is death through taxes. Joe Biden is president, not Huey Long.
Furthermore, greed does not take into account other wealthy people with similar opinions. It does not explain to pro-Brexit industrialists that they obviously had little to gain outside the European single market. That doesn’t explain why I can’t attend a financial dinner without hearing the Kremlin script (“You know, Zelenskyy is no saint”) from someone who neither benefits from the invasion of Ukraine nor loses from retaliatory sanctions.
Don’t always look for the material reason. There is such a thing as sincere evil. So how could the rich have gotten to these positions? Having some exposure to that world and a radar useful for detecting human frailty, I would suggest two things.
First, business owners struggle to understand bigotry. In commercial life, all actors are negotiable, even if their price is high. You could spend decades in the private sector without finding someone who has a total commitment to an abstract doctrine (socialism), to an individual (Trump), or to a cause (Russian self-love). This blind spot to zeal is why corporations were easy targets for the “woke.” And why did the oligarchs of a generation ago think that Vladimir Putin was their malleable instrument?
Read the wry but bitter diaries of Chris Patten, the last governor of Hong Kong. The bane of his life was the British merchants who thought that even tentative democratic reforms would cause the island to be squeezed by the mainland. That, as it turned out, not much provocation was needed, that communism was his own guarantee, somehow eluded their transactional minds. But of course it was.
This mental error applies to companies as a whole. But there is another one that especially affects the most successful exponents. The self-made super-rich tend to vastly overvalue contrarianism.
Dissent is critical to financial success. Why buy an asset unless you believe the market has undervalued it? Why start a business unless you believe the world is wrong for not already offering that product or service? Opening the humblest corner bistro is, in essence, a declaration that everyone who he hasn’t done it He opened one and missed a trick. Imagine how much stronger that contrarian impulse must be in a hedge fund seeking market-beating returns.
All power to this attitude. The world would be less prosperous without him. But he doesn’t translate well into public life. In politics, if you support a radical proposal and it turns out that you have misjudged it, the consequence could be, oh I don’t know, social ruin. (Or deaths at the Capitol). There is no equivalent of limited liability. There is no equivalent to the circuit breakers that the State places to contain bad commercial bets. The State itself is at stake.
Consider the question Peter Thiel is said to ask entrepreneurs seeking his capital. “What important truth do very few people agree with you on?” Whatever the vibe of All Souls’ entry newspaper, it’s a good question, within your domain. It tests the aptitude for original thinking, without which it is difficult to make a lot of money. Blackstone could also ask it of an aspiring portfolio manager.
The problem begins when this valorization of the dissident vision is diverted towards politics. Not only does it result in a collegial insolence that is unbecoming of middle-aged men and women (one partner at Sequoia Capital is pro-Trump because he doesn’t “drink the media Kool-Aid”). It leads to arrogant action and misjudgment of risk. The latest development in politics is not financial oblivion. It is oblivion.
Every day when I wake up at noon, I receive an email from a media organ called UnHerd, which, as its name suggests, deals with contrary opinions. Of course, it’s backed by Hedgie. The thing is, I don’t see how this mental habit can be avoided. Self-made tycoons are, almost by definition, people whose moments of iconoclasm have worked. We can only hope that their judgment is so sound when being wrong means something worse than a timid call to investors.
Email Janan at janan.ganesh@ft.com
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