When Being An Outsider Makes You A Better Insider
Malcolm Gladwell in The New Yorker on the rise of a short Jew on Wall Street -- a guy who went to P.S. 13, not Dartmouth:
Sidney Weinberg was born in 1891, one of eleven children of Pincus Weinberg, a struggling Polish-born liquor wholesaler and bootlegger in Brooklyn. Sidney was short, a "Kewpie doll," as the New Yorker writer E. J. Kahn, Jr., described him, "in constant danger of being swallowed whole by executive-size chairs." He pronounced his name "Wine-boig." He left school at fifteen. He had scars on his back from knife fights in his preteen days, when he sold evening newspapers at the Hamilton Avenue terminus of the Manhattan-Brooklyn ferry.At sixteen, he made a visit to Wall Street, keeping an eye out for a "nice-looking, tall building," as he later recalled. He picked 43 Exchange Place, where he started at the top floor and worked his way down, asking at every office, "Want a boy?" By the end of the day, he had reached the third-floor offices of a small brokerage house. There were no openings. He returned to the brokerage house the next morning. He lied that he was told to come back, and bluffed himself into a job assisting the janitor, for three dollars a week. The small brokerage house was Goldman Sachs.
From that point, Charles Ellis tells us in a new book, The Partnership: The Making of Goldman Sachs
, Weinberg's rise was inexorable. Early on, he was asked to carry a flagpole on the trolley uptown to the Sachs family's town house. The door was opened by Paul Sachs, the grandson of the firm's founder, and Sachs took a shine to him. Weinberg was soon promoted to the mailroom, which he promptly reorganized. Sachs sent him to Browne's Business College, in Brooklyn, to learn penmanship. By 1925, the firm had bought him a seat on the New York Stock Exchange. By 1927, he had made partner. By 1930, he was a senior partner, and for the next thirty-nine years--until his death, in 1969--Weinberg was Goldman Sachs, turning it from a floundering, mid-tier partnership into the premier investment bank in the world.
The rags-to-riches story--that staple of American biography--has over the years been given two very different interpretations. The nineteenth-century version stressed the value of compensating for disadvantage. If you wanted to end up on top, the thinking went, it was better to start at the bottom, because it was there that you learned the discipline and motivation essential for success. "New York merchants preferred to hire country boys, on the theory that they worked harder, and were more resolute, obedient, and cheerful than native New Yorkers," Irvin G. Wyllie wrote in his 1954 study "The Self-Made Man in America." Andrew Carnegie, whose personal history was the defining self-made-man narrative of the nineteenth century, insisted that there was an advantage to being "cradled, nursed and reared in the stimulating school of poverty." According to Carnegie, "It is not from the sons of the millionaire or the noble that the world receives its teachers, its martyrs, its inventors, its statesmen, its poets, or even its men of affairs. It is from the cottage of the poor that all these spring."
Today, that interpretation has been reversed. Success is seen as a matter of capitalizing on socioeconomic advantage, not compensating for disadvantage. The mechanisms of social mobility--scholarships, affirmative action, housing vouchers, Head Start--all involve attempts to convert the poor from chronic outsiders to insiders, to rescue them from what is assumed to be a hopeless state. Nowadays, we don't learn from poverty, we escape from poverty, and a book like Ellis's history of Goldman Sachs is an almost perfect case study of how we have come to believe social mobility operates.
...Nor did he try to pretend that he was an insider. He did the opposite. "You'll have to make that plainer," he would say. "I'm just a dumb, uneducated kid from Brooklyn." He bought a modest house in Scarsdale in the nineteen-twenties, and lived there the rest of his life. He took the subway. He may have worked closely with the White House, but this was the Roosevelt White House, in the nineteen-thirties, at a time when none of the Old Guard on Wall Street were New Dealers. Weinberg would talk about his public school as if it were Princeton, and as a joke he would buy up Phi Beta Kappa keys from pawnshops and hand them out to visitors like party favors. His savvy was such that Roosevelt wanted to make him Ambassador to the Soviet Union, and his grasp of the intricacies of Wall Street was so shrewd that his phone never stopped ringing. But as often as he could he reminded his peers that he was from the other side of the tracks.
At one board meeting, Ellis writes, "a long presentation was being made that was overloaded with dull, detailed statistics. Number after number was read off. When the droning presenter finally paused for breath, Weinberg jumped up, waving his papers in mock triumph, to call out 'Bingo!' " The immigrant's best strategy, in the famous adage, is to think Yiddish and dress British. Weinberg thought British and dressed Yiddish.
Why did that strategy work? This is the great mystery of Weinberg's career, and it's hard to escape the conclusion that Carnegie was on to something: there are times when being an outsider is precisely what makes you a good insider. It's not difficult to imagine, for example, that the head of Continental Can liked the fact that Weinberg was from nothing, in the same way that New York City employers preferred country boys to city boys. That C.E.O. dwelled in a world with lots of people who went to Yale and then to Wall Street; he knew that some of them were good at what they did and some of them were just well connected, and separating the able from the incompetent wasn't always easy. Weinberg made it out of Brooklyn; how could he not be good?
Gladwell writes later in the piece about CEOs who've overcome adversity; specifically, dyslexia.
I have ADHD. I don't consider it a "disorder," merely a different sort of brain function than most people apparently have. Certain things that are very easy for other people aren't so easy for me. Organization, for example.
When I talk to the kids at University High (inner-city kids who are bused to the school in West L.A.), I show them two pictures, before and after. The after shot is me at the LA Times Festival of books, moderating a panel with four authors. The before shot is that morning. While most moderators probably take a few minutes to type up a neatly organized list of questions to ask their panels, I have a harder time with that sort of thing. I wrote up probably six dozen questions, all mixed up on about eight or 10 pages, and then printed them on typing paper, highlighted some of them, and cut them all up. I then put them on my rug and started arranging them and taping them together.
I show the kids this shot to show them I'm not so great -- in fact, I kind of suck at things that most people find really easy -- I just work harder than a lot of other people, and work until I get what I'm doing to the point where (I think) it's better than the questions of the people it comes easy for. Also, I feel a pretty great sense of accomplishment from that, and I don't think that's unimportant.
One more bit from Gladwell's piece:
Twenty years later, Weinberg had his greatest score, handling the initial public offering for Ford Motor Company, which was founded, of course, by that odious anti-Semite Henry Ford. Did taking the business prick Weinberg's conscience? Maybe so. But he probably realized that the unstated premise behind the idea that the Jews control all the banks is that Jews are really good bankers. The first was a stereotype that oppressed; the second was a stereotype that, if you were smart about it, you could use to win a few clients. If you're trying to build an empire, you work with what you have.
The idea of Jewish people as great bankers, like most stereotypes, has at least a grain of truth at its heart. If I remember my history properly, and I almost invariably do, European Christian culture had decided to frown on money lending as an industry. It did so based on one point of scripture in which Jesus cast the moneylenders out of the temple (forgetting he did this not out of dislike for bankers, but because they had turned a holy place into a marketplace), and second because it was believed that money lending ("banking") was naturally opposed to charity, which was a desirable virtue to promote. One could further argue that the idealization of poverty (a long standing notion even today that the poor are somehow virtuous by virtue of being poor), but ultimately we can state reasonably that the first two premises were plenty.
Given the dominance of Christianity, and the then absence of Islam in the west, the only persons who were open to the banking industry in great numbers was the Jewish population. This is nae to say that they were "alone", only that those who get in early, get a head start. In time as people realized this dislike or even outlawing of banking work for Christians was expensive, and that there was money to be made at it, Europeans entered the field.
But there is where you get the idea of the great Jewish financier & the covetous Jew both at the same time.
That is, if I remember my history properly. *s* I'll leave it to y'all to weigh in on my accuracy.
Robert at November 9, 2008 7:45 AM
I sense that you believe in "meritocracy", Amy. So did Weinberg, I imagine. So do I.
But I sense that 4 of our major institutions have devolved far away from that notion:
1. Business
2. Government
3. Media/Journalism
4. Academia
If people are primarily promoted based on who they know and how good they are at NOT saying anything controversial (ie. PC-speak) then we're all the worse for it. I'm convinced that Weinberg would be ashamed at where our society is today.
Robert W. (Vancouver, BC) at November 9, 2008 11:05 AM
I do believe in meritocracy, but you're absolutely right that we've gone entirely in the other direction in so many facets of society. I can't believe all the big companies standing in line for a handout. Perhaps my memory fails me...were they making substantial contributions from their profits during the good years to the citizenry?
Amy Alkon at November 9, 2008 11:16 AM
> that Weinberg would be ashamed
You shouldn't cluck on his behalf; if he were alive he'd undoubtedly be clawing his way back into wealth and power, certain that things like "where our society is today" will take care of themselves, as they did during his day.
And I don't think it's as much about merit as is about zero-sum thinking vs. creating value. There are folks down here who voted for Obama who literally believe he'll be paying their rent and gasoline.
In the months ahead, a wave of disappointment is going to sweep across the electorate that will make Nixon's second term seem like a picnic. The pairing of the victories for Obama and Prop 8 out here in California is only the beginning.
Another bank failed in Los Angeles yesterday.
Crid [cridcridatgmail] at November 9, 2008 11:33 AM
Perhaps my memory fails me...were they making substantial contributions from their profits during the good years to the citizenry?
Do taxes count? :)
marion at November 9, 2008 1:35 PM
What crid said.
Also, I see another symptom of the decline of a meritocracy: the rise of paper qualifications. For example, business and government weight degree qualifications more than experience. A four year business degree counts more than four years of actual business management. Positively bizarre.
I wonder if this fallacy operates in publishing?
Jeff at November 9, 2008 2:31 PM
Amy Alkon
http://www.advicegoddess.com/archives/2008/11/09/when_being_an_o.html#comment-1603963">comment from JeffJust spoke to a very intelligent and inquisitive woman I know about this a few days ago. She never went to college officially, but she spent maybe two years sitting in on classes at some Ivy League school, and then started a successful international business. She's the kind of person a lot of people wouldn't hire for lack of a college degree. Dumb.
Amy Alkon
at November 9, 2008 2:51 PM
"The pairing of the victories for Obama and Prop 8 out here in California is only the beginning"
(cue West Hollywood protests)
"NIGGER!"
"FAGGOT!"
Oh, the sweet harmony of Hope, Change, and Unity in Obamalot:)
Regarding Gladwell's piece, I've never believed that poverty is a cradle for ambition and success. The vast majority of people in history who where born in poverty and ignorance died there. Poverty and lack of formal education are circumstances. Circumstances shaped Sidney Weinberg's character and guided his fate, but they did not make his character, or his fate.
For more evidence, consider the men I admire most, America's Founding Fathers. Alexander Hamilton definitely fit the Sidney Weinberg model. Thomas Jefferson could have lazed away his entire life as a gentleman of leisure, browsing rare books in his library and fucking his slavegirls. But both of them signed the Declaration of Independence with equal courage and conviction.
Martin at November 9, 2008 3:43 PM
Love this whole article. Agree with Martin however that greatness can be born poor and it can be born rich. Either way, you still have to work for it, just way harder if you're poor. But, hell, no one wants to work any more, not Paris Hilton and not .
I loved the image of Weinberg shouting "Bingo" during the numbers-laden meeting. I'm going to have to give that a try myself!
Monicats at November 10, 2008 10:49 AM
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