Thursday, August 04, 2011

"behind every great fortune there is a psychological aberration"

--- The Economist's Schumpeter columnist, in Great bad men as bosses, 23 July 2011.

Quote in context:

Balzac supposedly wrote that “behind every great fortune lies a great crime”. It would be truer to say that behind every great fortune there is a psychological aberration. Henry Ford hated Jews. George Eastman sanctioned industrial espionage. Thomas Watson turned IBM into a personality cult, complete with company songs about “our friend and guiding hand”, a man whose “courage none can stem”. Michael Milken, the inventor of junk bonds, was jailed. Richard Tedlow of Harvard Business School argues that many “giants of enterprise” suffer from what Norwegians call stormannsgalskap, the madness of great men.

Stormannsgalskap is particularly common among media barons, not least because they frequently blur the line between reporting reality and shaping it. William Randolph Hearst is widely suspected of stirring up the Spanish-American war to give his papers something to report. Lord Beaverbrook regarded himself as a kingmaker, literally so in the case of George VI. These men’s megalomania was captured in two masterworks: Orson Welles’s film “Citizen Kane” and Evelyn Waugh’s novel “Scoop”.

The ugly side of these entrepreneurs is often just as important to their success as their admirable side. You cannot reshape an industry without extraordinary confidence in your own rightness. And it is hard to build a great company from scratch without what Mr Tedlow dubs “the imperialism of the soul”. But these negative qualities often end up undermining the empires that they helped to create.