Mail Bag: Will The Business World Look Down On Me?
There was an interesting question sent to my inbox dealing with what are perceived as societal handicaps or disadvantages, and whether or not it will influence your career. I thought it might be a good chance to talk about the theory of interchangeable capital, which should be in your mental model toolbox.
It can also be useful because each of us is likely to face some situation in life when certain character traits or beliefs cause us to be at a disadvantage, whether that’s being a Christian living in Egypt, a Pakistani living in Great Britain, a women living in Oman, a white person dating someone from a traditional Chinese family who disapproves, or any number of permutations.
… frankly, I’m an African-American gay guy and wonder do you think the financial/business world would look down on me?
Before I get to the good stuff: You’re in the United States, so, no, I can’t imagine it being a problem unless you’re trying to open an Edward Jones franchise in the middle of a farm town where most of your clients are going to be octogenarians. Then you’d face a demographic challenge, I suppose.
Beyond that, there really isn’t such a thing as a “business world”, in the same sense as “there is no such thing as society” – there are just individual people, individual businesses, and individual corporate cultures. Life is going to be very different living in Southern California than it is Arkansas. I take it the heart of your question is whether or not a substantial percentage of the population is likely to be antagonistic due to your race and / or sexual orientation to the point it harms your livelihood?
Let’s take a step back and put this into a broader perspective. Think of capital as something that represents a claim check on society. There are many forms of capital – financial capital is one, strategic asset capital is another, knowledge capital, beauty capital, reputation capital, military capital, athletic capital, ad infinitum.
In the right circumstances, and depending upon your skill at knowing how to utilize it, you can use this capital to get something else you want; convert the various forms like an alchemist. Societies develop complex social pacts about what it considers acceptable when it comes to converting one form of capital into another. A beautiful man or woman could use his or her attractiveness to secure financial capital by entering a relationship with an older, wealthier man or woman. A very knowledgeable person could sell that knowledge to others on a freelance basis (e.g., consulting) in exchange for financial capital. Some forms of capital cannot be acquired other than by sheer effort – athletic capital is something you have to make yourself; you can’t receive it from anyone else, as is musical capital, artistic capital, and skills capital. Mozart wanted a paycheck and a lot of easy women, so he traded in his musical capital for money and ladies. Michael Bloomberg wanted political capital so he cashed in financial capital to support his now-ended, long-term reign over New York City. When an oil services giant hires an engineer, it is trading its financial capital for the skill and knowledge capital of the new worker. In free societies, it’s all just people negotiating amongst themselves to get more of the goods and services they find enjoyable or necessary to their own lives.
Each person has a unique capital scorecard. The range of values you can amass are dependent to some degree on genetics, but the actual values – where you fall along those Gaussian and non-Gaussian distributions – depend on your efforts and ingenuity. Furthermore, the value of your capital will vary from time to time, moment to moment, situation to situation.
Those interested in sociological studies focus on one particular form of capital – social capital – which they shorthand as “privilege”. Certain privilege is conveyed by merely being a member of the majority, whether that be race, religion, sexual orientation, political affiliation, or supporter of a given baseball team. Often, what is privilege in one situation is a handicap in another set of circumstances; a 35-year old white man walking around in an expensive store alone is going to be treated much better than most people, yet that same man sitting on a playground bench thinking is likely to be viewed with suspicion if he has no woman or child around him, which is itself a form of misandry; his privilege came to be a source of disutility when the external variables changed solely due to his gender.
Here is an excellent example of social capital differing based on skin color and how you can actually “lend” your social capital to others:
In this sense, it is true that you are going to occasionally deal with crap other people don’t have to experience. And it sucks. And it’s not fair. If you want to sell your time for a paycheck as your primary means of generating cash for your household, it is a possibility that you might encounter a boss, colleague, or client who simply doesn’t like you for who you are. This should be no great loss as you wouldn’t want to be around a person who would be so irrational, anyway.
The important thing is, those traits aren’t the only thing that determine how hard life will be for you. Humans are a complex mix of abilities and capital that create some interesting dynamics. Let’s go back to one of the first forms of capital I mentioned, beauty capital. Based on every psychology paper I’ve ever seen, I’d bet a heck of a lot of money that someone who was black and gay – things that should put him at a disadvantage relative to the general population – would actually do much better than the general population if he looked like Tyson Beckford.
Why? The level of beauty capital far exceeds other factors, creating a net advantage, and it is one of the most powerful forms of capital known. Yes, our theoretical person would still face unique forms of discrimination he otherwise wouldn’t have faced – and it is not fair nor okay – but the advantages he would receive from his physical appearance are extreme because beauty capital does crazy things. Social experiments on the topic have induced some models, who are disguised to look “ordinary”, to tears when they realize how differently they are treated. It even influences whether you are likely to get help if you have a flat tire. Beauty capital is important for men, but it is exponentially more powerful for women, both in the present and historically.
(To tie this in to our earliest examples, Beckford is a case of converting beauty capital into large amounts of money. He traded one claim check in for another, which he could use for his family. His estimated net worth is now more than $14,000,000, plus he can still earn a very high income that puts him in the top 1% by booking jobs independent of the cash his wealth produces. He is able to lend his beauty capital to clothing companies, putting a halo around the garments so that people desire them, leading to an increase in sales.)
Beauty capital makes compliance for even the most mundane of requests go through the roof. People like looking at attractive people; it rewards the brain, and the person who wields the beauty gets the dividend. (Beauty capital changes based on the situation – the clothing you wear, the hairstyle you choose, and the other signals you broadcast – and often declines with age.)
Obviously, very few people have that level of beauty capital, and even if their raw genetics were capable of it, they don’t exploit it by constantly working out, dressing the part, and maintaining their skin tone, manicure, and teeth whitening levels. (Note that an inheritance of potential beauty capital requires maintenance and development the same way an inheritance of financial capital does.) Instead, your advantage is more likely to be found in things like being more competent, more diligent, harder working, more knowledgeable, and developing better connections. Those types of factors can offset other handicaps so you end up at the top of your field, or at least do very well. There are a million different paths to the prize; these days, anyway (this was not the case if you had been gay and black in 1945, so thank God).
But this is all meaningless if you are talking about investments, rather than selling your time for money to a financial institution as a stock broker, trader, analyst, or what have you (getting paid for your investment knowledge). If you own $1,000,00 worth of Royal Dutch Shell plc ADR (Class B) at today’s valuation, you’re getting $53,000 per year in cash dividends. The stock doesn’t care if you’re black. The stock doesn’t care if you’re gay. The stock is totally agnostic. It will pay you the same reward it does an old, straight, white man. The money is green. That’s what makes it so wonderful.
In the event you find yourself at a disadvantage due to being black or gay when working for others, you could always take the strategic road Aaron and I chose in our own careers: hire yourself. Nobody gave Ray Kroc a job. He saw McDonald’s, negotiated a buyout deal, took it over, and started selling hamburgers. Nobody gave Bill Gates a job. He started Microsoft, bought an operating system, and started selling software by licensing it to IBM. Warren Buffett hired himself when he started some investment partnerships (and not everyone told him, yes; some people just didn’t like or trust him). If it were truly a problem (again, I don’t think it is enough to matter, not anymore in Western democracies), there are ways around this. A classic case study is the leading bank to the nation’s 400 richest Americans, Northern Trust. It setup specific practice groups focused on attracting clients who want to deal with people like themselves; they actually have a cadre of gay private bankers who do nothing but work with gay families. That’s a very intelligent way to handle the problem. They knew that their bank was at a disadvantage if all of their bankers were straight, white men. They needed someone else with whom a broader group of clients could identify.
(Personally, I think it’s all a bit stupid as my personality lends itself to only being interested in ability and honesty. If I were designing a skyscraper, and the best architect on the planet were an androgynous retiree who wore steam punk clothing and claimed to be in a relationship with a Japanese pillow person, I wouldn’t care. It’s meaningless to me. I’m hiring them for their skill. I don’t care if my banker is Christian or atheist, gay or straight, white or black – I just want competence and integrity; that they do the job with excellence.)
So, no, even though discrimination absolutely exists, in terms of personal strategy for getting ahead, I don’t think it’s worth worrying about at present if you choose your geographic location and employer wisely. But even if it were, why would you let that stop you? Have you chosen a career based on what you love to do? Because you find it rewarding? Because you’re willing to live with the trade-off of effort and time for money? If so, why would you let a few bigots stop you from your dream? They shouldn’t have that kind of power over you. Half the time they aren’t even thinking of you, anyway, and before long, most of them will be dead. That’s impolite to say, but it’s true.
Don’t worry about it. Follow your heart, do the best work you can, and amass surplus capital, in all its forms and manifestations, so you have more claim checks you can cash in down the road. Even if you don’t use them for yourself, you can pass them on to your children and grandchildren, give them to charity, or pick worthy strangers whom you want help.