"The Money-Making Personality" by Ayn Rand

This is the Ayn Rand program featuring the author of Atlas Shrugged and the Fountainhead in a series of half hour programs especially created for WKCR and heard every week at this time. Miss Rand was discuss current issues and problems from the viewpoint of her philosophy, Objectivism. Good evening ladies and gentlemen. Today I would like to read to you an article of mine which appears in the current April issue of Cosmopolitan magazine. It is entitled the Money Making Personality. Suppose that you have observed two young men on their way through college and on graduation day ask to tell which one of them will make a fortune. Let us call them Smith and Jones. Both are intelligent, ambitious and come from the same modestly average background. But there are significant differences between them. Smith is aggressively social and very popular. He belongs to many campus groups and is usually their leader. Jones is quite reserved. He does not join group activities. He is usually noticed, but neither liked nor disliked. Some people resent him for no apparent reason. Mies has a wide variety of interests but is always available for one more undertaking. Jones has chosen an undertaking, the pursuit of some special task or study outside the college curriculum to which he devotes all of his spare time. Smith adjusts himself to people easily, but finds it harder to adjust himself to changing circumstances. Jones adjusts himself to circumstances but is inflexible in regard to people. Smith's scholastic grades are uniformly excellent. Jones grades are irregular. He rates A in some subjects and C in others. Smith's image in people's minds is one of sunny cheerfulness. Jones image is grimly earnest. But some rare, fleeting signs seem to indicate that in the privacy of their inner worlds, their roles are reversed. It is Jones who is serenely cheerful and Smith who is driven by some grimly nameless dread. Which one would you choose as the future fortune maker? If you subscribe to the currently prevalent ideas, you would choose Smith and you would be wrong. Jones is the archetype of the moneymaker, while Smith is a deceptive facsimile who will never make money, though he may become rich. To describe him accurately, one would have to call him the money appropriator. Prospectors looking for gold know that there exists a mineral which deceives the ignorant by its brilliant glitter. They call it fool's gold. A similar distinction exists between the real producers of wealth and the pseudo producers. But the mineralogists of the human soul have not learned to differentiate between them. Most people lump together into the same category all men who become rich, refusing to consider the essential question, the source of the riches, the means by which the wealth was acquired. Money Is a tool of exchange. It represents wealth only so long as it can be exchanged for material goods and services. Wealth does not grow in nature. It has to be produced by man. Nature gives us only the raw materials. But it is man's mind that has to discover the knowledge of how to use them. It is man's thinking and labors that transform the materials into food, clothing, shelter, or television sets, into all the goods that men require for their survival, comfort, and pleasure. Behind every step of humanity's long climb from the cave to New York City, There is the man who took that step for the first time. The man who discovered how to make a fire or a will or an airplane or an electric light. When people refuse to consider the source of wealth, what they refuse to recognize is the fact that wealth is the product of man's intellect, of his creative ability. Fully as much as is art, science, philosophy, or any other human value. The money maker is the discoverer who translates his discovery into material goods. In an industrial society with a complex division of labor, it may be one man or a partnership of two. The scientist who discovers new knowledge and and the entrepreneur, the businessman, who discovers how to use that knowledge, how to organize material resources and human labor into an enterprise producing marketable goods. The money appropriator is an entirely different type of man. He is essentially non creative. And his basic goal is to acquire an unearned share of the wealth created by others. He seeks to get rich not by conquering nature, but by manipulating men. Not by intellectual effort, but by social maneuvering. He does not produce, he redistributes. He merely switches the wealth already in existence from the pockets of its owners to his own. The money appropriator may become a politician or a businessman who cuts corners or the destructive product of a mixed economy. The businessman who grows rich by means of government favors, Such as special privileges, subsidies, franchises, that is, grows rich by means of legalized force. In the present state of our economy, in the chaotic mixture of free enterprise and government controls, it is becoming progressively harder to distinguish the money maker from the money appropriator. When every business is tangled in government regulations, the dividing line between the earned and the unearned grows blurred. Authentic money makers are forced to resort to government help. And some money appropriators are forced at times to exercise some productive effort, if only for the sake of their public image. But if one watches a man's activity over a period of time, One can speak still see whether his success is due essentially to his productive ability or to political pull. No single outward characteristic can be taken as a sure sign of the money making personality. The traits ascribed to Smith and Jones may vary, but the net sum of their traits will always add up to the same essentials. The essential characteristic of the money maker is his independent judgment. The essential characteristic of the money appropriator is his social dependence. A man of independent judgment is a man of profound self esteem. He trusts the competence of his own mind to deal with the problems of existence. He looks at the world wondering what can be done? Or how can things be improved? The money maker, above all else, is the originator and innovator. The trait most signally absent from his character is resignation, the passive acceptance of the given, the known, the established, the status quo. He never says, what was good enough for my grandfather is good enough for me. He says, what was good enough for me yesterday will not be good enough tomorrow. He does not sit waiting for a break or for someone to give him a chance. He makes and takes his own chances. He does not whine, I couldn't help it. He can and does. The men who will never make money are the hedger who plays it safe, waiting to follow any trend, and the gambler or plunger who plays blind hunches on the spur of the moment, on hearsay, on his own unaccountable feelings. The money maker does neither. He does not wait for trends, he sets them. He does not gamble. He takes calculated risks, assuming the very responsibility which those two attempt to bypass. The responsibility of judgment. The man who will never make money has an employee mentality. Even in an executive's job, he tries to get away with a minimum of effort, as if any exertion were were an imposition. And when he fails to take the proper action, he cries, but nobody told me to. The money maker has an employer mentality, even when he is only an office boy, which is why he does not remain an office boy for long. In any job he holds, he is committed to a maximum of effort. He learns everything he can about the business, much more than his job requires. He never needs to be told, even when confronting a situation outside his usual duties. These are the reasons why he rises from office boy to company president behind his usually grim expressionist face. The money maker is committed to his work with the passion of a lover, the fire of a crusader, the dedication of a saint, and the endurance of a martyr. As a rule, his squeezed forehead and his balance sheets are the only evidence of it. He can allow the world to see. Neither space, time nor age can limit the moneymaker's extravagant energy and drive. At the age of 22, George Westinghouse observed the frequency of railroad accidents caused by inadequate brakes and invented the Westinghouse air brake, which, with some improvements is used to this day on all trains throughout the world. At the age of 69, Cornelius Vanderbilt, who had made a fortune in the shipping business, saw that railroads were to be the chief transportation medium of the future, gave up shipping and became one of the greatest figures in our railroad history. The creator of the New York Central system, Arthur Vining Davis, who died in 1962 at the age of 95, was the man who built single handed one of America's greatest industrial concerns, Alcoa, the aluminum company of America. He joined it at the age of 21, almost literally as the first hired hand wrote Fortune Quote in the decades following the turn of the century, when Alcor was the aluminum industry, A.V. davis was Alcoa. Close quote his associates said that he had, quote, absolute confidence in his own business acumen and judgment. He was described also as follows. Quote he has a fierce impatience to get things done, is intolerably intolerant of wits less nimble than his own, and has a noble temper. Close quote at the age of 89, with a fortune estimated at $350 million, Davis moved to Florida and embarked upon an entirely new career that involved a fantastic variety of new interests. Florida real estate developments, nurseries, airlines, hotels, banks, dairy farms, etc. All of which proceeded to manage with splendid efficiency and growing success. When he was questioned about his goals, he answered brusquely, I buy properties with the thought of making money. Observe that his new ventures were long range developments which required decades before they could pay off. The man who dream of winning a fortune on a sweepstakes ticket would never understand his psychology. It is only the money appropriator who lives and acts short range, never looking beyond the immediate moment. The money maker lives, thinks and acts long range, having complete confidence in his own judgment. He has complete confidence in the future and only long range projects can hold his interest. To a money maker as well as to an artist, work is not a painful duty or a necessary evil, but a way of life. To him, productive activity is the essence, the meaning and the enjoyment of existence. It is the state of being alive. Arthur Vining Davis had created Alcoa by the extraordinary range of his vision. He was a true builder and in order to feel alive, he had to remain a builder to his last moment. That long range vision is characteristic of all the great moneymakers. It was characteristic of JP Morgan, who made his fortune by his ability to judge which industries held the potential of future growth and to finance as well as organize their integration into industrial giants. United States Steel is one of his monuments, as well as the monument of Andrew Carnegie, whose company was the central property of that merger and who had started in life as a steel worker. The money maker's ability to defy established customs, to stand alone against storms of criticism and predictions of failure, was eloquently demonstrated by Henry Ford. Ford was a revolutionary innovator, both in technology and in economics. He was the first man to discover the financial advantages of mass production, the first to use an assembly line, the first to refute in practice the theory of class warfare by offering his workers an unsolicited raise in wages higher than any union scale at the time, which he did not for an altruistic purpose, but for the honorably rational purpose of attracting the ablest kind of labor and obtaining a higher production efficiency in his lifetime. Ford received no recognition of his achievements from the intellectuals who were swimming with the tide of collectivism and indulging in the rubber barons type of smears against all great industrialists. Such smears alleged that the man who had created this country's magnificent prosperity had done it by robbing the man who had not created it. Tom M. Girdler, the last living representative of America's great era, who rose from the ranks of labor to the presidency of Republic Steel, was a special victim of the collectivist tide. An intransigent advocate and embodiment of independence, Girdler fought a heroic battle against sundry politicians and intellectuals who singled him out as the object of particularly savage attacks. Many modern commentators of the collectivist persuasion claim that the day of the great individualist of the independent mind is past and that future progress will be achieved somehow by everybody in general and nobody in particular. But if we look at the money makers of the present who fought their way to success against the barrier of ever increasing political obstacles and confiscatory taxation, we see the same essential characteristic, the independent judgment that discovers the new and pursues the untried quote. If a man of the Renaissance were alive today, writes Fortune, he might find running an American corporation the most rewarding outlet for his prodigious and manifold talents. In it, he he could be scientist, artist, inventor, builder and statesman. It would be a company created in a man's image, molded by him in every significant detail, building a product, the embodiment of his genius that would be unique in all the world. He would gather around him Extraordinary associates selected with meticulous care, who would share his passions and his enthusiasms, who would create and build with him. Such a man, as it happens, does exist. He is Edwin H. Land. His company is Polaroid Corporation of Cambridge, Massachusetts, which makes the famous 60 second camera. Close quote. Land's history is the clearest modern example of an authentic moneymaker's role. Like Edison and Westinghouse, he is an inventor, industrialist. Starting from scratch, he has made a fortune estimated at about $100 million. The idea of a camera that would take, develop and produce finished pictures in a single operation lasting a few seconds would have been pronounced impossible by all the experts. The problem seemed insurmountable. Land solves them in in six months. I would be willing to bet, said one of his associates, that 100 PhDs would not have been able to duplicate land's feat. In 10 years of uninterrupted work, Land encountered and withstood the opposition of the routine mentalities that greets every great innovator. Quote Land revolution, writes Fortune, was at first derided by all the experts, the people who always know why a revolution cannot succeed. These experts included virtually every camera dealer in the country, every advanced amateur photographer, and nearly everyone on Wall Street. Land won, as every great innovator does when and if he is left free to win. It is significant that many of the new millionaires made their fortunes either on new inventions or on their ability to revive old companies perishing from bad management. One of the most interesting figures in the second group is James E. Robinson, president of Indian Head Mills, a true moneymaker in the stagnant textile industry. An industry stifled by the complex coils of protective tariffs and cotton subsidies. Robinson made a fortune by buying run down textile mills and turning them into lively profit making enterprises through his expert management. His policy rests on opposing all forms of stagnation and on a swift, decisive manner of upsetting traditions or routines. Fortune calls him the advocate of the UN status quo. a time when most businessmen are silent, evasive or apologetic about issues of political philosophy, Robinson is a militant crusader for pure capitalism. He seems to be fully aware of the fundamental crisis of our age. And he is not afraid to speak. He wrote a policy manual for Indian Head Mills which declares, quote, the objective of this company is to increase the intrinsic value of the common stock, unquote, and explains that the company is in business, quote, not to give, grow bigger for the sake of size, nor to become more diversified, not to make the most or best of anything, not to provide jobs, have the most modern plans the happiest customers lead the new product development or to achieve any other skill status which has no relationship to the economic use of capital. Any or all of these may be, from time to time, a means to our objective. But means and ends must never be confused. Indian Head Mills is in business solely to improve the inherent value of the common shareholders equity in the company. That this sounds shocking is a measure of the evasion permeating our cultural atmosphere. This is mere economic common sense and no productive company can function otherwise. In his youth, Robinson was profoundly influenced by Professor Malcolm P. McNair of the Harvard Business School who wrote, quote, the world's work has to be done and people have to take responsibility. Responsibility for their own work and their own lives. Too much emphasis on human relations encourages people to feel sorry for themselves. Makes it easier for them to slough off responsibility to find excuses for failure to act like children. Close quote. This passage holds a clue to the tragic situation of the moneymakers. They are the only group of men who who fully realize that the world's work has to be done. And they go on doing it under a deluge of abuse accusations and ever growing demands. They go on unable to defend themselves or fully to understand, knowing only that the survival of the world hangs on their unremitting effort. They are the silent, unknown and forgotten men of our culture. It is only the money appropriator who hires personal press agents and pastures in the public spotlight. It is the money appropriator who flaunts his money in vulgar displays of ostentation, who craves prestige and notice and hangs eagerly on the fringes of cafe society. The money maker does not care for money as such. Money to him is a means to an end, the means for expanding the range of his activity. Most money makers are indifferent to luxury and their manner of living is startlingly modest in relation to their wealth. A Wall street friend once said about Charles Allen, head of the investment banking house of Allen Co. Who has a large fortune and the simplest of wants. Charlie has no interest in in money except making it. Not all the money makers achieve enormous wealth. Their success depends in large measure on the degree of freedom still remaining in their particular field. Some realize only a small fraction of their creative potential. Some are never heard of. In today's conditions, it is impossible to guess their actual number. I once asked Alan Greenspan, president of Townsend Greenspan Co. Economic consultants, to venture an estimate on what percentage of men in our business world he would regard as authentic money makers, as men of fully sovereign, independent judgment. He thought for a moment and answered a little sadly. Quote, on Wall street, about 5%. In industry, about 15. It is a small, lonely minority that carries our world on its shoulders. Loneliness is the underground to which we have condemned the moneymaker, a bewildered loneliness that is not erased by his occasional moments of boisterous gaiety. It is the loneliness of sensing that he is the victim of some incomprehensible injustice. His coldly uncommunicative manner hides his enormous frustrated benevolence, his childlike innocence and his profoundly earned pride. Toward the end of his life, Carlos P. Huntington, one of the builders of the Central Pacific Railroad, a man of gigantic ability and mixed premises, who had the soul of a moneymaker but resorted at times to the methods of a money appropriator, made a startling change in his manner of living. He had lived his life in of spite, contemptuous of all material luxuries and frivolities. But in his 60s, he turned to a sudden frantic orgy of extravagance, indiscriminately buying palatial residences, French furniture, real works of art and costly trash, the sort of things he had condemned his partners for buying. Among these haphazard acquisitions, there was a painting, the Pink and Ancient Scene, for which he paid $25,000, an action that seemed incomprehensible to his contemporaries. But here is what Huntington wrote about that painting in his autobiographical notes. Quote, there are seven figures in it. Three cardinals of the different orders of their religion. There is an old missionary that has just returned. He's showing his scars where his hands are cut all over. He is telling a story to these cardinals. They are dressed in luxury. One of them is playing with a dog. One is asleep. There is only one looking at him, looking at him with that kind of an expression, saying, what a fool you are that you should go out and suffer for the human race when we have such a good time at home. I lose the picture in the story when I look at it. I sometimes sit half and hour looking at that picture. Unquote. What story was Huntington seeing? He was seeing a lonely, unappreciated fighter. He was seeing the money maker, the fighter for men's survival in the jungle of inanimate matter. The man who alone remembers that the world's work has to be done.