The Myth of the “Self Made Man”

Tom Perkins was on Bloomberg TV yesterday afternoon discussing  comments he made in a letter to the editors of the Wall Street Journal over the weekend.  In case you missed it, the letter explained how the 1% are a minority group being attacked by the majority.  And Perkins made a totally inappropriate comparison with the persecution of the Jews during WW2.  Not surprisingly, this set off a firestorm.

I understand the point Perkins was making.  But these aren’t the comments that interest me.  Instead, I was intrigued by some comments Perkins made in the Bloomberg TV interview.  At one point, he discussed how he came from the 99% and declared:

“i am your classical self-made man, if you will.”

I always find comments like this to be a little bizarre.  There’s a certain level of egotism in this idea that anyone is a “self made man”.  As if they’re Robinson Crusoe alone on an island building everything from nothing only to find themselves later surrounded by swarms of people dying to do business with them and praising their past efforts.  Of course, that’s not at all how life works.  We are inherently social creatures residing and evolving within an incredibly interconnected world where our future success relies on the past, present and future successes of many.

This is not to say that independent thinking or personal skills do not matter.  Far from it!  But I would echo the thoughts from the latest letter by Howard Marks on luck and skill:

“a great many things contribute to success.  Some are our own doing, while many others are beyond our control.  There’s no doubt that hard work, planning and persistence are essential for repeated success…But even the hardest workers and best decision makers among us will fail to succeed consistently without luck.”

Marks goes on to explain the role of chance in our lives.  How being born in the USA sets us on a dramatically different path than being born in a third world country.  Or how being born at a particular time can bring a person incredible fortune.   But this only scratches the surface of this myth of the “self made man”.

You see, in a monetary world, your success relies on millions of other people believing that you have something useful to offer the world.  In the aggregate, producers need consumers.  And consumers need producers.  There are two sides to every economic transaction and no one gets rich on their own.  And more importantly, in a highly socialized network like the modern monetary system, the structures that make up for success are ultimately built on the backs of millions of people who contribute to the past, present and future foundations of that system.  No one built all of this by themselves.

Tom Perkins is not unique here.  He did not build his firm on his own.  He was mentored by geniuses, utilized technologies that were developed by both the private sector and public sector and was fortunate enough to have access to the absolute best education in the world.  And only THEN was he able to leverage all of this into something great.  And don’t get me wrong – I am by no means saying that the success of someone like Tom Perkins is not due to hard work, personal skill and perhaps genius.  It’s just that there’s ALWAYS so much more to the macro story than one person’s micro achievements.

The bottom line is  - no one is “self made”.   And people who use this term are almost certainly trying to perpetuate some sort of self aggrandizing myth that makes them feel more comfortable with what is likely fragile ego masquerading as a heroic white knight.

Cullen Roche

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services. He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance and Understanding the Modern Monetary System.

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Comments

  1. This would be an interesting behavioral study. Human beings hate losing what they already have. And they feel like they’ve earned what they obtain. And any time an extremely wealthy person obtains a certain level of wealth they feel unjustly attacked if others claim they either didn’t earn that or should give some of it away. The idea of the “self made man” is an attempt to rationalize this bias.

    • Cullen, a very good sensitive post. I certainly remember those instances when lucky or unlucky happened beyond my control.

  2. That Perkins interview was priceless. He couldn’t stop digging that hole fast enough!

  3. Great post.

    Marks says, “There’s no doubt that hard work, planning and persistence are essential for repeated success.”

    Even here, someone’s ability to plan, persist, or their desire to work hard are all at least partially contingent on how this person’s cognitive abilities and brain develop. How much control do we have over our own brains development in our formative years? The social environment and parents play a critical role in this regard as well. Yet, at that point in our lives we have little control over their decisions involving us. This strengthens the point both Cullen and Mark’s present.

    That said, i don’t want this to come off as suggesting that people shouldn’t be celebrated for their accomplishments. Instead, I hope that these points provide us with the reasoning to treat others compassionately when they act in a way which we find to be in error.

  4. Cullen-

    “No such thing as a self-made man.” . . . . hmmm

    Sounds suspiciously like “You didn’t build that.”

    • Let’s keep the balance here and not veer off into extremist political la-la land (not that you are). My point is that we all take part in building things to a certain degree. You might even be responsible for a disproportionate amount of the building. Heck, I have been disproportionately responsible for everything I’ve built. But I would NEVER call myself “self made”. That would be a total misrepresentation of the fact that I was raised by amazing parents, afforded a great education and leveraged the skills, inventions and intelligence of lots of other people. That’s my point.

      • That was probably “somebody else’s” point as well. It is ad hominem to dismiss everything a certain someone says just because he is that certain someone, and (probably) confirmation bias to accept the same statement from certain other someones based mostly on where they sit in the “Great Hall.” Funny thing, pointing it out leads to fingers in ears.

      • Cullen, I think there’s a compliment here for you — you put this thought together and expressed it in a much better way than the president did.

      • I was one of the lucky ones that got to work with Tom Perkins during his “formative” years. His mantra in 1978, delivered to the five or ten of us working in the corner of an airfreight warehouse (named Genentech), was that we could “make it happen”. The projects we were working on were shunned by the pharmaceutical companies. He said to the five or ten of us (I’m not kidding), we would “change the world”, “do what nobody ever did before”, “push the envelope”. I well understood that commercial success on these projects would require Mother Nature helping our very own team in ways she never helped other human beings do — ever.

        This type of encouragement was in retrospect hugely inspiring. I was kind of the worrywart. If what we were trying to do did not work out, how long would it take for him to “pull the plug”? I was admonished more than once when I confessed: “we can’t do that”. The snap back response from Bob Swanson was, “don’t ever say can’t, just tell me what you need to make this happen.” This was the kind of attitude we were up against. It was fantastic! With Tom’s “hands on” help we soon put together the most talented group of brand new molecular biologist Ph.D.s ever assembled.

        Tom loves working with very smart people and putting them in a situation where they can do something they dearly love to do, that here-to-for was not done (and only hopefully not impossible). Tom is so excited about the process. Never mind that he can sell the result for millions — only if it works. Based on my own experience, I assure you that every one the builders he put to work on that incredible boat building project were excited, energetic and anxious ever single day they went to work. As a “boots on the ground” worker, what more could you ask for?

        I also submit that he is very good at taking credit for success. In my experience, everyone does not share this human feature. (BTW I’m not good at this.) Those who are good at it will get promoted up the ladder of the organization they are linked to only if they can translate the “success” part to everybody else. The “boots” (actually tennis shoes in our case), that actually caused the “success” (e.g. “made it happen”), don’t get the same kind of adulation. But I assure you the felling of “satisfaction” is pretty darn good, especially if you are properly rewarded for your efforts.

        I would like to comment on a couple of things he said. When I first read about Kristallnacht years ago, I was appalled. Luckily for me my GGGrandfather (Israel), moved our family from what was then the Austrian Empire to New York City in the 1890s, whereas the relatives chose to stay behind in their beautiful village in what is now the Ukraine. This tragedy stays in my mind, because it was so awful. My own Berkeley Molecular Biology professor, Dr. Günter Stent’s autobiography, brought this “Kristallnacht” image full force right in my face. For me the breaking of the glass windows by the crowd in San Francisco would have brought that vision right back in my face again. It’s not a good comparison, but what can I say? Also, when he made the flip comment that he was a “self made man”, he was actually referring to the fact that his wealth was not inherited. I know full well that he appreciates the fact that he was simply the Chairman of the Board, a manager, a director, and not the one with the tennis shoes. Maybe he didn’t directly “make it happen”, instead something inside his head said: “make it possible to happen”.
        http://archive.org/details/klienerperkins00perkrich

    • “Sounds suspiciously like “You didn’t build that.””

      That’s because it’s exactly the same point. Unless you want us to believe that Perkins built the interstates, the internet, the US military and probably stepped off the boat with Columbus, Perkins and people like him who imagine themselves to be islands of self reliance are lying to themselves and to the debt they owe every other tax payer and consumer in North America.

      • No one said Perkins didn’t build his company and success. All I said was that he got a lot of help along the way and the term “self made” often implies otherwise.

        • I agree “self made” often “implies” that. But taken in context, that is not what he said. So you are misquoting. I, from my own experience, say that is certainly not who he is. My link to his/my experience at Genentech (his oral history is worth a look). It is evidence that supports my understanding of the guy. “Self made” was about the fact the he did not inherit his wealth, instead he got it the old fashion way, on the backs of folks that loved what they did and got to benefit from their efforts.

          • BTW I am reacting to this supposition: “people who use this term [“self made”] are almost certainly trying to perpetuate some sort of self aggrandizing myth that makes them feel more comfortable with what is likely fragile ego masquerading as a heroic white knight.”

  5. The biggest myth is not the self made man but that anyone can do it with hard work.

    While I don’t doubt hard work is required in most cases other than inheritance, real wealth generation and even a successful business employing more than a few people and growing requires a combination of traits that include intelligence, social skills, education, grit, a belief that something is worthwhile and certain values. It ehlps if your imagination has been captured by an industry that continues to grow exponentially after you enter it.

    Only a relatively few people on the planet or in any one country or city directly employ in their own business more than 10 people. Many businesses are immediate family members and 1 or 2 others only and while they may be moderately successful, very few will produce top 5% wealth.

    On the other hand, working in someone elses business is unlikely to make you wealthy unless you are absolutely exceptional and become CEO of a Fortune 500 size company or organisation.

    • Or if you work in one of those business/industry where everyone believes they are irreplaceable talent and would quit if their bonus is cut from $1m to $900k and get to keep the profits from gambling other people’s money and get bailed out if things go wrong.

  6. The Fed backstop behind financial assets has been a significant driver of the success of the 1% in my opinion. Prior to the Fed, capital changed hands significantly after each crisis. Those on the sidelines became the new (some would argue “rightful”) owners and vice versa. Now the 1% can simply hang on. How different would the composition of the 1% look if the Fed had not stepped in during 2008? I’d argue very different. Yet how much does the 1% acknowledge this massive hidden insurance policy – i’ve never once heard it mentioned. “Self-made” is a bit of a joke.

    • Is there any doubt that the Fed’s policies helped the richest Americans more than the poorest Americans? The whole point was to enact a “wealth effect” after all. In order for this to work for you you need to have some wealth to begin with so naturally the wealthiest people benefit the most from this sort of policy.

      • No doubt here. You’d just think: a) adopting such a significant implicit policy would have broader buy-in…in fact, officials won’t acknowledge it exists and the population is generally in the dark and b) those who have benefited would realize they’ve benefited…seems to me they just feel “smart.”

  7. Those poor 1%ers being “attacked”. I notice how negatively its affecting them too. Their percentage of income/wealth grows each day. The 1% control well over 50% of wealth and income so I’d say they do an admirable job of fending off attacks.

      • I’m not a huge ADL fan in general, but i do think it’s nice that they usually publicly condemn stupid unwarranted Nazi comparisons, whether the perpetrator is left, right or center politically. They usually get a public apology w/in 24 hrs too. There’s not many institutions left in the US whose public shamings are effective across the political spectrum.

        • My refugee-immigrant parents had “front row seats” on the economic conditions, politics, resentments, hatreds, and envy leading up to WW-II and had shared with me what they saw.

          Scapegoating is scapegoating, whether it is for a person’s race, culture, religion, nationality, social class, wealth or lack thereof, or political alignment. And it starts small, with classes of people for whom there is general agreement deserve to be criticized.

          Those taking satisfaction in Mr. Perkin’s backing down in the face of criticism should heed the words of Martin Niemoller, “First they came for the Socialists, but I did not speak out, because I was not a Socialist . . .”

          • I almost wrote that in jest! “First they came for the 0.001%, but I did not speak out, because I was not one of them … plus they were in absolutely no danger whatsoever, and could afford any comfort, security measures and legal council one could possibly fathom. Then they came for the 0.01%…”

            I think it was entirely appropriate for Mr. Perkins to back down from using inappropriate and hyperbolic Nazi comparisons.

            If the socialists made an equally inane Nazi comparison, I’d say the same about them.

            Mr. Perkins didn’t have to apologize if he didn’t want to. Nobody put a gun to his head, but the fact is he did. What would be the consequences if he hadn’t apologized? Comparable to the fate of the socialists in Nazi Germany? I doubt it. I’ll take him at his word that it was a stupid thing for him to have said, and that he thought better of it later… and perhaps was a little embarrassed by it.

          • … plus what do you suppose Mr. Niemoller had mind when he wrote “came for”

            1. Upon ascent their political opponents to power, they were stripped of all their power, status, and possessions, declared to be outlaws and “enemies of the state,” and they and their families were arrested and sent to concentration camps like Dachau. (which is what I understand happened to the socialists after the Nazis took over)

            2. Upon continued dominance of their political opponents at the national, state, and local level, they felt they were unfairly portrayed as an economic group by a subset of the press, and probably had their feelings hurt (and maybe also feared a marginal increase in their tax liabilities)… which probably inspires them to up their political contributions for next year, and if any of them are rich enough, perhaps buy a newspaper or TV station to.

            Also, if Mr. Perkins could have made a case for being scapegoated, so be it. No need to exaggerate the situation by several orders of magnitude. That just makes his argument look silly.

            • Tom, I think that humans are predisposed to thinking that the are living in an “important” time. How else do you explain these types of reactions? When G.W. was president, the liberals were the ones saying that he was a fascist dictator that orchestrated 9/11 to get more executive power. Now that a liberal is president, the conservatives are the ones saying that Obama is a socialist, and every move he makes is a conspiracy to move us one step closer to a new world order.

              The reality didn’t reflect these extreme views in either case, but I think people take comfort in being able to pick out a villain, rally against that villain, and when and if they “win” (as Democrats feel they “won” in 2008, for example, or Republicans in the subsequent mid-term), they have this confident comfort that they railed against “the man” and made a difference.

              It’s all pretty narcissistic and divorced from reality, if you ask me, but it seems like we’re all predisposed to doing it.

              • I don’t recall liberals saying G W Bush was a Fascist Dictator. There was enough to criticize without using such labels

                • There were a few … anti-war protesters carrying signs showing Bush as Hitler (I’m pretty sure anyway). If not, then the conservatives have effectively planted that false memory in me. Congrats!

              • I agree about our thinking. And for the record I don’t think Hitler and the Nazi’s were necessarily worse than some others. Some people estimate that Stalin and Mao were more effective at mass killing… plus who knows really what’s happened in the past… perhaps there’s a “ugly” reason homo-sapiens are the sole survivors of a long (genocidal) pre-history of hominids.

            • Dividing people into “us” and “them”, a virtuous “us” and a less than virtuous “them” is a bad habit.

              It is a bad habit if it is the Left dividing us into a deserving “99%” and an undeserving “1%”, or Mr. Romney dividing us into a “tax paying” 53% and an “entitlement funded” 47%, or some on the Libertarian Right dividing us into “workers in the private sector” and “public service employees” endowed with job security and “gold-plated” pensions and benefits.

              Mr. Perkins invoking the image of Nazis has certainly offended your sensibilities along with those of many others, and yes, there is no comparison between the Holocaust and the current shaming of Wall Streeters. But Mr. Perkins wasn’t invoking the Holocaust — he was invoking an earlier stage of the progression of Nazism, Kristalnacht, the thinly veiled state support for rioters acting against Jewish business persons perceived somehow to be unfairly prosperous.

              What Pastor Niemoller was referring to was a kind of “frog dropped into boiling water” metaphor for the progression of the Nazi tyranny. It didn’t start with the full-blown industrial-style executions in the camps. It built up over time.

              The “Came for” aphorism is a distillation of Pastor Niemoller’s account of “what happened.” It started gradually with the demonization of persons for whom there was near universal social agreement that they “need to be demonized.” It started with unlawful acts, perhaps viewable as acts of protest by a people with a grevieance, but these acts escalated over time.

              Paster Niemoller is often discredited as having been an (early) supporter of the Nazis, but that is his whole point in the “Came for” aphorism. He was reflecting that the early “Came fors”, even to him, especially to him as a Christian minister, were no big deal; they were even welcomed. And the lawlessness and violence escalated until it was too late, and they eventually “Came for” him, although he survived his time in a camp.

              I appreciate how you, the ADL, and others take offense at comparing the extreme suffering of the Jewish people under the Nazis with the minor inconvenience of the “Wall Streeters” to endure mild criticism and social protest.

              Just as you and others take offense at such an “over the top comparison”, from my life experience as the son of refugee-immigrant parents, who had experienced first hand how this thing had progressed over time, I am uneasy with the tolerance of dividing people into “them” and “us”, no matter how reasonable and benign this dividing seems at the time.

              • Paul, thanks for your thoughtful comment. I certainly think that a good ideal to shoot for is not to divide people into us and them, however, I’m not optimistic that this can ever be obtained.

                I appreciate the distinction you make between the gradual slide into lawlessness and between the Kristalnacht and the holocaust (though I do seem to recall that Kristalnacht involved some out and out violence against Jewish persons as well… and that the police and fire departments offered no assistance except to ensure that non-Jews were not hurt as well, true?).

                Still, Mr. Perkins could have done himself a giant favor with people he may have had a chance of convincing by avoiding any reference to the Nazi era: that was just silly. It made him look like an extremely thinned skinned drama queen. I get the impression from this article and a few others in the past from successful wealthy people, that some of then are hyper-sensitive and fragile and can’t handle the tiniest bit of criticism. It reminds me of a friend of mine who told me she had a tantrum when she was a teenager… something to do with her misaligned teeth I think. Her Dad had enough of it, and reminded her of her friend (a fellow ballet dancer) who lost both her legs in an accident. She suddenly realized how lucky she really was and felt ashamed of her self for her tantrum. So I’m glad the ADL was there to throw a little cold water in Mr. Perkins’ face to wake him up a little. He may have amped up the sentiment of those already on his side, but I seriously doubt he helped his overall cause.

                There’s an old “law of the internet” (the name escapes me) that says that the first person to mention the Nazis in an online debate loses. Some have argued for an exception to this “law” … but I think the basic idea still stands as a good one, and I think it applies in full to Mr. Perkins.

        • It’s a bit perverse, because these organizations pretty much have to find things to be offended about to justify their continued operation.

          If they get the KKK or something like that to apologize I would be impressed.

          • KKK: I doubt they’ll apologize, ha!

            I’m critical of the ADL in some respects, but my broader comment is that we’ve so divided ourselves into camps now days (in the US) with our own separate media, that’s it’s difficult to find some organization capable of criticizing anybody, regardless of political affiliation. I think the ADL is one of the few: the conservatives are wary of painting them as traitor liberals, because they are always falling over themselves to be pro-Israel (I think to satisfy the Christian Zionist end-timer Rapture fans at the core of an important segment of the party), while the Democrats are only marginally less uncritical in their pro-Israel sentiments, plus they don’t want to lose any more ground amongst a group that was traditionally a Dem voting block.

            Thus the ADL can come out and slap the wrists of both sides for taking the hyperbole too far (at least in regards to a few things) and get away with it w/o being branded as traitors that should be ignored. I’m glad they do. Somebody needs to.

            • The only people who still get away with it are stand-up comedians.

              If you have a well connected, moneyed group with the public’s ear that gets offended on your behalf, the persecution of your group can’t run that deep.

  8. So why the 99% persent allowed the supposedly socialist president bail out the banks and arguably enrich the financial elite even more. Were they too afraid to lose access to cheap credit to buy the next widget? Shame on them. You cannot have your cake and eat it too. No bailout meant a depression at least for a short time. People pooped their pants and now are angrat 1%. I am embarrassed as a voter that there was no outrage about bailouts at least in a way they happened. Maximum that needed to be done by the government is an extension of depositor insurance, potentially with nationalization of a bancrupt entity.

  9. It is entertaining to see the world’s most wealthy cry like babies when a few dollars is taxed. Ain’t it awful.

    As Buffett says —– how many times have you seen taxes stop people from trying like hell to get rich?

  10. Anybody other than me getting tired of one politician after another comparing the other to Hitler and all the cry-baby other things spoiled worthless public servants do to act like teenage drama queens?

    • Yes, count me in on despising Nazi comparisons, no matter who does them. Almost every time somebody makes one they are way out of line (on very rare occasions I think they are warranted).

      I feel the same way about almost all hyperbole in public discourse, except if it’s clearly in jest. Even “dog whistle” terms (which aren’t necessarily hyperbole) put me on guard and thus more willing to ignore as propaganda what follows (e.g. “collectivist” and “wingnut”).

      I’m guilty of using terms like that myself on occasion, but I doubt it ever helped me persuade somebody. Maybe at one time those were perfectly good terms, but so many times I get the distinct impression they are meant to amplify their power through endless sneering repetition.

      I suppose it’s fun to indulge in that sort of thing on occasion (when it’s “your side” writing the piece, especially if it’s humorous), but you’ve got to know that you’re hearing somebody preach to the choir. You won’t get much more from it than amusement.

  11. To think macro requires a different mindset than to think micro. You touched that issue several times. An investor can get into or out of stocks but the whole of investors cannot, or where do profits come from in a macro sense.
    Here it is kinda similar. Perkins as a seflmade man thinks micro while you put him in a macro environment. And you’re right we cannot function on a micro level, so it doesn’t make sense to reason on that level.

  12. Hi Cullen,

    Firstly, let me say I think your blog is great. I think your comments are insightful and humble, and I’m very pleased to know there are others in the world of finance with a worldview more Alan Watts than Alan Greenspan. However, I think you have inadvertently created a straw man here, so I would like to challenge it and see what you think.

    When Tom Perkins describes himself as a self-made man, he does not mean to say that his success does not depend on transacting with other people or that he does not stand on the shoulders of giants. Nor does he mean he would achieve the same success if he were born into starvation. What he does mean is that, in the context of 20th/21st century America, he has come from just as humble means as many of those who suggest that such humble means make success impossible. And this, I think, is a valid point. I think it is very important that those who come from humble means take responsibility for their lives and that they take inspiration from “self-made men” rather than succumbing to the notion that their efforts are futile unless they happen to get “lucky”.

    I also take issue with the definition of luck that is used in these debates. To say, as Howard Marks (and Warren Buffett) does, that it is lucky that he was born in the time and place he was born, is based on a quasi-religious notion of being in possession of an identity somehow separate from the body it arose in. But the identity is a property of the body, arising under specific conditions (see the great book “I am a Strange Loop” for more on this). So to say that “I” am lucky to be born in the developed world, makes no more sense than to say “I” am lucky to not be born a mouse or a worm. The mouse is the mouse and I am the human in the developed world in the 21st century. That does not represent “me” being “lucky”, it just represents me being me. Any opposition to my “luck”-based success due to my lineage and location is then an opposition to me being me. I am not separate from the conditions that gave rise to my identity. Some people are born fit and healthy, and they might become athletes. Some people are not, and they are unlikely to become athletes. But two athletes can compete with one another, and the one that works harder, will probably win. Two non-athletes can compete with one another, and the one that works harder will probably win.

    When Perkins says he is a self-made man, he means that he worked hard and that that worked out for him, and he believes it can work out for other people like him too. Which is a valuable message, I think.

    • Thanks. That’s a nice comment. I largely agree. I am not saying that there’s nothing to the idea of working hard and building your own stuff from nothing. I have worked my ass off over the years to do exactly that. Granted, it’s nothing like what Tom Perkins has put together, but I have a great deal of appreciation for being an independent thinker and building something on your own from almost nothing. But the term “self made man” bothers me. It implies a man on an island who owes nothing to anyone and deserves nothing but praise. Maybe I am taking comments from Tom Perkins too literally. Then again, this is a guy who plastered this phrase across his $300MM yacht:

      “Rarely does one have the privilege to witness vulgar ostentation on such a grand scale.”

      Disgusting.

  13. When I was breaking into the brokerage business, we used to periodically received pep talk/motivational speeches from guys who were successful in the business. Most of them would talk about how hard they had worked to get where they were and how we needed to do the same or we would fail. There was a basic assumption: they had been successful because they worked hard and deserved it, and if someone failed it was because they hadn’t tried hard enough.

    One of the things I began to notice was that if they were allowed to talk long enough, they would eventually reveal what their “in” was–a well-heeled family connection, a father or uncle who had been in the business, a manager who had fed them accounts, a team they were part of, etc. In fact, another broker and I would have an over/under on how much time it would take for the speaker to let it slip. Now, I’m not saying that the speakers were undeserving or lazy–there were plenty of people who washed out even with advantages–just that it was patently obvious that “hard work” was only one component of success, and getting a helping hand at the start was crucial for most people.

    There are plenty of people in this world who believe themselves to be underappreciated–sounds like Tom Perkins is one of them. No one succeeds on their own; we all need help.

    • Anybody who has had narcistic parents conciously gaslighting them knows that success is not self-made, alot of it depends on AT LEAST having supportive parents.
      It’s incremental harder to become successful the more your parents try to work against you.
      Just based on this extra factor you can already see that success is not self-made, it is also made by your parents.

  14. Calling oneself a “self-made man” is another way of saying you don’t owe anyone anything.

    A self-made man would be an interesting biological phenomenon. He must have been born fully grown out of one of his own orifices.

  15. This post really hit home with me. I have been telling people for the last 35 years that I am extremely lucky.

    First, I was lucky to have had a single mother as a parent that found a way to help pay for my undergraduate Bachelor’s degree. Secondly, I was lucky to later enroll at another institution of higher learning in an effort to obtain some post-graduate work, but was luckier still to have skipped classes one day to attend a Jobs Fair.

    It was at that Jobs Fair that I was offered a career with an organization that would later allow me to retire at age 55 with a very secure financial future. (I retired in 2011)

    Sure, I worked hard. Sure, I studied hard. I even had to take some moves/transfers that I didn’t necessarily desire at the time…. but at the end of the day, I was lucky. I was in the “right place”, at what happened to be the “right time”.

    I agree that anyone thinking they are fully “self made” is only kidding themself.

  16. This kind of discussion helps very little to anyone, and it is purely waste of time and resources. We do not live in an island, rather we live in the great US with vast resources available to everyone. We elected our own congress and the president, and we have our own laws in this land. So if you don’t succeed, don’t blame anyone. If you succeed, you made it yourself. What exactly the purpose of the post? Jealousy of the rich? or you think he did something wrong making that money? why is he so disgusting? simply because he is bragging about his wealth, and he is different from your modest tone?

    • I think the point of this post is to offer some balanced perspective. I am by no means demonizing the wealthy. But I think there’s a certain level of arrogance and disconnectedness with the idea that a person is “self made” that often results from a relatively unbalanced view of the world. I have no problem with being rich, buying big boats and stuff like that. But to throw it in everyone else’s face and boldly declare that no one contributed to your success is a bit of an exaggeration. Maybe Perkins didn’t mean that when he said “self made”. I don’t know. He seems to have used lots of terms in this interview that he didn’t really mean, but have an extremist motive….

      • If this is just “view” issue, then this is free country with free speech. Anyone can express whatever their views are. Your”balance” view is no different from Fox news’ view or MSNBC’s view. If this is sentiment issue, then it is very similar to “you didn’t build that” kind of sentiment as mentioned above. If this is a personal issue, and you don’t like arrogant people, then it’s not worth discussing at all, don’t you think? I think the sentiment of “you didn’t build that” in the country is heavy now, and this post reflects that sentiment.

        • “So if you don’t succeed, don’t blame anyone. If you succeed, you made it yourself.”

          Pete, thanks for reminding us, yet again, of why Cullen’s post is necessary in the first place. And why it will also continue to fall on deaf ears.

  17. Nice piece Cullen.

    Perkins is a tool. Humbleness is a rare trait. I don’t expect Mr Perkins to display it anymore than the local heart surgeon parading around the country club. With that said, what is the appropriate “lucky tax” that the 1% should pay in order to satisfy the angry masses? I am pretty sure, whatever it is, it will never be enough.

  18. Forgive the long quote, but this brilliant passage by Marx elucidates the myth of the individual producer as a product of “bourgeois” society. He locates the genesis of this concept in 18th century “Robinsonades”–Cullen’s reference to Robinson Crusoe made me think of this. Interestingly, Marx associates the economic systems of Smith and Ricardo, two political economists he admired greatly, with this fallacy in their respective analyses of society.

    For Marx capitalist societies must, by their very structure, give the outward appearance of independent individuals (because most labor is sold as labor-power by individuals in return for a wage) and they must, consequently, hide or obscure the actual social relations of production. For Marx, the inherent social nature of all production includes all past (i.e., “dead”) labor, not just current living labor of both wage earners and capitalists. He went on to elaborate on this point in chapter one of Das Kapital in his concept of the “fetishization of the commodity.” Anyhow, this passage is taken from the Grundrisse, which were his notebooks written in 1857 as preparatory notes to Das Kapital.

    ************************************

    Karl Marx’s Outline of the Critique of Political Economy (Grundrisse)

    1. Production, Consumption, Distribution, Exchange (Circulation)

    (1) PRODUCTION

    Independent Individuals. Eighteenth-century Ideas.

    The object before us, to begin with, material production.

    Individuals producing in Society – hence socially determined individual production – is, of course, the point of departure. The individual and isolated hunter and fisherman, with whom Smith and Ricardo begin, belongs among the unimaginative conceits of the eighteenth-century Robinsonades, [1] which in no way express merely a reaction against over-sophistication and a return to a misunderstood natural life, as cultural historians imagine. As little as Rousseau’s contrat social, which brings naturally independent, autonomous subjects into relation and connection by contract, rests on such naturalism. This is the semblance, the merely aesthetic semblance, of the Robinsonades, great and small. It is, rather, the anticipation of ‘civil society’, in preparation since the sixteenth century and making giant strides towards maturity in the eighteenth. In this society of free competition, the individual appears detached from the natural bonds etc. which in earlier historical periods make him the accessory of a definite and limited human conglomerate. Smith and Ricardo still stand with both feet on the shoulders of the eighteenth-century prophets, in whose imaginations this eighteenth-century individual – the product on one side of the dissolution of the feudal forms of society, on the other side of the new forces of production developed since the sixteenth century – appears as an ideal, whose existence they project into the past. Not as a historic result but as history’s point of departure. As the Natural Individual appropriate to their notion of human nature, not arising historically, but posited by nature. This illusion has been common to each new epoch to this day. Steuart [2] avoided this simple-mindedness because as an aristocrat and in antithesis to the eighteenth century, he had in some respects a more historical footing.

    The more deeply we go back into history, the more does the individual, and hence also the producing individual, appear as dependent, as belonging to a greater whole: in a still quite natural way in the family and in the family expanded into the clan [Stamm]; then later in the various forms of communal society arising out of the antitheses and fusions of the clan. Only in the eighteenth century, in ‘civil society’, do the various forms of social connectedness confront the individual as a mere means towards his private purposes, as external necessity. But the epoch which produces this standpoint, that of the isolated individual, is also precisely that of the hitherto most developed social (from this standpoint, general) relations. The human being is in the most literal sense a Zwon politikon[3] not merely a gregarious animal, but an animal which can individuate itself only in the midst of society. Production by an isolated individual outside society – a rare exception which may well occur when a civilized person in whom the social forces are already dynamically present is cast by accident into the wilderness – is as much of an absurdity as is the development of language without individuals living together and talking to each other. There is no point in dwelling on this any longer. The point could go entirely unmentioned if this twaddle, which had sense and reason for the eighteenth-century characters, had not been earnestly pulled back into the centre of the most modern economics by Bastiat, [4] Carey, [5] Proudhon etc. Of course it is a convenience for Proudhon et al. to be able to give a historico-philosophic account of the source of an economic relation, of whose historic origins he is ignorant, by inventing the myth that Adam or Prometheus stumbled on the idea ready-made, and then it was adopted, etc. Nothing is more dry and boring than the fantasies of a locus communis.[6]

    Eternalization of historic relations of production – Production and distribution in general. – Property

    Whenever we speak of production, then, what is meant is always production at a definite stage of social development – production by social individuals. It might seem, therefore, that in order to talk about production at all we must either pursue the process of historic development through its different phases, or declare beforehand that we are dealing with a specific historic epoch such as e.g. modern bourgeois production, which is indeed our particular theme. However, all epochs of production have certain common traits, common characteristics. Production in general is an abstraction, but a rational abstraction in so far as it really brings out and fixes the common element and thus saves us repetition. Still, this general category, this common element sifted out by comparison, is itself segmented many times over and splits into different determinations. Some determinations belong to all epochs, others only to a few. [Some] determinations will be shared by the most modern epoch and the most ancient. No production will be thinkable without them; however even though the most developed languages have laws and characteristics in common with the least developed, nevertheless, just those things which determine their development, i.e. the elements which are not general and common, must be separated out from the determinations valid for production as such, so that in their unity – which arises already from the identity of the subject, humanity, and of the object, nature – their essential difference is not forgotten. The whole profundity of those modern economists who demonstrate the eternity and harmoniousness of the existing social relations lies in this forgetting. For example. No production possible without an instrument of production, even if this instrument is only the hand. No production without stored-up, past labour, even if it is only the facility gathered together and concentrated in the hand of the savage by repeated practice. Capital is, among other things, also an instrument of production, also objectified, past labour.

  19. People saying “self made” always makes me cringe. It’s an example of the Dunning-Kruger effect in action; ignorance breeds arrogance.

    Biologically, we may think that we pull a few levers at the macro level, sure, but most of the real “making” work happens at the micro level and we have very little control over it whatsoever. Trillions of cells co-operating together in an astonishingly complex system to construct and maintain a single eukaryotic organism that we call a human. Even at the macro level, the vast majority of the “making” events are thanks to the efforts of other entities living or deceased (and mostly not human). Yet who gives thanks to all animals and plants that lose their lives on a daily basis to feed us? They literally “make” us. Without them, no amount of “self-made” hubris can keep us alive.

    We are just along for the ride. We can ponder it, but should never assume we ARE the ride.

    There’s even ample evidence to suggest that “we” (meaning what we refer to as a “conscious self”) is just an illusion and that our current biochemical state simply responds deterministically to external perturbations. “We” later notice the change in direction and mentally loop back to construct a storyline that covers the time of the state change, deceiving ourselves in the process that we were in the driver’s seat and that a “choice” was made. ( http://www.nature.com/news/2008/080411/full/news.2008.751.html )

    Stop and reflect on this for a moment. Seriously. Drop everything and think this over (if you haven’t already). “We” are not even in control of our decisions so the “self-made” man had basically zero control over his fate. So then why does he have such a big ego?

    When we don’t perceive the reality of things, we call all that we can perceive reality and erroneously assume that we are the centre of that reality. Our arrogance promotes us all to the kings of that “reality” within our own perception, located in the site of greatest power: the middle.

    This is why, (before we were able to expand our perception of reality through development of mechanical sensors), we assumed that the earth was flat with edges that dropped away into nothing off in the distance at the limit of our vision (naturally we were in the middle).

    It’s why, when we realised there was a larger solar system, we assumed that the earth was at the middle of that solar system. It’s why when we realised there might be a bigger universe, we assumed that our sun was in the middle of that universe. It’s also why when we invent religions we position ourselves at the centre of the God’s (or Gods’) attention, that we’re somehow special or chosen, not to mention that each religion also “needs” to have a political structure that views itself as being at the centre of the religion and therefore deserving power. The list goes on and on. We overrate ourselves because we’re stupid.

    All of this perception of being central (powerful) is false, a consequence of a cognitive bias caused by our very limited nervous system, and “self-made man” is just another manifestation of this cognitive bias. Whatever contribution we make to our fate is minor indeed, demonstrated in spades through scientific investigation, but our cognitive bias combined with a large dose of ignorance prohibit us from seeing it. We don’t “self-make” our parents, our phenotype, our early diets and environment (key for epigenetic programming), our biochemical developmental path, our country of birth, our tools and technology, our civilisation, etc, yet those things make us.

    The vast bulk of the forces that shaped us (99.9%) and continue to shape us daily are outside of our control entirely but I never, repeat, never see a feted individual giving thanks to, for example, their immune systems for keeping them alive on a daily basis. Why not? They’d be dead without a functional immune system so how about assigning a % credit for a job well done? How about a functional electron transport chain, or regulated endocrine system, or a heart that keeps on beating in spite of the “self-made” man’s crappy decisions to smoke and drink? How about assigning a % credit of the outcome to the millions of people who live now or died in the past contributing to building a social soil in which the “self-made man” was then able to grow?

    No, all of that, the things that really matter, the logistics that take care of 99% of our lives on a daily basis are simply ignored because, hey, that call to short MSFT was really good!

    The cure is humility and a quest for exploration that results in expanded perception (knowledge). This is the scientific approach: humble exploration, accepting that we must shape our limited mental models to the reality of data that describes the real universe as we uncover it, rather than the typical way (usually done in economics) of mentally inventing a “reality” and then complaining when actual data doesn’t fit the “truth” of the model.

    Few books cover the application of this better than Jaynes’ unfinished masterpiece http://www.amazon.com/Probability-Theory-The-Logic-Science/dp/0521592712

    Guys like Cullen, Keen, etc, to their credit are attempting to apply the scientific method to the field of economics, a field that is full of centralising buffoons trying to force their political will onto others to make themselves centre of the “universe”. Good luck chaps, I hope you succeed but you’re fighting against the human genome, our chemically determined tendency to be political.

  20. “When we don’t perceive the reality of things” This is the central tenant of all great religious, philosophical, and scientific traditions.

    MR is not trying to understand the reality of all things, only the operational mechanisms of a limited, and artificially constructed, subset of “reality of things”. It’s simply recognizing certain operational realities that exist in our artificially constructed system of money.

    One can argue that money, as a purely human construct (there is no money in the world of nature), makes no sense as a subject of study, or one can argue that it makes perfect sense as a subject of study because it quite obviously forms a central operational tenet of much of the world’s processes even though it is a purely human derived concept.

    The idea that “but you’re fighting against the human genome” is intellectually ludicrous. The impetus for the human genome has evolved (or been constructed as a miracle of God if your of that viewpoint) over billions of years (or ca. 6000 if your of the miracle of God world view that rejects science and intelligence). Clearly the human genome has constructed money, so how could it be fighting against itself in this construct?

    It’s this type of vapid thinking that is so problematic in any discussion about economics. Ignorant views like “our chemically determined tendency to be political” are at the core of why economics is problematic as a science. No intelligent person could ever make the statement that politics is chemically determined, yet such views are commonly postulated by people who are intelligent enough to make postings (although not intelligent enough to pass any legitimate high school). How sad to be so intellectually challenged and even more so to the extent that one wants to advertise their limited IQ.

    • Vapid? Ignorant? Unintelligent? Intellectually challenged? High-school dropout? Limited IQ? The problem with using such slanderous terms is that, should the accusations turn out to be false, they tend to boomerang.

      http://www.amazon.com/Chimpanzee-Politics-Power-among-Apes/dp/0801886562

      http://www.sciencedaily.com/releases/2009/02/090202174958.htm

      Hmm…

      Perhaps you’d care to collate your research and publish a rebuttal? I look forward to reading your description of how genetics plays no part whatsoever in the formation of political behaviours in our closest animal relatives that are remarkably similar to those of humans.

      If that is a little too broad, you could keep it simple and explain how completely separated human populations manage to display the same political behaviours yet, amazingly, you find no evidence of a shared genetic foundation being responsible.

      (p.s. I’m a professional (epi)geneticist, systems biologist and bioinformaticist so don’t feel like you have to tone it down. Amaze me Einstein).

      Perhaps you simply constructed a straw man?

      As to the few civilised conversation points of your post.

      We use tools to amplify our natural behaviours, money being an example of such a tool. Studying money is fine, but to ignore the underlying behaviour that drives us to create and use money in the first place is naive. Yet this is exactly what economists do when they confidently state that “money is nothing more than a medium of exchange”.

      Nonsense! Money can buy people and is therefore also a highly desirable token of social power and thus inseparable from politics. Money is power and were any other social species to evolve to a human level of complexity then that species would also create money and use it the same way, leveraging an underlying drive for status and breeding success.

      Point #3: http://dieoff.org/page240.htm

      It is simply not possible to study the dynamics of money without studying politics because political motivations play such a dominant role in creating money itself, defining the rules of exchange and in driving monetary flows, be it at the level of the individual or the nation state. Attempts to ignore politics will leave behind such massive stochastic variables that modelling becomes a pointless academic exercise (which is the harsh reality of economics as it stands).

      Whilst it’s impossible to get political study out of economic study, it is possible, and should be attempted, to get economics out of politics. Maybe I’m wrong, but I thought the MR crew was actively trying to resist the “weaponisation of economics”, aka political capture of economists. I hope so. It’s just that I don’t believe the efforts will be successful in the wider economics landscape because the economic hitmen and “useful idiot” economists are far too useful for the ruling class to ever decommission.