March 5 (Bloomberg) -- One of the myths surrounding economic inequality in our society is that high incomes are often the result of selfishness and narrow-mindedness, rather than idealism and humanity. We tend to think that those in careers other than our own are fundamentally different kinds of people.
Personality and character differences are, indeed, somewhat associated with occupation. But we tend to attribute the behavior of others to personality differences far more often than is warranted.
We tend to think of philosophers, artists or poets as the polar opposite of chief executive officers, bankers or businesspeople. But the idea that those involved in business have personalities fundamentally different from those in other walks of life is belied by the fact that many often combine or switch careers. Consider a few examples.
Walt Whitman is one of our most revered poets, and his poetry is among the most transcendent. But he could not ignore more material concerns; he had to make a living. To do so, he turned to fiction -- more marketable than poetry -- and made his name with a commercial novel called “Franklin Evans, or The Inebriate: A Tale of the Times.”
Poets Need Money
The book was an embarrassment to him, but it made money, though apparently not enough to finance his future, more serious work. In 1855, when Whitman self-published the first edition of his masterpiece, “Leaves of Grass,” he offered to set his own type as part of his deal with the printer.
Although “Leaves of Grass” gradually gained acceptance, the publication of each subsequent edition was accompanied by further struggles. The third edition was long delayed: When the publisher declared bankruptcy, the printing plates of some poems were actually auctioned off. Whitman lost profits that could have helped finance his further writing. In his lifelong struggle to get his work to readers, Whitman was forced to take on the role of a businessman -- sometimes none too successfully.
Charles Ives, thought by some to be America’s greatest symphonic composer, was first a highly successful insurance executive. He graduated from Yale in 1898, and in 1909 he and a partner founded a life-insurance agency, Ives & Myrick. (Ives also wrote a finance book, “Life Insurance With Relation to Inheritance Tax.”) The company, which by 1929 had grown to be the biggest life-insurance agency in the U.S., made him a fortune of more than $20 million. His wealth gave him the ability to produce, and subsidize the performance of, his idiosyncratic and not immediately popular music.
In a scene in one biography, Ives is portrayed at a recording session, “probably with a sigh or curse,” taking out his own checkbook to compensate a conductor. Because of his wealth, Ives was better able to produce the kind of music in which he truly believed.
The contemporary artists Jeff Koons and Damien Hirst sometimes sell their works for more than $10 million. Koons holds the world’s record auction price for a sculpture by a living artist: $25,752,059 for “Balloon Flower (Magenta),” auctioned at Christie’s in 2008. Koons and Hirst are financial sophisticates, running businesses with numerous employees, and aggressive marketers of their own works. Koons started out as a commodities trader at Smith Barney and used the money he earned there to finance his art.
People in the most spiritually minded professions -- those who work in the church, the arts or philanthropy, for example -- are routinely involved in managing financial resources and executing deals and contracts.
Even revolutionaries have to involve themselves in finance. In “Walden: Or Life in the Woods,” Henry David Thoreau described spending 1845-47 in the woods at Walden Pond, contemplating nature and spirituality. But he was not really an advocate of dropping out, and in fact in his own life he did not do so. Throughout most of his life he was actually involved in managing his family’s pencil company and even invented a new way of making pencil leads. He just thought that making money should never be his life’s overriding purpose. “To have done anything by which you earned money merely is to have been truly idle or worse.” The key word in this sentence is “merely.”
To the list of revolutionaries who did not abandon commercial realities, we can add Jerry Rubin, the anti-establishment radical who wrote “Do It! Scenarios of the Revolution” and who was sentenced to four years in prison for inciting protesters at the 1968 Democratic National Convention in Chicago. After the sentence was overturned, Rubin headed to Wall Street to become a market analyst for the brokerage firm John Muir & Co.
The press portrayed his transition “from yippie to yuppie” as a contradiction, but in 1980 Rubin disagreed: “Money has always been power,” he said. “But in the 1960s a picket line made a difference. The ’80s are much more hierarchical. Picket lines don’t get much attention. Accountants have more power. Money is more the pressing social issue of our day.” The point here is not that Rubin has a coherent moral philosophy, but that the very same person could succeed on both the picket line and Wall Street.
Self-promotion and the acquisition of wealth, whether by financial or other means, is no crime. In fact, some of humanity’s greatest achievements originate in just such behavior.
(Robert Shiller is a professor of economics and finance at Yale University, where he teaches financial markets in the Open Yale Courses program. He is the author of “Irrational Exuberance” and “The Subprime Solution.” This is the first in a series of four excerpts from his new book, “Finance and the Good Society,” to be published April 4 by Princeton University Press. The opinions expressed are his own. Read Part 2, Part 3 and Part 4.)
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To contact the writer of this article: Robert Shiller at Robert.Shiller@yale.edu
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