Carter Lowe Creator, entrepreneur, and self-care advocate
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Slumdog Millionaire. How to turn disadvantages into advantages?

The rags-to-riches principle often found in American biographies. If you want to go up, it's much better to start from the bottom.

The rags-to-riches principle, often found in American biographies, has been given two different interpretations over time. The 19th century version emphasized shortcomings that would be compensated for in the future. If you want to get to the top, it's much better to start from the bottom: this way you will get the necessary skills and motivation in order to succeed. These days we don't learn from poverty, we avoid it.

1. From rags to riches

Sidney Weinberg was born in 1891 to Pincus Weinberg, a Polish liquor dealer and bootlegger in Brooklyn. In addition to Sydney, the family had ten more children. According to New York writer I. J. Kahn, Sidney was very short and therefore "he was in constant danger of being swallowed up by chairs of impressive size."

Sidney pronounced his last name "Vine-boy". Finished school at the age of 15. He had a scar on his neck from a knife fight that happened in early childhood while selling evening papers on Hamilton Avenue. This is the terminus of the ferry from Manhattan to Brooklyn.

At 16, he hit Wall Street and couldn't take his eyes off the "beautiful tall buildings," as he later recalled. Starting from the top floor of one of the buildings, asking in each office: "Do you need a guy for any job?" Going down and down, by the end of the day he reached a small brokerage house on the third floor. It was closed there. Sidney returned the next morning. He lied that the day before he had been offered to be the janitor's assistant for three dollars a week and told to come back in the morning. The small brokerage firm was called Goldman Sachs.

From this point forward, Charlie Ellis' book, Partnerships: Building Goldman Sachs, chronicles Weinberg's meteoric rise. Weinberg was soon moved to the post office, which he quickly reorganized. Sasha sent him to a business college in Brooklyn to study calligraphy. By 1925, the firm had bought him a seat on the New York Stock Exchange. By 1927 he had become a partner. By 1930, he was a general partner, and for the next 39 years—until his death in 1969—Weinberg was an icon of Goldman Sachs, transforming the firm from a potential middle-class partner into the world's premier investment bank.

2. Is poverty good?

The rags-to-riches principle, often found in American biographies, has been given two different interpretations over time. The 19th century version emphasized shortcomings that would be compensated for in the future. If you want to go up, the walker thinks, it is much better to start from the bottom: this way you will get all the necessary skills and motivation in order to achieve success in the future. "New York entrepreneurs prefer to hire country guys because they are considered to work harder, more determined, obedient and benevolent than native New Yorkers" , wrote Irving J. Willey in his study The Self Made People of America (1954). Andrew Carnegie, whose personal history set the direction for nineteenth-century careerists, insisted that it was a great advantage to be born, raised, and brought up in a school of poverty. According to Carnegie, “It is not from the children of millionaires or honorary members of society that the world receives its teachers, martyrs, inventors, managers, poets, or even businessmen. They all come out of the realm of poverty that gives them all these opportunities.”

Today, the opposite concept is leading: we are used to linking success and progress towards it with social and economic advantages, with financial support for these conditions. All mechanisms of social mobility (scholarships, social shares, mortgages) are related to turning the poor from "outsiders" into "insiders" - from losers into successful people; save them from poverty.

These days we don't learn from poverty, we avoid it, and a book like the Ellis story at Goldman Sachs is a near-perfect example for understanding how social mobility works. Six hundred pages in Ellis's book are devoted to a firm that symbolizes the golden era of Wall Street. From the boom of the 1980s to the banking crisis of the last decade, Goldman has brought impeccable members of the social and economic elite to Wall Street, where they make fantastically complex transactions and amass huge fortunes. However, when you open page 72 of the book - the chapter that tells about the years of Sidney Weinberg - it seems that you are entering another era. The man who created Goldman Sachs as we know it was a poor, uneducated member of despised minorities — and his story is so entertaining that perhaps only Andrew Carnegie can understand it.

3. Being in the minority

Weinberg was not a financial magician. His miracles were rather social. During his heyday, Weinberg served as chairman of the company's 31st board of directors. He attended 250 board or committee meetings a year, and in his spare time he often steamed in the Turkish bath at the Baltimore Hotel with someone like Coca-Cola's Robert Woodruff or Gimbel's Bernard Gimbel. During the Great Depression, Weinberg served on Franklin Roosevelt's advisory department and town planning board, and F. D. R. called him a politician for his ability to reconcile the warring parties. During the war, he was vice president of the military food committee, where he was known as the Corpse Snatcher because of the way he convinced young businessmen to join the war effort. Weinberg seemed to be the first to convince young entrepreneurs to join the common work during the war, proving that this is the surest way - to win the loyalty of consumers now, so that it will work for them further, in the post-war period.

When the Ford Motors Company decided to go public in the mid-1950s, in what is still one of the biggest deals in history, the two major divisions in this extremely complex deal—the Ford family and the Ford Foundation—wanted to let Weinberg lead the case. He was Mister Wall Street. There are hardly any outstanding corporate executives about whom Weinberg could not say: “He is actually a very close friend of mine...” Industrialists who wanted some information about their competitors invariably came to Weinberg, just as merchants consult on credit. rating agencies. The standard ending to most of his phone conversations goes something like this: “Who?.. Of course I know him. I know well… I used to be the Deputy Minister of Finance… Okay. I'll ask him to call you."

This sociability is exactly what we expect from the head of an investment bank. Wall Street—particularly clubbing Wall Street in the early and mid-twentieth century—was a relationship business: you make Continental Can product offerings because you know the head of Continental Can. It is common to think that in a business based on connections, the elite have an undeniable advantage. Against this background, we no longer perceive poverty, as in the 19th century, as something useful. So ideally, in order to do business with Continental Can, you need to know the head of Continental Can, and ideally, in order to get to know the head of this company, it would be good to study with him at Yale College.

But Weinberg did not study there, and he did not even try to join the circles of the elite. “We need to clear this up,” he will say. "I'm just an ignorant, uneducated kid from Brooklyn." He bought a modest house in Scarsdale in 1920 and lived there for the rest of his life. He rode the subway. Weinberg will refer to his public school as Princeton and jokingly buy Phi Beta Kappa keys in pawnshops and leave visitors as souvenirs. Roosevelt valued his skills and knowledge so much that he wanted to make him ambassador to the Soviet Union, and his connections on Wall Street were so extensive that his phone never stopped. But at every opportunity, Weinberg reminded his entourage that he was on the other side of the barricades.

At one of the board meetings, writes Ellis, “there was a very boring presentation, stupid, with detailed statistics. Numbers, numbers, numbers. When the nerdy presenter finally paused to rest, Weinberg jumped up, waving his papers in a highly defiant way, and shouted, "Bingo!"

The best strategy for an immigrant, according to a famous proverb, is to "think in Yiddish and dress like a British." Weinberg did just that.

Why did this strategy work? This is the great mystery of Weinberg's career, and it is very difficult not to come to the conclusion that Carnegie draws: there are times in history when being an outsider means becoming an insider in the future. It's not hard to imagine, for example, that the head of Continental Can really liked the fact that Weinberg was from "nowhere", similar to the fact that New York employers prefer guys from the suburbs. Weinberg was from Brooklyn; how could he not be perfect?

Weinberg's background also allowed him to play the classic "minority middle class" role. Sociologists say that one of the reasons why Persians in India, West Asians in Africa, Chinese in Southeast Asia, Lebanese in the Caribbean have been so successful among the rest of the inhabitants is that they are not connected with the communities in which they worked. If you are a Malaysian in Malaysia, or a Kenyan in Kenya, or an African American in Watsa and want to go to work in a grocery store, then you will definitely start with problems: you have friends and relatives who want a job or a discount. You can't stop your neighbors from taking loan after loan, because they are your neighbors, and your social and business lives are connected. Here is how anthropologist Brian Foster describes commerce in Thailand:

“It would be difficult for a merchant who was bound by traditional social obligations and restrictions to start a traditional business. If, for example, he was a full-fledged resident of the village and subject to social restrictions, it is quite logical that he would be generous to the requests of needy associates. It would be difficult for him to refuse loans and just as difficult to collect debts...

Those who are not part of society (such as the aforementioned Chinese in Southeast Asia, Lebanese in the Caribbean, etc. - Approx. per.) do not have these restrictions. A person belonging to such a group freely shares financial and social relationships. He can call a bad debt a bad debt and a bad visitor a bad visitor without worrying about the social consequences of such honesty.”

Weinberg had this quality, and that seems to be what attracted executive directors who hired him. The chairman of General Foods openly stated: “Sidney seems to be the only person I know who, in the middle of a meeting, can say what he once said: “I think you are wrong,” and somehow make me think that's a compliment." That Weinberg can turn a remark into a compliment is a consequence of his charm. And the fact that he can express his remark when it crosses his mind is a consequence of his social position. You can't tell the chairman of General Foods that he's an idiot if you were his classmate at Yale. But you can do it if you're the son of Pinkus Weinberg from Brooklyn. Telling the truth is easier from a position of cultural distance.

Ellis says of Weinberg:

“Shortly after he was chosen to head General Electric, Philip D. Reed invited Weinberg to represent the group at a banquet at the Waldorf Astoria. ". In introducing him to his colleagues, Reid expressed the hope that Mr. Weinberg felt the same as he did. "That GM is the greatest instrument of the greatest industry in the greatest country in the world." Weinberg got to his feet. “I can agree with the opinion about the greatest country,” he began. “And I guess I’ll even buy into this topic with the greatest industry. But the fact that GM is the greatest business in this field of activity - I'll be damned, but I won't call it that until I get binoculars. Then he sat down again, this time to loud applause.

Weinberg irreverence was still loved at GM. During World War II, a high-ranking official, Admiral Jean-Frenchose Darlan, visited the White House. Darlan was a classic French military man of great power, and was thought to have sympathized with the Nazis. It was officially stated that Darlan had established ties with the allies, and everyone believed that except Weinberg. Outsiders can quite calmly say what others are afraid of, and at the same time they will definitely win over everyone around them. “When it was time to say goodbye,” writes Ellis, “Weinberg, leaving the room, reached into his pocket and, taking out a 25-cent coin, handed it to the immaculately dressed admiral with the words: “Hey, guy, give me a ride.”

The idea that outsiders can benefit from their position goes against our understanding. The saying "Think Yiddish, act British" suggests that an outsider can be adept at hiding their differences. But there have been cases in history when minorities have benefited by emphasizing or even exaggerating their differences. Berkeley historian Yuri Slezkine argues in his book The Jewish Age (2004) that Yiddish evolved atypically: by studying its form and structure, one realizes its complete and fundamental artificiality—it is the language of people who are interested, in Slezkine's words, in "emphasizing their distinction and self-defense.

Anthropologist L. A. Peter Goslin, doing research work, not only studied the life of the indigenous population in a Malaysian village, but also observed the owner of a local shop - a Chinese who "tried on Malay culture well and turned out to be scrupulously sensitive to Malays in many aspects, including the daily wearing of a sarong., silence and politeness of Malay speech, modest and friendly manners. However, at times when it was necessary to go out into the fields and harvest, he would put on his Chinese suit of shorts and an undershirt, speak in much stronger terms, and act, in the words of one Malaysian farmer, "almost like a Chinese." This behavior was an indication that he would not be perceived as an ordinary Malay boy, from whom generosity or preferential credit terms could be expected.

Ellis's book repeats the Weinberg story described by Lisa Endlich: Goldman Sachs: A Culture of Success (1999). Lisa, in turn, repeats the stories about Weinberg with reference to Kahn, and Kahn points out the stories told by Weinberg and his friends. But then you realize that these are really just stories: anecdotes created only to stir up interest.

Ellis writes:

"A friend told of Weinberg attending a dinner party at Morgan's, where the following conversation took place: "Mr. Weinberg, I assume you served at the last war?"

- "Yes, sir, I was in the war - in the Navy." “And who did you serve there?” "Second class cook."

Morgan was delighted."

Of course, Morgan wasn't really impressed. He died in 1913, before the outbreak of the First World War, which was discussed above. So, due to his death, he could not give any dinner, but it is beneficial for Weinberg to say that such a thing could happen. And although Weinberg did start out as a cook (because of poor eyesight), he quickly rose to the high society of the naval intelligentsia and then spent most of the war leading the inspection of all ships that came to the Norkfolk post. But this is not mentioned in the myths about Weinberg, so as not to destroy the created image.

Here's another example:

“The heir to a large retail fortune once spent the night in Scarsdale with Weinberg. After the guest had gone to bed, Weinberg and his wife, clearing the glasses from the table and emptying the ashtrays (the only hired worker in their house was the cook), noticed that the guest had left his suit and shoes in front of the bedroom door. Weinberg took the things to the kitchen and, after washing his shoes and cleaning his suit, put them back. The next day, as he was leaving, the guest handed Weinberg five dollars and asked him to hand it over to the servant who had taken such excellent care of his wardrobe. Weinberg thanked him and pocketed the money."

May I note that we assume that the heir dined at the modest residence of Weinberg in Scarsdale and never saw the servant, nor did he see him in the morning, but nevertheless he was convinced that the servant was in the house there is. He thought the servant was hiding in the toilet? But what we're talking about is exactly the story that Weinberg needed to tell and his audience to hear.


4. Most entrepreneurs did not study well

It is one thing to say that being an outsider is strategically beneficial. But Andrew Carnegie went further. He believed that poverty was a better preparation for success than wealth; that is, in other words, compensating for a lack of something is more useful, developing, than an increase in advantages.

This idea is both clear and incomprehensible. Especially considering the ridiculous fact that many successful entrepreneurs have learning problems. Paul Orfaleia, the founder of the Kinko network, was a student of the "D" group (analogous to our D and C students. - Approx. per.), Failed two years of elementary school, was expelled from four schools and completed his education in the last year of high school (American high scool - "high school" - an analogue of the Russian high school, in other words, the education of Paul Orfaley was limited only to the school curriculum. "In third grade, the only word I could read was 'the'," he says, "and I kept track of where the group was reading, going from one 'the' to the next." Richard Branson, British billionaire and founder of the Virgin empire, dropped out of school after struggling with reading and spelling. “I was always one of the worst in the class,” he said. John Chambers, who built the $100 billion Silicon Valley firm Cisco, can't read email at all. One of the pioneers in the mobile phone industry, Craig McCaw, is dyslexic, as is Charles Schwab, founder of the discount brokerage house that bears his name. When business school professor Julie Logan surveyed a group of American small business owners, she found that 35 percent of them identified as dyslexic.

Very interesting statistics. Dyslexia captures the very skills that underlie the ability to manage the modern world. Schwab and Orphalea, Chambers and Branson, apparently compensated for their disability in the same way that Carnegie believes poverty is compensated. Because of their inability to read and write, they developed excellent communication and problem-solving skills. Because they had to ask for help from others to navigate the world of letters, they became great at delegating authority. In one British study, 80 percent of dyslexic entrepreneurs in high school were captains of sports teams, and of those entrepreneurs who did not suffer from such a disease, only 27 percent were captains in the past. These people compensated for their academic shortcomings with excellent social skills, and when they started working, these skills gave them every opportunity for a quick and impetuous start. “As a child, I was not self-confident,” Orfalea once said in an interview. “But it's for the best. If you get rejected a lot in life, you figure out how to do it in a different way.

There is no doubt that we are very uncomfortable to hear that people like Schwab and Orphaley take advantage of their shortcomings. As impressive as their success was, none of us would go so far as to wish for dyslexia for our own children. If a disproportionate number of businessmen are dyslexic, then the same can be said for prisoners. A system in which people compensate for their shortcomings will seem too Darwinian to us. The strong get stronger and the weak get weaker. The man who boasts of walking seven miles to school barefoot now drives his grandchildren 10 blocks every morning in his SUV.

These days, we are beginning to believe that the best road to success for our children involves a carefully crafted educational program: the “best” schools, the most highly qualified teachers, the smallest classes, the most diverse colors in a painting set. But one need only look at countries where students outperform their American peers—despite large classrooms, dilapidated schools, and small budgets—to be surprised that our mass infatuation with the advantages of advantages is not as simple as Carnegie's theory of the advantages of disadvantages.

E. J. Kahn, in his work, mentions a story told by Averel Harriman about a manager who quit after Weinberg was hired. It was in Sunny Valley, at the Hariman ski resort, where, according to Kahn, Weinberg was present, who had never skied before:

Several corporate presidents collectively bet $ 25 that Weinberg will be able to drive off the steepest and longest track in the area. Weinberg was about fifty, but he was still himself. “I will use the help of an instructor named Franz some or some Fritz and work out for 30 minutes,” he said. “Then I will climb to the top of the mountain. It will take me about half a day to get down, and I will finish my route with only one ski, and then another two weeks I will be black and blue, but I will win this argument.

This is an example of how the white elite, against the backdrop of a mountain idyll, subjects a small Jew from Brooklyn to boarding school hazing. But that's just another ploy by Weinberg, as the story is told in light of the determination of a Brooklyn kid who will sell his soul to win this argument with smirking CEOs. One can imagine that Weinberg told this incident first to his wife, and only then to friends in the Baltimore steam room. And when he woke up in his bed the next morning, this story may well have happened to him, because sometimes humiliation is just a good opportunity to behave completely unexpectedly at the right moment.

20 years later, Weinberg scored his biggest victory ever with a public offering of the Ford Motors Company, which was founded, of course, by that consummate anti-Semite, Henry Ford. Did the Jewish question touch Weinberg's heart? May be so. But he probably understood that behind the rumor that the Jews controlled all the banks, there was a very clear idea that the Jews were good bankers. If the first was used as a humiliating stereotype, then with the help of the second it was possible to grab several new customers, if, of course, you worked your head. If you want to build an empire, you need to work with what you have.

5. More Weinbergs, Fewer Cuttings

First World War. Goldman was a Germanophile, meaning he opposed helping the Allies in the war. (And this is the same Henry Goldman who would later buy a 12-year-old Yehudi Menuhin a Stradivari violin and give Albert Einstein a yacht). The Sash brothers Walter and Arthur were desperate for a replacement and eventually settled on a young man named Waddill Kutchings, Arthur's close friend from Harvard. He worked for Sullivan & Cromwell, one of Wall Street's great and aristocratic law firms. He had industrial experience under his belt, several company reorganizations, and "most importantly," as Ellis writes, "Cutchings was one of the most talented, pleasant, charming, well-educated and businesslike people on Wall Street."

Catchings' bold idea was to create a huge investment trust called the Goldman Sachs Trading Corporation. It was the forerunner of today's hedge funds; he was tasked with buying up large blocks of shares held by groups of corporations. The fund originally had $25 million, but then Catchings, during the boom of the 1920s, doubled it to $50 million, and then again to a hundred. He then merged the Goldman Foundation with another foundation and added two subsidized trusts, resulting in G. S. T. C. became the owner of assets worth half a billion dollars.

“Walter and Arthur Sasch traveled through Europe in the summer of 1929,” writes Ellis. “In Italy, they found out about the transactions that Kutchings made on his own, and Walter Sasch became worried. Upon his return to New York, he immediately went to Kutchings' suite at the Plaza Hotel to insist on more careful behavior. But Kutchings, still in the euphoria of the banking market, was unshakable. “Your problem, Walter, is that you have no imagination,” he said.

And then came the collapse of the financial market. Shares of G. S. T. C., which traded at $326, fell to $1.75 a share. The Goldman capital was destroyed. The firm was inundated with lawsuits, the last of which was closed only in 1968. Eddie Kantor, one of the most famous comedians of the time and a defrauded investor in that fund, revealed the revered Goldman name in a different vein: “They told me to buy stocks for my old age…and it worked well. For the past six months, I have felt like a very old person.” Catchings was removed from office. “Very few people can succeed,” Walter Sasch concludes. "And he wasn't one of them." Privileges did not prepare Cutchings for the crisis. Subsequently, the Sash brothers replaced Kutchings with a man who had no privileges at all, and perhaps now we can see the results of this wise decision? Perhaps Wall Street needs less Waddill Kutchings and more Sidney Weinbergs? Author: Malcolm Gladwell