Snobbery is a bad way to do business
First published in the Financial Times on 30th October 2012.
Money and power allow anyone to crash almost any scene
Few can say they are entirely free of snobbery of one type or another – be it social, financial or intellectual. After all, everyone occasionally likes to feel superior to others. I suppose it is a permitted vice, like greed or lust. The world of business is no exception – although I suspect it is not as bad as certain professions.
One of the reasons I like enterprise is that it is largely a meritocratic sphere. Entrepreneurs are the essence of self-made individuals. They come from all backgrounds and cultures, occasionally from privilege but mostly not. All have prejudices alongside their competitiveness, but overriding such tendencies are ambition and dynamism. They are successes not because of whom they know or where they went to school or who their father was – but because of what they’ve done.
Of course, once they have made money, lots of new tycoons try to join the modern day establishment – hanging out in Klosters or St Tropez, joining clubs such as White’s or Mark’s Club, and buying tacky contemporary art.
Often entrepreneurs can be a curious mix – insecure in socially elite surroundings, but fabulously confident in the boardroom or on the shop floor. Many achieve wealth by breaking the rules – yet once they arrive, they start to imitate aristocratic behaviour and codes.
The fresh energy that up-and-comers inject into the decaying elite of every generation is what keeps a society vigorous. Too much inherited wealth and the gene pool stagnates. This constant renewal is the very essence of evolution and human progress. It is partly why social mobility matters – although government redistribution is not the way to engineer it. A former business partner of mine refused under any circumstances to take public transport. It reminded him too much of his modest roots. He had expended much effort and taken too many risks to ever want to descend to the level of the masses again.
Investors can be snobs, and usually such foolishness proves expensive. A classic example was the way institutional lemmings queued up to back Nat Rothschild’s Vallar “special purpose acquisition company” in 2010 at £10 a share. It seems they fell for the prestige of the Rothschild name, and all the financial genius and connections it implies. As a consequence perhaps those fund managers didn’t do all the homework they might have on Indonesian coal mining.
Today the renamed Bumi PLC shares lie slumped at a quarter of their flotation price. Meanwhile the honourable Mr Rothschild has resigned from the board, expressing doubts about its ability to stand up for investors; the chairman accused him of “disruptive behaviour” at a board meeting, investigations into alleged financial irregularities continue at Bumi Resources, and various parties are calling for the promoter to be stripped of his incentive shares.
Then there is snootiness towards industries that are seen as boring or grubby. Catering, where I have mostly made my living, is generally held in low esteem by those in the smart set – although guests at dinner parties used to prick up their ears when they learnt I owned The Ivy. In recent years, several of the high-status jobs seem to have lost some of their glamour – in particular investment banking, once full of pomposity, but now not so grand.
I can recall looking down on geeks in the early 1980s, when home computers were just catching on. I thought anyone obsessed by software was a nerd with body odour and oily hair. Studying the ranks of technology billionaires, who is the mug now?
In the global world of commerce, the participants are so diverse that old cultural snobberies make no sense. Money and power allow anyone to crash almost any scene, no matter how bad their manners. Of course, we English still obsess about class, but perhaps better that than the US equivalent: race.
High pay can help overcome career snobbery. Mars always used to offer high-flying recruits better salaries than other companies, to ameliorate any aversion to confectionery and dog food. These days Aldi, the discount supermarket chain, provides highly competitive pay and security of employment – attractive features in these volatile times, which doubtless account for the huge upsurge in its popularity among top graduates.
Snobbery might pay in some luxury markets, but if you want scale then egalitarians tend to win.