The Paris Hilton Effect
Is the new upper class eroding its own competitiveness?
Posted October 2, 2012
1. How companies are placing increasing value on brainpower: “Take a look at the quants. I went to eat lunch at the patio outside Renaissance Technologies—arguably the most successful of the quant firms—and I was thinking I’ve probably never been in a place with a higher mean IQ. Most of them were pure mathematicians and Ph.D.s in physics. I would be willing to bet that the mean IQ of the 25 guys sitting around me was at least 150. People at Microsoft, Google, and Apple are highly screened for IQ. But it’s not just the tech firms. A lawyer that is able to negotiate an extremely complex merger or a regulatory maze can make a difference in a case involving hundreds of millions of dollars, so they can charge four figures per hour. The same is true of managers in corporations, who are making decisions involving huge sums of potential profit or loss. The financial rewards for brains are much higher today in various occupations up and down the ladder than they were in the past.”
2. How there has certainly been a convergence over time between the populations that compose the top percentiles in brains and wealth. However, some companies may not even be recruiting from the most elite schools today. What he wonders is whether “the children of the new upper class are being raised as such hothouse flowers that they won’t have the resilience, toughness, and competitiveness that other less talented kids have. I’ve talked with a CEO of a very large corporation, and he said to me his company no longer even recruits at Harvard, Princeton, Yale, or Stanford. They would much rather have kids at Southeastern Oklahoma State because those kids come to the job with the ‘right values’ and are much readier to work hard.” However, he notes that “I have no idea to what extent other corporations are beginning to feel that way.”
© 2012 by Jonathan Wai