"The Smart Machine Age will usher in an era where the smartest humans are not those that have the deepest knowledge"
--- Edward Hess & Katherine Ludwig, Humility is the New Smart (2017)
Summary
With the dawn of the Smart Machine Age, humans need a new playbook to thrive. That playbook is laid out in detail by Edward Hess and Katherine Ludwig in Humility is the New Smart. In order to reach “New Smart” you need to:
(1) Quiet your ego
(2) Manage yourself (emotions & thinking)
(3) Reflectively listen
(4) Emotionally connect & relate to others (otherness).
What if I told you that the whole point of the stock market is not to make money? What if I told you that the stock market itself is just a Game, and the real object of this Game is not money; it’s the playing of the Game itself?
In The Money Game Adam Smith (also known as George J. W. Goodman) sets out to explain how the stock market is a Game to be played with objectives that oftentimes do not make sense. While money preoccupies so much of our consciousness, The Money Game is adamant that making money is not the real objective of playing the stock market Game. The sooner we realize that the stock market Game is an irrational one, the better we will play it.
Through a series of chapters asking questions and describing real events and real characters (real but masked), George J. W. Goodman sets out to explore the unexplored area of the markets … the emotional area. As he states very eloquently in Chapter 2, “There are fundamentals in the marketplace, but the unexplored area is the emotional area. All charts and breadth indicators and technical palaver are the statistician’s attempts to describe an emotional state.
In the end, the one requirement to win The Money Game is to remember the Irregular Rule: If you don’t know who you are, this is an expensive place to find out. Emotional maturity must be displayed over the long run if you are going to survive the game called the stock market.
My Summary Conclusions from Each Chapter
Part I. YOU: Identity, Anxiety, Money: Chapter 1-9
Preface: The game we create with it is an irrational one, and we play it better when we realize that, even as we try to bring rationality to it.
• Chapter 1: The word game was deliberately chosen to describe the stock market and the sooner that all of us small investors understand that this is a game, the better off we may be.
• Chapter 2: Do not forget the Irregular Rule: If you don’t know who you are, this is an expensive place to find out!
• Chapter 3: It all comes back to the Irregular Rule that you must know yourself for the stock market is an expensive place to find that out. The requirement to win this game is emotional maturity.
• Chapter 4: Since 80% of the market is psychology or deeper still human emotionality, the market can really be seen as a crowd. Because of this tendency, there is no substitute for good information, good research, and good ideas.
• Chapter 5: On one hand you have Adam Smith the father of modern economics stating definitely that money is about the maximization of profit and in some sense the accumulation of wealth (i,e. The Wealth of Nations). On the other hand, you have Norman Brown who sees money as a noose around our necks that ultimately makes our human nature impoverished. You must decide for yourself!
• Chapter 6: There are countless reasons people get into the Game. Some people love to gamble and lose. Others just want to make money over the long term by owning stocks forever. Regardless of your reason, you need to know yourself and stick to your plans.
• Chapter 7: The only real protection against all the ups and downs of the market (the anxiety) is to have an identity so firm it is not influenced by all the brouhaha in the marketplace. And remember, the stock doesn’t know you own it!
• Chapter 8: So if we are talking about real big money, forget the stock market. Build a company and have the market capitalize on your earnings.
• Chapter 9: The “simple equation of wealth”: To get rich, you find a stock whose _ has been compounding at a very fat, and then the stock zooms, and there you are.
Part II. IT: Systems: Chapter 10-14
Chapter 10: Charting assumes that what was true yesterday will also be true tomorrow. But you and I know that past patterns/performance are not predictive of future patterns/performance.
• Chapter 11: To quote Professor Fama, “the history of the series of stock price changes cannot be used to predict the future in any meaningful way. The future path of the price level of security is no more predictable than the path of a series of cumulated random numbers. If the random walk is indeed Truth, then all charts and most investment advice have the value of zero, and that is going to affect the rules of the Game.
• Chapter 12: The Game is such that computers take away any long-term advantages individuals find. Our only chance is to rely on luck (random walk thesis).
• Chapter 13: The numbers created by “independent auditors” should be looked at with a grain of salt given that the accountants are paid and hired by the companies themselves.
• Chapter 14: Someone has to be on the losing end of the transaction and that is usually the little investor.
Part III. THEY: The Pros: Chapter 15-18
Chapter 15: Professional investors are “performance” managers who are focused on driving results in the short term. Very few “performance” managers think in the long term. It’s all about driving big capital gains!
• Chapter 16: Like everything in life, those that are really in the know!
• Chapter 17: The market does not follow logic, it follows some mysterious tide of mass psychology.
• Chapter 18: If you are in the right thing at the wrong time, you may be right but have a long wait; at least you are better off than coming late to the party.
Part IV. VISIONS OF THE APOCALYPSE: Can it All Come Tumbling Down? Chapter 19-20
Chapter 19: Sooner or later you have to come to reality, and stop being a father to the world. Lead it, yes. Buy it. No.
• Chapter 20: Sure, it can all come tumbling down. All it takes is for belief to go away!
Part V. VISIONS OF THE MILLENNIUM: Do You Really Want to Be Rich?
Chapter 21: You need to create your own money philosophy to answer the question do you really want to be rich?
Visual Summary of Key Findings from Book
“Unfortunately, as we have seen, the playing of the Game is not entirely a rational affair. There is nothing so disastrous, said Lord Keynes as a rational investment policy in an irrational world”
"Change might not be fast and it isn't always easy. But with time and effort, almost any habit can be reshaped."
--- Charles Duhigg, The Power of Habit (2012)
Summary
At the center of the Habit Loop sits the Craving Brain which looks for simple cues and clearly defined rewards. A typical habit emerges when the brain finds a way to save effort, and habits are powerful because they create neurological cravings. When a habit emerges, the brain stops fully participating in decision-making. Although you never can really extinguish bad habits, you can change a habit by keeping the old cue and reward but changing the routine.
Three-Step Loop
A cue triggers the brain to go into automatic mode and which habit to use
The routine is physical or mental or emotional
The reward helps your brain figure out if this particular loop is worth remembering for the future
How To Change a Habit
By focusing on the keystone habit, you can fix a myriad of other habits in the process. You must work to identify cues and choose new routines in order to change your habits. But for habits to permanently change, people must believe that change is feasible.
In closing, to modify a habit, you must decide to change it. You must consciously accept the hard work of identifying the cues and rewards that drive the habits’ routines and find alternatives. You must know you have control and be self-conscious enough to use it.
The real power of habit is the insight that your habits are what you choose them to be. It is important to note that no matter how strong our willpower is, we are guaranteed to fall back into our old ways once in a while
“The ability to make good decisions regarding people represents one of the last reliable sources of competitive advantage, since very few organizations are very good at it.”
Most companies would agree that the single most important driver of organizational performance and individual managerial success is human capital or talent. Yet most companies still leave their talent acquisition process to chance using outdated interview techniques that lead to poor long-term results.
In June of last year, I read Topgrading by Bradford D. Smart as I geared up to hire a Director of HR. And like “every important business book” out there, Topgrading has been recommended by every who’s who in the business world. I honestly must say that the book is chalked full of strategies that promise to improve your talent acquisition process. I could spend 30+ days trying to unpack all the different tidbits I obtained by finishing this read, but I won’t. Instead, I want to share how my approach to talent acquisition has changed as a result of reading this book.
The Current Reality
The cold reality is that the average company suffers a 75% failure rate hiring people. 75% of managers hired externally without Topgrading methods are mistakes, underperformers, or miss-hires. The following chart shows the reality of talent dispersion:
The Goal
The directly stated goal of Topgrading is to fill at least 75% of positions in an organization with high performers (A Players) by hiring and promoting people who turn out to be high performers at least 75% of the time.
Topgrading companies, in contrast to their competitors, get disproportionately better talent for the total compensation dollars they spend. As ruthless as it may sound, Topgrading is all about increasing the percentage of high performers, A Players, and not being satisfied with B Players who never are worthy of a Very Good or Excellent rating.
The How and What
When you finish reading Topgrading, you are introduced to the Topgrading Interview process where you spend close to a full day accessing your potential hire. You take a chronological approach starting with school years and progressing through many questions about every job starting with the first job and moving forward to the present. The proven magic of Topgrading interviewing is to learn how the candidate has evolved across the education years and full career history.
During this tenacious interview process, you will spend hours accessing 50 separate competencies across five domains:
Intellectual
Personal
Interpersonal
Management
Leadership
The following chart details the 50 competencies and ranks each competency across three dimensions of people’s ability to change their behaviors related to each competency.
50 Specific Competencies For Managers
Most companies have 5 to 10 competencies for most jobs, but the Topgrading method believes that for management jobs these 50 competencies are all important. This means that if a new hire is only Fair or Poor on even one of the above competencies, that new hire is apt to be considered a miss-hire. How tenacious is that?
Resourcefulness is the Most Important Competency
Early in the book (Smart, 2005, p. 36), Bradford D. Smart unequivocally states that resourcefulness is the most important competency to hire for. Resourcefulness (Initiative) is defined as:
“Passionately finding ways over, around, or through barriers to success. Working to achieve results despite lack of resources. A willingness to go beyond the call of duty and a bias for action. A results-oriented “doer.”
Resourcefulness is a composite of several competencies. It’s proactivity, energy, passion, analytical skills, and persistence wrapped into one. In common terms, resourcefulness is the brains and drive to figure out how to get over, around, or through barriers to success. A Players all exude resourcefulness in spades. C Players never seem to develop it.
Resourcefulness is a crucial leadership skill for today’s generation of leaders. A resourceful person is one that is able to quickly adapt to new or different situations, is able to find solutions, think creatively, and sometimes manage with what they have available to them. Given today’s challenges leading during the COVID-19 pandemic, everyone is having to learn how to make do with what they have and develop a skill in doing more with less (Hardwick-Smith, 2020).
A Players Do The Following Really Well…
What I Will Do Differently
As a knowledge-work leader, the key to my success, in the simplest terms, is to hire the best employees, create an empowering environment, provide the necessary tools and guidance, and then get out of the way. I must continuously align individuals’ responsibilities to be consistent with their strengths, weaknesses, and interests.
“At the end of the day, you bet on people, no strategies”
—Larry Bossidy
As a result of finishing this book, I will do some things differently in my talent acquisition approach. Specifically:
I will look harder to find talent at all salary ranges. The focus will be on hiring A Players at the right salary level. Regardless of what we pay people, we should be sure to get top talent for the salary we can afford.
I will screen harder on the front end to select the right people. Time is a precious resource but more time needs to be spent in the phone screening process to eliminate B and C Players upfront.
I will act more quickly to confront nonperformance and redeploy chronic B and C Players.
I will use 360 email surveys and skip-level meetings to gain deeper insights into every manager’s strengths and weaker points, including myself!
In closing, the name of the game is to create talented teams that drive towards better results over the long term. As Peter Drucker so eloquently put it, “Culture eats strategy for breakfast & lunch.” Topgrading will help me prevent the 75% failure rate in hiring and promotions that are so commonplace in most companies. But almost more importantly, it will help me solve the three biggest hiring problems:
Rampant dishonesty by weak candidates who easily get away with fudging their resumes and faking their interviews,
Insufficient information, because most companies use superficial hiring methods that enable candidates to control and hide what they share about themselves,
Lack of verifiability, as most reference checks are practically useless.
Having finished the 750+ page tome to Capital by Thomas Piketty well over a year ago, I have just gotten around to writing up what I learned. In attempting to summarize this book, I realize that there is no way I can cover everything I learned. Quite simply, Piketty has blown my mind with the depths of his research. This book is the deepest source I have ever read on how capital behaves and why wealth and income inequality are two sides of different coins.
I figure that the best approach with this write-up is to break it down into manageable chunks. What follows below is a summary of the theoretical characteristics of Capital and how it behaves in the world today as well as in the past. I’ll unpack the features of income, capital, and output and how each of these dynamics interplay with one another.
The next write-up at a later date yet to be determined, will delve into the impacts that Capital has had on inequality. I’ll unpack the structure of inequality and some potential solutions that Piketty mentions. This review is by no means a political or opinion piece. I am simply sharing some of the learnings I received from diving into this book.
With that, let’s dive in…
Is r > g the Central Contradiction of Capitalism?
The first concept that Piketty spends time unpacking is the relationship between returns on capital and the overall growth rate of the economy. Piketty boldly states that growth in the future will slow and capital will be that much more important. As economic growth slows and falls below the average rate of return on capital, past wealth naturally takes on a larger importance. This is simply because it takes only a small flow of new savings to increase the stock of wealth steadily.
Thomas Piketty’s First Fundamental Law of Capitalism
The second concept that Piketty spends time unpacking is what he calls his First Fundamental Law of Capitalism. This law shows how important capital is in relation to the national income of a country. As the nature of wealth over the long run continues to transform (i.e., capital used to be agricultural and has since been replaced by industrial, financial capital, and urban real estate), its importance as measured by the capital/income ratio has remained steady and unchanged.
Thomas Piketty’s Second Fundamental Law of Capitalism
The third concept that Piketty spends time unpacking is what he calls his Second Fundamental Law of Capitalism. This law shows that countries with high savings rates and low growth rates accumulate enormous stocks of capital relative to their incomes over the long run. This can have significant effects on the social structure and distribution of wealth in a country. Piketty emphasizes that the impacts of this law are gradual and take decades to manifest. Boldly, Piketty predicts that by 2100 the entire planet could look like Europe at the turn of the 20th century with a capital/income ratio of 6-7 years.
The Dynamics of the Capital/Income Ratio in Europe and the U.S.
By investigating the dynamics of the capital/income ratio of Britain, France, Germany, and the United States, Piketty uncovers that the nature of capital in these rich countries has changed: capital was once mainly land but has now primarily become housing, industrial, and financial assets. But capital’s importance remains the same.
The Dynamics of the Capital/Income Ratio in Britain
In Britain, private wealth in 2010 accounted for 99% of national wealth and the bulk of the pubic debt in practice was owned by a minority of the population. Britain in summary is a country with accumulated capital based on public debt and the reinforcement of private capital.
The Dynamics of the Capital/Income Ratio in France
In France, private wealth in 2010 accounted for 95% of national wealth and the bulk of wealth in France was driven by accumulations of significant public assets in the industrial and financial sectors followed by major waves of privatization of these same assets. In a sense, France is a country with a model of Capitalism without Capitalists.
The Dynamics of the Capital/Income Ratio in Germany
In Germany, capitalism takes on a more social ownership point of view. Prevalent in the German marketplace is the stakeholder model of business where firms are owned not only by shareholders but also by certain other interested parties like the firms’ workers themselves. This Rhenish Capitalism has resulted in lower stock market valuations for German firms when compared to British & French firms.
The Dynamics of the Capital/Income Ratio in the United States
In the United States, more than 95% of the assets are American-owned but the influence of landlords and historically accumulated wealth was less important in the U.S. than in Europe. However, the structure of capital in the United States took on a different form. Specifically in the South, slave capital largely supplanted and surpassed landed capital. So much so, that the total market value of slaves represented nearly a year and a half of U.S. national income in the late 18th and first half of the 19th century.
Conclusion
A market economy based on private property, if left to itself, contains power forces of divergence, which are potentially threatening to democratic societies and to the values of social justice on which they are based. My next write-up on Capital in the Twenty-First Century by Thomas Piketty will dive into the immense inequalities of wealth that have occurred as a result of the natural dynamics of capital.
Traditionally HR has been more about compliance than it has been about developing and managing talent, and changes in HR have been a long time coming.
After World War II, when manufacturing dominated the industrial landscape, planning was at the heart of human resources. Simply put, companies recruited lifers, gave them rotational assignments to support their development, groomed them years in advance to take on bigger and bigger roles, and tied their raises directly to each incremental move up the ladder.
But business today is far less predictable, and these “15-year plans” are no longer sustainable practices in today’s game of talent management. HR must become more agile to properly support the rest of the organization, and take its rightful place as a strategic partner to the C-Suite.
Every CEO in the world would say that employees are their greatest asset. Some would even go as far as to say that their companies are nothing without their employees. Yet traditional HR departments in most companies spend endless amounts of time, effort, and money writing and enforcing policies to deal with problems that a small subset of employees might cause.
On Reinventing HR is a collection of eleven essays originally published in the Harvard Business Review. Each of these eleven articles has been hand-selected to create a collection of impactful readings on transforming and reinventing HR in your businesses.
Outdated HR Model
Many current HR tasks, such as traditional approaches to recruitment, onboarding, and program coordination, will become obsolete, as will expertise in those areas. The problem with Traditional HR typically is that most companies spend endless time and money writing and enforcing policies to deal with problems 3% of their workforce might cause.
As a result of these outdated HR models, companies are not properly developing their pipeline of future leaders, and the battle for talent means that companies are facing a real scarcity of top talent. Globalization compels companies to have to reach beyond their home markets and compete for the people who can help them drive their companies forward. These changing business dynamics are forcing business leaders to take a hard look at our HR functions and re-skill as necessary.
After reading On Reinventing HR two companies (Netflix and Deloitte) have undertaken some radical changes to their HR processes that I would like to take some time to unpack below.
Recruit and Chill the Netflix Way
Don’t look now but Netflix isn’t just disrupting the way we consume content these days. They are also reinventing the HR function itself. At Netflix, it starts with how they define and structure HR. Traditional HR processes and routines are organized under the finance function, while HR serves only as a talent scout and coach.
Next, Netflix spends all of their efforts hiring people that will put the company’s interests first and who will support their desire for creating a high-performance workplace. They believe in their heart of hearts that if you’re careful to hire people who will put the company’s interests first, who understand and support the desire for a high-performance workplace, 97% of your employees will do the right thing.
To accomplish this, Netflix sticks to the following tenets of talent management:
Lastly for Netflix, the best thing you can do for employees is hire only “A” players to work alongside them because excellent colleagues trump everything else. If you want only “A” players on your team, you have to be willing to let go of people whose skills no longer fit, no matter how valuable their contribution had once been. As a result, at Netflix, adequate performance gets a generous severance package when performance no longer keeps up with the job requirements.
Deloitte Redesigns Performance Evaluations
We have all worked for companies that have quarterly evaluation processes, and if you are like me, you probably dread them slightly. Partly because giving and receiving honest feedback is very hard, and partly because most performance evaluation processes are poorly designed.
Since 2015, Deloitte has been working hard to redesign its performance management system and process of evaluations. Not surprisingly, when Deloitte polled their employees, more than 58% believed that the company’s current performance management approach drove neither employee engagement nor high performance.
To improve this flawed process, Deloitte went deep into the “Science of Ratings.” What Deloitte found is that on average ratings of employees reveal more about the raters than they do the ratee’s performance. So much so, that 62% of the variance in the ratings of employee performance could be attributed to the individual rater’s peculiarities and/or biases. Actual performance only accounted for 21% of the variance.These abysmal stats forced Deloitte to radically redesign its performance evaluation process.
Now, Deloitte asks managers and team leaders four future-focused statements about each of their team members:
1. Given what I know of this person’s performance, and if it were my money, I would award this person the highest possible compensation increase and bonus [measures overall performance and unique value to the organization on a five-point scale from “strongly agree” to “strongly disagree”].
2. Given what I know of this person’s performance, I would always want him or her on my team [measures ability to work well with others on a five-point scale from “strongly agree” to “strongly disagree”].
3. This person is at risk for low performance [identifies problems that might harm the customer or the team on a yes-or-no basis].
4. This person is ready for promotion today [measures potential on a yes-or-no basis].
In effect, this radical redesign asks each of Deloitte’s team leaders what they would do with each team member rather than what they think of that individual, and is thus their new approach has become a much fairer system for “rating” employee performance.
My Key Takeaways
The goal of On Reinventing HR is to help people become more adept with HR strategies that will move their companies forward and raise the HR department to its rightful place as a strategic partner to the organization. Finishing this book has motivated me to spend all my time and effort carefully hiring people who will put the company’s interests first, and who ultimately understand and support the company’s desires to build a high-performance workplace. Some other key strategies I would like to employ going forward:
Be on the lookout for the employees who are energy creators and develop them because these are the people who get to the heart of issues, reframe ideas, create informal bonds that encourage collaboration, and in general make the organization healthier and more productive
Increase the number of check-ins with my people. The book has a phrase that I love: “Radically frequent check-ins.”
Continue to work hard to separate compensation decisions from day-to-day performance management.
Reconsider how we do our annual merit-based raises. Traditional one-time-a-year merit raises are less effective because too much time goes by.Radical solution:make salary adjustments twice a year.
Curiosity and potential are oftentimes better indicators of future success. Interview and promote those who show:
(1) The right motivation and commitment to excel in the pursuit of unselfish goals
(2) A penchant for seeking out new experiences
(3) The ability to gather and make sense of information
(4) A knack for using emotion and logic to communicate and connect with people
(5) The wherewithal to fight for difficult goals despite the challenges they face.
To close off, if you’re careful to hire people who will put the company’s interests first, who understand and support the desire for a high-performance workplace, 97% of your employees will do the right thing. The problem with HR typically is that most companies spend endless time and money writing and enforcing policies to deal with problems the other 3% might cause.
You should read On Reinventing HR if you are interested in learning some tactical strategies to build your people-focused organization of the present and future. When it comes right down to it, your business is simply a collection of different people. Management and nurturing of people eat business strategies for lunch.
(1) Overhaul performance management practices to jump-start motivation and engagement; (2) Use agile processes to transform how you hire, develop, and manage people; (3) Establish diversity programs that increase innovation and competitiveness as well as inclusion; (4) Use people analytics to bring unprecedented insight to hiring and talent management; (5) Prepare your company for the double waves of artificial intelligence and an older workforce; (6) Close the gap between HR and strategy
Stamped from the Beginning chronicles the development of racist ideas, and the ongoing failure of American society to root out these ideas. Throughout time, racist ideas about Black people have perpetuated racial discrimination against Black people, and have led the consumers of racist ideas to believe there is something inherently wrong with Black people.
Ibram X. Kendi focuses his efforts on emphasizing that the policies and the history of oppression and racial discrimination of Black people have made opportunities for Black people scarce. And it is truly this scarcity of Black opportunities that is inferior – not Black people.
It’s clear that racism and discrimination are still highly pervasive in today’s world. And while there are multiple angles to the current problem of race, I want to spend this post unpacking the long-term economic implications of the consistent scarcity of opportunities faced by Black people. The end of slavery for many Black Americans was just the beginning of a larger quest for economic and democratic equality.
But First … What’s A Good Definition of Racism and Racist Ideas?
Any concept that regards one racial group as inferior or superior to another racial group in any way is a good definition for racism as illustrated in this book. And historically, there have been two kinds of racist camps in the World:
The best way to separate the Segregationists from the Assimilationists is to think of their racist ideas as a spectrum. The Segregationists regard Black people as biologically distinct and inferior to White people while the Assimilationists encourage Black people to adopt White cultural traits and/or physical ideas.
Assimilationists read Darwin as saying Black people could one day evolve into White civilization; Segregationists read Darwin as saying Black people were bound for extinction. Both camps are racist because they each regard White people (on racial group) as superior to Black people (other racial group).
In stark contrast to the Segregationists and Assimilationists stand the Anti-Racists; people who think there is nothing wrong with Black people and think that Black people as a whole are an equal racial group to all. Anti-Racists are truly committed to racial equality and focused on interrogating and shedding our world’s racist ideas.
In American history specifically, there have been four major fathers of Segregationist and Assimilationist ideas and one major mother of Anti-Racist ideas. While far from exhaustive, the graphic below depicts each individual:
Why Do These Delineations Matter?
The delineations between Segregationist, Assimilationist, and Anti-Racists matter simply because the issue of the 21st century is “the problem of the color line” that is a result of the racist ideas that have been perpetuated by Segregationist and Assimilationists alike. As multiple series of separate but unequal laws were instituted, nearly ever aspect of southern life from water fountains, to businesses, to transportation were segregated. These separate and inferior Black facilities and opportunities fed White people and Black people alike the segregationist idea of Black people being fundamentally separate and inferior people. It is these racist ideas that have led to policies that have on average rendered Black Americans second-class status socially, economically, and politically.
So, although official segregation is dead, we as an American society still face a real “problem of the color line.” The laws against color can be removed, but that will leave the poverty that is historical and institutionalized consequence of color. For some three centuries now, the communal experiences of the slaves and their descendants has been adversely shaped by social, economic, and political institutions of our ignoble past[1]. And the true American tragedy is our current reluctance to engage in conversations to fix the results of this ignoble past. As nearly two average American lifetimes (79 years) have passed since the end of slavery, America’s national sin is now the responsibility of the third and fourth generations to fix[2].
Slavery Fueled the Growth of the American Economy; Cotton Fueled America’s Growth as a Global Player
The first slaves arrived from West Africa in 1619 and by 1776 slavery was everywhere and legal in all 13 newly created states. But it wasn’t until the rise of cotton during the 19th century that the US went from a colonial and primarily agricultural economy to the second largest industrial power in the world. Cotton created an interconnected global market that linked the industrial textile mills of the Northern states and England with the cotton plantations of the American South. And slave labor fueled it all.
As the following chart shows, cotton-based slavery became America’s first big business:
As cotton production grew exponentially (roughly 400% over 60 years), so did the number of the enslaved (roughly to 4 million people by 1860). The bodies of the enslaved served as America’s largest financial asset and became the force needed to maintain America’s most exported commodity[3]. More than just cotton, this new US economy accelerated worldwide commercial markets in the 19th century, creating demand for innovative contracts, novel financial products, and modern forms of insurance and credit[4].
Cotton profits propelled the United States into a position as one of the leading economies in the world, and made the South its most prosperous region. Unquestionably, cotton-based slavery transformed the American economy.
The Myth of the Antiracist North and the Racist South
When current day citizens look back at the atrocities of slavery, they often pin these atrocities on the South, and the South alone. Doing so, downplays the true capitalistic nature of cotton-based slavery. Because cotton was the number one export from the US during the 19th century, there was a very tight relationship between slavery in the South and the economic and industrial expansions that happened in the North and other parts of the Western worlds. Put very simply, the slavery economy of the US South was deeply tied financially to the North, to Britain, and the rest of the modern Western Worlds.
The benefits of cotton produced by enslaved workers extended to industries beyond the South. In the North and Great Britain, cotton mills hummed, while financial and shipping industries also saw gains. Banks in New York and London provided capital to new and expanding plantations for purchasing both land and enslaved workers[5]. Everyone in power benefited from the system of slavery except of course the millions of enslaved.
Today’s racial wealth gap is perhaps the most glaring legacy of American slavery and the violent economic discrimination and dispossessions that followed[6]. And failure to provide the formerly enslaved with the land grants of 40 acres originally promised through Sherman’s order only accelerated this wealth gap.
Today’s Racial Wealth Gap Began in the Past
Since the Civil War, Black people have faced social, economic, and political headwinds that provided limited opportunities for Black people to accumulate wealth. Even post-Reconstruction, Black people faced law and public policy that was disadvantageous to their cause. Through the first half of the 20th century, the federal government actively excluded Black people from government wealth-building programs like the New Deal.
Between 1944 and 1971, federal spending for former soldiers totaled over $95 billion. Combined with the New Deal and suburban housing construction, the GI Bill gave birth to the White middle class and winded the economic gap between the races. But as our nation tends to do with programs like these, Black veterans faced discrimination that reduced or denied their benefits under the New Deal welfare programs.
The continuous scarcity of Black wealth building opportunities is one of the biggest reasons why the wealth gap started in the past and continues on today. In many ways, the opportunity to accumulate wealth is contingent on the wealth positions of one’s parents and grandparents. As the stats below will show, the descendants of slaves suffer from a scarcity of opportunities that will have lasting adverse impacts on Black wealth as a whole.
The following are some stats on the disparities in wealth between Black and White households.
White Americans have 7x the wealth of Black Americans on average
Median family wealth for white people is $171,000. Median family wealth for black people is $17,600
White households earned a median income of $69,823 in 2019 versus $43,862 for Black households
Black people make up nearly 13% of the US population by hold less than 3% of the nation’s total wealth
Black households have on average $4,400 in home equity, compared with $67,800 for white households.
The gap in homeownership rates in 2019 between Black and white households—about 41% for Black Americans versus 73% for whites—was the widest in a quarter-century, according to census data.
Mutual Obligation to Fix the Devastating Legacy of Slavery and Discrimination
There is no silver bullet to correct the inequalities that are 400 years in the making and deeply ingrained in our systems, institutions, and laws, Richard Neal (D., Mass.), chairman of the House Ways and Means Committee, wrote in a recent report on health and economic equity[7]. While we cannot change the past, we as Americans must not also be indifferent to the current suffering that is linked directly to that same past.
Our history has in fact dealt Black Americans a bad hand; one of inherited poverty and a devastating legacy of discrimination. Collectively, we as a people must work together to address this nation’s unfinished racial opportunity.
Not tackling the question of past discrimination is akin to asking Black people to enter the 100-yeard dash forty yards behind the starting line. And when Black people lose the dashes and the racial disparities of our country persist, racists blamed the supposed slowness of Black people, not the head start of accumulated White privilege.
What the survivors of slavery endured in the cotton fields has everything to do with the wealth of the US today and the disproportions of the wealth between While people in the US on average and the wealth of Black people in the US on average. Continuing to turn a blind eye to this fact is our nation’s continual sin.
[1] Loury, Glenn C. (1998, March 1). An American Tragedy: The legacy of slavery lingers in our cities’ ghettos. Retrieved from https://www.brookings.edu/articles/an-american-tragedy-the-legacy-of-slavery-lingers-in-our-cities-ghettos/
[2] Desmond, Matthew. (2019, August 14). In order to understand the brutality of American capitalism, you have to start on the plantation. Retrieved from https://www.nytimes.com/interactive/2019/08/14/magazine/slavery-capitalism.html
[3] Lockhart, P.R. (2019, August 16). How slavery became America’s first big business. Retrieved from https://www.vox.com/identities/2019/8/16/20806069/slavery-economy-capitalism-violence-cotton-edward-baptist
[4] Baradaran, Mehrsa. (2019, August 14). Cotton and the Global Market. Retrieved from https://www.nytimes.com/interactive/2019/08/14/magazine/slavery-capitalism.html
[5] Timmons, Greg (2018, March 6). How slavery Became the Economic Engine of the South. Retrieved from https://www.history.com/news/slavery-profitable-southern-economy
[6] Lee, Trymaine (2019, August 14) A vast wealth gap, driven by segregation, redlining, evictions, and exclusion, separates black and white America. Retrieved from https://www.nytimes.com/interactive/2019/08/14/magazine/racial-wealth-gap.html
[7] Tergesen, Anne and Gillers, Heather. (2021, February 22). U.S. Retirement Crisis Hits Black Americans Hard. Retrieved from https://www.wsj.com/articles/u-s-retirement-crisis-hits-black-americans-hard-11613989981?mod=djem10point
[8] Kendi, Ibram X. (2016). Stamped from the Beginning: The Definitive History of Racist Ideas in America. Bold Type Books.
Do you believe that ability is fixed and needs to be proven? Or do you believe that ability can be developed through learning? Most of us would agree with the second statement. Yet in Mindset: The New Psychology of Success, Carol Dweck proves time and time again we humans often live in a fixed mindset (statement one), and often do so without even knowing it.
At the heart of Mindset: The New Psychology of Success, is a detailed walkthrough of two types of views you can adopt for yourself: (1) the fixed mindset and (2) the growth-mindset. Under the fixed mindset, you believe your qualities and that of others is cared in stone and this creates an urgency to prove yourself over and over. Under the growth-mindset, you believe that your basic qualities are things you can cultivate through your efforts, your strategies, and ultimately through learning. Each mindset can have profound affects on the way you lead your life and view life in general. The following blog post will unpack some of the things I learned through reading this book.
Inside the Mindsets
When you think of yourself under the eye of each mindset, you quickly realize that there are two meanings to everything the happens in life. Better said, there are two ways of seeing every interaction or happening… Two sides of the same coin. The following chart details the differences in mindsets across a few domains of life:
While far from exhaustive, the two lists above show pretty clearly that the fixed-mindset is limiting by its very nature. Yet Carol Dweck shows in her book that time and time again we have a hard time avoiding the fixed-mindset even though we understand that it hampers our ability to live our best life.
Don’t Buy Talent, Buy The Growth-Mindset
Sports has a funny way of helping us see things clearly (and often times less clearly [insert smiley face). When we think about the greatest athletes of all time in each of their domains, we don’t believe they got to their greatest heights by talent alone.
From Michael Jordan to Tiger Woods to Babe Ruth and back to Wilma Rudolph, we intellectually understand that talent + relentless hard work is the ultimate recipe for their success. Yet in our day to day lives, we shun this idea, oftentimes without even realizing. Malcolm Gladwell suggests that this happens because people prize natural endowment over earned ability. As much as our culture talks about individual effort and self-improvement, deep down, he argues, we revere the naturals.
The fixed-mindset can trick us into believing that natural talent should not need effort. In fact, those with the fixed-mindset even go as far as to think that effort in general is for the others, the less endowed. Carried away with their superiority, “these naturals” with the fixed-mindset never ask for help and never learn how to work hard nor cope with setbacks. This way of thinking can contribute to very negative outcomes Take a look at the following two images with quotes from two of the world’s greatest champions in sports:
Both Tiger Woods and Michael Jordan, two of the greatest athletes of all-time, clearly exhibit the growth-mindset. They stand out because of their commitment and effort to honing their craft. And this is the key to their overall success. People with the growth mindset think it’s nice to have talent, but that’s just the starting point.
Long-Term Corporate Health Needs Growth-Mindset Leadership
Evidence shows time and again, leaders with the fixed-mindset over the long-term lead organizations astray. From Lee Iacocca to Albert Dunlap, back to Ken Lay and Jeff Skilling, and over to Steve Cash and Jerry Levin, these fixed-mindset leaders fostered cultures of big egos, blind heroism, and entitlement, which eroded their company cultures and destroyed their chances at long-term sustainable corporate health.
Fixed-mindset leaders want to be the only big fish so they stifle others to make them feel a cut above the rest. These leaders foster environments full of negative assessments, stereotypes, and often prejudices that put their employees in the fixed-mindset ultimately holding them back from success. Instead of learning, growing, and moving the company forward, everyone within is more worried about being judged. This is why fixed-mindset leadership is so detrimental for long-term corporate health.
In contrast to these fixed-mindset heroes, stand growth-mindset leaders in action like Jack Welch, Lou Gerstner, and Anne Mulcahy that focused all their efforts in establishing cultures focused on learning, growth, and collaboration, not individual brilliance. Organizations steeped in the growth-mindset embody a zest for teaching and learning, an openness to giving and receiving feedback, and an ability to confront and surmount obstacles.
Working Towards a Growth-Mindset
Whether you are a parent, business leader, coach, spouse, or athlete, working towards the growth-mindset will have meaningful impact in your life. But how do we actually instill these principles in our lives? And how do we maintain the growth-mindset once “we get there?”
Moving towards a growth-mindset takes plenty of time and effort to achieve and maintain so it’s important to first understand this right at the outset. The growth-mindset starts with believing that all people can develop their abilities. This belief in people’s ability to grow and learn is the heart of the growth-mindset. Changing one’s mindset towards the growth-mindset also starts with a deep appreciation for hard work, trying new strategies, and consistently seeking input from others.
When you face setbacks, the growth-mindset is about responding with interest and treating these setbacks as opportunities for learning. In short, moving from a fixed-mindset to the growth-mindset is all about embracing all the things that have felt threatening: challenge, struggle, criticism, and setbacks.
Changing your mindset isn’t about picking up a few pointers here and there. It’s about seeing things in a new way. Embracing the growth-mindset is a way of life that will change you from a judge-and-be-judged framework to a learn-and-help-learn framework. It’s a journey that takes time but as Carol Dweck proves time and time again in her book, it’s a journey that is well worth taking.
In summary, the growth mindset looks a bit like this:
“Knowing who we are is hard. It’s hard. Eliminate who you are not, first, and you’re going to find yourself where you need to be… The race is never over, the journey has no port. The adventure never ends, because we are always on the way.” [1]
Regardless of how enlightened we think we are, we all struggle to better understand ourselves. And this struggle leads to a lot of personal discontent in our lives. Recently, I was given a copy of The Only Astrology Book You’ll Ever Need by a good friend of mine who is way more in touch with the occult than I am.
Historically, my only interactions with the subject of astrology were usually in the form of modern day horoscope columns in mainstream magazines and newspapers. From these columns, I understood that I was a hardworking Virgo but I never really thought much more than that. In reality, astrology has way more to offer than a weekly horoscope from Cosmopolitan.
Astrology is defined as a pseudoscience that claims to divine information about human affairs and terrestrial events by studying the movements and relative positions of celestial objects (usually the planets and stars). When you break that down more simply, at its core, astrology offers you a different compass or lens into who you are. If you are willing to do the work to find and analyze your Birth Chart, astrology can help you find some deeper insights into who you are.
Looking to the Heavens from Earth
Because each entity in our solar system moves at a different speed and rate, and in a separate path or orbit, the combination of the placement of the planets are almost endless. At the moment of your birth, the Sun, Moon, and planets were in a particular arrangement in the heavens. This exact arrangement will not be repeated for 4.32 million years!
Astrology analyzes how the Sun, Moon, and planets in their specific arrangements interact with one another to shape the various aspects in your life, ultimately helping to answer questions about yourself. Since astrology takes an Earth-centric view of the cosmos, the 10 celestial bodies (planets) of astrology are the Sun, Moon, Mercury, Venus, Mars, Jupiter, Saturn, Uranus, Neptune, and Pluto. And each planet represents a different set of characteristics and qualities which rule over different parts of our lives. The following picture depicts the 10 celestial bodies of astrology and the characteristics each governs/rules over:
Every single person has the same 10 planets in their astrological birth chart, but each with varying power and influence. And each planet expresses themselves uniquely based on the zodiac sign they were located in at the time of your birth.
A Personal Look at My Birth Chart
Using Cafe Astrology.com, I created my Birth Chart. I then used Joanna Martine Woolfolk’s book on astrology to analyze my personality traits based on the position of each astrological body at the time of my birth:
I guess I am more than just a hardworking Virgo!
As you can see from the above, I am so much more than a hard-working Virgo. There were definitely aspects of my personality that surprised me, and others that confirmed what I already knew about myself. But all in all, spending some time analyzing myself through the lens of astrology helped me understand a lot of factors that have interacted to shape my life, for good and for bad!
In Closing
Roughly 30% of Americans believe in the merits of astrology as a whole. I, like most people, doubted the validity of the practice given the rise of pop astrology and horoscopes in mainstream magazines and newspapers. But having spent some time reading The Only Astrology Book You’ll Ever Need, and analyzing my Birth Chart, I can definitely say that there is way more to astrology than I realized before.
People might say that astrology suffers from the confirmation bias as we seek to confirm pre-existing theories or beliefs about self. Though they may be a hint of truth to that, it’s hard to deny the point that there are influences beyond our controls. Whichever higher power you place your faith in, the constant drive to understand self is a ceaseless human desire.
The ultimate reason astrology exists is to answer questions about the self. I have learned that there are so many more dimensions of my being. I hope that after reading this post you will open up to a new way of looking at yourself. Invest some time with astrology and see what you will learn about yourself.
We all know someone in our lives that seems to catch all of the ‘lucky” breaks. No matter what happens in their lives, the sun seems to always shine on them. But the truth is, luck isn’t as unpredictable as we often make it out to be. Luck is a combination of your preparation, your attitude, an opportunity, and your action. The following from Ben Sherwood’s The Survivors Club and I hope it will help you bring more luck into your life.
Develop a Lucky State of Mind
In Closing
Lucky people are far less random than one would think. In reality how you approach this world and your state of mind determines how much luck you achieve/receive. Unlucky events happen to people and purely random things do sometimes occur. But, the luckiest of us all find a way to see ourselves through these events. Remember, 90% of your life is determined by the way you think.
