From Peon to Boss: It Still Happens
Weinstein, Kenneth R., The American Enterprise
Andrew Carnegie started out as a $1.20 a week bobbin boy. By the end of his life he was head of the largest company in the world. Rags to riches, literally, in one working career.
But that was the old, freewheeling, frontier America. Today, we're told that you need a fancy It still education and a friend at the bank to make it big. Books and news stories say upward mobility ended with the last generation. The U.S. is becoming a caste society. Now, it's only the rich who get richer.
Is Horatio Alger dead? The nineteenth-century Unitarian minister, made famous by his 130 tales of up-from-nothing success, once inspired generations of Americans. Nowadays, he is mocked as a myth-maker. Sophisticates sneer at the idea that big things can be achieved through hard work alone. It's a nice notion, they say, but it can't be done today. Only the well-credentialed and the already-well-off can hope to break through.
Such pessimism is factually unfounded and ultimately self-defeating. In the 1990s just as in the nineteenth century, enterprising Americans can go from the bottom to the top of the heap in short order.
In an 1859 address, Abraham Lincoln, himself a model of the poor-but-ambitious American, attacked the view that "whoever is once a hired laborer, is fatally fixed in that condition for life." "The prudent, penniless beginner," Lincoln noted, "labors for wages awhile, saves a surplus with which to buy tools or land for himself," and eventually saves enough to hire others to help him. These hired laborers then begin the same cycle over again. This, Lincoln proclaimed, was a "just and generous, and prosperous system, which opens the way for all - gives hope to all, and energy, and progress, and the improvement of condition to all."
Today there is actually a Horatio Alger Association of Distinguished Americans, based in Alexandria, Virginia, that recognizes individuals who have "risen from humble beginnings to personify the ideal of success through hard work and courage." The society was formed a half-century ago to teach young people that America's days of opportunity are not over.
One of the 1997 Alger inductees is Alan "Ace" Greenberg. As a young man in Depression-era Oklahoma City, Greenberg read The Robber Barons and decided that he, too, would end up on Wall Street. In 1949, after graduating from the University of Missouri, he headed East and landed a $32.50 a week job as a clerk in the oil department of the brokerage house Bear Stearns. Six months later, he became an arbitrage clerk. By age 25, he was running the arbitrage department before becoming a Bear Stearns partner at age 31. Soon diagnosed with cancer, he triumphed over it- and over his competitors - guided by the belief that "thou will do well in commerce as long as thou dost not believe thine own odor is perfume."
In 1978, "Ace" was made CEO of Bear Stearns. Under his reign, the company grew from 1,200 employees to 7,800. And while other brokerage firms were busy recruiting MBAS, Greenberg declared an abiding preference for "PSDs" - Poor, Smart, with a deep Desire to be rich, and no college education at all.
The historian Henry Adams (1838-1918) noted that in the United States, "the penniless and homeless Scotch and Irish immigrant was caught and consumed" by economic opportunity. "Every stroke of the axe and the hoe made him a capitalist, and made gentlemen of his children."
The members of the billionaire club at the top of the Forbes 400 list of the wealthiest Americans may not all be gentlemen, but there are certainly more than a few high school and college dropouts who were "penniless beginners" laboring for others as they saved enough to build their own businesses. Takeover titan Kirk Kerkorian (worth $3.4 billion) didn't make it through junior high, but started a charter airline company as a World War II veteran using surplus planes. Lawrence Ellison ($6 billion) quit the University of Illinois and struggled through low-level jobs in Silicon Valley before starting network computer manufacturer Oracle with just $1,850 in 1973. …