An Economy of Grinds

In his column for the New York Times (7/12/10), David Brooks introduces the concepts of princes and grinds in an economy. Princes are, according to Brooks, someone you’d like to sit next to at a luncheon. “If you go to business conferences, you know that at lunch it is definitely better to be seated next to a prince than a grind. Princes, who can be male or female, are senior executives at major corporations. They are almost always charming, smart and impressive. They’ve read interesting books. They’ve got well-rehearsed takes on the global situation. They can drop impressive names as they tell you about their visits to the White House, Moscow or Beijing. If you’re having lunch or dinner with a prince, you’re going to have a good time.” Grinds are people who are boring. “Grinds, on the other hand, tend to have started their own company or their own hedge fund. They’re often too awkward to work in a large organization and too intense to work for anybody but themselves. Over lunch, they can be socially inert. You try to draw them out by probing for one or two subjects of interest to them. But as often as not, you find yourself playing conversational ping-pong with a master of the monosyllabic response. Every once in a while you’ll run into one who can’t help but let you know how much smarter he is than you or anybody else in the room. Sitting at this lunch is about as pleasant for him as watching a cockroach crawl up his arm. He’d much rather be back working in front of his computer screen.”

But, he goes on to say, Princes often turn out to be untrustworthy and grinds turn out to build the economy through small business startups and entrepreneurial efforts that create jobs. He correctly deduces that unfortunately, the princes (who caused the recession) are doing fine now, but the grinds are not. The grinds are suffering. “The big companies are posting excellent earnings. They’re sitting on mountains of cash. The aspiring grinds, meanwhile, are dead in the water. Small businesses are not growing. They are not hiring. They are struggling to stay alive.”

Brooks spends the rest of the essay describing the differences between the princes and the grinds.

I agree with almost all of what he writes. My two exceptions are:

1. Including hedge fund creators in the Grinds. They’re still just manipulating money, not creating anything that serves a public good or creates anything of extrinsic value.

2. Not mentioning innovation. It’s innovation that creates real economic growth and opportunities for jobs and capital investment. It’s innovation that both of his types of people have forgotten.