Crazy Rich

By Daniel Gross
Posted Tuesday, Feb. 15, 2005, at 1:50 PM PT

Are Americans rich because they're nuts?

That's the thesis of a new book, The Hypomanic Edge: The Link Between (a Little) Craziness and (a Lot of) Success in America, by John D. Gartner, a psychotherapist and clinical assistant professor of psychiatry at the Johns Hopkins University Medical School. America may be the dominant force in the global economy because we're a nation made of somewhat Crazy Eddies—gonzo businessmen and -women who may be genetically predisposed to take big-time risks.

It sounds right. Creativity and genius have often been linked to mental illness. Many virtuoso painters, composers, and architects are a little kooky. Why not entrepreneurs? Gartner identifies "hypomania" as a benign form of madness—manic without the depressive. Here's how they present: "Hypomanics are brimming with infectious energy, irrational confidence, and really big ideas. They think, talk, move, and make decisions quickly. Anyone who slows them down with questions 'just doesn't get it.' " They find it hard to sit still, channel their energy "into the achievement of wildly grand ambitions," feel a sense of destiny, "can be euphoric," have a tendency to overspend, take risks, and act impulsively, and with poor judgment. They are "witty and gregarious" and possess a confidence that makes them charismatic and persuasive. It sounds a lot like Jim Clark, the founder of Netscape and animating character of Michael Lewis' The New New Thing. Or like President Bush.

Gartner concludes that many of the components of the archetypal American character—optimism, entrepreneurial energy, religious zeal—fit the hypomanic profile. Perhaps, he posits, this nation of immigrants has a gene pool of hypomanics. Immigration may select for it. After all, who else would be eager to embark on a dangerous journey, convinced he could make it in the New World? As a result, Gartner writes, Americans may be "culturally and genetically predisposed to economic risk."

Gartner sets out to prove his case not through contemporary case studies or the aggregation of vast quantities of data, but through brief, lively studies of key hypomanics from five different centuries. Christopher Columbus, the "messianic entrepreneur," had divine ambitions. Some of the first settlers of the United States were "protestant prophets"—John Winthrop of Massachusetts and Roger Williams in Rhode Island. Alexander Hamilton fearlessly charged British positions at Yorktown and wrote The Federalist papers in a series of all-nighters. His hypomania "was an essential ingredient in his accomplishments. And his accomplishments were an essential ingredient in the creation of America." Andrew Carnegie, the hypomanic steel baron, feverishly built up an industrial empire and then spent the rest of his life trying to change the world. More recent hypomanics might include movie-studio moguls David Selznick and Louis B. Mayer, and geneticist Craig Venter, who founded Celera and set off a race to decode the human genome.

It's a fun read. But Gartner's diagnosis overlooks the more rational factors that were crucial to the settling of America and the construction of our unique economic and business culture. The British Protestants who crossed the Atlantic Ocean in the 17th century came for God, but they also came for the cod. And the timber and the tobacco. By the time John Winthrop arrived in Massachusetts, non-dissenting settlers—economic opportunists, not prophets—had been farming and trading in Jamestown, Va., for more than 20 years.

Immigrants like Hamilton, Carnegie, and David Selznick's parents may have been hypomanic. But whether you were a landless peasant in Ireland in the 1840s, a Jewish cobbler in Russia in 1910, or an Indian computer programmer in the 1980s, the decision to move to America made profound economic sense. America had cheap land in abundance. The opportunities—if occasionally overblown—were real. So was the infrastructure that provided for the rule of law, capital markets, and the protections of minority rights.

In fact, practicality and realism have coexisted with messianism and utopianism in the American experiment from the very beginning. Benjamin Franklin was almost certainly hypomanic by Gartner's reckoning, but he was also one of the most relentlessly practical Americans of the 18th century. The U.S. economy has been distinguished by hypomanic booms and busts and by the creative destruction that lies at the heart of entrepreneurial capitalism. But it's also distinguished by durable systems and institutions that are emblematic of our distinct style of managerial capitalism—the Federal Reserve and the New York Stock Exchange, our telecommunications networks, and Procter & Gamble. Such institutions are not the work of flamboyant geniuses but of tons of thoughtful, far-sighted, and average Americans.

To put it another way, hypomanics instigate, but they rarely build institutions that outlive them. The necessary counterpart to the hypomanic Henry Ford was Alfred P. Sloan, who built General Motors. Andrew Carnegie could never have monetized his fortune were it not for the constantly rationalizing financier J.P. Morgan. In every generation, cooler-headed executives and entrepreneurs enter a field after a burst of creativity and build businesses and fortunes by imposing the discipline and order the creators may have lacked. Steve Jobs of Apple (who certainly has hypomanic tendencies) is an innovator who has become a billionaire, made long-term investors wealthy, and helped spread the personal computer revolution. But the same can also be said of the preternaturally well-adjusted Michael Dell.

Executives who chew the scenery may suck up attention, revolutionize industries, and symbolize American capitalism. But they're not particularly good for companies' long-term health, as Harvard Business School professor Rakesh Kurana's argues in his book Searching for a Corporate Savior: The Irrational Quest for Charismatic CEOs. No country produces as many turnaround artists, bankruptcy specialists, and temporary CEOs as America does.

The late 1990s Internet boom was the golden age of hypomanic CEOs. But how many of their companies still survive? Perhaps the most prominent and successful Internet executive is eBay's distinctly unhypomanic Meg Whitman. So, yes, Gartner is right that hypomanic first movers matter a lot, and that we need a few more. But we shouldn't forget the huge contributions of the more sober-minded folks who follow behind and pick up the pieces.