Gwern's Reviews > Titan: The Life of John D. Rockefeller, Sr.

Titan by Ron Chernow
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Fascinating account of a Gilded Age titan much worse known than Carnegie.

His charming but scheming wandering bigamist con-artist father reminds me of my old observation that a lot of very successful people seem to be high but not too high on the psychopathy continuum and have had difficult or abusive childhoods; while we tend to think of psychopathy as all negative, aspects of it, like its heritability, are consistent with it being a lifecycle strategy under balancing selection, indicating advantages to the social skills, fearlessness etc. The benign end of psychopathy may give us great leaders and businessmen and heroes like firefighters.

Rockefeller's puritanism and obsession with accounting & ledgers renders his early life unpromising. I suspect Rockefeller may've been a bit influenced by Benjamin Franklin's Autobiography. Although the virtues of accounting no longer appeal quite as much - for example, one thing Rockefeller was famous for later on was giving children shiny new dimes and then lecturing them about the virtues of savings and how a dime was the annual interest on a dollar in a savings account, 10%. This is no longer quite as compelling today when your bank's annual CD pays 0.5% or less, which hardly even covers your time in filling out paperwork.

This clerkish fixation on details and pennies makes his subsequent ability, after some modest success in trading & transporting goods, to risk his entire fortune and career going deeply into debt on visionary speculation in the nascent Pennsylvania oil fields all the more extraordinary and inexplicable to me. Why did he do it? How did he know that oil wasn't some temporary Pennsylvanian oddity which would run out soon, ending a quaint era of rustics slopping wooden vats of crude oil in horse-carts, but would be found worldwide and power the future, becoming one of the defining industries & resources of the 1800s-2000s? Rockefeller, in Chernow's telling, keeps his own counsel. It is the pivotal moment of Rockefeller's life, and thoroughly unsatisfactorily described.

I am left to wonder if it is another selection effect and what I've noted elsewhere, like my review of The Media Lab: we often assume millionaires and billionaires must have deep wisdom ("if you're so smart, why aren't you rich?"), when they may actually be deeply irrational, risk-seeking, and little more than lottery winners of timing & chance. (Several competitors to Rockefeller which Chernow mentions could easily have taken his place, and the post hoc explanations of why they were 'visionaries' and 'business geniuses' would also have been as easy to write.)

Having somehow seen the future and figured out that the refineries, sitting squarely in the middle between the raw oil of the Pennsylvania derricks and the end product of refined kerosene sitting in cans in customers' homes after being transported on railroad to their city, were the strategic point, he began buying up the Cleveland refineries to play off and balance the railroads (who otherwise would be propelled into ruinous competition) against his own cashflow needs and pipelines and the oil fields' smalltimers. This was a house of cards on par with Elon Musk's empire, as Rockefeller had to keep going deeper and deeper into debt, but somehow, it all held together and paid off enormously in the end. (It all sounds like it would make a great board game in the German vein where players compete to control geographical routes of railroads/pipelines/refineries and cooperate until the exact right moment to stab another player in the back and take them over. I checked, but while there are 2 or 3 existing oil-themed board games, they either are about off-shore drilling or take a much more abstracted macroeconomics point of view.)

Rockefeller's second career as a philanthropist is equally interesting and Chernow gives it plenty of space. It's not much of an exaggeration to say that Rockefeller was one of the first Effective Altruists, in caring deeply that his money was spent as carefully and sustainably and effectively as possible. Indeed, some of his favored projects like the deworming of the American South have echoes in modern EA projects - deworming being a particular focus of GiveWell! Rockefeller was a complex man trying to be simple: he knew many of the criticisms of him were true but tried to delude himself to the end; he was a devout Baptist, who was intelligent and worldly enough to see the problems there and how the wicked flourished; he loved homeopathy, but his funding of medical research and the Flexner Report would kill the last shreds of legitimacy it had.

The philanthropy transitions into an account of Rockefeller Junior, as he is entrusted with it, who emerges as diligent and effective, but not the man his father was. Senior attempted to replicate his own upbringing (without the - well-intentioned, intended to raise them properly without being corrupted by wealth - abusiveness), but as so often in dynasties, the founder's extreme qualities do not fully carry over to his offspring, who regress to the mean.

The lesson I take away from Senior's other, even more disappointing offspring (variously mediocre, wastrel, neurotic, or gullible) is that if you want to build a family empire, you must have a lot of offspring so the surviving maximum may be adequate, and also be willing to go outside direct descent or even adopt outsiders (eg the Romans or Japanese); this is the only way to keep a family business going for centuries. We just don't know how to raise kids in a way which prevents them from easily turning out mediocre, dumb, insane, or unmotivated, once all the basics are provided for. Anyone who claims otherwise, like the Polgar sisters, is fooling themselves, and ignoring the vast legions of 'prodigies' whose parents took the credit but who accomplished nothing (eg Norbert Weiner's child prodigy peers at Harvard, since forgotten), because they simply regressed to their adult mean, as expected, since there is no secret sauce. It's mostly genes and randomness.

The strategy of the rich, putting all their eggs into 1 or 2 baskets, is hopelessly fragile and a hostage to the slightest bit of bad luck. (Consider the Kennedys!) Why do so few of the rich & powerful not realize this and maximize their family size? I have to wonder. Perhaps it's the selection effect again: if so many people think that Rockefeller would have reliably become rich in many possible worlds due to his own perspicacity & hard work, why should we expect Rockefeller to think any less of himself or believe less that he could mold his children into worthy successors? (Live by the sword, die by the sword.) Or perhaps it's peer effects and nurture illusions: having more kids is what poor people do, a good rich parent has two children and makes sure they both get into Harvard by getting into elite pre-k and summer schools.
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Reading Progress

April 29, 2016 – Started Reading
April 29, 2016 – Shelved
May 3, 2016 – Finished Reading

Comments Showing 1-6 of 6 (6 new)

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Alasdair Reads Also echoes of quantified self in his accounting and monitoring of his virtues i thought!


message 2: by Ctkrohn (new) - added it

Ctkrohn If you're curious about Rockefeller's early days, the account of the beginnings of the oil industry in The Prize (https://www.goodreads.com/book/show/1...) is excellent. Yergin repeatedly refers to Rockefeller's "belief" in oil, almost on par with his religious convictions.


Gwern He clearly did have belief in it, and I wouldn't be surprised if he literally believed in a divine mission and guidance in betting everything on oil. Does Yergin cover where this belief came from or just mentions the fact of it? I don't doubt he had it, I'm just puzzled where it came from when so little in Rockefeller's life suggests him willing, or even capable, of making such a total gamble.


message 4: by Ctkrohn (new) - added it

Ctkrohn Unlike some of his contemporaries, Rockefeller was convinced that oil was a superior illuminant than its competitors. But that, in and of itself, probably isn't a justification for all the risks that he took, given his otherwise conservative personality. And even Rockefeller didn't appear to foresee oil's transition from a light source to a source of motive energy. I don't have a great answer.

It's an interesting contrast to Phil Knight in "Shoe Dog" (https://www.goodreads.com/book/show/2...). He took a number of gambles, any one of which could have led to the death of Nike. A massive dose of luck was crucial to his success. But unlike Rockefeller, gambling is much more consistent with the rest of his personality.


message 5: by Kevinch417 (new) - added it

Kevinch417 I should think that for most wealthy people, the idea of having a large family is contradictory to the decisions that gained their wealth. Every extra child is an added large expense.


Gwern That's a bizarre psychology to impute to them. Kids are cheap, if you want them to be; even people who are broke or making $2 a day still manage to have kids. Wealthy people clearly care very much about having heirs and passing on their wealth or power to an heir and will spend extreme amounts of money ensuring this and trying to *make* them good heirs (which is most of why kids are expensive for the wealthy).


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