The villains who caused the 2008 financial meltdown ran the gamut of society, but arguably their sins were the same. The speculators who did shoddy work on houses to flip them, the brokers who lured unsophisticated buyers into loans they couldn’t afford, and the investment bankers who repackaged those risky loans and unloaded them like a hot potato onto unsuspecting investors, all prioritized short-term greed over long-term profit.
Four years later, the culture of the quick buck is still alive and well. Those are the values in play when bankers make billions betting against their own shady financial products, when Goldman Sachs executives prey upon their own clients, when traders are celebrated for what they can make in a day, rather than what they can build over a decade.
Short-term thinking is getting shorter than ever: Today, computer traders can reap a windfall from selling an instant faster than a competitor.
“ ‘Short-term’ used to be focusing on the week or the month,” said Steve Priest, a consultant on business ethics. “Now it’s on a fraction of a second.”
At a time like this, it is worth remembering the great American fortunes that were made over a lifetime, not in a day; by building things, not trading on what others have built; by businessman who acted with honor and integrity, not in spite of them.
Henry Crown, born in Chicago in 1896, was perhaps the greatest in this class of titans. The son of Russian immigrants, he dropped out of school in the eighth grade to help put food on the table. He and his brothers formed a company that bought and sold steel and gravel. Over time, it built Chicago’s highways and skyline.
His word was as good as a contract. Once, he was at a fancy party when he learned that one of his loyal clients hadn’t received a shipment of gravel they needed. Still in a tuxedo, he jumped in a truck and delivered the gravel himself.
Crown didn’t think you had to deceive people or twist their arms to get rich. “If you ever lied to him, he was finished with you,” recalled Francis Hoffman, who became a close friend. “He believed that if the deal wasn’t a good deal for both parties, it wasn’t a good deal.”
Crown was so keen to avoid the appearance of a conflict of interest that when he volunteered for the military during World War II, and was assigned to procurement, he sold off his stock in companies that did business with the army.
Those ethical practices didn’t keep him from getting rich. To the contrary, he grew wealthy enough to buy the Empire State Building.
By the 1970s, he told reporters his goal was to have less money at the end of every year than he had at the beginning. His family gave away more than $100 million to charity.
Crown died in 1990. His widow, who died a year later, left Hoffman and his wife in charge of doing something special to memorialize Crown’s legacy.
Hoffman and his wife looked far and wide, trying to find something special enough. But every institution they visited just wanted to name a building after Crown, or endow a professorship in his name.
That wasn’t Henry. “Henry didn’t care about that stuff,” Hoffman said.
Finally, they reached the Aspen Institute in Colorado and picked up a brochure about seminars for leaders in business. A light bulb went off: Why not hold seminars aimed at creating long-term value for society, rather than short-term swindles?
With help from folks at Aspen, the Henry Crown Fellowship Program was born, which provides mentoring on values-based leadership for about 20 emerging leaders each year. Each one must devote time to a community project.
Some of America’s best-known leaders in business have gone through the program, including the founders of Netflix, Pandora, and LinkedIn. (A promising young attorney named Deval Patrick was also a fellow, before he got into politics.)
Now Aspen is expanding the circle to recruit the best and brightest from Africa, Asia and Latin America. A gathering last year drew more than 200 fellows from around the world to discuss ethical challenges, from corruption to conflicts of interest to the search for the “good society.”
The culture of the quick buck would have outraged Crown, so it is fitting that the fellowship in his name seeks to be its antidote.