Reaching for the stars is a drive and, for some, a characteristic. Relatively few succeed. However, touching and harnessing the stars is seen in many of the rich and powerful. They are committed to extreme success. They have outsized goals that they conclude are undoubtedly attainable. Their achievements reinforce their drive to achieve. In other words, their accomplishments will often breed greater success, known as the Matthew Effect.
The sociologist Robert Merton coined the term the Matthew Effect. It refers to a verse in the biblical Gospel of Matthew. It describes the preferential acquiring of “rewards” and “stature” by those who already have “rewards” and “stature.” In other words: the rich get richer.
When it comes to the rich and powerful, because of their accomplishments, many more doors open. For example, they tend to be introduced to a larger percentage of moneymaking possibilities. Moreover, these various opportunities tend to be on preferential terms. While there are certainly questions about the “fairness” of the Matthew Effect, this is purely a structural facet of society.
Another factor contributing to the greater achievements of the rich and powerful is self-efficacy, an individual’s belief in their ability to achieve in specific situations. Critical here is to realize that these people are quite adept in certain areas that translate into affluence and influence. When savvy about their strengths and weaknesses, they will delegate other roles and responsibilities to people more proficient in those areas than they are. Some of them are not that smart regarding their proficiencies and deficiencies.
When Great Success Leads To Failure
For some of the rich and powerful, these factors that work in their favor can warp their perceptions of who they are and what they can realistically accomplish. They can dull a high achiever’s understanding of their limitations. While there are some exceptions, a meaningful percentage of the rich and powerful lose sight of what they did to become very influential and wealthy and start to see themselves as more expert and capable than they actually are.
Unfortunately for these rich and powerful individuals, their narcissistic tendencies bloom. They may increasingly believe the world revolves around them. It is their knowledge and skills that are essential to make things happen. These accomplished and affluent individuals increasingly conclude that they and only they can sort through the morass and solve the problems across a broad range of situations. Instead of recognizing their strengths and their weaknesses, their strengths become greater as their weaknesses seem to vanish.
The reason for these individuals crashing and burning is, in a word, hubris.
Their expanding unchecked arrogance produced by and coupled with the misplaced certainty of their abilities, knowledge, and the like will often result in bad judgments that will only continue to compound. To become rich and powerful, these people likely found a niche where they excelled. It is within these niches that they showed themselves to be exceptional. Their drive, insights and capabilities translated into their ability to amass significant wealth and influence.
What goes wrong is that they leave their niches. Problems regularly arise when they believe their successes in one area are readily transferable to other areas. These clear cases of hubris commonly result in irrational acts and poor decisions impacting business and life. Some examples of hubris from the literature include:
- In Mary Shelly’s Frankenstein where Dr. Frankenstein seeks to prove his brilliance by creating life only to regret the decision.
- In John Milton’s Paradise Lost, Lucifer wanted the other angels’ worship and was consequently cast into hell.
- In the Greek tragedy Oedipus Rex, Oedipus was told his fate but chose to defy it, causing it to come true.
Their false sense of invulnerability leads the rich and powerful to serious failures, including the degradation and possible collapse of prosperous business endeavors. Believing their decisions, even in areas where they have little expertise, are unquestionably correct will commonly set a path to ruin.
This is often a function of “gambler’s ruin.” When gamblers constantly raise their bets when winning but fail to lower the bet when losing, they will eventually go bust even when the odds are on their side. Their excessive confidence in their abilities is disproportionate to the probabilities. The same phenomenon is seen among the rich and powerful who suffer from hubris.
It Is Never Their Fault
Complicating the problem for these people is the “fact” that their failures are, in their minds, outside their control. There are certainly times when adverse circumstances are not their fault. For example, this is the case such as when a pandemic upends a business endeavor. However, for most of them, nearly all the time, the failures can be seen in their poor decisions and actions. So, even if a pandemic was disastrous to their business, their decisions and actions to deal with the crisis are regularly misinformed and only exacerbate the adverse consequences. Still, due to their narcissistic tendencies, they tend to strongly believe other people are conspiring to get them.
There are usually an array of reasons these other people are plotting and striving to bring them down, such as:
- Jealousy of their accomplishments
- Schadenfreude
- Racism, ageism, sexism, some “-ism”
- Fear of their future successes and their contributions to society
- Other people do not appreciate and most likely denigrate the efforts they made to achieve
For one reason or another, they often believe these other people are actively contributing to the rich and powerful crashing and burning. It is not their actions and decisions because they were unquestionably correct in their assessments and chosen courses of action. It is some cabal or terrorist or conspiracy that brings them low.
Most rich and powerful who have seen their fortunes fall and authority wane can quickly point to people gloating at their downtrodden situation. They see this as proof of conspiracies and the like. The reality is usually much more straightforward. As these individuals ascended to loftier heights, they probably ruffled some feathers along the way. Many of them likely made some serious enemies.
Few people amass great wealth and a position of command without antagonizing other people along the way. For example, entrepreneurs cannot be nice and always agreeable and still build substantial companies. They will sometimes be disagreeable and even mean to some people to grow the companies. When entrepreneurs succumb to hubris and severely diminish the companies, those who do not like them will likely gloat or call it karma. This does not mean they created a cabal to take down the entrepreneur.
Being Honest
Hubris among the rich and powerful is often a product of their achievements. Their business and financial accomplishments fuel their extreme egotism and the misbelief in the unassailable rightness of their decisions. For most of them, the consequences are substantial losses and, for some, total disaster.
On the other hand, the rich and powerful who understand their limitations and have strong business and personal support structures tend to stay focused on what they do exceptionally well. This regularly translates into building significant business endeavors, extreme personal wealth, and substantial power.
Russ Alan Prince is the executive director of Private Wealth magazine and chief content officer for High-Net-Worth Genius. He consults with family offices, the wealthy, fast-tracking entrepreneurs and select professionals.
