I have here a special, economics-type query which I direct to Brad DeLong, among others. Here's the thing: I have known many investment bankers in my day. Hell, I'm related to plenty of investment bankers, even if only by marriage. Many of these men are stand-up guys, fun to be with, always up for smoking a few bowls and playing golf. Others are asshole blowhards....Delong answers:
All of them, however, have the same basic character type, which I will call 'Chet'. Chet is a hail-fellow-well-met sort, cracking jokes all the time (some of most of which may be 'politically incorrect', because he doesn't care about things like that). Chet is tall, probably tan, and has big white teeth like a mouthful of chiclets.... Chet is a member of country clubs, and has a thin wife, and two adorable kids, etc. etc. If you close your eyes and imagine a picture in a silver frame on an end table in an apartment on 84th and Park, then you know what Chet's kids look like (super cute!).
...A bigger part of this answer is that there are four relevant human capabilities here: the ability to master details, the ability to quickly grasp what the salient issues are and follow them through to their conclusion, the ability to work like a dog, and the ability to size up people--figure out quickly who will actually produce something useful and who will not, who will hang tough and who will easily bid more, who will soften if wooed and who will stay hard-nosed. Next to nobody has all four or even three of these capabilities in world-class measure. Fewer people than you think have even two. And for someone who has one of the other three--mastery of detail or skill at analysis or the ability to work like a dog for ungodly periods of time--mastery of Chet-hood is a very valuable and lucrative skill.Alex chimes in:
Pushing the model a bit further I suggest that detail mastery, analytical thinking and working like a dog are more open to meritocracy than sizing people up because to size people up it helps to get them to like you and that is more culturally bound than the other skills. Minorities may rise to the top more quickly in fields that emphasize the first sets of skills than in those that emphasize the latter. Birth in general, connections etc. are also more important for the latter set of skills. Thus in America, it's Chet not Vijay even though Indian Chets surely exist in just as high a proportion as WASP Chets.Here's my $0.02: I've worked in sales, and am (Admittedly) not nearly as smart as either Alex or Brad. While in the mutual fund industry, it seemed that the best deal makers were typically not the best academically. This is not to say that they weren't intelligent, but their intelligence was of a different sort - what's known a "emotional intelligence". They had an uncanny ability to know how to read people, when to push (and how), and when to back off. They also had "big brass ones".
The comments in Brad's thread are particularly instructive. I heard once that arrogance comes from comparing your strengths to someone else's weaknesses. We have a natural tendency to look down on those with "different strengths". I see this in academia - the researchers look down on the non-researcher teachers as not having the ability to publish in top journals, the profs bringing in the big consulting $$ look down on the pure researchers as being out of touch, and so on.
It takes a lot of inputs to do a successful deal on Wall Street - you need some quants, some "people readers", and a lot of grunts. Investment banking houses have a bit of the "old boy" thing going on, but they're mainly about making money - the "Chets" of the world bring a valuable skill to the table, or else they wouldn't make the $$ they do.