Character is revealed by what we do when we think that nobody is looking and by what we choose to do when we think we can get away with it. Sadly, what is revealed is all too often disappointing and dreadful in the extreme.
The new issue of Smithsonian magazine features an article entitled The Dark Side of Thomas Jefferson. In it, historian Henry Wiencek contrasts the public (and publicly depicted) Jefferson with how he actually lived and ran his homestead plantation, Monticello. The article is based upon his forthcoming book and predicated upon new archaeological work at Monticello and upon previously overlooked or disregarded evidence in Jefferson’s papers.
Unlike earlier portrayals — erroneous due to some combination of confirmation bias and the desire to sustain the Jefferson legacy (he penned “We hold these truths to be self-evident, that all men are created equal,” after all) — Wiencek suggests that, to get at the truth of Jefferson’s character, we must simply follow the money.
Jefferson the spendthrift made a success of his debt-ridden plantation thanks in no small part to what he calls the “silent profits” gained from his slaves. He financed the building of Monticello via a credit line that used his human chattel as collateral. He caused young slave boys to work at making nails (and allowed them to be whipped when they were “truant”) because the profits paid his grocery bills. Parents are divided from children — in his ledgers they are recorded as money — and escapees are recaptured and sometimes dealt with severely. He owned over 600 slaves during his lifetime and freed exactly three of them.
In essence, Jefferson reneged on his stated principles because his human assets provided a perpetual and predictable dividend at compound interest: “I allow nothing for losses by death, but, on the contrary, shall presently take credit four per cent. per annum, for their increase over and above keeping up their own numbers.” Indeed, it appears to have become his favorite investment strategy. Jefferson advised that “an acquaintance who had suffered financial reverses ‘should have been invested in negroes.’ He advise[d] that if the friend’s family had any cash left, ‘every farthing of it [should be] laid out in land and negroes, which besides a present support bring a silent profit of from 5. to 10. per cent in this country by the increase in their value.’”
Nearly all of us like to think that we will do the right thing when tested. But, far too often, we don’t. In our business that includes big problems like insider trading and Ponzi schemes. But it includes smaller stuff too — like selling a higher paying product that isn’t as good simply because we can or even “liking” a product just because it pays well. Fiduciary status should help some, but it’s no panacea either. For example, I suspect that the “annuity puzzle” (why income annuities are used so much less than economists think they should be) is due in large measure to advisors failing to advocate for them because their use provides small compensation and advisors lose control of the money so invested.
Even otherwise great men often put profit before principle. I hope I have and will have the strength to do better every time I am faced with similar challenges.