Capital vs. Talent: Who’s on First?

Thomson Reuters hosted a panel last night at its Manhattan offices that was presided over by Anand Raman, HBR Editor At Large, featuring Roger Martin, Dean of Rotman School of Management, Canada, and New Yorker staff writer and author Malcolm Gladwell (The Tipping Point, Outliers, What the Dog Saw). The panel’s title “Capital vs. Talent: The Battle That’s Reshaping Business” comes from an article by Martin of the same title that appeared in the July 2003 issue of Harvard Business Review. Gladwell covered “talent” in a New Yorker article this past October. It’s hard to imagine but in the not so distant past, baseball players, models and even attorneys were paid paltry salaries. The person who changed all that, according to Gladwell, is Marvin Miller who took over as head of the Major League Players Association in 1966. Miller brought to the position a union background and before long was negotiating hard and fast standing up to the behemoth owners on the players’ behalf. Surprisingly, “capital” caved and in the space of a couple of decades a player such as Barry Bonds was not only making more in one year than his player father, Bobby Bonds, but even more than his father’s teammates made in their entire careers. And the buck didn’t stop there. Talent went on to have its way over Capital across the board. Lauren Hutton noticed one day in the newspaper what Catfish Hunter, as Gladwell notes “the first player Miller freed from the tyranny of the reserve clause,” was drawing as a salary and immediately demanded a contract of Revlon ushering in the era of the Super Model—and hedge fund investors, and CEOs who reap rewards across the board whether they were poor performers or happened to bring on a global financial disaster. Gladwell expressed incredulousness over the lack of outrage that is not playing out in society. Where is the outrage, he asked? And what’s more, where will it all end? The cultural aspect was touched on as well. Wealthy individuals measure their worth against their peers only, not against the broader class of Americans. What does that reveal about the competitive spirit? It’s not that one aspires for his country’s standing to be #1, but to surpass one’s neighbors in goods and more goods which prompted this question: is self-restraint a relic—a thing of the past? This writer came away thinking that we seem to be living in a mythological era—our heroes are demigods who may not have our best interests at heart (what Shakespeare described as young wanton boys who pull the wings off of insects for sport). Or deep down, do we still believe that the market is self-correcting and will make this all go away so it can be like it was before? In his Financial Times blog today, David Rothkopt, called Obama and Americans out for buying into the Innovation Myth, which has all the great inventions of the Modern Age originating in the USA, which as Rothkopt explains with sound evidence that they did not. However—who could have predicted the surprising and odd event that was also covered today in the news. Not Gladwell nor Martin. As reported by the New York Times today, Kansas City Royals pitcher, Gil Meche, breached a fundamental principle of Major League Baseball by turning down 12 million smackeroos! What on earth would make a baseball hero do such a thing? Meche said it was the uncomfortable feeling of taking money for something he could no longer deliver—pitching with a bad shoulder. Instead, he didn’t ever want to live with himself feeling that way ever again and therefore chose retirement. At the ripe age of 32, he is walking away –get this—with gratitude for all the game has given to him and his family. A gentleman. Could we even begin to hope that this may be the beginning of a new trend?

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