Welcome to the second installment of act two of author Ted Scofield’s on everybody else’s biggest problem but your own. If you missed one or more of the previous installments, you can find them here.

In Act One of this greed epic, we determined that as a society we cannot define the term. Each of us has an individual definition of greed that does not include us and, as our socio-economic situation evolves, so does our perception of greed, leaving us forever outside its grasp. It’s our life-long refrain, with rotating boogeymen: The other guy is greedy. I am not.

In Act Two we’re examining why we cannot define greed and last time we discovered that, despite data to the contrary, we believe accumulating money and possessions leads to happiness, so it can’t be greed, at least not when we do it.

Today we’ll look at a second answer to the why question, the fact that in our culture, money is a proxy for intelligence. The more cash we accumulate, the smarter we are assumed to be, so of course we will not define greed in a way that degrades our imperfect bur pervasive proxy. Greed must remain a mystery; it must remain Everybody Else’s Biggest Problem.


“Think Kim Kardashian is all butt and no brains?” The New York Post asked in February 2015. “Think again. According to Forbes, the 34-year-old is worth $28 million.”

So there you have it. In addition to her famously overexposed butt, Kim Kardashian has brains because she has money. To be rich is to be smart, and data suggests we embrace this equation.

In a 2012 Pew Research Poll of 2,508 adults, for example, 43% of respondents said rich people are more likely to be more intelligent than the average person. Only 8% said less likely.

I posted a survey to my social and professional networks, asking one question: All other factors being equal (age, education level, etc.) is it more likely, less likely, or neither more nor less likely that a person earning $200,000 per year is more intelligent than a person earning $50,000 per year?

  • 71% of 268 respondents said it’s more likely the person earning $200,000 annually is more intelligent that the $50K earner.
  • 29% replied neither, no difference in intelligence.
  • 0.4%, one respondent, said the higher income person is less likely to be more intelligent.

Clearly, a sizable percentage of us believe money is a proxy for intelligence, albeit an imperfect one.

Thinking about it objectively, hasn’t it always been this way, at least to a certain extent, for what my experience tells me are common sense reasons?

Investment bankers, once again the politicized boogeymen du jour, are generally highly-motivated graduates of the best business schools in the world. Here in New York I know a lot of guys and gals who work on – gasp! – Wall Street, and I perceive all of them to be of far above “average” intelligence, whatever that may be.

Physicians and attorneys are also highly educated groups of people with above average incomes.

unnamedAnd how about mega-wealthy innovators like Bill Gates, Oprah Winfrey, Mark Zuckerberg and Elon Musk? Would anyone suggest they possess less than average intelligence?

Sociology professor Lisa Wade provides scientific support for what we in general assume to be true: “The relationship between IQ and income is somewhat correlated; in general, people with higher IQs make more money.” Her conclusion has a lot of support.

Commenting on “the least surprising correlation of all time,” that “kids from higher income families get higher average SAT scores,” Harvard economics professor Greg Mankiw teaches: “The key omitted variable here is parents’ IQ. Smart parents make more money and pass those good genes on to their offspring.”

A 2013 study out of Australia concluded: “One explanation for differences in educational attainment between children of low and high socio-economic backgrounds is parents’ cognitive abilities and inherited genes.”

In 2014, a Duke research scientist wrote in the journal Intelligence, “America’s elite are largely drawn from the intellectually gifted, with many in the top one percent of ability.” The CNBC headline cut through his jargon: Billionaires are Smarter, Study Says.

Lo and behold, our federal government uses money, both income and wealth, as proxies for intelligence. This fact surprises most all of my entrepreneur clients when I explain to them who can, or more specifically, who cannot, invest in their ventures.

In the wake of the great stock market crash of 1929, the Securities Act of 1933 was born, designed to protect investors by forcing companies to provide extensive information to people, for example, before they sell stock to the general public.

Of course, as Mark Zuckerberg will happily tell you and Jordan Fishfeld, the CEO of PeerRealty, points out, “most companies create their wealth long before they ever go public.” So, who is allowed the privilege of investing in these private, pre-liquidity transactions? Who gets rich on the backs of the “protected investors”?


Federal law has two criteria for individuals hoping to hit it big:

  • Any natural person whose individual net worth, or joint net worth with that person’s spouse, exceeds $1,000,000; or
  • Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year.

Net worth and income fall short? Sorry, Uncle Sam says, you’re too stupid “to make informed judgments about whether to purchase a company’s securities.” Note it doesn’t matter if Fred makes $200K but is $800K in debt, or if Mary is a genius whose salary tops out at $190K. The test is the test. Fred is in; Mary is out.

What does this mean? When a private company is bought out by Google or goes public, rich people get richer. If your bank account falls short, our paternalistic government says, don’t fret, it’s for your own good. You need to be protected from risky opportunities you are incapable of evaluating because you don’t have a net worth of a million or income in excess of $200K. Do you feel protected yet?

Many commentators argue that private investment opportunities should be open to a broader group of Americans, that excluding a finance professor because her salary is “only” $190,000 per year is ridiculous. “Personally,” Jordan Fishfeld says, “I don’t believe that wealth is a proxy for intelligence.”

In my recollection, back in the day no one thought Brooke Shields was smart. She was a successful, wealthy model and actress, but smart? Then she went to Princeton, majoring in French literature, and the headlines changed: “Beauty and brains, Brooke Shields has it all!”

And therein, I suggest, lies a cultural development that renders an imperfect proxy far more imperfect. A segment of our society has omitted a necessary link connecting money and intelligence – the requirement for knowledge or accomplishment or skill or innovation. A segment of our society has adopted our government’s test, which shrugs its shoulders at education, attainment or even basic literacy.

Author Laura Penny holds a Ph.D. in comparative literature. In her 2010 book More Money Than Brains, she laments the trend:

Once when I was teaching a class, I made an off-hand comment about Paris Hilton that was half joke, half example. I do not recall which fictional dimbulb I was comparing her to, but I vividly remember the young man who disagreed with me. Paris Hilton must be smart, he said. She had all that money and got all that attention, didn’t she?

Paris (and Ms. Kardashian) might be members of Mensa. That’s not Professor Penny’s lament. “If wealth is the ultimate measure of intelligence and money the surest proof of brains,” she writes, “then Paris trounces low-earning losers like poets and philosophers.”

unnamed-1In his 2014 book Greed, British philosopher and scholar Stewart Sutherland doesn’t pull any punches, arguing that money is not only a proxy for intelligence, but greed itself: “Greed tells us it is more a matter of smartness with a tendency to cunning to establish or change ownership….”

In other words, smart and cunning people are more capable of getting others to part with their money, voluntarily or involuntarily, and therefore can command higher prices – make more money – than those of lower intelligence. “The skilful accountant or adversarial lawyer is paid more,” Sutherland notes, “because there is more money at stake.”

Good grief. I don’t know about you, but I find this entire discussion both exhausting and depressing.

Yes, plenty of science demonstrates a correlation between income and intelligence. Yes, at a certain shallow level, it seems to be common sense. We humans love our shortcuts.

But I fear the matter becomes a self-fulfilling prophecy. If our culture equates money with intelligence – currently on a sliding scale to oblivious oblivion – we will strive to accumulate money to be perceived as intelligent, regardless of the value of the fruits of our labors. Sex tapes and reality television become legitimate career goals. We can’t look away, and the performers’ paychecks bloat with each grotesque spectacle.

“It is hardly surprising that our culture cranks out students who think Paris Hilton is smart because she is rich,” Professor Penny writes.

To be smart is to be rich is to accumulate cash. And the more cash we accumulate – conspicuously, or what’s the point? – the smarter we are perceived to be. How much money do we need to be smart? More. Always … more.

“Smart” is good, right, a noble goal? So more cannot be greed.