There’s a natural, hormone-mediated life cycle to a businessman’s career: when he’s young, he goes for broke (and often goes broke). He borrows big, fights hard, doesn’t take no for an answer, and builds up an empire. In middle age, the business still expands, and the CEO’s waistline expands, too; he’s more content with steady growth, and doesn’t feel a need to do anything especially revolutionary. As he slows down, so does the business; retirement is a blessing.
All this closely tracks levels of testosterone: in addition to its well-known effects on variables like muscle mass and body hair, testosterone affects personality. People with higher levels of testosterone are more willing to take risks. They’re more assertive. There’s a reason little old ladies rarely die in hang gliding accidents or get hospitalized for eating too many Flamin’ Hot Cheetos, and it’s not just cultural. Testosterone levels are higher for men. They typically peak in a man’s early 20s, and decline steadily through their adult life.
Two forces have upended this dynamic:
- Across a wide spectrum of the male population, testosterone levels are falling. Precipitously. Testosterone levels are declining at about 1% per year, which is pretty close to the annual pace of decline for a given man after age 20. No one is entirely sure why: perhaps comfortable modernity suppresses testosterone production. Perhaps we’re less physically active and more obese. Then there’s the cultural changes we’re less likely to think about. After all, declining cigarette consumption plays a role—nicotine boosts testosterone levels. Or maybe there’s something in the water.
- Meanwhile, testosterone supplementation is a booming business. No longer the province of bodybuilders (well, no longer solely theirs), it now goes by the name Testosterone Replacement Therapy. For a modest payment, your MD can give you a vial of the same stuff Arnold was injecting to win Mr. Olympia.
TRT is not cheap, and finding a doctor who is willing to diagnose you with low testosterone is not as easy as it could be. I, personally, haven’t indulged.
But it appears that many people have. The number of TRT patients in the U.S. tripled from 2001 through 2013. And doctors are willing to prescribe doses that, while reasonable for a younger man, are excessive for a middle-aged or older one. Doctors can also connect the discriminating patient with sources of Human Growth Hormone (effects: higher muscle mass, lower body fat, faster injury recovery—all good for maintaining high natural testosterone levels).
This is an open secret in the fields of sports and entertainment. How does a man in his late thirties add a few inches to his biceps over the summer? How does a party-going fifty-something actor still have a six-pack that would be the envy of a frat boy on Spring Break? The answer is a vial in his medicine cabinet.
(I don’t mean to imply that drugs alone can get you an amazing physique. You still have to work out. But in one of nature’s cruel jokes—or gifts to the diligent—the extra ambition and energy from higher levels of testosterone tends to lead to more workouts. It’s a cruel truth for fat men: if you’re too lazy to go to the gym, it’s because you haven’t been going to the gym.)
But playing hormonal games isn’t just for actors and athletes any more. Executives do it, too. I don’t have access to anybody’s confidential medical records, and I wouldn’t tell you if I did. But probably a few of these guys are juicing:
- Jeff Bezos has apparently aged roughly negative five years since founding Amazon. He used to look like the kind of dweebie guy who would spend hours in Wikipedia edit wars about Michael Bay movies; now he looks more like the Terminator.
- Elon Musk also used to look like a sickly, pale guy. He’s not adonis these days by any means, but it’s clear he’s working out. And maybe more.
- Sergey Brin has stayed in pretty solid shape for a middle-aged guy. He’d probably still be able to seduce subordinates several decades his junior sans physique, but would he have bothered?
- He’s no longer in the saddle, but Henry Nicholas of Broadcom seemed to enjoy some extra chemical assistance. At least, that would explain his reputed habit of waking up at three in the morning to blast metal and do deadlifts. It would also explain why he was doing this in his enormous underground sex dungeon.
What’s interesting about these characters is that they aren’t just staying physically youthful. They’re also maintaining a young person’s monomaniacal zest for world domination. Jeff Bezos is growing Amazon at a breakneck startup pace, and seems to treat the entire business as being engaged in de facto trench warfare with anyone who sells anything to anyone. What is “Your margin is my opportunity” if not a declaration of war on anyone with higher profit margins (AMZN net margin in 2017: 1.7%) or a higher cost of capital? (AMZN cost of capital: close enough to zero for our purposes).
Musk tends to engage in such responsible hobbies as tweeting on LSD; giving unrealistic production estimates; working twenty-hour days to meet them; starting various feuds with the financiers who float his businesses, the regulators who could shut it down, and Thai cave divers.
Musk and Bezos, by the way, are engaged in a private space race to see who can shoot rockets the farthest. As it has been since the days of JFK and Khrushchev, this is clearly a contest to see who is more hyper-masculine.
Bezos, Musk, and Brin don’t just look young. They act young.
I suspect that it’s because, hormonally, they are young. They may have the same level of rambunctious combativeness they did when they were quitting jobs and risking it all in their twenties, because, in physiological terms, they’re still in their twenties.
Can this continue?
Not indefinitely. Eventually, high doses of testosterone lead to blood pressure problems and premature heart attacks. But we know this because bodybuilders have been helpful guinea pigs, at much higher doses. So we know that if you’re jacking your T levels to 50% above peak human levels for years on end, you’ll have a hard time making it past 50. We don’t know what keeping moderately elevated testosterone levels does to someone, and my guess is that on net it’s positive. Many of the health problems we associate with middle and old age are lifestyle problems; middle-aged people get diabetes and heart issues because they’re less active, and they’re less active because they don’t have Vitamin T telling them to go do laps in the pool or grind out some squats. Certainly, moderate testosterone supplementation increases most men’s healthspan, especially given the precipitous drop in male testosterone levels over the past few decades.
The social implications are: prepare for more of the same. Imagine if, when Bezos had started Amazon, someone had given him a check for $18 billion. That’s how much operating cash flow Amazon generated last year. If he continues to invest it with the talent of a tech visionary, the personal network of a well-connected Sun Valley regular, and the ambition of a young man, imagine how long that wealth will keep compounding.
The power of artificial hormonal supplementation is creating a new generation of corporate leaders who will remain Young Men In A Hurry well into their seventies. We should expect more bold ventures, more oceans of tactically spilled red ink, epic financial feuds, and, of course, a staggering rise in inequality.
Mixing Drugs And Business—Two Precedents
But we can zoom back for a bit: this thesis seems extreme. Drugs have led to social changes, but have they changed business?
I present, as a case study, the Dopaminergic Theory of Financial Bubbles.
The theory works like this: dopamine is a neurotransmitter that we think of as the pleasure signal, but it’s more the anticipation of pleasure signal. And speculation is just a form of competitive anticipation: you make a bet on treasuries, or oil futures, or a hot penny stock; somebody else takes the other side, and whoever anticipates the best wins.
So it’s no surprise that, in finance, drugs that affect dopamine have pretty high uptake. Generally intranasally.
There are two bubbles that we can attribute pretty directly to the availability of exciting new dopaminergic drugs. In the 1980s, the U.S. was flooded with cocaine. It wasn’t cheap, but yuppies were rich, so to the yuppies it went. The 1980s were also the era of the hostile takeover: find some sleepy old company, borrow 95% of the value of the company’s assets, buy it up, shut it down, liquidate the pension, and walk away with a big chunk.
This is total cokehead behavior, and in the 1980s, coke was ubiquitous on Wall Street. There’s probably a banker somewhere who didn’t even remember that he worked on the RJR-Nabisco deal until he read Barbarians at the Gate, just like Stephen King with Cujo. A few major Wall Street figures at the time either got caught doing cocaine, or quietly spent some time in rehab.
After the 80s, cocaine use declined, and the merger world changed. There were still blockbuster deals and stupid acquisitions, yes, but they lacked the hyperkinetic mile-a-minute nature of the Hostile Takeover Blizzard.
Two decades later, there was another hot net drug, not so much on the street as on The Street. It as another dopaminergic drug, with a slower release and a longer half-life: Adderall. Adderall is the drug of choice for rote, repetitive tasks that still require some brainpower. Term papers, say. It’s not a good drug for boldness, but a great one for artful precision. And in the 2000s, the big boom wasn’t in swashbuckling buyouts: it was in complex credit derivatives.
To deal in credit derivatives, you need to deal in minutiae. The difference in returns between two credit products might be 0.5% per year, but if you’re borrowing thirty times your equity, that’s a respectable 15%. Adderall helps people power through boring tasks, but it comes at a cost: as anyone who has popped a pill hoping to get some work done and wound up cleaning their room for six hours can attest, it doesn’t help you work on the right thing. The credit bubble was predicated on the idea that real estate, while volatile at the level of individual houses and even individual cities, was stable at a national level.
The evidence is circumstantial and anecdotal, but powerful: the availability of new drugs correlate with new trends in business behavior, for better or for worse.
(You could argue that the widespread availability of prescription pep pills in the 1950s is a counterexample, but that’s not quite true: first, a credit bubble wasn’t really possible in the 1950s, because the country wasn’t very leveraged, and because banking across state lines was difficult. On the stock market side, stocks did have a good run in the 1950s, and in fact valuations went up more relative to earnings than they did in the bubblier 1960s.)
I write to bring attention to an interesting phenomenon, not to condemn it. A decent share of human accomplishment comes from men hopped up on high levels of testosterone taking insane risks just for the bragging rights. (At the time of the moon landing, the average age in Mission Control was 26. Many of the same guys stuck around for NASA’s sclerosis and decline in the following decades.)
Entrepreneurial brio and risk-tolerance are, like so many other products, increasingly Made in China. We could benefit from having more of the home-grown variety, even if it’s not Certified Organic.
Compared to previous generations of ultra-rich, the modern wealthy are less likely to engage in conspicuous consumption and more likely to engage in conspicuous donation. When they make additional money, they don’t consume most of it; they mostly seem to reinvest in either a) their businesses, or b) ambitious side projects. J.P. Morgan competed with plutocrats to see who could have the nicest yacht; Bezos and Musk compete to see who will be the first to set foot on the moon.
In fact, there’s a sense in which the ambitious of the modern ultra-wealthy—to fix education, fly bigger and better rockets, and massively improve health—-mirror the federal government’s big ambitions during the 1960s, perhaps the last era during which the United States government had a clear vision and attempted to execute on it. Perhaps, just as in the 1960s, the billionaires are offering these Great Society-esque improvements for the same reason JFK and LBJ did: to prove that their capitalist system works better than the alternative.
What’s the long-term impact of this trend? It’s politically infeasible to ban anything rich people like, especially if they like it discreetly, so we should expect it to continue. And assuming the rich are fully optimizing their health, not just optimizing for looks, we can expect the average executive tenure to lengthen. So the smart bet is to expect the economy to look more like it did in the mid-90s, or the mid 2010s, for longer: bigger tech companies, grand ambitions, and the occasional colossal failure.
But we can also expect these trends to broaden. Many popular products start out as status symbols for the rich before slowly becoming ubiquitous: cell phones, computers, flying, even cars. At best, this will simply mitigate the secular decline in testosterone, and lead to a steady state where the average man is roughly as manly as men have historically been. At worst, it will fix a symptom but not treat the underlying condition: something has changed about men, and the means to revert it is currently available to a lucky or risk-tolerant minority. Perhaps we should figure out why.