Richard Helms CIA Director
In 1973 I was living in Iran, on leave from my faculty position at Harvard Business School, helping to start a new business school in Tehran—the Iran Center for Management Studies (ICMS). While there I spent an afternoon with Richard Helms. He had been one of the founders of the CIA and had been its chief since 1966.
When I met Helms, he had just been pushed out by President Nixon because he refused to help cover up the Watergate affair. He was in Iran for a week, mulling what would soon be his new position in the hinterlands—ambassador to Iran. Helms was concerned with how the U.S. embassy staff tended to live apart from ordinary Iranians and wanted to talk about how we avoided that kind of insularity at my school.
We talked about my work at the school and I tried to explain the students’ reaction to our curriculum. They wanted very much to become professional managers. They wanted to believe that our way of looking at business—as a profession—made sense. But it was an uphill battle because everything in their culture and social life told them a different story—that success was not earned. Rather, it was granted by those with position and power.
Helms told me that I was really trying to be a missionary, trying to preach the gospel of capitalism in a country that had been, one generation ago, stuck in the Middle Ages. “Your students,” he said, “listen to you because you are an emissary of a rich and powerful society. We have created wealth and power in a new way—a way that seems almost magical to people caught in a traditional culture. Very few societies protect private initiative and private enterprise and very very few build great companies like IBM or Sears. In much of the world, the only way to get wealth is by inheritance, war, or skimming.”
“Skimming?” I asked. He explained: “Where there are large flows of money, you will find skimmers. It is hard to make a living as a farmer here in Iran, but those who can get close to the billions in oil money flows can become remarkably wealthy by skimming off just a bit.”
As he spoke, Helms moved his hand in a shallow horizontal sweeping motion, as if diverting a little water from a fast moving stream. “The bigger the flow, the more they can skim without anyone making a fuss. In traditional societies, it was the king’s taxes. Here in the Middle East, its oil.”
Helms’ dictum that “the bigger the flow, the more they can skim” helps explain the dynamics of Washington D.C. and Wall Street. In Washington, the U.S. income tax has produced the largest concentrated flow of money in human history–a skimmer’s paradise. And Wall Street has to be the center of the next largest money flow, a place where skimming has been institutionalized in the form of proprietary trading and computerized front-running (high-frequency trading).
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