We hear plenty about tech entrepreneurs not finishing college, notably Mark Zuckerberg, Bill Gates, and Steve Jobs. Clearly, success in business does not require a college degree. In the case of Kirk Kerkorian, high school wasn’t required.
William C. Rempel’s The Gambler: How Penniless Dropout Kirk Kerkorian Became the Greatest Deal Maker in Capitalist History chronicles the improbable rise of the son of Armenian immigrants who MGM-Mirage co-CEO Daniel Wade said, “He always took the risks. He never took the credit.”
Kerkorian was an eighth-grade dropout who would go on to earn billions. He epitomized what Dr. Peter Klein writes in The Capitalist and the Entrepreneur. According to Klein, “The creation metaphor implies that profit opportunities, once the entrepreneur has conceived or established them, come into being objectively, like a work of art.”
Kerkorian began his art early, by necessity. “When you’re a self-made man you start very early in life…” Kerkorian said. “You get a drive that’s a little different, maybe a little stronger, than somebody who inherited.” Unlike a certain president of the United States we know. Rempel starts his first chapter with a quote from Mark Twain, “Necessity is the mother of taking chances.”
The author writes that in 1989, Forbes magazine listed Kerkorian as one of the country’s 66 billionaires. The eighth-grade dropout “called the list useless, meaningless, and ‘completely unnecessary.’” Donald Trump, who called Kerkorian “the king,” lobbied the magazine hard that year to be included among the ultrarich. The next year Trump was dumped. Forbes had been “mislead by incomplete information.”
One thing the real deal-making billionaire envied about the New York phony was he wished he “could talk like Trump.” Kerkorian had “a paralyzing fear of public speaking.” But the Armenian never defaulted on a loan, never wanted his name on a building or anything else and “regarded his handshake as a binding contract.” Rempel writes, “He carried his own bags and drove his own car, typically a Ford Taurus or Jeep Cherokee.”
Murray Rothbard, explaining Ludwig von Mises’s view of entrepreneurship, wrote,
The entrepreneur who buys raw material and hires labor, and who thereby incurs costs in order to produce a future product, is expecting that he will be able to sell the product to customers for a revenue greater than the costs. Just as the stock speculator purchases stock in the hope and the expectation that it will rise in price, so the employer incurs costs in the expectation that he will be able to sell the product at a greater price.
Professor Israel Kirzner saw the role of the entrepreneur differently. Rothbard explained,
Kirzner’s entrepreneur is a curious formulation. He need not, apparently, risk anything. He is a free-floating wraith, disembodied from real objects. He does not, and need not, possess any assets. All he need have to earn profits is a faculty of alertness to profit opportunities. Since he need not risk any capital assets to meet the chancy fate of uncertainty, he cannot suffer any losses. But if the Kirznerian entrepreneur owns no assets, then how in the world does he earn profits?
Kirk Kerkorian was every bit a Misesian entrepreneur, speculator, and gambler, who once wagered $1 million on the single roll of the dice. He won. Kerkorian seemed to have the magic touch, whether it was buying and selling airline companies and stocks, car companies, movie studios, casinos, or land.
A daredevil pilot who as a civilian flew for the Royal Air Force Ferry Command, he later went head-to-head with Howard Hughes and survived the 2008 crash when many in Las Vegas believed the City Center project would bankrupt MGM. His MGM stock was worth $1.8 billion when he died.
Kerkorian seemed to trade wives and companions as often as he bought and sold businesses. What Rempel’s book doesn’t provide is why. Kirk’s highly coveted privacy, at least in this area of his life, will continue.
I still remember how thrilled I was, just seeing him in person, having dinner in a corner booth at Piero’s, with who I assume was his sister. Just the two of them. No entourage. No line up to kiss his ring.
Mr. Kerkorian was the real deal. The real entrepreneur Mises envisioned.
