How DEI Initiatives Might (Ironically) Help White Dudes Accelerate the Crypto Transition

Earlier this month, State Street allegedly instituted a new hiring policy (see here) that would preclude consideration of heterosexual white males, until all other identity groups had been considered. This past week, Major League Soccer announced something similar – two candidates from an underrepresented group had to be considered for the final round interview of any organizational job position (see here) and one of them had to be black.

If you are wondering what an underrepresented group is the MLS defines it - Black, Hispanic/Latino(a), American Indian, Asian, Hawaiian/Pacific Islanders, Canadian Indigenous, Women, and members of the LGBTQ+ community. 

They could have just saved the time and said “Straight white males need not apply.”

What is happening at State Street and the MLS is happening across corporations and universities as organizations embrace hiring initiatives that are pro-actively discriminatory against white males – spurred on by the “anti-racist” movement.

Rather than explore the growing (and often humorous) examples therein, let’s ask a different question – what happens when this happens? That is when the gate keepers to the establishment decide to warp America’s meritocratic promise to achieve some desired social end.

While America’s greatness has been its meritocratic promise, American history is replete with examples where that meritocracy fell prey to racial bias – Jim Crow, China Exclusion Act, Irish Need Not Apply etc.  – and groups were entirely shut out. What is happening to young white males today (and Asian males) is not that. It is instead a curtailment of sorts – one that finds its closest corollary with the experience of young Jewish-Americans a century ago.

Starting in the early 1900s, second generation Jews were beginning to climb America’s meritocracy ladder. They did so quickly - so quickly that the WASP establishment had to react.

From the 1920s through the 1940s, Ivy League schools and establishment firms put in policies to actively curtail the number of Jews. Jews as a % of the student body at Yale medical school, for instance, dropped from 47% in 1920 to less than 7% by 1940 (see here).

Did these policies in the end kill Jewish upward mobility?

Decidedly no. 

Second generation immigrant Jews like Jonas Salk who got denied from the Ivy League went to public universities and made those entities great – the barely funded City College of New York produced more future Noble Prize winners in the 1930s than any other public University in the United States. Bereft of smart Jews, Ivy League schools fell behind schools like University of Chicago and NYU that didn’t institute these anti-Semitic policies. 

The Jews who were blackballed from the white shoed law firms and investment banks simply built their own like Skadden and Goldman and even built new industries like Hollywood. 

By the 2nd half of the 20th century, American Jews had to be welcomed into the Establishment – after all, they had helped create it.

The moral justification for excluding white males is different than those given to exclude Jews – but they do rhyme. Jews were considered foreign while white men are considered racist/patriarchal. Jews were antithetical to the WASP value system that presided over the establishment; white males are antithetical to the woke value system that is now taking over the establishment.

While the hostility from the Establishment that young Jews faced in the 1920s was much more severe, we’re seeing an increasingly overt and covert hostility towards the white male as evidenced by these recent initiatives.

So, back to the original question - what happens when ambitious young white men can’t go work at the State Streets of the world because they don’t match the hiring prerogatives of some HR person fresh off her DEI seminar?

(This isn’t to say that there won’t still be lots of young white men who work at these places - just as Jews continued to go to Ivy League Schools in the 1920s – but there will be some number of marginal white guys who are qualified and should get the job but won’t.)

They like the young Jewish men in the first half of the 20th century will have to build their own funnel. 

And that very well could be what is in part driving crypto today.

All the smart, establishment rejects (white and Asian men) are turning to a place that is removed from the dominion of the establishment.

This is what one of the leaders of a crypto De-Fi project told me –

Imagine being a smart young white guy from some random part of the country whose parents aren’t rich. You never are getting a real shot at the Ivy Leagues because you’re not a legacy or part of a favored DEI class (e.g. black, Latino). Even if you do well at a public university, Wall Street is too hard a nut to crack– you have no in. So, if you want to get rich, where do you turn? You turn to crypto. Crypto is an anon world that is pure meritocracy.

The empirical data does seem to somewhat support this generalized view. According to Modo, crypto users are 79% men and 86% forty or under (see here). In its 2021 State of U.S. Crypto Report — Gemini found that 71% of the crypto users are white. If you look at the major crypto projects (and firms), they are all almost universally led by young white men (with a smattering of Asian males).

Contrast this to JP Morgan’s recent Sales and Trading rotational summer internship program, which included hardly a single white male according to a managing director friend there.

The big establishment banks now, which were started by white males and exclusively run by white males even to this day, are actively seeking to avoid hiring them.

The ultimate irony though is that this attempt to curtail white males in traditional finance (a place they have long flourished) might actually in the long run help them if it accelerates their early entrance into the new technology space that could end the presiding financial establishment.

In the end, establishments that aren’t based on meritocracy will get disrupted.

America’s original establishment – the old WASP establishment – rewarded people based on their family last name, not their test scores. For that reason it got obliterated by the outsider strivers.

As our presiding establishment tilts ever so deeply into the grasp of the woke religion rewarding people based on their race, not their test scores. It too will get disrupted.

The JP Morgans of the world will be replaced by De-Fi projects.

And like before, the people disrupting it will be the very folks they didn’t let in…