Numismatics: History as Market

Most people call it “coin collecting” but numismatics is the art and science that studies the forms and uses of money. This includes stock certificates, bank drafts, military decorations and fine art medals as well as coins, which, after 2500 years, are still the most common form of money. “Coins are history you can hold in your hand,” is a common saying in numismatics.  You can own a coin struck by Philip II of Macedon and believe within reason that it might have been given to Aristotle.

 

Miletos 1/12 stater: lifetime of Thales
(0.9 cm; 1.1 grams)

Back in the 1990s, inspired by the episode “Backbone of the Night” from Carl Sagan’s Cosmos broadcasts, I assembled about 25 ancient coins from the towns and times of famous philosophers, from Thales to Hypatia. Except for the Owl of Athens and a tetradrachm from Alexandria in Egypt, none cost more than $200 and most cost less than $100 at the time.

Middlesex DH 1033a:
Sir Isaac Newton
Half Penny Token

The political leaders of the American Revolution who signed the Declaration of Independence, the Articles of Confederation and the Constitution, also signed paper money. Many of these are available in middle collector grades, Very Good to Very Fine, for less than $500, sometimes surprising less.

During the late 1700s and early 1800s, the British royal treasury was nearly empty, yet the benefits of capitalism were everywhere. Taverns and merchants issued their own bronze penny and halfpenny tokens. Hundreds of types and thousands of varieties are known. Many of them celebrate trade, commerce, peace, and prosperity.

Reverse of DH 1033a
about the size of a
US Quarter

In America, from about 1834 to about 1844, a series of economic changes brought “hard times” and Hard Times Tokens. These privately minted coins stand out as being pointedly political, for or against Jackson, Van Buren or Daniel Webster. There were even Abolitionist tokens. These all circulated in daily trade. Many are also advertising cards, for instance for Van Nostrand, which then was only a bookstore in New York.

 

Canadian tokens of the 1840s were part of the social fabric that led to The Rebellions and ultimately to the burning of the Parliament at Montreal. Other Canadian tokens from the Maritime Provinces explicitly honor Trade and Commerce, and state “Pure Copper is Preferable to Paper,” and assert, “More Trade, Fewer Taxes.” 

During the early 19th century, private banks in America often displayed vignettes of Spanish and Mexican coins.  Promising to pay "25 cents" or "50 cents" the pictures would be of one- and two-reales coins.  (See Spanish Coins on American Notes here.)

Stock certificates from the Edison Companies are always in greater demand, and certificates from the mid-1800s cost much more than those from the early 20th century. However, the Erie Railroad, the New York Central, Bethlehem Steel, and the many Edison Electric companies left us legacies that are very affordable. 

Numismatics is one of the last unregulated markets. In the USA, no government licenses or special regulations exist to define who is a numismatist.  (Specific laws do define “coins” and otherwise regulate the creation and production of money objects and money substitutes.)  The very few college courses in numismatics on American campuses are fleeting at best, though in Europe such studies are recognized. In this market, anyone can claim to be anything. Validation, such as it is, is by ad hoc standards of conduct set within the hobby by private organizations: the American Numismatic Society, the American Numismatic Association, the International Association of Professional Numismatists, and the Professional Numismatists Guild. These groups set standards far above any government laws. For instance an ANA dealer can be banned from membership for selling a single counterfeit item, and ignorance is not an excuse.

Realize that even among the oldest known examples, few types of coins are objectively rare. In fact, demand drives price.  So, an ancient Roman coin, known only from a museum catalog, will be dirt cheap compared to a so-called “rare” American coin with a certified population in the tens of thousands.  Coins, stock certificates, bank drafts, and other monetary media always were  intended to be common. Coins are easily the most common artifact of any civilization - and even so-called "primitive" societies have objects of social status that serve some of the purposes of money. 

We have a slogan in numismatics: Buy the book before you buy the coin. It is a general warning that this is a hobby where knowledge and money are identical. Numismatics is a hobby that actively rewards greed. 

If you have a passion for a time and place in history, such as the American Revolution or the Golden Age of Athens, you will enjoy your acquisitions - but you may not find another buyer later.  In a previous generation, most American collectors accumulated circulating American coins.   Today, collectors tend to become specialists. 

The American Numismatic Association offers two sequential week-long seminars on its Colorado Springs campus. They also provide a range of self-study materials; and they grant a master’s certificate in numismatics.  Numismatists are autodidacts.

My interest, of course, goes back to reading Atlas Shrugged as a teenager.  But it was not until 30 years later that I became active in the hobby.  I wrote magazine articles and then joined Coin World as their international editor for a year.  After that, I stopped collecting entirely, sold off my inventory, and focused on research and reporting.  (See Forgery and Fraud in Numismatics here on Necessary Facts.)

I have been editor and webmaster for the Michigan State Numismatic Society (2004-2011) and for seven years (2003-2010), I wrote the “Internet Connections” column for The Numismatist.  Below are some of the trusted resources that will help you find your own interests in this huge, unregulated market for the material artifacts of trade and commerce.

The American Numismatic Association was founded in 1891, and chartered by Congress in 1912.  Congress declared the charter permanent in 1962.  At semi-annual ANA conventions, about 300 dealers from around the world come to meet several thousand collectors.  You also will find sales booths for private and government mints from around the world, as well as educational seminars, museum-quality educational displays and judged exhibits, various auctions, and nightly awards dinners and celebratory parties.  You can find local member dealers via the ANA website.

The American Numismatic Society  was founded in 1859 and is considered the more scholarly of the two national American organizations. The ANS is focused closely on colonial and early republic American coins and paper money, ancient coins, and similar topics. 

Eugen Böhm-Bawerk founder of Austrian economics

• The Wildwinds database of auctions of ancient coins is highly regarded.
• Coin Archives posts auction results for a small group of dealers in ancient and world coins.  These firms are members of the Professional Numismatists Guild, the ANA, and other similar societies.
• The International Banknote Society  provides a very active resource for hobbyists.
• The VCoins dealer ring was founded over ten years ago to overcome the distressing lack of trustworthy online auctions.  Their dealers are typically members of other professional societies as well.

For several years, Clinton Hollins ran classified ads selling 100 different stock certificates for $55.  After he passed, his wife took over the business.  They also sold the standard catalog for American stocks and bonds.  Scripophily is the formal name for the study of stocks, bonds, and fiduciary instruments; and specialty clubs and other resources are out there.  Find the Professional Scripophily Trade Association here. 

• Whitman Publishing  https://www.whitman.com/store
• Krause Books http://www.krausebooks.com/
• Amos Press http://www.amospress.com/
• Stanton Publishing http://www.stantonbooks.com/
• Coin World newspaper (Amos Press)  http://www.coinworld.com/
• Numismatic News (Krause Books)  http://www.numismaticnews.net/

These discussion boards are trusted places for new and experienced collectors to share information, news, and gossip.  

• Coin Talk: http://www.cointalk.com/
• Coin People: http://www.coinpeople.com/
• Numis Society: http://numissociety.com/
• Coins are Fun http://www.coinsarefun.com/

 (This article was based on a similar post for Rebirth of Reason website, Monday March 21, 2005.)

Also on Necessary Facts

Forgery and Fraud in Numismatics 

Numismatics Informs Economics 

Numismatics: the Standard of Proof in Economics

Murray Rothbard: Fraud or Faker?

Money is Speech 

Money as Speech and Peacemaking 

To Make Money 

Objectivism and the Gold Standard 

The Influence of Ayn Rand's Objectivism

On May 14 of this year, the Ayn Rand Institute announced total sales for all of the author’s books for the year 2012 at one million copies.  Of those, Atlas Shrugged sold 359,105 behind 2009 (best ever) and 2011 (second place).  According to them “Rand’s books have sold a total of 29,500,000 copies.”  I believe that total sales of all books by and about Ayn Rand probably exceed 40 million.  That said, the number of active “Rand fans” is probably one-tenth of that, at most.

The ARI released these sales tallies back on April 7, 2008:

1- We the Living - 3 million

2- Anthem- 4 million

3- The Fountainhead - 6.5 million

4- Atlas Shrugged - 6 million

5- For the New Intellectual - 1 million

6- Virtue of Selfishness- 1.5 million

7- Capitalism: the Unknown Ideal - .650 million

8- The Romantic Manifesto - .350 million

Hank Rearden and Dagny Taggart find the remnants of
John Galt's Motor in Atlas Shrugged, Part 1.

Since then, other sources such as The Economist reported "over half a million" copies of Atlas Shrugged sold in 2009. Similar reports gave 445 thousand for 2011.  The 2012 volume narrowly outpaced 2010’s purchases of 350,000.  That comes to 1.65 million, a 27% increase since 2008.  Extrapolating a 25% increase across the eight most popular books yields these estimates:

1- We the Living – 3.75 million

2- Anthem- 5 million

3- The Fountainhead – 8.1 million

4- Atlas Shrugged – 7.5 million

5- For the New Intellectual – 1.25 million

6- Virtue of Selfishness- 1.8 million

7- Capitalism: the Unknown Ideal - .810 million

8- The Romantic Manifesto - .437 million

The total (28.647 million) is close to the ARI number of 29 million.  However, it does not take into account 30 other books. 

9. Introduction to the Objectivist Epistemology by Ayn Rand

10. Philosophy: Who Needs It? by Ayn Rand

11. Return of the Primitive (formerly The New Left: the Anti-Industrial Revolution) by Ayn Rand

12. The Voice of Reason: Essays in Objectivist Thought by Ayn Rand, et al

13. Early Ayn Rand vol. 1-

14. Three Plays- (Early Ayn Rand vol. 2)

15. The Ayn Rand Lexicon: Objectivism from A to Z by Harry Binswanger

16. Ayn Rand Answers: The Best of Her Q&A by Robert Mayhew

17. Who is Ayn Rand? by Nathaniel Branden and Barbara Branden

18. The Philosophic Thought of Ayn Rand edited by by Douglas J. Den Uyl and Douglas B. Rasmussen

19. The Psychology of Self Esteem by Nathaniel Branden

20. What Art Is: The Esthetic Theory of Ayn Rand by Louis Torres and Michelle Marder Kamhi

21. Ayn Rand: A Sense of Life (film and accompanying book) by Michael Paxton

22. Judgment Day: My Years with Ayn Rand by Nathaniel Branden

23. The Passion of Ayn Rand by Barbara Branden

24. Ayn Rand: The Russian Radical by Chris Matthew Sciabarra

25. The Passion of Ayn Rand's Critics by James S. Valliant

26. Goddess of the Market: Ayn Rand and the American Right by Jennifer Burns

27. Ayn Rand and the World She Made by Anne C. Heller

28. Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement by Brian Doherty

29. It Usually Begins With Ayn Rand by Jerome Tuccille

30. Is Objectivism a Religion? by Albert Ellis

31. Objectivism in One Lesson by Bernstein

32. On Ayn Rand by Gotthelf

33. Ayn Rand and Alienation by Greenberg

34. Ayn Rand and Business by Geiner and Rinni

35. The Contested Legacy of Ayn Rand by David Kelley

36. Metaethics, Egoism, and Virtue by Gotthelf and Lennox

37. With Charity Toward None by William F. O'Neill

38. Ayn Rand's Normative Ethics by Tara Smith

39. Blue Water Comics Female Force #1 (May 2011): Ayn Rand by John Blundell, et al.
40. Anthem (Graphic Novel) Charles Santino and Joe Staton (New American Library).

[Addendum: Since the original posting, I found these, the first two of which I should have known.]
41. Ayn Rand Explained: From Tyranny to Tea Party (2012) Merrill, Ronald E., Chicago, IL : Open Court, 2012.
42.  Ayn Rand nation : the hidden struggle for America's soul (2012) Gary Weiss, New York : St. Martin's Press, 2012.
43. Ayn Rand and alienation : the Platonic idealism of the objectivist ethics and a rational alternative by Sid Greenberg. San Francisco : Greenberg, c1977.

[And again, at the library today (August 3), I found five more at the University of Texas library. In addition to Who is Ayn Rand? (#17 above), the Brandens also wrote three other books, one of which prompted another book in response.]
44.  The Ayn Rand Companion by Mimi Gladstein and Chris Matthew Sciabarra
45.  Feminist Interpretations of Ayn Rand by Mini Reisel Gladstein
46.  Ayn Rand by Tibor Machan
47.  Essays on We the Living by Robert Mayhew
48.  The Fountainheads: Wright, Rand, the FBI and Hollywood by Donald Leslie Johnson
49.  Judgment Day by Nathaniel Branden
50.  My Years with Ayn Rand by Nathaniel Branden
51.  The Passion of Ayn Rand by Barbara Branden

[August 10, 2013]
52. Ayn Rand: In Her Own Words (DVD: 72 mins), John Little, Northern River Productions (2011).
53. Objectively Speaking: Ayn Rand Interviewed. Marlene Podritske and Peter Schwartz, eds. Lexington Books, 2009.

[September 14, 2014] On MSK's Objectivist Living site, contributor Jerry Biggers told of this:

54.  The Vision of Ayn Rand: The Basic Principles of Objectivism, by Nathaniel Branden. LaissezFaire Books/Cobden Press, 2009. Also issued in Kindle eBook format on Amazon.com in 2014. This is a transcription of the original NBI set of lectures.

Through all of this, realize that the Ayn Rand Institute is the single largest consumer of books by Ayn Rand.  They buy them from the publisher and then give them away.

October 14, 2010 ARI Press release

ARI has given high school teachers more than 185,000 copies of “Atlas Shrugged” to date, and over 1.6 million copies of Rand’s “Anthem” and “The Fountainhead.”

Yet another detail expands the number of readers over the numbers of books sold. When teaching middle school in Albuquerque 2002-2003, I saw cartloads of Anthem coming and going as assigned reading along with other easy books such as Call of the Wild and Animal Farm. How many young people come to Ayn Rand's ideas via this route cannot be tallied by book sales alone.  Considering the assigned reading from middle school through college, we have to at least recognize the CliffsNotes, Monarch Notes, and Sparknotes for Anthem, The Fountainhead and Atlas Shrugged. 

A recent Zogby Poll raised more questions.  Touted by the ARI in a November 30, 2010 press release, the poll found “that 29 percent of the 2,100 adult respondents have read Ayn Rand’s novel Atlas Shrugged.” Of those who read the book, 49 percent agreed that Atlas Shrugged changed the way they think about political or ethical issues….”

And that is all well and fine, but the same poll claimed: “… that 21 percent of respondents have read Ayn Rand’s The Fountainhead; 7 percent, Anthem; 4 percent, We the Living 3 percent, The Virtue of Selfishness; and 3 percent Capitalism: The Unknown Ideal. “  Contrasted against the number of middle school and high school students who are assigned Anthem every year, those numbers seem like under-reports compared to the tallies for Atlas Shrugged.

The numbers at the top actually indicate that anyone who buys Anthem, The Fountainhead, or Atlas Shrugged will buy the other two, though not always.  Sales of Atlas slightly outpace the others. 

I also believe from the numbers that while only a few may buy Philosophy: Who Needs It? or Introduction to the Objectivist Epistemology these are acquired by those who are interested in the technical philosophy having been introduced to it from the novels.  That points to the claim at the top that 40 million books sold might reveal only four million people with a passion for Ayn Rand: I own 20 different titles by and about. 

In addition, I have three copies of Atlas Shrugged: a 95-cent "gold cover" paper back 7th printing November 1960; another ppb to read and annotate; and the Highbridge Company audio tapes read by Edward Herrmann.  I have both ppb and hard cover editions of The Fountainhead, Anthem, Virtue of Selfishness, and Capitalism: the Unknown Ideal (I bought it as a first edition because I was taking the "Basic Principles" class when it came out.)  And not tallied above, I have a bootleg VHS tape of Ayn Rand's last public lecture. Among the other ephemera is a January 1944 Reader's Digest with Rand's essay, "The Only Path to Tomorrow: The Moral Basis of Individualism".   And I archive two copies of "Female Force" (in bags, with boards, of course).

(This post was edited from my April 6, 2013, commentary "Objectivism as a Strong Undercurrent" on the Rebirth of Reason website.)

Also on Necessary Facts

Ayn Rand and Star Trek

That Goddam Ayn Rand Book

Reflections on Atlas Shrugged Part 1 

Objectivism and the Gold Standard 

To Make Money 

Apollo 11: Task Accomplished

"That we had seen a demonstration of man at his best, no one could doubt—this was the cause of the event’s attraction and of the stunned numbed state in which it left us. And no one could doubt that we had seen an achievement of man in his capacity as a rational being—an achievement of reason, of logic, of mathematics, of total dedication to the absolutism of reality."-- Ayn Rand

Celebration at Mission Contol.
Note that the banner says "Task Accomplished"
but no day follows the month in the date.

Completing my master's I had a class in advanced criminology theory.  The professor, Gregg Barak, prided himself on engagement; and he varied his approaches to the material from class to class.  Our semester, we read post modernism: so-called "science" is only a Euro-centric, phallo-centric narrative denying voice to oppressed peoples. The scientific method, according to them, does not work and is not how scientists actually accomplish whatever it is they do.  My reply - which brought neither agreement nor denial from my classmates, only disinterested stares - was that when the elevator technician tunes the drive motors that bring us to the seventh floor without fail, she does not rely on an arbitrary narrative. And if the elevator should fail, a fail-safe mechanism prevents us from falling to our deaths, again, not a mere choice of ideological symbols. 

The supreme achievement of the Apollo missions - and the NASA space program in general; and, in fact, the entire global enterprise of space - is a singularity symbolizing all of the very many achievements the we create every day.  We deliver these to each other in exchange and all parties benefit incrementally.  We take that for granted.  But every now and then, it helps to ponder and reflect on the depth and complexity of our time spent at work.

Aboard the International Space Station July 19, 2013

Four page excerpt from "Apollo and Dionysus" from The Ayn Rand Reader by Gary Hull and Leonard Peikoff on Google Books here.
The recorded original lecture "Apollo and Dionysus" on the website of the Ayn Rand Institute here.

The Virtues of Aviation Culture

Aviation is unequivocal: flying your own airplane is forty-nine times more likely to result in your death than being a passenger in a commercial airliner. The facts of reality force an ethos on pilots. The virtues of aviation are Intelligence, Self-Control, Independent Judgment, and Honor.  Within these overlapping spheres are other concepts, often shades of meaning with arguable differentiations among them.

What is the culture of aviation? In what ways do pilots think, talk, and act differently from other people? What is good etiquette in aviation? When is a pilot behaving in a non-aviation or anti-aviation manner? What mechanisms inform us of aviation's unwritten rules and by what means is our behavior corrected when it strays from the expected or normal?

(This essay originally appeared on two webstites, www.studentpilot.com and www.aviatorwebsite.com in 2001 when I was learning to fly. My first flying lesson was in 1984 after reading The Right Stuff, but it was not until 1997 that I seriously pursued the requirements. I wanted to write a newspaper story about our local airport in Howell, Michigan, but getting the pilots to talk to me as a reporter was difficult. So, I started taking lessons. After half a dozen or so, meeting the local fliers became easier. I eventually sold a multi-page front page story for the Sunday edition of the Livingston County Press. From there, I continued writing and flying.)

In a Schleicher sailplane

One way to draw an outline of aviation culture is to look at its virtues. We all might want to be virtuous according to every standard.  However, humility is simply not a virtue in aviation. Bragging is not a virtue, either, and displaying humility is not necessarily wrong.  However, nothing in aviation implicitly demands and specifically rewards humility--even though a good dose of it might be a blessing. Other virtues such as charity or fidelity also might be nice to have, but aviation does not require them of you.

• Intelligence The primary virtue of any human. More than being born "smart" it means using what you have. Intelligence is thinking things through, knowing a tool when you see one and knowing when and whom to ask for help. Accompanying Intelligence are honesty, foresight, wisdom.
• Self-Control Aviation is scary. The question is whether or not you are ruled by your viscera. Other aspects of this are courage, fortitude, pride.
• Independent judgment The first Federal regulation of flying is that you can break any rule in order to maintain or achieve safety. This derives from the undisputable fact that the pilot is in command. Objectivity, conjectivity and integrity are corollaries.
• Honor The above are personal virtues. These here are social virtues. Generally speaking, the unequivocal nature of aviation—the fact that you can get killed—is the source of these honorable attributes. Other aspects of Honor are responsibility, trustworthiness, forthrightness, magnanimity, respect, courtesy, and humor.

 As an attribute of intelligence, honesty means more than not lying to other people.  It means recognizing the “primacy of existence”—in other words admitting what you know to be true (about the plane, about the weather, about yourself) no matter how much you wish it were not.

Pride is an aspect of self-control. Ultimately, pride may be considered the source of self-control.  In either case, the pride referred to is not just the external show of proper respect for your own achievements but the inner strength that causes and is rewarded by self-control.

Preflight inspection

Integrity makes independent judgment possible.  Not all pilots practice it, but aviation rewards it, nonetheless. Integrity is being who and what you are.  Independent judgment requires the objectivity (honesty) of recognizing the facts.  Conjectivity is the virtue of being willing to try something—especially when you are in trouble—to see if the effect is beneficial to you.

"We lived in fear of the mountains of Spain
over which we had to fly,
and in awe of our elders." Antoine Saint Exupery on France 50 Franc Note

The list of social virtues under Honor stem from the fact that no one else's opinion of you is as important as your own opinion of yourself.  We tend to gloss over this.  We are shy and we do not like to brag.  The bottom line is that every flight is a test flight. Flying is unequivocal: you cannot argue the facts away. We are reality-based and this colors all of our relationships. 

To act dishonorably, or irresponsibly, or disrespectfully is to fall from grace. Pilots act like angels because we live in the sky.

ALSO ON NECESSARY FACTS
Leadership  

Short Snorters 

Challenge Coins 
Drones are Everywhere 

1000 Words

Knowledge Maps

Now running on the Objectivist discussion site, Rebirth of Reason, is a set of multilateral exchanges comparing and contrasting the epistemologies of Karl Popper and Ayn Rand.  I believe that independent of partisanship many of the presentations are taxed by a lack of common vocabulary.  

Often, writers intend different meanings from the same word.  This is a hallmark of discussions with Objectivists for whom selfishness is a virtue.  One sub-thread differentiated “risk” from “uncertainty” with different assertions originating in the varied life experiences of the writers.  To engineer Fred Bartlett, a machined bolt of 8.5 cm +/- .03 is unarguably defined.  Is “authority” always unarguable?  Political authority is easily contradicted, but what about the “authority” of reason? 

 

From Frege's Lectures on Logic: Carnap's Student Notes (2004)

Certainly, the Objectivists are not alone in their quandaries.  Every non-trivial communication risks failure, from slight to partial to complete.  Common schooling left us all with the implicit belief that if you can look a word up in a dictionary, you can rely on an objective definition that everyone understands.  However, the important elements of our lives cannot be expressed in a handful of words, delivered as phrases, rather than sentences.  (Dictionaries do include pictures.)  On a different plane of understanding, the Austrian economist Ludwig von Mises acknowledged that capitalists and socialists often agree on the facts – in a certain place, at a given time, some commodity had a known price.  Where they disagree is on what the facts mean.  Such meanings cannot be found in a dictionary.  They require more complicated, nuanced, and subtle explanations, often including analogy and allegory. 

 

In the Star Trek: Next Generation episode “Darmok” 
we met the Tamarians who communicated in allegory. 
(See Memory Alpha here.) 
Tamarian Captain and Jean-Luc Picard.
Picard recites from the Gilgamesh before the wounded Tamarian dies.

Even if the philosophers could decide on a common vocabulary and a common narrative, the primary constraint may be the very dependence on verbal expressions: graphs might serve everyone better.  Outside of information systems, we do not study means of graphical representation, except, of course, for actual artists. 

Order Entry Program Code Documented
with Nassi-Shneiderman Diagram

Microsoft’s Visio delivers many graphical tool sets.  You are not morally obligated to engage the Database shapes and connectors only for the design of databases.  In the machine shop, we neither use screwdrivers as chisels nor calipers as clamps; but, a thousand years ago, when mastodons roamed the streets, my friend Geoff saw VisiCalc for the Apple // and said, “You could make a pretty good word processor with this.” 

 

From Carnap's Notes (2004)

Gottlob Frege developed a graphical representation for logic.  It presaged the notation systems of electricians.  The electrical schematics for series and parallel circuits, for Normally Off and Normally On, led to the circuit logic we accept today.  That much is all fine for planar arrays of linear logic.  What about events that unfold over time?

Star Trek Enterprise, "Cold Front"
Crewman Daniels shows Captain Archer
a map of their problem

PREVIOUSLY ON NECESSARY FACTS
Visualizing Complex Data
Readability is the only Metric
Documentation is Specification
The Genius of Design
The Art of Typography 

Bob Swanson and Genentech

Money is a culture medium for growing viable enterprises into self-sustaining engines of creation. 

Bob Swanson was 29 when he provided the money for Prof. Herbert Boyer to start Genentech.  Like all overnight successes, the real story is more complicated, with deep roots.  Bright, accomplished, and motivated, Swanson had obvious potential – and a string of failures to show for it.  In the documentary, Something Ventured (see below), Thomas J. Perkins said that his firm, Kleiner Perkins Venture Capital, brought on Bob Swanson, but “there was not much for him to do.”  Swanson said that he would look into biotechnology.  Perkins replied that if something was there, they would be interested, otherwise… And at that point, Perkins trailed off into a gesture and face.  Clues are always little things.

“So we hired Bob Swanson, whom Eugene Kleiner had known through venture capital circles. Bob had worked for Citibank in their venture capital operation and he and Eugene had been involved in a failed deal. Eugene had been impressed with Swanson's ability to think straight and get things done. So when Bob was looking for a new position, we hired him. That would have been about late 1974. We were in Embarcadero Center Two then, on the top floor.[…]  Bob worked on various deals for us. And, I have to say, not very successfully. Eugene, in particular, was increasingly unhappy with Bob. He didn't think much was going to be happening.” – Thomas Perkins [Source 5]

Robert A. Swanson was born in Brooklyn, New York, November 29 1947.  When he was still an infant, his family moved to Florida where his father worked for Eastern Airlines.  He attended MIT and completed his bachelor’s in chemistry in 1969 and followed that in 1970 with an MBA at the Sloan School of Management.  [Source 1] (Wikipedia gives 1970 as the year of both degrees.) 

Immediately after completing his MBA, he was hired by Citicorp Venture Capital.  Within three years, they were impressed enough with him that he was sent to San Francisco to open a Citicorp Venture Capital Office there.  In 1975, he joined Kleiner, Perkins, Caufield & Byers.  (Perkins recalled that as “late 1974.”) [Source 5]

Swanson had read about the research in recombinant DNA and gene splicing.  He sought out Dr. Boyer and asked for 10 minutes.  The two men spent three hours in a tavern.  Swanson’s knowledge of chemistry served him well, as he could understand the nuances in the different techniques being pursued by different researchers.  Swanson saw the market for Boyer’s work.  They launched Genentech on April 7, 1976. [Source 2]

In 1977, Genentech started with human growth hormone by contracting for production with City of Hope Hospital in Los Angeles and with the University of California at San Francisco. That allowed Genentech to move up to cloned human insulin in 1978.  They followed that with other successes: alpha interferon, gamma interferon, a hepatitis B vaccine, and thrombolytic (clot-producing) agents for hemophiliacs, and then tissue plasminogen activator (TPA) to dissolve blood clots associated with heart attacks.

America’s bilateral East Coast / West Coast dichotomies are easy to cite, especially in technology.  (In Hackers: Heroes of the Computer Revolution, Steven Levy pointed out that the Spacewars video game came from MIT, whereas Stanford gave us Adventure, based on Lord of the Rings.)  But Robert Swanson understood the importance of social capital, built with strong employee bonds.   His scientists could publish their work, something most big drug companies were reluctant to allow.  Also typical of the West Coast, Genentech held Friday parties known as ho-hos.  As Genentech researchers remembered it: 

“The Ho-Ho tradition began simply with refreshments for employees every Friday afternoon. At the end of one particularly hectic work week, a manufacturing VP said, "Oh, another Friday afternoon, ho, ho, ho, ho." And the name stuck. …
The Ho-Ho was an occasion for play and absurdity. One time Swanson and Boyer came dressed up as Tweedledee and Tweedledum… But from the start, Ho-Hos were more than just fun. To Swanson, the Ho-Ho was “a wonderful idea, because you need a place where people at all levels of the organization, from the president on down, can get together in their shirtsleeves and talk about the issues, as equals... One of the things you worry about, as you get higher in an organization, is whether people are comfortable telling you the truth about the way they see the needs of the company - where are we screwing up as a company?” 

The firm posted a profit in 1979 and went public in 1980. That public offering came at some human cost for the venture capitalists.  Perkins and Swanson disagreed on the timing, with Swanson being opposed to going public.  Eventually, Swanson saw Perkins’s point, but their strained relationship was worse off for it.  Still, Bob Swanson worked as CEO of Genentech through its steepest growth curve through 1990.  Tom Perkins was chairman of the board.  Then, from 1990-96 Swanson served as chairman.  In 1990, Genentech and Roche Holding Ltd. completed a $2.1 billion merger. Initially Hoffman-LaRoche bought a majority interest in Genentech. Then in 2009, LaRoche bought the rest of the stock, but turned around and sold off blocks of it in to the public.

After leaving Genentech Bob Swanson formed a private investment management firm (K & E Management), and served as chairman of Tularik, Inc., a firm researching gene expressions that can be harnessed to produced therapeutics. He also volunteered his time to civic organizations and to his daughters’ soccer teams.

In the book, 1,000 Years, 1,000 People: Ranking the Men and Women Who Shaped the Millennium, (New York :, Kodansha International, 1998) the authors ranked Bob Swanson number 612 for launching the biotechnology revolution.

After a year of battling brain cancer via surgery and chemotherapy Bob Swanson passed away on Monday, December 6, 1999, at his home in Hillsborough, California. (The Guardian gave it as November 30.)  He was 52.

Sources:

1. http://web.mit.edu/newsoffice/1999/swanson-1208.html (Obituary)

2. http://www.gene.com/about-us/leadership/our-founders (Tribute)

3. http://www.nytimes.com/1999/12/07/business/robert-a-swanson-52-co-founder-of-genentech.html (Obituary)

4. http://www.guardian.co.uk/science/1999/dec/10/obituaries.genetics (Biography)

5. http://content.cdlib.org/view?docId=kt1p3010dc (Program in the History of the Biological Sciences and Biotechnology: Kleiner Perkins, Venture Capital, and the Chairmanship of Genentech, 1976-1995; interviews conducted by Glenn E. Bugos, Ph.D.)

6. "The Origins of Biotechnology: A Genentech Perspective"

http://blog.zymergi.com/2013/01/origins-biotech-genentech.html

(Personal recollections and images of artifacts including company newsletters.)

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