Jared Diamond, the 88-year-old Pulitzer winner behind 'Guns, Germs, and Steel,' has a new argument to make about who actually runs the show in business and politics. His forthcoming book, 'Profits, Prophets, Coaches, and Kings,' out this fall from Mariner Books, is billed by Diamond as his final work.
The question at its core, Diamond told Fortune, is whether leaders change outcomes or merely ride forces beyond their control — a debate he frames against Thomas Carlyle's 'Great Man theory' on one side and Tolstoy's view of leaders as history's puppets on the other.
Diamond's method borrows from epidemiology: 'natural experiments' that compare what happens when a leader dies, is fired, or is replaced against cases where nothing changes. His touchstone example is John Snow's 1854 removal of the handle from London's Broad Street pump, which proved cholera was waterborne before germ theory existed.
Applied to boardrooms, the findings are blunt. Diamond's studies attribute somewhere between 6% and 29% of the variation in company earnings to individual CEOs — with industry and company structure accounting for the rest. Boards, he notes, pay chief executives hundreds of millions of dollars a year on the belief that leadership matters enormously, even where the data say otherwise.
He ranks CEO influence highest in computers, perfume and cosmetics, movies, toys and restaurants — industries where consumer taste shifts fast. He ranks it lowest in utilities, steel, shipbuilding and railways, where capital structure and regulation, not vision, drive results.
Diamond illustrates the point with two contrasts. A friend who designs T-shirts for teenagers gets rich by correctly betting on what they'll buy in the next two weeks. 'He deserves every million dollars he earns,' Diamond said. A public utility CEO, by contrast, 'can barely decide anything for the business because of strict regulation.' His verdict: 'You should not be paying a large salary to a CEO of a public utility company when they don't have much effect, and there are 49 other people who could do an equally good job.'
He applies the same skepticism closer to home. UCLA has spent more than $150 million buying out coaches' contracts since the John Wooden era, Diamond said, despite his own read that losing records were what dice-throw odds would predict — 'they never asked me.' He also points out that only 20% of Angelenos bother to vote for their mayor, evidence, in his view, of a broad public hunch that individual leaders count for less than boards and voters assume.
Diamond also assembled a table of 22 major 20th-century politicians for the book, deliberately excluding Donald Trump.
Strip away the academic framing and the finding lines up with a plain market lesson: pay should track authority, not title. Where regulators, not entrepreneurs, set the terms, the numbers show executive judgment barely moves the outcome — yet the compensation often assumes otherwise.
That is the real cost of the administrative state to shareholders and, ultimately, to consumers and taxpayers who fund heavily regulated utilities. Free enterprise rewards the T-shirt designer who reads the market correctly. Command-and-control regulation, Diamond's own numbers suggest, mostly rewards incumbency.
