A Book with Legs – Toby Stuart: “Anointed”
September 15, 2025
Host: Cole Smead, Smead Capital Management
Guest: Toby Stuart, Professor at UC Berkeley and author of Anointed: The Extraordinary Effects of Social Status in a Winner-Takes-Most World

Overview

In this episode, Cole Smead interviews Toby Stuart about his new book, Anointed: The Extraordinary Effects of Social Status in a Winner-Takes-Most World. The discussion explores the role of social status in markets, careers, and societies — why the “who” often matters more than the “what.” Stuart, a leading scholar on status and entrepreneurship, shares stories and research on how value is socially constructed, why cumulative advantage snowballs, the psychology of anointing, and how new technologies like AI could reshape these dynamics.

Key Discussion Points & Insights

1. Origins & Motivation for “Anointed”

• Toby’s Path to Researching Status

  • Accidental entry into business academia with a liberal arts background (02:01)
  • Inspiration for writing the book: A long-time research agenda on social status, particularly in tech and entrepreneurship, finally moved forward during Covid downtime (02:46)
  • “Writing a book is just fun…an excuse to go read everything.” (04:17, Stuart)

• Status Dynamics in Authors’ Life

  • The very process of writing and publishing the book is itself an exercise in status dynamics (04:46)

2. The Art World Story: Jan Six and the Power of Anointment

[05:27–09:57]

• The Rembrandt Parable (05:27)
  • Jan Six, Dutch Rembrandt expert, spots a misattributed painting (“Circle of Rembrandt”) at auction, buys it for ~£100,000, and sets out to “anoint” it as a real Rembrandt.
  • Dramatic value shift: If reclassified, the painting’s worth catapults to $50–100 million, purely by a change in perceived authorship.

“That shift in the identity of the painter is like $50 million in valuation, but the painting itself is the same. That’s social status at work.”
— Toby Stuart (09:28)

• Broader Point: Markets are shaped not just by the object but by who is affiliated with it: the same item is valued wildly differently depending on the status of its producer.

3. The “Big Shift”: Evaluating the Who over the What

[10:54–13:22]

• Why Do We Value Who Made It over What It Is?
  • Evaluative uncertainty is everywhere (e.g., wine, books); when unable to judge quality directly, we default to proxies — typically the creator’s status.

“You don’t evaluate the wine, you evaluate the winemaker.”
— Stuart (12:02)

• The Self-Fulfilling Nature of Status
  • Prestige breeds more prestige — echoed later in the Matthew Effect.

4. The Limits of Social Foresight

[13:22–16:37]

• Quote:
  • “We are wizards at solving the physical world…we’re demonstrably thick-headed when it comes to predicting the social world.” (13:22, Stuart, quoting from book)
• Difficulty Predicting Tastes & Outcomes:
  • Hollywood, book publishing, and other creative markets are plagued by unpredictability—the “hit” is unpredictable even with unlimited resources.

5. Three Forms of Uncertainty

[17:07–20:16] Stuart breaks uncertainty into three buckets:

• Consumption: What do we pay attention to/consume? (e.g., books, media)
• Behavioral: How do we behave in uncertain social contexts?
• Allocative: How are group resources allocated among members?

“Status is just essential to how we make choices…consumption, behavioral, allocative.”
— Stuart (19:18)

6. Stereotypes and Categories: Useful but Biased

[22:50–26:31]

• Stereotypes and schemas speed up our cognitive processing; they are efficient, automatic, and essential—but can also “hardwire” unjust social hierarchies (race, gender, class).

“There are tons of legitimate biases that we have that we don’t have out of malice…They make processing of things really efficient.”
— Stuart (23:09)

7. Famous Near-Misses: Alfred Russel Wallace & Darwin

[26:45–29:02]

• Wallace developed a theory of evolution parallel to Darwin but was edged out due to social networks, prominence, and the process of anointment.
• “Once credit is given, it just radically alters the future.” (27:10)

8. Sources of Status: Worker Bee, Ascription, & Anointment

[29:52–36:59]

• Status is universal, but what is valued varies by group (29:52).
• Three sources of status:
  1. Merit (“worker bee”): Earned through talent or effort.
  2. Ascribed: Inherited or assigned at birth (race, class, gender).
  3. Anointment: When those with status “bless” others (patronage, endorsements).

9. The Matthew Effect & Cumulative Advantage

[41:25, 56:13–61:08]

• Front-Running the Anointers: Matthew Cooper
  • The story of Cooper predicting Robert Parker’s wine ratings, cornering the Australian wine market before Parker could publish—demonstrating the market power of anointed tastemakers (43:59–46:29).
• Cumulative Advantage (Goldfish Story)
  • Even small initial advantages compound into outsized results over time — from fish in a bowl to careers or investments.

“In certain aspects of life, it is enormously valuable to have what we call a relative advantage. And when cumulative advantage processes happen, what often is at stake is that one of two actors has a tiny little advantage over the other one, but that tiny advantage just compounds and compounds and compounds.”
— Stuart (59:20)

10. Anointment in the Stock Market & Private Equity

[47:47–51:45]

• Value is created by being “anointed” by the right investor or opinion leader (e.g., Sequoia in venture capital, Warren Buffett in public markets).
• Crypto and meme coins as a modern example — worth billions largely because high-status figures have blessed them, not for fundamentals.

11. Status Dynamics in Sports

[51:45–56:13]

• Even in objectively measurable domains, initial advantages or anointment snowball; the “winner” gets cumulatively more resources, opportunity, and recognition (“winner-takes-most”).
• Quote:
  • “Even in the most objective areas…we still see these status hierarchies emerge with real consequences on how, on life outcomes, earnings, performance, fame, celebrity…” (56:04)

12. Psychological Reactions to Anointment

[63:24–75:48]

• Four Responses to Being Anointed:
  1. Impostor: Feels the status is unearned; struggles with anxiety (Stuart’s own early career experience).
  2. Born-on-Third-Base: Believes their anointment is due to their own excellence (“thinks he hit a triple”—attributed to Barry Switzer, 69:03).
  3. Divine Ordination: Status is seen as a sign of God’s favor (Rockefeller’s view, 72:30).
  4. Humility/Gratitude: Embraces status as a gift and stays humble (74:42).
• Status is inherently relational; it depends on the deference of others.

13. On Comparison and Reference Groups (Big Fish/Little Pond)

[76:02–81:26]

• People select their own comparison groups (“ponds”), affecting self-perception and motivation.
• Studies show being the “big fish in a small pond” generally produces better outcomes (oldest in the class, etc.), but everyone navigates multiple hierarchies at once.

14. Technology and the Future of Status—AI’s Coming Revolution

[81:26–94:47]

• The arrival of AI is not just evolutionary, but “distantly…the most significant development in human history” (82:46).
• AI as a radical equalizer, democratizing access to knowledge and analytic power that previously required years of training or large teams (83:25).
  • “There are tasks I do that I might have spent months on that I can now do in a minute…But anybody can do them.” (83:25)
• The pace of AI advances is unprecedented, rivaling or surpassing the impact of the internet as a foundational, society-altering technology.
• Implications: Changes in access to knowledge, the structure of economic hierarchies, and status orderings. (86:36–92:39)
• “We’ve already seen probably 10 plus trillion dollars in market cap created with AI.” (90:47)

Notable Quotes & Memorable Moments

• On Anointment:

  • “Somebody has the status to anoint…There’s no 100% definitive way to know that a painting is a Rembrandt, but somebody has the status to anoint it a Rembrandt.” (08:00)

• On Status Hierarchies:

  • “There’s a status system everywhere—it’s just oriented around different characteristics.” (32:07)

• On Cumulative Advantage:

  • “If you just get a little bit ahead, you go off to the races with it…” (60:04)

• On Psychological Reactions to Status:

  • “I would argue it’s probably the least healthy, but the most rational response—like that’s how most high-status people should feel about the world.” (69:03)

• On AI:

  • “My view of AI is that it is, distantly, distantly, distantly, the most significant development in human history.” (82:46)
  • "Anybody can type [the prompt], and as the models get equal to and then better than us at analytic work...that alone is a radical change in everything." (83:25)

Timestamps for Key Segments

| Segment / Story | Timestamp | |----------------------------------|-----------| | Toby’s background & book origin | 01:45–04:46 | | The Rembrandt/Jan Six story | 05:27–09:57 | | The “big shift” (Who vs. What) | 10:54–13:22 | | Three forms of uncertainty | 17:07–20:16 | | Stereotypes and categories | 22:50–26:31 | | Alfred Wallace & Darwin | 26:45–29:02 | | Sources of status | 29:52–36:59 | | Matthew Cooper & wine arbing | 41:25–46:29 | | Anointment dynamics in markets | 47:47–51:45 | | Sports & cumulative advantage | 51:45–56:13 | | Hoover & the goldfish story | 56:13–61:08 | | Reactions to anointment | 63:24–75:48 | | Big fish/small pond discussion | 76:02–81:26 | | AI’s implications for status | 81:26–94:47 |

Conclusion

This episode provides a wide-ranging yet accessible look at how markets and societies reward those who carry, confer, or simply appear to have status. From Rembrandt to Robert Parker, from the boardroom to AI, Stuart and Smead connect the dots between seemingly disparate systems, showing listeners how “anointment” invisibly shapes value, opportunity, and competition. The discussion ends with a forward look: AI, says Stuart, may upend the entire machinery of anointment and status—ushering in not just a new era, but a new logic for advantage.

For more, connect with Toby Stuart on LinkedIn, and pick up his book, “Anointed,” for a deeper dive into the world of social status and cumulative advantage.