x Abu Dhabi, UAEWednesday 26 July 2017

Money never sleeps

Books Scott McLemee reads the anthropologist Karen Ho's ethnography of bankers, traders and analysts, the tribe of elites who shape our world in the image of 'Wall Street's bulimic culture of expediency'.

The New York offices of the French corporate and investment bank Calyon:
The New York offices of the French corporate and investment bank Calyon: "Wall Street's decisions are smart because smart people made them."

Scott McLemee reads the anthropologist Karen Ho's ethnography of bankers, traders and analysts, the tribe of elites who shape our world in the image of 'Wall Street's bulimic culture of expediency'. Liquidated: An Ethnography of Wall Street Karen Ho Duke University Press Dh102 Long before talk about globalisation became inescapable, we used to hear prophesies of an emerging "global village." This, as Marshall McLuhan assured everyone four decades ago, would be brought into being by the mass media, with their power to convey images and sound over long distances. The dominant culture of the previous five centuries had been organised, down to its very cells, by print. People got their information and their sense of the world through reading, silently and separately. Now this order of things had begun to dissolve. Audiovisual immediacy would turn the world into one big open-air marketplace. The existential terror of isolated individuals would soon be replaced by a new pattern of experience, post-literate and neo-tribal... something closer in spirit, perhaps, to lively cosmopolitan folk dancing.

To be sure, the bourgeois western individual is not exactly feeling on top of the world these days, especially when contemplating his or her retirement package; and the world does seem smaller. But its unification has not been quite so utopian as once predicted, and its pace has been set by a medium of communication that McLuhan largely ignored: namely, money. The public square looks a lot less like Woodstock than it does a scene of generalised fear and trembling, with Detroit capitalists and Chinese peasants sharing in the dread. The pace and direction of economic change is attributed to the market. But the financial world has its own distinctive and powerful social norms, now described and analysed in Karen Ho's Liquidated: An Ethnography of Wall Street.

An anthropologist by training - she is now an associate professor of the subject at the University of Minnesota - Ho spent the late 1990s working as a business analyst at Bankers Trust, an investment house in New York that has subsequently been taken over by Deutsche Bank. Her time on Wall Street was not a matter of fieldwork, it seems, so much as an accommodation to the realities of the job market.

In any case, Ho kept a journal of observations on the tribal norms prevailing among the investment bankers. After losing her job during one of the financial sector's periodic waves of layoffs, she returned to graduate school to continue studying anthropology. To supplement her own impressions as "participant observer," she conducted interviews with people working at various institutions on Wall Street. She has shaped this data into an account of the myths and customs in that corner of the global village calling the tune to which the rest of us must dance.

Liquidated bears little resemblance to several recent books on the scams and self-delusions of Wall Street over the past few years (a genre of muckraking that would prove more valuable if it were not done ex post facto). Ho's approach is not to expose the nefarious doings of the investment banks but to analyse the culture that has taken shape within them. Each social group has its particular mixture of small-scale habits, large-scale rationalisations and everyday assumptions about the how the world really works. Like a good journalist, the ethnographer will find and describe telling details about what goes on within a subculture. But the ethnographer takes an additional few steps by trying to understand how even the most taken-for-granted aspects of behaviour within a group reflect a set of powerful but largely implicit rules and beliefs. Daily experience tends to reinforce the subculture's shared outlook in ways that make it seem inarguable.

It's one thing to do this with, say, Albanian shepherds - and something else to attempt it with those financial titans who Tom Wolfe once satirically called the Masters of the Universe. But the same general principles apply. The ethnographer has to spend time observing what the Albanian shepherd expects from the sheep, and from himself - and also figuring out how either may be different from what a Greek shepherd expects. A significant part of Wall Street's outlook is available in documents, of course, unlike with a rustic subculture; but the really interesting dimension of Liquidated comes from its account of how the financial sector's members understand their own daily experience.

For large sectors of the Street's workforce, that experience is undramatic, even drone-like, involving long hours spent assessing the relative performances of companies and determining how, through reorganisation, they might be made more profitable. A thin layer of front-office aristocrats live the gilded-age dream of making deals on the golf course. The rest crunch numbers and enjoy the expense-account perks of having pricey dinners delivered from downtown restaurants and being driven home by the company limo service at the end of an 18-hour day.

One term in particular serves as a way into the heart of this typically heartless worldview: "smartness." Ho shows in some detail how incessantly Wall Street pursues talent from elite universities, to the exclusion of all others - with up to half of Harvard's and Princeton's students going through the recruitment process for investment banks and top business consultants. Even during periods when firms are laying off large numbers of employees, the search for fresh talent from a handful of Ivy League schools goes on without any noticeable loss of avidity. But there is more to this than a hunt for powerful brains with splendid credentials.

"On Wall Street," writes Ho, "'smartness' means more than individual intelligence; it conveys a naturalised and generic sense of 'impressiveness,' of elite, pinnacle status and expertise, which is used to signify, even prove, investment bankers' worthiness as advisers to corporate America and leaders of the global financial markets." Sheer cognitive capacity is only part of it, for smartness also involves "being impeccably and smartly dressed" and possessing "quickness, aggressiveness, and vigour" in the "continued aggressive striving to perpetuate [one's] elite status." Doubtless the people creating formulas for new financial products could appreciate the mathematical brilliance of Stephen Hawking, but he might lack the flair, adrenalin and cupidity to count as really "smart".

This prevailing sensibility leads to constant self-policing on fine points of behaviour. Bringing one's lunch to the office, for example, might seem like a sign of willingness to concentrate on work - yet it violates the logic of "smartness." It reveals "a lower-class concern with overspending, a relationship with money that was not nonchalant." And yet a long meal in the cafeteria "was not considered professional, except on occasion, because it connoted time away from hard work." At times, the distinction between "smartness" and an anxiety disorder sounds very thin.

The conviction of being the best and brightest of the best and brightest understandably boosts Wall Street's sense of possessing the qualifications needed to shape the entire economy of the United States (and so the world). Ho describes the hold on the investment bankers' imagination of the belief that they have always been decisive players in creating modern corporations and assessing them as productive enterprises. "Today," she writes, "my informants, following much of the financial and business literature, assume that the stock market collected and funnelled the capital necessary for corporate America to grow, when in fact it was the other way around: the rise and growth of modern corporations helped to generate the stock market."

The result is a coherent ideology, or at least a compelling set of tribal myths. Wall Street's decisions are smart because smart people made them - and necessary, since no other player in the economy is really capable of judging otherwise. The effect may be massive layoffs of corporate workers, and the shutting down of productive capacity that proves insufficiently profitable compared to the returns available from risky but rewarding forms of speculation. But the people who might complain about this simply do not count.

"The labour of most nine-to-five workers," writes Ho, "the honest (but plodding) day's work from which my informants regularly distinguished themselves, is understood as complacent and stagnantly routine. Most corporate work, from Wall Street's perspective, is neither change-orientated, financially innovative, nor directed toward spiking stock prices; it is not forward-thinking nor in lockstep with the market, and as such is inherently unproductive."

By contrast, of course, someone gobbling a sushi lunch three years ago between stints of credit-default swapping was the very embodiment of human creativity. Doubtless that person is now unemployed. The business cycle plays itself out not just on the stock market but within investment banks themselves. "Financial fads and products... that predominate one year," writes Ho, "employing entire floors of people, can be decimated the next, the departments previously devoted to them shrinking to one or two desks."

The pleasing Wall Street euphemism is to say that a firm is "releasing people." But volatility is intrinsic to the rhythms of finance, and job insecurity is an accepted fact of life. To work for an investment bank requires identifying with the market so deeply as to accept liquidation by it without complaint - pursuing the highest possible compensation for one's "smartness," with no confidence of long-term employment by any given firm. And that, in turn, reinforces the urgent need to find and exploit the next speculative bubble.

In an appallingly apt turn of phrase, Ho characterises this as "Wall Street's bulimic culture of expediency." Wall Street firms, when given the opportunity to influence the organisation of other businesses and industries, invariably presume that they should operate just like Wall Street does: they should hire and fire employees willy-nilly, with not thought for stability or the impact on the lives and workers.

The customs and legends of Wall Street are not, unfortunately, quaint and local; they communicate their effects across the map. It is the ethnographer's task to show how a particular culture creates and sustains a little cosmos for itself. This Karen Ho has done - except that the world she reconstructs is one the rest of us are obliged to live in, as well. Scott McLemee is a recipient of the National Book Critics Circle award for excellence in reviewing.