Human cost of corporate ethos

On many occasions, I have expressed my displeasure at the behaviour of ‘bankers’ in these pages. I, like many others, have used the phrase in a catch-all fashion aimed at including a number of different professions in the financial world under the umbrella.

For this reason, I greatly appreciate the education I’ve been treated to in the last few weeks. I have been reading the book Liquidated: An Ethnography of Wall Street by the anthropologist Karen Ho. It details her ethnographic research carried out over a number of years on Wall Street in the run-up to the financial crash of 2008 and is nothing short of revelatory in the insight it gives on the culture of a certain kind of bankers. What has startled me most of all is the level of pity I feel for those engaged in the viscous game of making stacks and stacks of money.

As well as telling some of the personal stories of those involved, Ho charts the export of Wall Street’s work ethic, worldview and culture into the wider landscape of corporate America. This has very obvious implications for the rest of the world, given that American corporations are ubiquitous on the business topography all over the world. Inherent in this creed are gender and racial discrimination as well as the machismo exemplified by Oliver Stone’s film Wall Street in the 1980s. The fact that the main character Gordon Gecko, along with his statement that “Greed is good,” are touchstone icons for modern Wall Street bankers is an extraordinary example of the cycle of life imitating art and vice-versa.

Ho begins her story in some of the Ivy League universities in the United Sates, where companies such as Goldman Sachs, Morgan-Stanley and all the others that so regularly grace our television news bulletins begin head hunting and priming potential employees from their first days in freshers’ week. Telling them they are ‘the best and the brightest’ the companies nurture a relationship with the young people.

They lavish money and privilege upon them and when they graduate, bring them into the fold among ‘their own kind’. This encouragement to see themselves as better than and smarter than everybody else has been so indoctrinated by this point that the working conditions new recruits are forced to endure are seen not as a joke or a scourge but rather as a rite of passage.

The new recruits work 80-hour weeks. They work, socialise and think their workplace and company. They are there to work, to earn money and to play hard. They are in this ‘privileged’ position because they are ‘the best’ so they do not question the initiation. The workload is obscene but eventually the rewards will be great.

Karen Ho elegantly teases out the export of this extreme work culture to the rest of corporate America since the 1980s and links it directly to the excess of those years and the adoption of the creed of “shareholder value”. When shareholder value grew to dominate all other concerns, the human cost of satisfying it was totally overlooked as an issue. A trend of “downsizing” took hold and has continued ever since. The job insecurity, which had been the reserve of Wall Street, was transplanted into the general corporate culture with quite incredible human costs.

When the dividends of the shareholders is the paramount concern of managers and CEOs, the fewer workers needed to do more work the better. The fact that you will have to work the employees left to the bone in order to get the job done matters little because it does not appear on the balance sheet. Cut the workforce, increase the workload and watch the profits skyrocket.

The participant observation research technique employed by Ho gives a unique insight into the extent to which the employees, or victims as you soon come to regard them, buy into the creed they are pushing for and suffering because of, on a daily basis. It is reminiscent of Stockholm syndrome, where the abducted person comes to have positive feelings towards and empathise with their abductor. Dutton and Painter described it best in their 1981 paper Traumatic Bonding: The Development of Emotional Attachments in Battered Women and Other Relationships of Intermittent Abuse, published in Victimology: An International Journal. Traumatic bonding or Stockholm syndrome is “strong emotional ties that develop between two persons where one person intermittently harasses, beats, threatens, abuses, or intimidates the other”.

Meanwhile, the adopted cultural practices of corporate America that promote job insecurity and normalise lay-offs and downsizing, to maximise profits for shareholders, have become utterly normal and accepted. In Ho’s own words, “Although shareholder value and externalised market justifications are Wall Street’s models for understanding downsizing, I move beyond these dominant assumptions, demonstrating that bankers’ own work experiences, market temporalities and organisational culture serve as an incisive model to explain Wall Street’s role in downsizing and financial crisis.”

In thinking about this situation over the past few weeks, I have come to a conclusion. There is a kind of Stockholm syndrome in existence between political leaders in the West and those in the financial industry. This might sound a little ridiculous and of course if I were suggesting anything other than a metaphorical image it would be. Politicians in the US, Europe and many other nations fail to robustly regulate not only major corporations but also the financial markets that run them. There is a perception that if these people are touched, then everything will come surely and quickly apart. In fact, what will happen is that some very wealthy people will make less money and more workers might keep their jobs. It doesn’t strike me as cataclysmic.

What Karen Ho has identified in this important work is the spread of a destructive set of work practices and an ideology with terrible implications for people and their families all over the world. The sole aim of making more and more money, at whatever the human cost has become utterly normalised in everyday corporate life and in other spheres too. Private sector approaches are now forced on public sector workers in many countries, Ireland included, and a decent pension that will allow a person a safe retirement is among the first things to be attacked. She has identified the problem, what is needed now is someone with the ability to change it to take heed and take on board the very important lessons in this work.