Liquidated: An Ethnography of Wall Street (John Hope Franklin Center Book) [Tapa blanda]

Derived from her PhD dissertation, this book seems designed for an academic audience. The Introduction can be painful, as it sets the intellectual context, demonstrates a command of theory, justifies research choices, and makes a case for relevance to the policy world. Subsequent chapters are more accessible and interesting. See the opening paragraph of Chap. 6, pp 249-50, for a clear, succinct statement of her agenda and conclusions.

How could this book - for the public now, no longer a dissertation - have been made more accessible? In the Introduction eliminate jargon and shorten sentences (stop addressing all imagined contingencies in a single sentence); eliminate all but key citations. Shorten the rest of the book by giving less exhaustive detail.

P. 296 summarizes one of her key findings: "Wall Street's rise to dominance - through its smartness, its use of history and shareholder value ideology, its 'own' experiences of downsizing as empowerment - has allowed it to project a local model of employee liquidity and financial instability onto corporate America and the financial markets at large, generating globalizing economic crises." The author develops this "local model" through "analyses of bankers' dispositions and organizational culture," based on research on Wall Street (mostly among low- and some mid-level professionals and managers).

This research is impressive, especially its case examples. Yet projecting that local model "onto corporate America and the financial markets" is harder to assess, and will be challenged: (1) By those who do not accept her purported linkages between (a) micro (employee) behaviors and sub-cultures, and (b) the larger course of economic and financial events. Rephrased, that the recruitment, socialization, and employment practices described cannot be so readily linked as causes to macro outcomes. (2) By critics who do not accept her macro (overview) analysis of the financial industry and its role in historical events.

I described this book's description of recruitment practices (from elite universities) to friends exprienced with CULTS. To them it sounded like the workings of a cult: firms pampering and flattering prospective hires, and assuring recruits that they can sustain the same elite associations and friendships after graduation. "Don't worry about going out into the humdrum, mediocre world. Our firm will help bring Princeton (etc.) with you." Ho seems at least implicitly to appreciate this view, but I would have expected an anthropologist to be more explicit.

Karen Z. Ho is an anthropologist who did ethnography on Wall Street in the time leading up to the current financial crisis. She studied the "culture" of high finance in the largest Wall Street firms, while working in one of the largest. She documents in excruciating detail the fact that Wall Street is not just a neutral market place. It has a definite culture, and that culture led to the financial meltdown in 2008-2009. Among other points she makes is that American high finance placed an extreme priority on liquidity--that everything tangible had to be turned into liquid assets--sliced, diced and homogenized into negotiable commodities. It is thus that mortgages got turned into credit swap defaults and other esoteric commercial paper. Once that had been done, not only could the resulting products be bought and sold, they could be sold two and three times, and shorted. This book is penetrating, fascinating reading from a trained observer who understands both finance and the culture of those promulgating it. For anyone wanting to know the truth about the current financial crisis, this book is absolutely essential reading.

Karen Ho's fascinating study is provocative on so many levels, beginning with her courageous project to "study up" and analyze the culture of some of the most powerful men (and a few hardy women) in the world. On some level, I think everyone with a 401K buys the myth that The Market is an abstract force, rather like a moody Judeo-Christian god, rewarding and punishing us at His whim, but hopefully proving merciful in the end. By questioning this "natural" force and exposing the everyday practices of Wall Street, Ho provides convincing evidence that financial markets are in fact created and manipulated by very fallible human beings.

Ho's description of the recruitment and indoctrination of future masters of the universe is perhaps the most poignant part of the book. Targeting young people from elite Ivy League schools (I'm a Princeton grad and witnessed my own classmates' enchantment with the allure of investment banking as an uber-Princeton of the best and smartest), then forcing them to work hellish hours in a cutthroat environment that can only impair judgment, sounds rather chillingly like an initiation into a cult. But even those who survive the hazing face constant job insecurity and pressures to perform for immediate profit. Ho argues persuasively that Wall Street projects these dysfunctional values onto corporate America, to the detriment of millions of workers, shareholders and their families.

An earlier reviewer expressed the wish that this book could be made more accessible, and I agree that the message of this book would benefit a wide audience. However, this non-specialist reader found Ho's explanation of the history of financial markets and cycles to be very clear--I feel I "got" what really happens on Wall Street. I'd also like to humbly suggest that the use of "excruciating" in another review was not directed at the amount of detail, but rather described investment bankers' misguided ambitions and the costs to our society over the decades. Talk about painful! While it's hard to feel sorry for the people who create such havoc for us all, Ho's emphasis on their humanity and personal vulnerability provides a unique and illuminating perspective on our recurring financial crises.

There's no question our financial system as it stands is not serving us well, but is there any way for an ordinary citizen to fight back? While "smartness" alone may not be the key to global domination, knowledge is power, and reading this compelling book may very well be a good place to start.