Ho traces the rise of shareholder value beginning in the 1980s as the dominant ethos for business. It became “the central explanation and rationale for corporate restructuring, changing concepts of wealth and inequality, and the state of the America economy.” (122) She argues that the phrase was uttered constantly by her informants, and that “it shaped how they used their ‘smartness’ and explained the purpose of their hard work.” (123)
Shareholder value was premised on the notion that financial analysts knew more about what these firms needed than those with expertise and experience. And it also meant dismissing any concerns for stakeholders other than shareholders. Any money spent on others—whether that was employees or the communities that depended on these businesses—was seen as a waste. This stance justified and encouraged “hyperexploitive labor practices.” (146) The destruction such practices inflict are justified by the idea that it brings about “efficiency.” As one analyst said:
If I’m an employee, then there may be some temporary dislocations in the economy, but long-term, with a higher employment rate because at the end of the day, the most efficient, the most imperative industry should survive. The best operation should survive. (157)
Economic inequalities then—inequalities in freedom as producer and as consumer—are embodied in unequal legal rights. In assigning and enforcing legal rights to the fruits of transactions, the law is doing more than protect the winnings in the game of production and exchange. It is dealing unequal hands to the players. Further state intervention to alter the distribution of rights and liberties, to the advantage of those whose liberty is most restricted as a result, in part, of state action cannot be properly described as “statism” in any obnoxious sense. There may, however, be good reasons of policy against disturbing many of the present inequalities. But elucidation of this matter will require another chapter.
Karen Ho reports that one defining feature of work on Wall Street is exploitation: specifically incredibly long hours and very hard work. She calls it “a white collar sweatshop.” (84) Recruits experience shock when they realize what their working conditions will be like. But ultimately, this work is seen as justifying the vast differences in rewards they receive and great inequities among them. “Unlike most workers in the neoliberal economy, elite Wall Streeters still experience a link between hard work and monetary rewards and upward mobility—although that link is importantly enabled by prestigious schooling, networking and a culture of smartness.” (74) Yet they (wrongly) imagine that others in the economy did not work hard—that the rest of corporate America worked nine-to-five. (103) “On Wall Street,” Ho says, “overwork is a normative practice.” (99) Indeed, these two things go together—Wall Street’s denizens believe they are smarter and work harder than everyone else, and that this justifies the power they wield in the country and around the world.
It’s normal to hear critics of “education reform” or “the accountability movement”, speak of “corporate ed reform,” and highlight the role of finance in pushing it. But it’s not always clear what this means. Reformers certainly praise choice and markets, and rail against unions and public institutions. But is there more to it than that? I think there is. When I read Karen Ho’s Liquidated: An Ethnography of Wall Street, I found the connections between her findings and the ed reformers striking. Attending to these connections, I would argue, helps us make sense of both of these world’s better. This post is the first of three posts discussing the link between Wall Street and education reform. (You can read part II here and part III here.)
Karen Ho’s ethnography of Wall Street places great emphasis on what she calls the ‘culture of smartness’ as a key to understanding this world.
One of the most important concepts for understanding politics is quiescence. The great political scientist Murray Edelman placed the production of quiescence and arousal at the center of his approach to politics.
Government affects behavior chiefly by shaping the cognitions of large numbers of people in ambiguous situations. It helps create their beliefs about what is proper; their perceptions about what is fact; and their expectations of what is to come. In the shaping of expectations of the future the cues from government often encounter few qualifying or competing cues from other sources; and this function of political activity is therefore an especially potent influence upon behavior.
To make this point is to deny or seriously qualify what may be the most widely held assumption about political interactions: that political arousal and quiescence depend upon how much of that they want from government people get. Political actions chiefly arouse of satisfy people not by granting or withholding their stable demands, but rather by changing the demands and the expectations. (Emphasis in the original. Politics as Symbolic Action.)
For Edelman, the key to understanding politics is the ways the demands made by the public are managed, not how they are fulfilled. Often this is done through the use of symbols.For example, think about how in response to the Fight for 15 protests, Democrats have embraced a $10.10 minimum wage, including voting on it in the Senate, even though it has zero chance of making it even through that body. This has included the president imposing it on federal contractors, with the caveat that it would only apply to new contracts (making his earlier feet dragging consequential). Similarly we see states like Maryland enact $10.10 but limit its scope and extend the timeline for when the full new minimum should be imposed. The long timeline will make pushing for additional raises more difficult, although not impossible. In Seattle, where activists have successfully pushed the 15 dollar number onto the agenda, the mayor’s proposal has all sorts of loop holes, even as he claims to be leading the 15 dollar cause. The top number is the symbol, while the details are used to limit its impact.
I can’t stand Disney. At one time, I had difficulty articulating why. But it came together when I read Jennifer Hochschild making this point a while ago.
The theme of most Walt Disney movies boils down to the lyric in Pinocchio: “When you wish upon a star, doesn’t matter who you are, your dreams come true.”
Nonsense of course. It does matter who you are, not because people get what they deserve, but because things are not fair. And wishing is worthless, fighting for it is what matters – fighting with others.
When we organize, our dreams have a chance of coming true.
Amidst all the debate about charter schools, one thing has often been left out. They are not delivering on what their advocates claimed they would do, as the New York Times reports:
A primary rationale for the creation of charter schools, which are publicly financed and privately run, was to develop test kitchens for practices that could be exported into the traditional schools. President Obama, in recently proclaiming “National Charter Schools Week,” said they “can provide effective approaches for the broader public education system.”
But two decades since the schools began to appear, educators from both systems concede that very little of what has worked for charter schools has found its way into regular classrooms. Testy political battles over space and money, including one that became glaringly public in New York State this spring, have inhibited attempts at collaboration. The sharing of school buildings, which in theory should foster communication, has more frequently led to conflict.
Now, I’d push back a bit here. Read the rest of this entry »