Posts Tagged ‘Wall Street’
This was the first of three posts exploring the connections between Karen Ho’s Liquidated: An Ethnography of Wall Street, and so-called “education reform.” I have Alexis Goldstein to thank for pushing to to stop talking about this idea and just do it.
[T]his sort of smartness infuses the movement for corporate education reform. It can be seen in the pattern of seeking to provide maximum power to a few executives over public education, displacing the authority of schools boards, unions and the constituencies these represent: parents and teachers, and more broadly, citizens. This can mean mayoral control over schools, or top school administrators (some, like in Chicago, now labeled CEOs), or state appointed boards like Philadelphia’s School Reform Commission. The idea that a single strong authority can “fix” schools by overriding the concerns of other stakeholders is so commonplace it was the theme of the movie Waiting for Superman, which focused on reform darling / authoritarian and DC Chancellor Michele Rhee. Rhee made a name for herself through her confrontational style in relation to teachers and parents, famously taking a film crew along with her to fire a teacher. Significant experience teaching or administering schools is not required to wield this sort of unchecked power.
Alexis Goldstein interviewed me on the Disorderly Conduct podcast on my three part series on Wall Street and ed reform. It was my radio debut.
You can listen to the interview here.
[Update: The other guest was Kshama Sawant. You can hear the whole episode here. And you should!]
[Update 2: You can also read the full transcript of my interview.]
And here are the posts. Don’t forget part three – it needs some love.
Dan Greene contributed some additional thoughts here: There’s always another market: Liquidity, Wall Street and Ed Reform
Guest post by Dan Greene
I wanted to chime in and talk about a liquidity, character, and the social mission of these institutions because I think there’s another parallel between Wall Street and ed reform that we can draw out from Karen Ho. She writes:
For Wall Street bankers, one of their key imagined social roles as ‘market doers’ is to create liquidity, to speedily unlock and allocate money (as in the takeover movement) to its ‘best’ use. Through their own immersion in the market, especially the anxious, difficult experiences of constant downsizing and reinvention, their skills and lives—embodying the market and their roles in it—have also become “more liquid.” (244)
Traders justify their high pay not only by their smartness and overwork but by their perceived social benefit: They inject liquidity into illiquid markets or commodities, they make markets where there weren’t markets before. This generates shareholder value but, by a neat trick of historical revision, shareholder value is conflated with economic value more generally. So not only are they justified in theirs risks and bailouts and what not by providing liquidity to businesses who need it, but by a sort of trickle-down cultural intervention where staid institutions are liquidated and become better able to adapt to quickly changing and increasingly global economic conditions. So bigger institutions and different people get modeled on the personal lives of financial elites: constant downsizing and reskilling is prized above all, and rewards are based on bonuses and other deal-related incentives and not on anything related to the underlying asset, let alone anything approaching a long-term investment like a salary or a pension.
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)
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.