Highlights: Liquidated: An Ethnography of Wall Street (a John Hope Franklin Center Book), by Karen Ho


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Location 139-141

AT&T stock leaped 6.125 points to 63.75, or 10.6 percent of its total value, “growing” another $9.7 billion. But what shocked me the most, upon further investigation, was that the stock prices of Wall Street investment banks also rose. What was the connection?

Location 148-150

For the past three decades it is precisely these kinds of inversions that have dominantly characterized the corporate landscape and the relationships among layoffs, corporate profits, and stock prices.

Location 151-152

not only record corporate profits and the longest rising stock market ever, but also record downsizings (O’Sullivan 2000).

Location 161-164

What was so arresting about Wall Street’s approach to corporate downsizing was its celebratory tone, its rejoicing in the very fact of corporate restructuring.3 Throughout the mid–1990s, countless financial news articles demonstrated what seemed to be a new “structure of feeling.”

Location 179-181

While the desire for profit accumulation is certainly not new, what is clearly unique in the recent history of capitalism in the United States is the complete divorce of what is perceived as the best interests of the corporation from the interests of most employees.

Location 187-191

Whereas, under the assumptions of post—Second World War welfare capitalism, workers struggled for and (sometimes) received their (unfair) share of corporate earnings, today even this traditional capitalist hierarchy has been largely eliminated such that employees often no longer benefit at all (or even suffer) when the corporation makes a profit. It is this new logic which I encountered on Wall Street that I investigate throughout this ethnography.

Location 194-195

How do investment bankers actively make markets—that is, produce the dominant sensibilities of the stock market and Wall Street financial norms through their daily cultural practices?

Location 208-210

By Wall Street, I mean the concentration of financial institutions and actor-networks9 (investment banks, pension and mutual funds, stock exchanges, hedge funds and private equity firms) that embody a particular financial ethos and set of practices, and act as primary spokes-people for the globalization of U.S. capitalism.

Location 212-215

Wall Street investment bankers and banks, at the level of the everyday, helped to culturally produce a financially dominant, though highly unstable, capitalism: what kinds of experiences and ideologies shaped investment banker actions, how they were empowered to make these shifts, and how these changes were enacted and understood to be righteous.

Location 216-217

counters the widespread conception of capitalist globalization as an abstract metanarrative and homogenizing force too unwieldy for ethnographic translation.

Location 222-224

proper—corporate finance and M&A—because they directly demonstrate the interconnections between financial and productive markets, between financial and corporate institutions.

Location 230-235

Although investment banks are corporations in an organizational sense with specific corporate cultures, they also possess a supplementary role as the voice of the financial markets, and claim to speak for millions of shareholders as well. They thus occupy a unique social position: investment banks represent both “the market” and the corporate entities that are subject to the market. Locating the supposedly abstract market in sites with particular institutional cultures localizes the market, demonstrates its embodiment, and shows how it is infused with the organizational strategies of investment banks.11

Location 239-240

Rather, instability and crisis fundamentally characterize this particular culture of liquidity, and signal not the decline but the influence of Wall Street values and practices.

Location 243-245

This observation is methodologically and theoretically crucial to the argument of this book: it demonstrates that Wall Street investment banks have incubated, promulgated, and themselves undergone the very radical shifts they imposed and recommended for corporate America.

Location 245-247

nurtured—one that promotes the volatile combination of unplanned risk-taking with the search for record profits, constant identification with the financial markets and short-term stock prices, and continual corporate downsizing—has not only been imposed on corporate America but also fundamentally characterizes and affects Wall Street itself.

Location 260-262

It is important to mention that while I argue that these dismantlings germinate out of the specific corporate culture of investment banking, massive governmental deregulation and the shareholder value revolution helped to catalyze this cultural system.

Location 270-272

dismantling—that is, they relinquished a “purist” notion of investment banking—and financial institutions were allowed to “have it all,” both commercial and investment banking ambitions.13

Location 273-274

Street—its ability to globally market and proselytize both its products and its ethos—has generated not only record profits but also volatility, crisis, and a continual existence on the brink of annihilation (for itself as well as corporate America).

Location 294-300

Yet this insight is rendered invisible precisely because Wall Street investment bankers as well as academic and popular analysts of finance often resort to an abstraction they call “the market” to explain these crises. Junk bonds, merger crazes, internet bubbles, highly leveraged housing meltdowns, and subprime debacles are mistaken for, and understood to be the organic results of, market cycles (what goes up must come down) with a dash of greed and hubris as human nature thrown in. As such, the construction of booms and busts are simply conflated with “the market” and are not understood as arising from the particular workplace models, corporate culture, and organizational values of Wall Street financial institutions (investment banks in particular) or the specific and personal experiences of those who work for them.

Location 307-308

I demonstrate how, for example, the personal biographies of investment bankers play into, and converge with, job status and workplace experiences to shape a “common-sense” understanding of the righteousness of Wall Street analyses and recommendations.

Location 309-311

investment bankers enter into a Wall Street workplace of rampant insecurity, intense hard work, and exorbitant “pay for performance” compensation. Forged in these experiences is a particular investment banker habitus which allows them to embrace an organizational model of “employee liquidity” and to recommend these experiences for all workers.

Location 309-311

investment bankers enter into a Wall Street workplace of rampant insecurity, intense hard work, and exorbitant “pay for performance” compensation. Forged in these experiences is a particular investment banker habitus which allows them to embrace an organizational model of “employee liquidity”

Location 309-311

investment bankers enter into a Wall Street workplace of rampant insecurity, intense hard work, and exorbitant “pay for performance” compensation. Forged in these experiences is a particular investment banker habitus which allows them to embrace an organizational model of “employee liquidity”

Location 312-314

To answer why constant corporate liquidation, including the downsizing of employees, has been celebrated and justified on Wall Street, it is necessary to understand how the people heralding downsizing themselves experience it.

Location 315-317

notoriously insecure work environments not as a liability, but as a challenge. Bankers, recruited as they are only from the Ivy League and a few comparable schools like MIT and Stanford, are trained to view themselves as “the best and the brightest,” for whom intense deal-making through insecurity becomes a sign of their “smartness” and superiority as well as a way to cope with an anxious environment.

Location 319-322

They understand their lack of employment security as testing and developing their “mettle.”14 In this context of privilege and insecurity, investment bankers, on a practical level, are incentivized and learn to relentlessly push more deals (usually short-term transactions intended to boost stock prices) onto corporate America.

Location 326-327

my Wall Street informants conflated their organizational practices with their cultural roles as interpreters of the market and saw themselves, not as describing their own work and life circumstances, but as explaining “natural” market cycles and economic laws.

Location 338-341

among them: governmental policies and federal “reregulating” of corporations, a neoliberal resurgence in departments of economics and business schools, various crises in the rate of corporate profits and the choices made by corporate managers, the invention and popularity of new financial instruments from junk bonds to mutual funds, and the compromising of labor movements punctuated by racialized and gendered inequalities.

Location 354-356

family as dichotomous with, or external to, the very processes of capitalist formation ignores the centrality of the connections and sentiments of kinship that make capitalist production possible (Yanagisako 2002).

Location 354-356

As Sylvia Yanagisako points out, framing kinship and family as dichotomous with, or external to, the very processes of capitalist formation ignores the centrality of the connections and sentiments of kinship that make capitalist production possible (Yanagisako 2002).

Location 361-363

16 a “hybrid” investment and commercial bank, as an “internal management consultant” analyst, part of a group that acted as an “agent and advisor of change” for the different businesses within the bank.

Location 368-371

I kept a journal of personal reflections and experiences, taking care not to describe in detail the thoughts and actions of my coworkers and friends who—although they knew of my research interests—were “on the job.” As such, the experiences that I relate from this period are based on my observations and journal writing and not on any information that was considered private or proprietary.

Location 382-384

in the late 1990s it was precisely the fact that almost no one from Wall Street lived in my overwhelmingly Latino, white ethnic, and Arab American neighborhood that enabled me to put on a suit for three years and take the F train into a highly sanitized world of shareholder value proponents spouting the bull market hubris of Wall Street.

Location 387-389

Under constant pressure to vie for more and more projects in order to demonstrate my smartness, my capacity for hard work, and my ambition for deal-making responsibility, I was expected to demonstrate the desire for more money as evidence that I had properly imbibed these new sensibilities.

Location 393-394

The rationale given by BT for eliminating MCG was that we were a fixed expense that detracted from shareholder value.

Location 402-403

Investment bankers were subjected to, and suffered from,

Location 402-403

Investment bankers were subjected to, and suffered from, the same concepts and practices they imposed on others.

Location 410-413

Given the hierarchical structure of investment banks, front-office workers, such as investment bankers, traders, and investment managers who take credit for all profits and deals done, depend on the back office for daily support, all the while looking for ways to restructure these “cost centers.” I knew immediately that I would resist; for me,

Location 410-413

Given the hierarchical structure of investment banks, front-office workers, such as investment bankers, traders, and investment managers who take credit for all profits and deals done, depend on the back office for daily support, all the while looking for ways to restructure these “cost centers.” I knew immediately that I would resist; for me, this was the freedom of being a future fieldworker.

Location 414-415

Taylorist time-motion study of their workday, actually charting and measuring the kinds of tasks and the time needed for completion to judge how many workers were necessary.

Location 414-414

Taylorist time-motion study of their workday, actually charting and measuring the kinds of tasks and the time needed

Location 432-435

Given that recent work in social studies of finance has demonstrated that economists and financial models and theories, not only describe and analyze financial markets, but also perform and produce them (Callon 1998; MacKenzie 2006), it thus seemed a distinct possibility that studying the personal crises of investment bankers could provide a unique insight into the production of corporate restructuring and financial crises.

Location 432-434

Given that recent work in social studies of finance has demonstrated that economists and financial models and theories, not only describe and analyze financial markets, but also perform and produce them (Callon 1998; MacKenzie 2006), it thus seemed a distinct possibility that studying the personal crises of investment bankers could provide a unique insight into the

Location 435-437

bankers have themselves been subjected to the revolving-door model of employment that they recommend for other workers, although their particular mix of privilege, pedigree, compensation, and networking affords them a very different “lesson learned” from the experiences of downsizing and insecurity.

Location 446-446

action—than with Wall Street investment banks’ notorious lack of planning and follow-through even in their search for short-term gains.

Location 458-460

I was able to focus my study not only on “the interior lives of experts as an elite as such, but rather to understand their frame … a project of tracking the global, being engaged with its dynamics from their orienting point of view” (Holmes and Marcus 2005, 248).

Location 467-469

The very notion of “pitching tent” at the Rockefellers’ yard, in the lobby of J. P. Morgan, or on the floor of the New York Stock Exchange is not only implausible but also might be limiting and ill-suited to a study of “the power elite.”

Location 497-499

found some affinity with fellow Asian American women and men, especially those who were struggling with issues of what it meant to be an Asian American professional (expectations of upward mobility, relative class privilege, racial discrimination and stereotyping at work, bicultural identity formations),

Location 519-520

When I rode the subway to the field,22 determined not to allow “the study of the stock market” to be “left to economists” (Hertz 1998,

Location 519-522

When I rode the subway to the field,22 determined not to allow “the study of the stock market” to be “left to economists” (Hertz 1998, 16), I was bombarded by images and representations of the United States as a nation of stockholders and investors, and of the stock market as a populist site of economic empowerment for all Americans.

Location 530-532

In Wall Street’s new rhetoric of market populism via shareholder value, “each mass-market success by a bank or brokerage [was declared] a victory for a democratic ‘revolution’ ” (Frank 2000, 125). To take just one example, Thomas Frank describes how E*Trade appropriated the language and imagery of the civil rights and feminist movements.

Location 534-536

Wall Street thus allied itself with the “common people,” constructing a pro-Wall Street populism and incorporating the disenfranchised into a cool new image opposed to its older, stodgier self.

Location 547-549

This assumption only makes sense, of course, if success in the stock market depends on a delicate balance of insider knowledge, market hype, and timing.25 Wall Street, then, views the democratization of stock market participation as a bellwether of oversubscription and as a signal for insiders to sell,

Location 550-552

Despite Wall Street’s and corporate America’s proclamations about putting shareholders’ interests above all other constituencies of the corporation, the very practices that constitute the shareholder value repertoire do not necessarily enrich owners of corporate stock or empower shareholders to make corporate management decisions.

Location 577-579

Morgan Stanley’s advice, intended to bolster shareholder value, actually damaged AT&T’s stock price in the long run, despite the fact that this deal making helped to generate an explosion of wealth for shareholders primed to cash out during the short-term price spikes.

Location 593-596

A central question for this book, then, becomes: why do Wall Street investment banks continually fail to achieve their raison d’être? How can investment bankers do what they do and engage in seemingly irrational practices, such as proclaiming shareholder value while engaging in actions that not only undermine it but produce corporate and financial market crisis? How does shareholder value maintain cultural legitimacy despite the inconsistencies and failures of its champions?

Location 597-599

part of the crisis of representation and the turn toward greater anthropological reflexivity was the realization that anthropologists were unable to see “the objects of social analysis” (usually the marginalized) as “also analyzing subjects”; furthermore, ethnographers did not sufficiently locate or recognize their gaze, influence, or dominant authorship

Location 604-606

Given the historical imbalance between the native’s voice and that of the ethnographer, this strategy is understandable. However, when one is studying the powerful, this approach is no longer appropriate, as it can overprivilege the informant.

Location 619-620

Wall Street cultural legitimacy and shareholder value are naturalized through “origin myths,” particular interpretations of neoclassical economic thought, and investment banking histories of shareholder rights.

Location 623-628

The presumption is that investment banks financed the very creation of the U.S. corporate system and have throughout history been the primary suppliers of fresh capital to maintain and expand it. So ingrained are these notions that even the project of delineating “what Wall Street actually does” proved a much more intricate endeavor than I had realized precisely because most of the literature (popular, “native,” and academic) about Wall Street is framed by this dominant, taken-for-granted narrative of its roles and responsibilities, one which relies on a particular interpretation of American corporate and financial history.

Location 628-629

indicative of mainstream culture’s approach to Wall Street as both highly secretive and esoteric as well as crucially important for the functioning of our capitalist system:

Location 638-641

One of the key ways in which Wall Street investment bankers control their present and future representation as a fountain of capital that “build[s] the nation’s factories” is to strengthen their hold on the past. Such a storied role allows them to spin the pursuit of seemingly selfish goals as, in the end, a force for social good, arguing that the incentive of personal gain leads to an efficient economy, greater innovation, and better

Location 657-661

“Keeping performativity in mind reminds us also to ask: if the model is adopted and used widely, what will its effects be?” Further, are these models “accurate” and “what sort of a world do we want to see performed” (MacKenzie 2006, 275; Maurer 2006)? Given the limits of the shareholder value model and the gap between the ideal and the effects, my approach to shareholder value inquires what other financial cultural values and norms, beyond the “most authoritative” and dominant, shape Wall Street investment banks’ restructuring of corporate America and financial markets.

Location 662-663

I approach Wall Street historiographies of shareholder entitlement and Wall Street’s conception of itself as fundraiser to the world as origin myths,

Location 664-667

Bronislaw Malinowski (1948, 96) writes that “an intimate connection exists between the word, the mythos, the sacred tales of a tribe, on the one hand, and their ritual acts, their moral deeds, their social organization, and even their practical activities, on the other.” I document how Wall Street, through strategic alignments with long-standing neoclassical desires entrenched in American cultural norms, evokes nostalgia to construct a “restoration” narrative central to its “rightful” succession.

Location 670-672

Delineating the differences and contestations between capitalists serves as a foil to better situate and historicize investment bankers’ universalizing and taken-for-granted assumptions.

Location 672-673

I write against assumptions of a singular, static, totalizing capitalist worldview, promulgated by homogenous capitalists.

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“If the art of speaking is itself an art of operating and an art of thinking, practice and theory can be present in it.” He further explains that “stories” serve to “authorize” and “found” a set of social practices, to delimit and carve out “a theater of actions”

Location 690-691

Banker talk of shareholder value simplifies corporate history, limits others who may have claims on corporate profits, and forecloses a range of more equitable corporate practices.

Location 694-696

Through circulation and repetition, these stories “delegitimate” the corporation as a social institution and “legitimate” the corporation as a private investment vehicle for the few (Caldeira 2000, 38).

Location 706-708

and market truths, the strength of what anthropology can contribute to unpacking Wall Street lies in its ability to demonstrate ethnographically how Wall Street’s institutional practices produce experiences that then make discourses come alive, more than the other way around.

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Because Wall Street investment bankers are highly visible in terms of their own self-representations and claims to truth and authority, yet culturally invisible in terms of their everyday practices and assumptions, by directly accessing key agents of change on Wall Street,

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By taking as central the assumption that finance capital is abstract and abstracting—that is, separated and decontextualized from concrete lived realities, in turn shaping and corroding social relations in mystifying ways—we run the risk of allowing elite players in the global economy even more space to define and decipher our socioeconomic lives (see Gregory 1998; Tsing 2000a).

Location 725-727

This legacy stems in large part from the work of Karl Polanyi, who challenged the “ ‘economistic fallacy’ of liberal economic thinking, in which market relations… come to be viewed as universal models of human conduct,” and argued that economic practices are embedded in social networks, relations, and institutions (Slater and Tonkiss 2001, 94).

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Just as “nonmarket” gift exchanges are characterized by a high degree of formal calculation, “market economies are more fully embedded in social networks than Polanyi’s strict separation allows” (Slater and Tonkiss 2001, 101).32 The “actual practice[s] of economies” defy top-down notions of market: “high finance is largely concerned with personalities, private perks and little interest groups, prestige, imagination, almost anything but what might be called a market” (D. Miller 2002, 224, 228).

Location 748-750

I describe these academic critiques of neoliberalism as “neoliberal exceptionalism,” where the confrontation with conditions of socioeconomic inequality encourages scholars to privilege distant logics over particularity and grounded cultural analysis, which (ironically) overempowers neoliberalism.

Location 751-753

Overarching scripts of universalizing financial logics and capitalist globalization not only obscure the heterogeneous particularities of Wall Street practices and effects and prevent the interrogation of Wall Street investment banks’ hegemonic claims, but also ironically parallel the marketing schemes and hyped representations of Wall

Location 757-759

Bill Maurer (2006, 15, 19) rightly points out that the notion of money as abstract and deracinating is a dominant “Western folk theory” and in analyzing markets, money, and finance, “anthropology…too often repeats the same story of the ‘great transformation’ from socially embedded to disembedded to abstracted economic forms.”

Location 765-766

Put simply, allowing finance to be simply abstract lets it off the hook.

Location 768-769

While I am sympathetic to explanations of corporate downsizing and rampant job insecurity as the intensification of abstraction, my intervention is to demonstrate that what seems like abstraction can actually be culturally decoded.

Location 770-771

but also that of neoclassical economics, where there is the “attachment of great value to detachment; in its passion for dispassionate analysis” (Nelson 1998, 78).

Location 775-777

powerful knowledge producers from financial economists to corporate executives to Wall Street bankers have over the past two decades used and relied even more heavily on these indicators to make top-down decisions about jobs and policies. Tackling these

Location 777-781

Tackling these profound changes, anthropologist James Carrier explains that abstract neoclassical economics, armed with greater institutional power, is engaged in “the conscious attempt to make the real world conform to the virtual image.” It is precisely this “move to greater abstraction and virtualism” in economic thought that is creating a prescriptive model for reality, a “virtual reality” that is reductive, dislocating, and divorced from responsible and engaged social relationships (Carrier 1998, 2, 5, 8; Carrier and Miller 1998).

Location 784-786

“It is not too far-fetched to see the disaggregation of firms and the increasing use of outsourcing and temporary workers as a kind of disembedding, for economic activities that had occurred within the structure of the firm and the durable employment and institutional relations contained within it, move outside and are acquired through relatively more impersonal and transient market relationships.”

Location 788-789

are not only loosening social ties but also generating conditions of supreme socioeconomic inequality by obliterating any concern for the daily lives and dilemmas of everyday people.

Location 794-796

The unequal conflict between the priorities and agendas of the powerful versus the powerless, not to mention the dismissal, may in turn be experienced as being “turned into a dollar sign from above,” yet such a phenomenon is perhaps better explained as the social effect of concrete manifestations of power relations, not abstraction.

Location 798-800

but about reclaiming the “rightful” capitalist unity between ownership (of stock) and control over corporations that had been sundered during the heyday of managerial, “welfare” capitalism, which in turn fosters the values of responsibility, efficiency, and individual proprietorship.

Location 802-804

It is a discursive strategy used by powerful financial institutions to articulate their vision of the world and fight for their elite interests by utilizing a shareholder value worldview to impose short-term, financial market-based decision-making on corporations.

Location 807-808

Given that on Wall Street, financial models are not fully actualized in practice, the interstitial space between “virtual” models and its “real” effects is a crucial analytical site.

Location 815-816

I demonstrate that economic ideals are neither wholly performed and instantiated into reality nor virtual substitutions for “real life complexity.”

Location 821-823

When conflicts between unequal values and interests are interpreted mainly in terms of abstraction, which in turn is refracted back as a core characteristic of finance, such assumptions further obfuscate the task of grounding Wall Street actors.

Location 824-827

Richard Dyer (1997, 38–39) has written that one of the central markers of white identity is “the attainment of a position of disinterest—abstraction, distance, separation, objectivity.” Yet, while privileging the notion of universality, abstraction, and invisibility, whiteness paradoxically also claims individuality, a particular display of spirit and character, as well as a sort of privileged “race.”

Location 828-830

discursive power of the financial market is precisely its representation as abstract, its seeking to be everywhere and claiming to be nowhere coupled with its particular mission and claims to freedom, democracy, property, and prosperity.

Location 833-835

I intervene against the flexible and productive power of markets by rendering it concrete and by demonstrating that investment banking decisions and the very experiences of the investment bankers themselves are thoroughly informed by cultural values and the social relations of race, gender, and class. I hope to portray a Wall Street shot through with embodiment, color, and particularity.

Location 853-854

It is precisely this global confidence in their capabilities that allows them the freedom to act unimpeded.

Location 869-869

most distinguishing features of investment banks are their smartness and exclusivity:

Location 883-886

On Wall Street, “smartness” means much more than individual intelligence; it conveys a naturalized and generic sense of “impressiveness,” of elite, pinnacle status and expertise, which is used to signify, even prove, investment bankers’ worthiness as advisors to corporate America and leaders of the global financial markets.

Location 889-891

The key criterion of smartness is an ability to “wow” the clients—generally speaking, the top executives of Fortune 500 companies. In this sense, although technical skill and business savvy also help to constitute smartness on Wall Street, they are often considered secondary, learnable “on the job.”

Location 897-898

What allows investment bankers to claim smartness, what defines and legitimates them as smart in the first place, and what particular kind of smartness is being deployed?

Location 900-901

Wall Street’s cultural values in action, particularly the construction and maintenance of the hegemonic elitism that produces “expert” knowledge of financial markets.

Location 909-912

I make the case for the importance of the biographical and the institutional in enacting global capitalist change. The building blocks of dominant capitalist practices are also personal and cultural; people’s experiences, their university and career tracking and choices, are constitutive of capitalist hegemony; and the financial is cultural through and through.

Location 920-923

Just as “it is through the ‘small stories’ that one can begin to unravel and challenge homogenizing discourses embedded within concepts such as globalization, ‘the’ market, and ‘the’ state,” it is possible to decenter the market as an abstract agent and powerful force by demonstrating that it is only through the small and the everyday that we can understand the creation of hegemony in all its particularity and contextuality.

Location 970-971

Perhaps the most self-evident reason for Wall Street’s recruiting monopoly is simply that its presence dominates campus life:

Location 976-978

monopolize the attention of the student body by showing up with the most polish, fanfare, and numbers. They hand out the best goodie bags, the most titillating magnet sets, mugs, Frisbees, water bottles, caps, and t-shirts, and in a matter of days, thousands of students become walking advertisements as their logos disperse into campus

Location 984-986

Taufiq Rahim, a Daily Princetonian columnist, wrote of what he called the “hunting season”: “They’re here. I can see them. I can smell them. They’re in my inbox. They’re in my mailbox. They’re on my voicemail. They’re outside my door. They’re on campus, and they smell blood.…

Location 1020-1021

“Because if you hang out with dumb people, you’ll learn dumb things. In investment banking, the people are very smart; that’s why they got the job. It’s very fast, very challenging, and they’ll teach as quickly as you can learn.”

Location 1023-1024

“We’ve got Hong Kong, we’ve got Sydney, we’ve got London.” He returned, inevitably, to the presentation’s central motif; with an admiring gaze at the audience, he exclaimed, “You are all so smart!”

Location 1033-1034

In these sessions, I was struck by how proclamations of elitism (through “world-class” universities, the discourses of smartness and globalization) seemed foundational to the very core of how investment bankers see themselves, the world, and their place in

Location 1069-1070

Goldman Sachs, as Lin described, worked very hard to position itself as an extension of Harvard and, in doing so, confirmed Harvard as the progenitor of the best.

Location 1083-1084

This conflation of elite universities with investment banking and “the perfect lifestyle” is crucial to the recruitment process, reproducing as it does the ambience of Wall Street cocktail parties,

Location 1086-1087

not to mention how Wall Street business success is premised on pedigree, competitive consumption, and heteronormativity.

Location 1131-1134

When you are social chair at HBS, you have a certain carte blanche to talk to and call up the CEOs of companies.” What Thompson experienced as social chair of her class mirrored the Wall Street’s relationship with corporate America. Wall Street, armed with HBS graduates, has “carte blanche” to advise CEOs on the latest deals and expectations.

Location 1172-1174

Central to Wall Street’s construction of its own superiority is the corollary assumption that other corporations and industries are “less than”—less smart, less efficient, less competitive, less global, less hardworking—and thus less likely to survive the demands of global capitalism

Location 1190-1192

It is one thing if one’s goal in life is to make “multi-million-dollar corporations even richer” or if one “cannot be happy unless you work for Goldman,” but the crux of the problem is that students hardly question or ponder what they might truly be passionate about, much less the contradictions of their own privilege

Location 1199-1200

Where to find Harvard after Harvard? The push to replicate is excruciatingly intense. As Devon Peterson (2002) observed: “Perhaps most difficult to overcome is the naturally difficult task of giving up social status and an elite way of life.”

Location 1233-1234

In place of the elite, individualized family of men came the elite “Princeton” or “Harvard” family, which relied on a new variant of kinship based on alumni rather than “old boys’ ” networks.

Location 1249-1251

the assumption is that everyone on Wall Street is smart and comes from Princeton or Harvard; as such, this smartness generically applies to all members of this class or kind in a way that is naturalized and comprehensively descriptive of this entire group of workers.

Location 1312-1315

Possessed of a combination of traditional cachet, class standing, and pedigree, they can show prima facie evidence of their “excellence” by virtue of their schools’ (presumably) exclusive selection processes; and they demonstrate a constant striving for further “excellence” by virtue of their participation in the intense process of recruiting and their evident desire for a high-status, upper-crust

Location 1372-1372

they are recruiting their status as experts in the global financial markets (Rubalcava 2001).

Location 1386-1390

During the market crash of 2001 and the aftermath, Alex Rubalcava, in a prescient article for the Harvard Crimson, taunted investment banks for even thinking of “cutting back” on Harvard recruitment in 2001. He observed, for example, that “the core competency of … an investment bank … the real value these companies bring to the world and to their shareholders is their unmatched skill at recruiting fresh-faced young students from the Ivy League.” He continued, “Remember that companies that do nothing of value must obscure that fact by hiring the best people to appear dynamic and innovative while doing such meaningless work.”

Location 1411-1415

In recounting this performance, my informants describe how the MD begins the meeting by “introducing the rocket scientists” to stake Wall Street’s claim that the client will have “the smartest guys in the world advising you”: “At Morgan, we only have the best”; “At Goldman, we have the deepest pool of talent assembled here”; “This guy went to all the best institutions in the world.” Positioning themselves as smarter, savvier, and more cutting-edge than corporate America by capitalizing on the aura of elite institutions, investment banks construct a mutually reinforcing connection between the market and the Ivy League:

Location 1419-1421

Smartness leads to market dominance, not only because of explicit assumptions about talent and credibility, but also through the premise that smartness is spatial, that it should rightly spread, colonize, and necessarily manifest as the natural determinant and arbiter of global market leadership.

Location 1435-1436

“What does ‘global’ mean for Merrill Lynch? Is it simply that you have an office in Frankfurt and Tokyo? No, it doesn’t mean just ‘global’;

Location 1443-1446

Through this inundation and identification with institutions and individuals whose brand of smartness is universal, Wall Street investment banks construct “the best culture,” which leads to global leadership in the market and the naturalized right, not only to expand, but also to largely influence the direction of corporate America and financial markets.

Location 1538-1540

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.

Location 1584-1587

except for the four internal management consultants, was slated to become a back-office worker (though in management positions), everyone in the “elite” Corporate Finance group was tracked to become a front-office investment banker. They had fancier food, better supplies, and a professional “facebook” which detailed their pedigrees and biographies, along with excellent head-shots.

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Moreover, whereas everyone in the GMFTP group, except for the four internal management consultants, was slated to become a back-office worker (though in management positions), everyone in the “elite” Corporate Finance group was tracked to become a front-office investment banker. They had fancier food, better supplies, and a professional “facebook” which detailed their pedigrees and biographies, along with excellent head-shots. It was precisely at the moment when the GMFTP group realized the existence, not only of myself, but also of the “elite group,” and uncovered the unequal positions and directions that we were tracked into, that their hope and excitement—that first job in New York City at a global investment bank, for goodness’ sake—became shot through with sarcasm.

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It was also during this time that my GMFTP friends began to go home early, recognizing the fact that no matter how long past 6 p.m. they stayed at work or how much initiative they showed, they were excluded from the front-office positions: for them, hard work was already severed from advancement

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can only be recognized as “contributing” to the firm’s profitability through cost savings or “stop losses”—which are mainly achieved via the drastic reduction of wages or the elimination of jobs.

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An investment bank engaged in constant deal-generation, immediately and efficiently responding to client and market demands, must maintain a twenty-four-hour shop. If senior bankers have the privilege of occupying the normative workday and they demand something “on their desk the next morning when they arrive,” then the analyst and associate are the ones working from 7 p.m. to the wee hours of the morning.

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In fact, senior managers on Wall Street are renowned for their exceptionally poor management skills, as Wall Street emphasizes short-term, competitive individualism, not teamwork or the cultivation of long-standing mentorship, or collegiality.

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Of course, such a dual ratcheting depends on an abundance of resources for everything from dependent care to food procurement, and a particular dominant embodiment of what constitutes financial authority, which on Wall Street continues to be mapped onto pedigreed white males.

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correctly—every little mistake, you get questioned like, “If this is wrong, maybe the other thing is wrong. If that is wrong, then the whole analysis is wrong.” So, you want to be as accurate as possible.

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Certainly, the trend, since the 1990s, of most large corporations hiring financially trained MBAs and ex-investment bankers instead of promoting industry managers from within the organization goes hand in hand with the financialization of corporate America and its alignment with the values, practices, and expectations of Wall Street.

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Perhaps the most frustrating aspect of work for analysts and associates, and one of the central reasons they must stay at the office until the wee hours of the morning, is that they are catering to the schedules of the senior bankers. For

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thought—that somehow investment bankers are a qualitatively “different” kind of people than “nine to five” workers. They possess a particular combination of intelligence, ambition, and hard work, which they view as the driving and legitimating forces behind their dominant position in the financial markets.

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This is the whole self-worth thing—to complete and do things. In a big corporation or in the academy, it is hard to get things done. [On Wall Street], you work with so many people where anyone you talk to is so responsive and pretty bright and really motivated, it just makes for a pretty good working environment.

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And that is why people who have more than enough money … more than enough respect, still are involved in this at the expense of their families because they need to feel needed. And, there is nothing better than to complete things on a regular basis.

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Many investment bankers I interviewed remarked, occasionally with envy but usually with an edge of moral superiority, how inefficient corporate America is because people move so “slowly.”

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Taken together, Wong and Baker demonstrate a core sentiment of most of my informants: that the efficient “smartness” of a corporate America restructured according to Wall Street ideologies and expectations mirrors the “internal” smartness of investment bankers, which is itself modeled and justified on a daily basis by the intense hard work, motivation, exposure to greatness, risk-taking, and entrepreneurial resourcefulness bankers are encouraged to demonstrate in their own work environments.

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the dominant condition for most lower-middle-class workers is overwork; investment bankers’ representation of the complacent nine-to-five “bureaucrat” is thus a straw man.9

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The particular combination of pinnacle status and market superiority founded on smartness and arduous work begs the question of what kind of work is being privileged.

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While investment bankers certainly recognize that they do, in fact, bullshit their clients, they usually view such practices as justified by the hard work they genuinely put in, their superior knowledge of the market, and the financial good they are sure their interventions ultimately accomplish. (At the same time, such conscious manipulation foreshadows my later discussion of how investment banking corporate culture, in its privileging of “the deal” above all other considerations, contradicts Wall Street’s own professed ideals.)

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believe that they cannot help but outwit, outmaneuver, and in short, run circles around most corporations. These kinds of charts and jokes work to perform and produce this sense of superiority and entitlement.

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For investment bankers, the labor of most nine-to-five workers, 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 oriented, 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. It does not “add value” according to the financial parameters by which investment bankers measure success.

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My informants often legitimated their work and its effects on corporations by appealing to their own work ethic: the mergers and acquisitions they manage must be good because, well, they work so hard at them.

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which differentiate some “marked” investment bankers as less worthy of the generic status of smartness that is normatively associated with Wall Street. Specifically, these investment

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which differentiate some “marked” investment bankers as less worthy of the generic status of smartness that is normatively associated with Wall Street. Specifically, these investment bankers look toward hard(er) work to erase their marked status and ease their entry into the money meritocracy.

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The money meritocracy posits that the only color Wall Street sees is green, and because its lust for money is even greater than that of most institutions, it is inadvertently “less racist and sexist” than society at large.

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Of course, instead of understanding desire for money as itself a constructed “passion,” most Wall Streeters see it as a naturalized state. Similarly, the Wall Street mantra that “money does not discriminate” resonates powerfully with the assumption of neoliberal economic theory that racism and other prejudices form “an impediment to efficient market transactions and [are] therefore likely to be overridden in the long run by the exigency to generate profit” (Browne and Misra 2003, 495). On Wall Street, “economic outcome” is seen as constituted through skill, merit, and education, not such “externalities” as race, class, and gender.10

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said that in order to succeed in his career, he focused so intensely on the complexities and techniques of deals that his clients and the other bankers on his team “didn’t have to talk about what country club they went to.”

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According to many of my informants, the jobs and departments that were understood to require less socializing and “schmoozing with the elite” were also perceived as less racist and sexist, and therefore “better” places for women and people of color.

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. So it should not be surprising that I picked M&A after being a double minority, as a woman and as an Asian woman. I am a product specialist. When I get hired, I am getting hired for my understanding and my expertise, and so when they take advice from me, they don’t really have to like me. They can say, “Oh, she is a bitch!” Whereas on the relationship side, they really do have to like

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All he did was play golf because the clients loved him. They thought he was fabulous. He was giving them tips on how to hit the ball. It was actually very comical because he had to do something for me, and he didn’t know how to do it!

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(It is important to mention that these spaces of whiteness enact white male privilege and set the stage for the hypermobility of young white men by allowing them uninhibited access to powerful, older white men.)

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So, we need to find a mentor, get a guide; we need to be invited to that country club and get access to powerful men… . We need to know the land mines. The onus is on the people on this panel. It’s not just about hard work: I learned how to play golf.

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Since socializing in exclusive contexts is an inescapable part of the job, many of my “marked” informants found that this narrative of separation (hard work from relationships) was not only hierarchically segregationist but also misleadingly detrimental to future promotion because it disguised the extent to which “professional space” is constructed beyond the confines of the workplace.

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For those who have historically (and presently) not been excluded from the Street’s “walls,” one’s “social” life and “work” life intersect and overlap such that both spaces aid in strengthening the density of one’s professional network. Because the boundaries are often unseen, there exists little differentiation between the two spaces and very little consciousness about the fact that what counts as “professional” space

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More importantly, the particular places that often do count as after-work social spaces (from the strip club to the country club) have been long-term perpetuators of exclusion. As such, those experiencing blatant ostracism from the spaces of after-work socializing have often welcomed the limiting of the boundaries of what constitutes “the job.”

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these same workers can be taken advantage of and perceived as unstrategic precisely because they are working so hard. Read as being too willing to “give away” their time, their time is understood to be less valuable.

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Because I think on Wall Street, in particular, if you show that you’re willing to kill yourself, you would think that would be a good thing, but I don’t really think it

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I never really believed in that, but I think that a lot of people do. You come in, you pay your dues, you do your work, and if you show that you’re willing to do grunt work when you’re supposed to be beyond that, then I think that’s a bad thing.

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For example, my husband… . He is not as hard of a worker as I am, he is probably not as smart as I am, but he will do much better on Wall Street than I will because he has confidence in himself.

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Furthermore, after having accomplished such mammoth tasks, which are often not the high-profile deals given to men, women are often interpreted or represented not as “leaders” of the deal but rather as being overwhelmed and reduced by the work. Women are imagined, as well as structurally positioned, as stupidly “not beyond” the grunt work (and correspondingly unworthy of high-profile work) by virtue of having done it.

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were discussing one afternoon how many women who work on Wall Street wear sneakers during the commute and then change into their heels once they arrive at the office. Because many women wear skirt suits to work, they already have on pantyhose underneath the white athletic socks. The end result, Bennett and Fan agreed, is “tacky.”

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Upon further rumination, the significance of this change of shoe practice became clear: the socks and sneakers over hose is a marker, albeit imprecise, of a lower-class status.

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Front-office women, then, make sure to distinguish their dress from that of administrative staff: they wear body contouring suits that are not too tight, heels that are not too low or too high, hair that is coiffed but not too high or too hair sprayed. Because women in general are often treated similarly as a class and are “feminized” as support staff, female investment bankers must constantly guard against class slippage: being mistaken for assistants or “admins.” Thus, they must police themselves and each other for such class infractions as wearing socks over hose. This concern is even more pronounced among women of color, as racial hierarchies threaten to “deprofessionalize” them even further.

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After one meeting, Summers was astonished at the amount of food left over and appalled when no one helped the administrative assistant, also an African American woman, carry the trays out of the meeting room. Summers struggled through an internal debate. Although she knew that she was “not supposed to,” she did not want the administrative assistant to think that she thought herself “above” carrying the tray and also wished to compensate in some way for her colleagues’ lack of consideration. In an attempt to maintain rapport, she checked to make sure no one else could observe her, quickly carried out one tray, then disappeared back to her cubicle.

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When I asked her why not, she replied that it was not professional, that if your peers or bosses witness you performing a “support” role, they will believe that you do not take your own time seriously and might assume that you are willing to be taken advantage of and do “scut work.” They will lose respect for your professionalism via your association with administrative work (work that is beneath the front office),

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Kim Chung, an Asian American research analyst at Salomon Smith Barney, had the same issue with a “tech guy”—also Asian American—who was sent to troubleshoot her computer. Feeling guilty that the technician was doing all the work while she was just standing there, she got down on the floor with him and helped him. Then a peer walked by and pulled her aside, admonishing, “Kim, you just can’t do that. What if the VP sees you?”

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Because Chung thought that she was simply trying to be helpful, she did not realize at first that she was crossing a boundary in a way that could shape representations

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Herein lies the rub: there continually exists the danger that professional women get mistaken for administrative staff, where hard work, instead of being associated with upward mobility, is reduced to, as well as conflated with, grunt work. This danger is even more heightened for women of color.

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KH: Could you bring your own lunch? KM: That was an indication of being maybe frugal or being concerned about [money], you know. Yeah. I never knew anyone who worked in Wall Street’s front offices who brought their own lunch, whereas many in the back office and the administrative staff certainly did. Front-office workers always purchased lunch at the bank’s cafeteria or at quick-eat shops within walking distance. Bringing one’s lunch was not a sign of upward mobility—it connoted a lower-class concern with overspending, a relationship with money that was not nonchalant.

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KH: Could you bring your own lunch? KM: That was an indication of being maybe frugal or being concerned about [money], you know.

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Bringing one’s lunch was not a sign of upward mobility—it connoted a lower-class concern with overspending, a relationship with money that was not nonchalant. It sent messages of asocial behavior, as frugality took precedent over going out and buying lunch with colleagues.

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Instead, I was told that regardless of what engravings or plaques decorate our offices, “the mission (of all of Wall Street and all corporations) is always to create shareholder value.”

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However, just as smartness and hard work are represented as unmarked, meritocratic ideals embodied by Wall Street despite their groundedness in hierarchy, shareholder value itself is an all-encompassing objective, which implodes and contradicts in practice.

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would argue that despite its ubiquity and dominance in American capitalism, “shareholder value” continues to be a black box, an uninterrogated concept that desperately needs to be contextualized within particular power relationships, institutional configurations, and a specific interpretation of financial history.

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These questions project an ahistorical capitalism across time and space; conflate profit with stock price; flatten the complexity and multiplicity of capitalist institutions, values, and motivations; and reinforce dominant approaches to capitalist histories.

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consider the following juxtaposition. In The Concept of the Corporation (originally published in 1946), a classic study of industrial capitalist organization, Peter Drucker describes the mission and the character of the corporation, using General Motors as his prototype: “If the big-business corporation is America’s representative social institution it must realize these basic beliefs of American society… . It must give status and function to the individual, and it must give him the justice of equal opportunities… . [T]he corporation in addition to being an economic tool is a political and social body; its social function as a community is as important as its economic function as an efficient producer” (Drucker 1972, 140).

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The notion of shareholder ownership of the corporation is an “old” and “crude” but “linger[ing]” fiction (Drucker 1972, 20). Writing in the heyday of manager-dominated bureaucratic firms, Drucker emphasizes: “In the social reality of today … shareholders are but one of several groups of people who stand in a special relationship to the corporation. The corporation is permanent, the shareholder is transitory.

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primary concern of the corporation was the maintenance of the integrity of the organization over and beyond what was dubbed as the “derivative” claims of the shareholder—which might have to be sacrificed for the good of the corporation itself.

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Komisar states: “People walk into a VC [venture capitalist] presentation and their first line is about exit strategy. They’re not talking about the investors—they’re talking about themselves. How will they cash out? And this raises a subtle point: These founders don’t think of themselves as CEOs of operating companies. They think of themselves as investors” (J. Useem 2000, 85, my emphasis). What are the social implications of the CEO as investor rather than long-term employee committed to building a permanent social institution?

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And this raises a subtle point: These founders don’t think of themselves as CEOs of operating companies. They think of themselves as investors” (J. Useem 2000, 85, my emphasis). What are the social implications of the CEO as investor rather than long-term employee committed

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As Fortune writer Jerry Useem observes, modern entrepreneurs eschew “building sustainable companies with long-term economic value,” instead “pumping a concept, ‘flipping’ it to an acquirer, then hopping to the next hot opportunity like a day trader riding momentum stocks.” Such ventures are known as “burgers—built to be flipped”

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In fact, the dominance of welfare capitalism from the New Deal to the 1980s depended, not only on paternalistic corporate practices and state policies and regulation, but also on the insulation of American business from the stock market.

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How did we get to this point where corporations have shifted from complex, bureaucratic, social firms into liquid networks of shareholders? What are the implications for “traditional” constituents of the corporations such as “the worker” if corporations are now conceptualized as components of individual and institutional stock portfolios governed by an ideology of instant liquidity and convertibility into cash?

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Creating or reclaiming shareholder value was morally and economically the right thing to do; it was the yardstick to measure individual as well as corporate practices, values, and achievements.

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“The goal of the firm itself,” he told me, “should be to create shareholder value,” adding that “there’s no illusion that they’re looking to enhance the community in any way.”

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While my informants would recognize the “consequences” of shareholder value primacy such as restructuring and downsizing, these undersides were often uttered as a matter of fact, as if there were no tensions to be resolved. This is not to say that my informants were not sympathetic to downsized workers; in fact, most had thought about rampant job insecurity and acknowledged that massive job loss, including their own, was a typical result of shareholder-value-led corporate restructuring.4 Yet did they not see or acknowledge how corporations they were purporting to grow and help via streamlining for shareholder value were in fact hurt by their very advice and influence? What was I missing?

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What you said doesn’t make sense because in theory, what is good for the share price is good for the company because the company is the shareholder. As long as the share price goes up, that is all [the company] cares

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Whereas I had assumed that the corporation included multiple constituents, the most important being employees, Clark understood the company to be synonymous with its shareholders. Whereas I had thought that corporate purpose was about growth, productivity, and the welfare of its workforce, and that the central struggle in modern capitalism was between capital and labor, Clark said that the former was about ownership and shareholder value (not productivity or employment) and the latter was about the struggle between the owners of capital versus managers, where managers had squandered the fruits of capital by sharing them with other constituents.

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Although in the modern history of capitalism in the United States, the desire for profit accumulation is not new, what is clearly unique about Wall Street’s shareholder value perspective is that employment is thought to be outside the concern of public corporations. Job loss was certainly a sad event, but beyond the responsibility of corporate America. Thus, for Clark, there could be no conflict in his experiences.

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In the face of this “evidence,” investment bankers continued to maintain a faith in shareholder value, and although some of my informants began to question whether or not shareholder value was actually being achieved, especially in the long term or when the deals imploded shortly after the fact, such a doubt did not seem to destabilize their belief in the righteousness of their particular mission, nor their belief in “the market.”

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Yet the particular neoclassical logic of their shareholder value worldview gave investment bankers the tools to negotiate this tension, even translate ideals and actions into a social good.

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The takeover movement of the 1980s was perhaps the single most important set of events to stimulate the “liquidation” of corporate America. Wielding the threat of corporate takeover, Wall Street investment banks forced corporations to choose between shareholder value and other alternatives of corporate governance, and thus “actualized” the shareholder value worldview by instigating fundamental structural changes in U.S. corporations in line with Wall Street’s particular vision of what corporations are and whose interests they should serve.

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By putting corporations “in play,” proponents of shareholder value created a historically unprecedented environment where all the largest corporations were up for grabs to the highest stock-price bidder, thus forcing them to be immediately responsive to the exigencies of the stock market.

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takeover movement helped to create not only a market in corporations but also a market for the control of corporations,

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The takeover movement culturally commoditized and transformed the very definition and purpose of a public corporation: the corporation became its quickly exchangeable stock in the financial markets, and its primary mission was to increase its stock price.

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They spun a compelling narrative of how in the postwar era an elite, complacent, and self-serving managerial class squandered corporate resources extravagantly on themselves or on ill-advised expansions, and allowed foreign competitors to overtake the United States in productivity, innovation, and strategy. As a result, corporate stock prices no longer reflected companies’ “true worth,” the economy suffered, and stockholders—the rightful owners of corporations—were betrayed. According to this vision, one of the main goals of the takeover movement was “unlocking” the value of “under-performing” stock prices, which were depressing the entire economy.

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As commonly understood on Wall Street, in the 1980s it was investment bankers who realigned managers to their true purpose of increasing shareholder value by wielding the full force and discipline of the stock market. To many, such as Jason Kedd, a specialist in M&A at DLJ, the key figure of the 1980s was Michael Milken, inventor of junk bonds, a type of financial instrument that enabled corporate raiders to launch hostile takeovers of corporations, lay off workers, then strip their assets, and extract as much immediate value as possible.

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Wong argued that going into the new century, “American companies are the strongest because we have gone through this whole period of shareholder value focus, management reorganization, restructuring of companies.

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Wall Street’s particular understanding of history is disseminated through investment banks’ institutional memory, business schools, colleagues, the financial media, and pop culture. A number of my informants, trying to convey their understanding of the era, cited Oliver Stone’s movie Wall Street

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Advocates of shareholder value urged American business down one of many potential paths. But while the assumptions that shareholders are the “true owners” of corporations, that corporations are solely private property, and that shareholder betrayal caused a post-Second World War corporate decline are all problematic and contestable assertions, they must also be understood as strategic and political claims to truth and power that have had very real consequences.

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Business economist Marina Whitman declares that “more than any other single factor,” “the restructuring-takeover phenomenon of the 1980s” ushered in the changes in capitalist values that demanded the goal of increasing stock price for the gain of corporate shareholders. This wave of mergers, acquisitions, and down-sizings “tore asunder … the fragile reconciliation between the property and social-entity views of the corporation and its obligations” (Whitman 1999, 93–94).

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Perhaps even more telling is that one decade after the watershed 1980s, by year-end 1999, the dollar volumes of mergers and acquisition deals in corporate America were up by almost 400 percent from the height of the takeover movement in 1988.

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Conglomeration was the expansion of corporations through external acquisitions, most often in “unrelated lines of business” (O’Sullivan 2000, 109). The unwieldy creations that resulted became one of the main targets of the takeover movement, the poster child for what was wrong with corporate America and how Wall Street could fix it.

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Restrained from “anticompetitive mergers,” “expansion-hungry managers” found “new outlets for their surplus cash” by “cobbling together companies in unrelated industries”

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in fact Wall Street also played an important role in devising the strategy in the first place. Though financiers elide such histories from their world-views, investment bankers encouraged and influenced senior executives to use their profits to buy unrelated companies.

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Conglomeration was heralded by Wall Street and managers alike as an effective expansion tool, promoting diversification, growth, and what would later be dubbed “one-stop shopping.” They were understood to be “a group of several companies in different businesses making up one corporation … to enable an older corporation to move into a fast-growing business by buying a company already in that business instead of starting from scratch, sometimes representing an effort to give a company a shot in the arm” (Low 1968, 201).

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market—after decades of dormancy or stability from the Great Depression into the 1950s—to “finally” reach and surpass the heights of 1929.

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In the stock market boom of the 1960s (like the bull market of the 1990s), one of the major practices of investment banks was to encourage corporations to buy other companies because the acquisition became “cheap and easy” as the corporation used its highly priced shares as currency to buy up other companies.

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In Mergers, Sell-Offs, and Economic Efficiency, a study of the consequences of M&A activity in the 1960s and 1970s, Ravenscraft and Scherer demonstrate that the proclaimed profitability and efficiency benefits of conglomerates were predominantly false, as companies actually declined in productivity and the “synergies anticipated from acquisition frequently did not materialize”

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conglomerates failed “to manage acquired companies as well as they were managed before acquisition,” they point out that there were no major downsizings of acquired (or acquiring) companies, as there were in the 1980s and 1990s (Ravenscraft and Scherer 1987, 213). Shareholder value had not yet overtaken the concept of corporations as social institutions with commitments to their employees.

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Rather, the takeover movement transferred corporate wealth into the hands of large shareholders and their advisors, and downsized multiple constituents from corporate participation and profit sharing. Shareholder value advocates wove a narrative of historical birthright, managerial incompetence and betrayal, and corporate decline, capped by the restoration of shareholder rights and the consequent revival of U.S. capitalism, while ignoring their own participation (like invisible hands) in the failures of conglomeration.

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Until the 1970s, pension funds and insurance companies as well as savings and loans institutions faced legal restrictions on the amount and proportion of their portfolios they could invest into the stock market—a legacy born out of the Great Depression, when banks and investment trusts were barred from gambling depositors’ savings on the securities market. In the 1970s, however, oil-induced inflation created pressure for investment funds and banks to generate higher returns in riskier endeavors such as the stock market, not to mention third-world debt.

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It was the “transfer of stockholding from individual households to institutions such as mutual funds, pension funds and life insurance companies” that “made possible the takeovers” as this development empowered Wall Street, created an institutional buyers market to fund takeovers, and “gave shareholders much more collective power to influence … the corporate stocks they held” (Lazonick and O’Sullivan 2002,14).

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Keeping “a laser-bright beam trained continuously on Wall Street Historiographies 137 firms’ quarter-to-quarter financial results,” investment banks were not only strengthened by the growing “shareholder activism” of institutional investors, but also used these institutions as evidence of their mass investor constituency (Whitman 1999, 11).

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Keeping “a laser-bright beam trained continuously on Wall Street Historiographies 137 firms’ quarter-to-quarter financial results,” investment banks were not only strengthened by the growing “shareholder activism” of institutional investors, but also used these institutions as evidence of their mass investor constituency (Whitman 1999, 11). Importantly, in the 1970s, Wall Street itself was experiencing a crisis in profitability as well; many of its staple revenue-generating tools, such as underwriting, had been saturated, many (if not most) of its conglomerate deals had gone sour, and investment banks were “induced to search for new sources of profits” (O’Sullivan 2000, 163). According to Thomas Douglass, managing

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Keeping “a laser-bright beam trained continuously on Wall Street Historiographies 137 firms’ quarter-to-quarter financial results,” investment banks were not only strengthened by the growing “shareholder activism” of institutional investors, but also used these institutions as evidence of their mass investor constituency (Whitman 1999,

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1970s, Wall Street itself was experiencing a crisis in profitability as well; many of its staple revenue-generating tools, such as underwriting, had been saturated, many (if not most) of its conglomerate deals had gone sour, and investment banks were “induced to search for new sources of profits” (O’Sullivan 2000, 163).

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What made the 1980s so revolutionary was the primary focus on shareholder value as well as the sheer enormity and hostility of the transactions.

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“As a result, employment by Fortune 500 companies dropped substantially in both absolute and relative terms. Their employment rolls fell from over 16 million in 1979 to 11.5 million in 1993. During the early 1970s, these firms had employed one of every five Americans in the nonagriculture workforce; by the early 1990s, that fraction had dropped to one in ten” (Whitman 1999, 9).

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The crucial difference between the speculative booms of the go-go sixties and the ga-ga eighties was, in the words of Wall Street historian John Brooks, that whereas “the acquirers of companies in the sixties usually intended to operate them or let them operate themselves, those of the eighties … seemed … to be for the purpose of dismantling them in whole or in part for a quick-cash profit” (Brooks 1987,

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Whereas a merger connotes the coming together of two companies, a takeover usually refers to the acquiring of a company by wealthy individuals (occasionally top corporate executives) or a group of “takeover specialists/investors” from a variety of Wall Street investment firms, both aided by financial innovations such as junk bonds and large investments from pension and mutual fund capital.

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had to be initiated, in a sense, from “outsider” corporate raiders and, initially, rogue (then mainstream) investment banks and financial firms, by those who were entrenched in the opposing worldview that corporations needed to come under financial market control.

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Takeovers were thus repackaged and made socially acceptable, and most major investment banks in the United States began to sell such services like any other product offering. Moreover, by the 1990s corporate America was so successfully aligned with shareholder value worldviews that corporations, with the advice and instigation of Wall Street investment banks, began to initiate M&A with other companies.

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allowing for record volumes throughout the past decade. Although the rationale for M&A transactions continued to be shareholder value, the discursive style of its promoters and storytellers emphasized market populism and shareholder democracy rather than the derring-do of robber-baron corporate raiders and their hostile takeovers.

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Corporate raiders were mainly wealthy white men from the United States and England, independent financiers or owners of their own corporations; the best known in mainstream and financial literature included T. Boone Pickens, Sir James Goldsmith, and Carl Icahn.

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Among the more conservative, blue-blood investment banks, takeovers were initially not considered “gentlemanly.” For example, Drexel Burnham Lambert was an investment bank, yet because it specialized in raising funds for takeovers through the selling of junk bonds, it was not considered (especially in the early 1980s) as reputable as many of the most established, “white-shoe” investment banks such as Morgan Stanley.

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Instead of “just representing” corporate America, “investment banks have gotten into the business of buying companies for themselves,” as part of the larger process of turning “corporate America into aboard game” (M. Lewis 1991, 76).

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Ironically, the managers who completed this transition were often lauded by the financial media as “brave risk-takers,” when in fact they put very little down of their own capital, used borrowed money to buy the company, put the corporation in debt, sold off pieces to service the debt, took the company public again, and cashed out to make millions. In essence, these managers were participating in a transfer of wealth from the multiple corporate stakeholders to themselves as shareholders and thus set a precedent for the primacy of shareholder value as the goal and measure of good corporate governance.

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Liar’s Poker, called this an attempt to “turn the managers into entrepreneurs,”

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In a larger sense, the takeover movement of the 1980s helped to radically reshift the interests of senior executives from the workings and constituents of the corporation as a social institution to those of Wall Street and large shareholders.

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Whereas past CEO salaries were in a sense “tied” to the salaries of other employees in the organization and were held, albeit amorphously, to be proportional to the profits of the organization as a whole, today, CEO compensations are linked instead to bonuses and the stock market, with the largest boost coming from stocks and stock options, which can be immediately sold or “vested” after a short-term waiting period.

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“transformed the notion of what was legitimate for … a small group of people to extract from US corporate enterprises to the extent that they were willing to become the ostensible servants of financial interests”

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A year before the takeover, Safeway posted record profits of $235 million; five years earlier, they had instigated a corporate strategy that remodeled stores, “experiment[ed] with employee productivity teams,” and slowly phased out less profitable division through attrition and limited layoffs. In this case as in many others, there was no evidence of global uncompetitiveness, technological distress, or lack of profitability, but “all that wasn’t enough for takeover-crazed Wall Street, where virtually no company was invulnerable to cash-rich corporate raiders” (Faludi 1992, 288–89).

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The company whose “first store had been opened by a clergyman who wanted to help his parishioners save money” and whose longtime corporate motto had been “Safeway Offers Security” was redefined. Now, “the new corporate statement, displayed on a plaque in the lobby at corporate headquarters, reads in part: ‘Targeted Returns on Current Investment’ ” (Faludi 1992, 287–88).

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the “trimming of fat,” the disciplining of labor, and the efficiency of spending that comes with the burden of paying off debt.

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The concept of “disciplining through debt” was popularized and widely accepted by the business community in the 1980s. What was rendered invisible by this discourse was that this debt was a mechanism through which corporate wealth was transferred from the multiple stakeholders of a corporation to a small number of owners.

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Owners were only able to cash out spectacularly (if done quickly), not by newly redesigning productive corporations, but by dismantling previously accumulated wealth and infrastructure and instituting new, hyperexploitive labor practices. The share prices of companies that have been taken over often decline sharply in the medium-term; thus timing is crucial for takeover artists who want to cash

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Although Mercer cogently pointed out the contradictions in their logics—that shareholder value is unsustainable without a corporation that is productive, and that stock price should measure long-term, “quality” corporate performance—his arguments were ignored in favor of a discourse of immediate shareholder rights.

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James Bare first summarized the superseded managerial point of view: “I think you have presented an enormous dilemma for the CEO of Peachtree… . I was trained that a corporation was a guest in this society to present quality goods at a reasonable cost. We were not trained to react to the financial markets and such. We were trying to find a balance between long-term and short-term; we were trying to be sensitive to our communities because we genuinely believed that that would optimize our profits by reacting to those particular needs.” But, he defeatedly concluded, “the fact is, we must change,” because “the Street is telling us that the trader or the short-term investor prevails, and therefore it’s my duty to react to that.”

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This deal was heralded as a victory for RJR Nabisco shareholders because in order to take over such a large corporation, KKR had to outbid two other raiders such that the share price of RJR more than doubled in a year. “Yet in the world’s greatest concentration of RJR shareholders—Winston-Salem, North Carolina—few were thanking Johnson [the CEO] even as the money gushed into town. Nearly $2 billion of checks arrived in the late-February mail. Now, more than ever,

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First, they are constantly searching for poorly managed companies, where aggressive changes in strategic directions could dramatically improve the value of the stock. Second, they identify undervalued assets that can be redeployed to boost the stock price. As a result, many executives recognize a new and compelling reason to be concerned with the performance of their company’s stock”

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stock? The first is simply to give a tender offer (an offer to buy at a certain price) for a company’s stock as a way of generating fear and transferring corporate control from those who are not as concerned with stock price to those who primarily

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“adds value,” that is, is worthwhile in and of itself. Allocating resources to other constituencies besides the shareholder constitutes “overfunding,” and as such, these companies are “undermanaged.”

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selling in order to quickly increase the stock’s value. The entire organization becomes a site for potential liquidations, and not surprisingly, the corporation as a liquid transfer site for stock-price appreciation is usually unsustainable. The productive capabilities of corporations can only be reallocated to shareholders and depleted without replenishment for

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In other words, the “ideal” target company for takeover is oftentimes a very well-performing company that enjoys an abundant cash flow, a rich company with well-funded pensions and “excess” cash! Does this not signify that these takeover candidates are “healthy” by a variety of other measures, and that these measures are precisely those that fly in the face of Wall Street worldviews?

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diverging and hierarchical cultural values and practices. As Giovanni Arrighi writes in The Long Twentieth Century, “Finance capital is not a particular state of world capitalism, let alone its latest and highest stage. Rather, it is a recurrent phenomenon which has marked the capitalist era from its earliest beginnings in late medieval and early modern Europe.

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Shareholder value has been, on the one hand, largely ignored by anthropologists as a powerful explanatory tool, and on the other, decontextualized, naturalized, and globalized by institutional financial interests and many economists.

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In other words, if shareholder value, not welfare capitalism, is the ideal, then the jobless recovery makes perfect sense, for stock prices (which spike because of downsizing), not jobs, are the focus and the measure of corporate health and success.

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The merger turned out to be a “megaflop” by multiple measures: by the third quarter of 2000, DaimlerChrysler’s income plummeted 92 percent, with its Chrysler division losing $512 million, and its market capitalization (its stock price times the number of shares outstanding) was $43 billion, lower than that of Daimler-Benz alone before the merger (Ball, White, and Miller 2000).

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According to the Wall Street Journal, the DaimlerChrysler split amounted to a “second payday” for Wall Street investment banks that reap “fees at both ends” by bringing together and soon after “dismantle[ing]” companies (Cimilluca and Walker 2007).

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but also the debt that financed these buyouts did not fund investments in new productive assets nor improve “efficiency,” but were merely “transfers of value away from other claimants on enterprises’ existing cash flows” (O’Sullivan 2000, 169).

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O’Sullivan reaches stark conclusions about the consequences of the takeover movement of the 1980s: there is a “striking dearth of unambiguous evidence to support” the shareholder value theory; shareholder value is not beneficial for corporate efficiency or employee productivity; and the central assumption that shareholder wealth is an adequate measure or “proxy for corporate performance” is wrong (O’Sullivan 2000, 167, 169).

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Shareholder value must be read as a political strategy to monopolize corporate control and advocate for “the demands of financial interests to reap high returns” in a very short amount of time.

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The question then becomes, how did my informants explain the real-world failures of the strategies that were supposed to achieve shareholder value? When asked, some were able to produce textbook neoclassical responses that neatly linked corporate restructuring, shareholder value, and efficiency, though I soon began to realize that such circular logic was believed by only a minority of bankers.

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KH: So, you are saying that the way it works is even though with corporate restructuring, there is going to be an initial downsizing of jobs and dislocation, this will create more value for shareholders and ultimately because you are creating more shareholder value, then in the long term, things are better for the economy?

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this will create more value for shareholders and ultimately because you are creating more shareholder value, then in the long term, things are better for the economy?

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By justifying restructuring and the breakup of companies with discourses of future excellence, Kedd not only excised worker trauma from his account of downsizing but also deflected into a vague future concerns and critiques that corporate restructurings might subvert the professed result of the (supposedly) “best,” “most efficient,” and “most imperative” companies.

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KH: Okay, so when you said moral, how about moral [costs]? JT: I wasn’t ready to answer that question. I mean, it is the drive for profitability now; everything now is about shareholder value, and then you wonder about social responsibility and whether that has any role to play.

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So, when you do an M&A transaction, people are expecting a rationale for it. And in that rationale, management is going to talk about where there might be synergies or opportunities that have good value. The market is looking for you to act. It is going to mean laying off workforce and taking a big restructuring charge to become the entity you said you were going to become, (my emphasis)

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Taken together, my informants’ contradictory and inconsistent use and understandings of efficiency taught me a few things. First, efficiency was not as central to explaining “native” Wall Street worldviews of the relationship between corporate restructuring and shareholder value as I had assumed. Second, efficiency rationales did not clarify how Wall Street’s shareholder value ideal could not fully make sense of corporate restructurings’ (seemingly inefficient) failures to produce corporate “health” or shareholder value. I then began to realize that part of my surprise stemmed from the spell of efficiency that entrances many academic interlocutors.

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First, I argue that it is crucial for social critics to rethink their notions of efficiency, as their understandings of efficiency grounded in labor and industrial productivity linked to sustained corporate growth are no longer appropriate to new financial concepts of efficiency, which are measured by the number and size of deals and transactions that create short-term stock price increases.

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My point is, however, that although the productive process continues to be crucial for the extraction of surplus value and a necessary precondition for financial maneuvers, the rules and priorities structuring what corporations are and who can lay claim to them have radically changed.

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It is thus also crucial for academics to recognize that not only has the definition of efficiency changed, but also that efficiency is simply not being produced in that investment bankers oftentimes do not create shareholder value, the very measure of the “new” efficiency.

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On our side of the business, which has become a major driver of corporate behavior, [are] institutional investors … under a lot of pressure to perform. So, the money managers in a place like this, every quarter they have to report to their clients, on which stocks and which bonds they have bought and sold and how they did versus a given benchmark that they have agreed to when they take on the assignment. And because of the ninety-day timeframe they are operating within, they place that same requirement on the managers of these enterprises. That’s really how it starts.

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Douglass also pointed out that executives are “incentivized” to work for the short term, and spoke of “lots of

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According to Graham, there exists a discrepancy “between what Wall Street pretends the objectives or the criteria ought to be and what they actually are.” Investment bankers claim that they want corporations to create shareholder value, but from the standpoint of the corporations, one of the main and only feasible ways to actually live up to the (unstated) short-term and immediate demands of shareholder value is to, as Graham critiques, “ring the cash register” as many times today as possible, which in turn detracts from shareholder value.

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My analysis of Wall Street’s shareholder value worldviews has shown that the values and practices that have historically governed the stock market have been translated and utilized to govern corporations themselves. It is precisely this conflation, this “coming together” of financial and shareholder values with those of corporate America, that has legitimated the dismantling of welfare capitalism.

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Much like myths of “family values,” which derive their moral authority and disciplinary agenda from invoking an idyllic past of the nuclear family, the narrative of “shareholder value” generates much of its authenticity and persuasive force by claiming itself as the original state of economic life, and by extension, entrepreneurial, free-market capitalism as the true nature of human society. It is on nostalgia for a perfect capitalism that shareholder value thrives.

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For example, the coming of the modern corporation—with its complex organizational structure, multiple constituencies, and burgeoning sense of paternalistic “responsibility”—problematized and contradicted traditional neoclassical concepts such as individualism, private property, and self-interest which came to serve as the basis for shareholder value ideology.

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On the one hand, fearing the subsuming of entrepreneurial proprietorships into complex corporate firms, neoclassical advocates sought to reduce the multidimensional corporation to the one-dimensional framework of the individual owner/entrepreneur/shareholder.

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One of the most egregious mistakes in neoclassical narratives of corporate history is their refusal to understand the history of stocks, shareholders, and the stock market as a phenomenon different from (though related to) the history of corporations, and thus constructed on a diverging set of values and historical trajectories.

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The most obvious problem with neoclassical economic theory is simply that its core premises are significantly different from, and clash with, any understanding of the firm as a social organization. Neoclassical theories are derived from the “classical” worldviews of Adam Smith in the eighteenth century, built upon and reconfigured by the “neoclassicists” of the nineteenth and early twentieth centuries—all before the modern corporation was established as the major organizational form through which business in the United States is conducted.

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Smith, like many classical economists who followed, centered his theories on the single individual, the notion of an entrepreneur who both owned a small, private enterprise and managed it.

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Even after the modern corporation came to be the dominant form of economic organization in the early twentieth century and the “visible hands” of multiple constituents and managers became apparent, neoclassical theories maintained the centrality of the individual entrepreneur.

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The resurgence of shareholder value in the 1980s, then, can be read as part of a long line of neoclassically inspired world-views attempting to collapse and treat the corporation as a single profit-maximizing individual in the market. Championed by Wall Street financial institutions and brought to prominence during the leveraged buyout movement, the shareholder value movement became, arguably, the culmination and most effective demonstration of neoclassical values in the history of American business.

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Specifically, neoclassical capitalist worldviews recognize the presence of two entities: the individual owner and private property,

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neoclassical capitalist worldviews recognize the presence of two entities: the individual owner and private property, understood as an exclusive unit. The individual and his private property are the only two inputs into the equation;

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It is precisely because the owner controls the enterprise and gets to “own” the profit that he, driven by self-interest, is compelled to use his industrial property and labor “efficiently” and grow for the strict purpose of accumulating more profit. This pivotal sequence-ownership, control, full access to profits, efficiency—constitutes the neoclassical, logical order of the relationship between individuals and private property.

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The directors of [joint-stock] companies, however, being the managers rather of other people’s money than of their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own.

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While it is… obvious… that all firms are created by individuals, with the help of a legal structure that makes incorporation possible, it is… much more controversial … to claim that corporations are owned at all.

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In keeping with this logic, the shareholder was (and still is) the perfect device to reconcile the structure of the modern corporation with the expectations of neoclassical values.

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With this symbolic as well as monetary transfer, the shareholder now symbolized and “stood in” for the whole of the corporation and became the sole locus of concern and analysis.

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As such, in the transition from owner/entrepreneur/family firms to large corporations, neoclassicism understands the shareholder to be the only “natural” successor to the original owner-entrepreneur of the firm, the only legitimate recipient of property transfer because of the assumption that property should be kept “private” and passed on from owner to owner.

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The problem, however, is that neoclassicism equates shareholder “ownership” with ownership by private business families and entrepreneurs when in fact most modern shareholders have never run corporations.

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What is forgotten is that historically shareholders have had a distant relationship to the corporation, as they have looked toward the stock market to realize their gains. What neoclassical advocates ignore (and obscure) is that the politics of shareholder value, which insists that corporations should be run only for shareholders, has the effect of concentrating control over corporations in those institutions that claim to speak for, and in the name of, shareholders: Wall Street and the stock market.

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This discursive and practical reorganization laid the foundations for a form of social violence tantamount to the institutional erasure of the interests of all groups concerned besides shareholders—or rather, their proxies.

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The 1890s to the 1920s is a period understood by many historians as the era of the “corporate reconstruction of American capitalism,” during which business in the United States moved from the recurrent depressions and crises of laissez-faire, robber-baron capitalism into a relatively more coordinated and bureaucratic period, characterized by the larger-scale form of organization that would come to be understood as the modern industrial corporation

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Throughout the 1880s, “not a single industrial corporation was listed on the New York Stock Exchange,” the Dow Jones Industrial Average did not exist until the mid-1890s, and “the age of the publicly traded industrial corporation” did not dawn until around 1900 (S. Fraser 2004, 171).

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Through this process, dubbed “Morganization,” financier J. P. Morgan and “his confederates erected a kind of private economic command center” which “prohibited self-destructive competition, rationed out investment capital, and centralized the management of the economy in ways repugnant to the devotees of laissez-faire”

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Many corporations, in fact, explicitly resisted the power of Wall Street financial capital to dictate to industry, and the “Street was never able to exercise the degree of control it wished to” (S. Fraser 2004, 305). Ford Motor Company, Standard Oil, Wanamaker, and many other corporations chose to rely directly on retained earnings as a way to establish independence from bankers.

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Such commentary, even at the nascent stages of stock market development, demonstrates the importance of self-representations of finance as productive and akin to “real” property ownership in shaping Wall Street’s identity as a progenitor of corporations via finance capital.

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Of course, with the explosion of financial innovation in the late twentieth century (that is, junk bonds, derivatives, securitization of myriad kinds of payments such as mortgages), Wall Street has certainly “raised” capital for a variety of financial transactions such as corporate takeovers and mergers and for buying sophisticated trading products, but they have not been the primary source of operational business investment for most major corporations.

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For most of the twentieth century, most corporations raised capital through the issuance of bonds, meaning that the stock market did not have to skyrocket for corporations to have access to more capital. O’Sullivan argues that “corporate retentions and corporate debt, not equity issues, have been the main sources of funds for business investment” (O’Sullivan 2000, 78). These corporations relied on the stock market, not for original funding, but for founders and entrepreneurs to cash out of their enterprise and to find “a convenient way to transfer ownership between limited circles of business associates” (Baskin and Miranti 1997, 177–78, quoted in Ott 2007,

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Today, my informants, following much of the financial and business literature, assume that the stock market collected and funneled the capital necessary for corporate America to grow, when in fact it was the other way around: the rise and growth of modern corporations

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Today, my informants, following much of the financial and business literature, assume that the stock market collected and funneled 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.

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Contrary to mainstream Wall Street assumptions, it was the state that “catalyzed both mass investment and investorism” during the First World War through the mass selling of Liberty war bonds to some 30 million middle-class Americans.

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Given this historical opportunity created by the state’s war economy, corporate leaders and Wall Street developed the tenets of shareholder democracy to promote their own long-sought cultural and economic legitimacy, articulate a conservative, antiregulatory, anticollective political agenda, and obscure unequal class antagonisms through an employee buy-in of the corporate capitalist agenda (S. Fraser 2004; Ott 2007).

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individual can “compensate for his lack of independent proprietorship in the traditional sense by assuming the mantle of corporate shareholder”; in an era of large corporations, it was through “investment, rather than production or consumption,” that individual economic betterment could be pursued, that the “salaried man could preserve his political stature as an individual property-owner”

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In fact, they recognized not only that “the public,” the common mass of shareholders, had no actual “control” of (nor sustained input into) the corporation, but also that the very shares sold to individual investors at the time were nonvoting, watered-down stock, whereupon increased distribution actually solidified legitimacy and power in the hands of management and financiers, to whom all voting shares and powers were allocated (Ott 2007, 427).

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Interestingly enough, it was mainly economists, legal scholars, social critics of Wall Street, and advocates of a “New Proprietorship” who worried, not only about the separation and dilution of ownership from control and the relationship between shareholders and corporate managers, but also about the small investor as a victim of Wall Street and the trusts (Ott 2007).

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Critiquing the “ ‘passing of ownership from Wall Street to Main Street’ ” as an “optical illusion,” Ripley called on the federal government to help restore the potency of shareholding and individual proprietorship (S. Fraser 2004, 389).

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Their motives were to promote conservative social and political goals designed explicitly to counter state regulation of markets, foreclose contestation over the control of corporate governance by invoking the semblance of agency via investing, and resist worker unrest.

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Their failure to understand the history of the “development of public corporations and securities markets” dooms them to “replicating a past that never was” (Werner and Smith 1990, 154, my emphasis). In this section, I focus on the historical construction of the separation between ownership and control of corporations. The stock market in the United States was formed in order to separate stockholding from the control of corporations and its “internally generated corporate revenues,” which were left in the hands of career management (Lazonick and O’Sullivan 1997, 13).

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As Werner and Smith argue, “Attempts to return control to shareholders who never had it are, therefore, misguided” (Werner and Smith 1990, 154).

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One purpose of the stock market was precisely to separate people’s investment strategies (buying and selling at will) from the day-to-day business of corporations. The stock market locates the stockholder outside of the corporation itself; it is to the stock exchange where “most security holders look both for an appraisal of the expectations on their security, and by curious paradox, for their chance of realizing them” (Berle and Means 1991, 247).

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Historically, stockholders participated in the stock market, not the corporation.

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convertible into cash or other stocks. Adolf Berle and Gardiner Means wrote in 1932 that “one of the recognized functions of modern finance has been to make mobile the wealth otherwise locked up” (Berle and Means 1991, 248). One of the main goals is securitization, which is “the transformation of hitherto ‘unliquid capital’ into tradeable instruments,” a process which, in light of the “massive advances in telecommunications and electronic networks,” has increased the mobility and globalization of capital (Sassen 1998, xxxv).

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for what constitutes liquidity in this particular context is impersonality and separation from responsibility for the enterprise. For corporations to exist as long-term social institutions, they demand energy, resources, responsibility, even immobility from its caretakers;

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Liquid property… obtains a set of values in exchange, represented by market prices, which are not immediately dependent upon, or at least only obliquely connected with, the underlying values of the properties themselves. Two forms of property appear… related but not the same. At the bottom is the physical property itself, still immobile… demanding the service of human beings, managers… Related to this is a set of tokens, passing from hand to hand… requiring little or no human attention, which attain an actual value in exchange or market price only in part dependent upon the underlying property. (Berle and Means 1991, 251)

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These differences between stocks and corporations do not mean that stocks have become “divorced” or abstracted from the corporation, but rather that stock prices represent a particular set of values historically divergent from corporations.

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The shareholder’s “real right of disposition is… over the token itself, over any returns which may be distributed to him, and over the proceeds of its sale. He has, in fact, exchanged control for liquidity” (Berle and Means 1991, 251).

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“This lack of control was a feature of public stockholding that portfolio investors not only accepted but favoured. The market in industrial securities evolved in the United States to effect the separation of stock ownership from strategic control because it offered American households liquidity but did not require commitment” (O’Sullivan 2000, 70).

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As philosopher of money Georg Simmel has argued, the stock market helped to create the independence of the stockholder from the corporation and its managers.

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Simmel himself heralded the joint-stock company (that is, the modern corporation) as the “pinnacle,” the ultimate example of the effect of a monetary economy because it is “completely objective to, and uninfluenced by the individual shareholder, while the company has absolutely nothing to do with him personally except that he holds a sum of money in it”

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money (which both generated an exhilarating individualized freedom and brought about a “vapidity of life,” a loosening of human connections),

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On the contrary, I approach finance as measured by values that are often in conflict with many people and communities, and it is precisely this hierarchical conflict, not the innate nature of money itself, that generates such a sense of disconnection and destruction.

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The triumph of the notion that shareholders have always controlled corporations has rendered invisible the separate histories and spatiotemporal location of shareholders and the stock market, and has allowed Wall Street (as the institutional voice of the stock market) to gain control of corporations. This means, specifically, that those whose relationship to corporations have been characterized by a complete historical separation and lack of commitment, whose values were structured through liquidity, and whose experiences have been characterized by transitory flexibility, are now the ones directing corporations.

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one part of the traditional notion of property is reclaimed (“owners” controlling their property), the other, more substantive part of the tradition—that owners are attached and committed to their property—is long gone. From Wall Street’s point of view, the fact that

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one part of the traditional notion of property is reclaimed (“owners” controlling their property), the other, more substantive part of the tradition—that owners are attached and committed to their property—is long gone.

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Wall Street has mobilized shareholders as a kind of private army.

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As Berle and Means put it, the key problem is that, ‘Ownership of wealth without appreciable control and control of wealth without appreciable ownership appear to be the logical outcome of corporate development” (Berle and Means 1991, 66).

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capitalist causality is sundered when the putative owner of

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dissolved (Berle and Means 1991, 8).

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The tight unity between ownership and control that drives the system—“the atom of property”—is dissolved (Berle and Means 1991,

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and the values of self-interest and efficiency are threatened. With the increase of managerial control, even the fiction of shareholders’ rights, which had been reconciled in the legal definition and mainstream assumptions of the corporation, became increasingly undermined.

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With the increase of managerial control, even the fiction of shareholders’ rights, which had been reconciled in the legal definition and mainstream assumptions of the corporation, became increasingly undermined.

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One of the main neoclassical complaints about this new class is that they own so little stock that the pivotal notion of running a company for individual profit is broken. Managers (supposedly) have little incentive to use corporate resources efficiently because there is no possible reason (social or otherwise) that an individual would be impelled to run a corporation for any cause besides his own self-interest.

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Because self-interest is the obvious motive recognized in neoclassical logic, the only conclusion is that managers have usurped the rightful place of the true owners to run the corporation for their own self-interest. Self-interest (of managers), then, has begun to work against the system, which strikes the neoclassicist as rather perverse.

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Even those in favor of managerial capitalism have little discursive space to talk about any other motives or results of managerial influence besides self-interest and the desire for total control.

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The crucial point is that managers who run corporations not based on self-interest (because they don’t own stock) cannot be trusted because self-interest as measured by the stock market is the primary engine of successful business. Any other action becomes self-serving because, unlike self-interest, which is conceptually linked with efficiency and prosperity, self-serving behavior creates lazy managers on stockholder welfare.