liquidated

We all know that the market, today, reigns supreme. But what is the market? Or, to ask a simpler question, what adjectives accompany, or should accompany, the term “market”? “Financial”: this is the answer that one can distill from Liquidated, Karen Ho’s hot-off-the-press ethnography of Wall Street (Duke UP, 2009). And by “financial,” we should understand the ethos and practices concentrated in Wall Street investment banks.

Why does it matter to answer this question? Because while talk of the market is by now commonplace in the social sciences and humanities, it is often unclear what exactly is meant by it. Manuel DeLanda has taken note of this fuzziness in A New Philosophy of Society (2006). “Markets,” he tells us, “should be viewed, first of all, as concrete organizations (that is, concrete market-places or bazaars) and this fact makes them assemblages made out of people and the material and expressive goods people exchange” (17). To view markets in this way is to avoid “vaguely defined general entities” that serve to obscure the concrete acts that make up that heterogeneous entity that we often call the market. DeLanda goes on to cite Ferdinand Braudel who invites us to imagine

a complex consisting of a small market town, perhaps the site of a fair, with a cluster of dependent villages around it. Each village had to be close enough to the town for it to be possible to go to the market and back in a day. But the actual dimensions of the unit would equally depend on the available means of transport, the density of settlement and the fertility of the area in question. (17)

DeLanda continues this analysis:

Roughly prior to the emergence of steam-driven transport, the average size of these complexes varied between 160 and 170 square kilometres. In the high Middle Ages, as European urbanization intensified, these local markets multiplied, generating a large population of similar assemblages. Then, some of the market-places belonging to these populations were assembled together into regional markets, larger assemblages with an average area of 1,500 to 1,700 square kilometres. Each such region typically exhibited a dominant city as its centre and a recognizable cultural identity, both of which are parts of the larger assemblage. Next came provincial markets, with dimensions about ten times as large as the regional markets they assembled, with a lesser degree of internal homogeneity. Finally, when several such provincial markets were stitched together, as they were in England in the eighteenth century, national markets emerged. (18)

“Even this simplified picture,” DeLanda concludes, “is already infinitely better than the reified generality of ‘the market’” (18)

In Liquidated, Ho seems to advance along a similar path. Her aim is to “conceptualize and approach markets only as a set of everyday, embodied practices,” distinct from any such “reified generality” (294). One of her central premises is that the history of finance capital should be kept separate from the history of the corporation. “[S]tock prices,” she explains, “represent a particular set of values historically divergent from corporations” (185). While investment capital rests on the neoclassical assumption of individual ownership, the corporation, particularly post-WWII, avowedly represents the site of multiple interests, of which the stockholder is only one. The modern corporation is “like the state or church,” with a temporality distinct from that of the stockholder. Ho cites the example of Theodore Hauser, CEO of Sears, Roebuck and Co., who in 1957 pointed out the “basic conflict” between “‘what is most desirable and necessary, long-term, to the corporation’ and the implicitly short-term, private interests of shareholders. A corporation goes on ‘as long as the society of which it is a part goes on,’ and as such it does not operate according to the same timeline, viewpoints, or measurements of ‘any human span of life’” (196-87).

Here, then, are the basic outlines underlying Ho’s main argument: that the history of the corporation and the recent history of finance capital exhibit divergent, conflicting values; that the values of the latter are embodied in the habitus of investment bankers; that the central innovation of late capitalism is the exporting of these values onto the corporation.

Much of the usefulness of Ho’s book lies in her cataloguing of these values. Among them, a certain construction of “smartness” is central. Wall Street firms recruit among a small cadre of elite colleges, which are themselves stratified. Harvard and Princeton, along with Wharton, are the favored recruiting grounds, followed by the rest of the Ivies, Stanford and Chicago, as well as MIT’s Sloan School of Management. This elitism is important for several reasons. One, it allows investment bankers to consider themselves as high-performing exceptions from the rest of society. One of her informants spells this out clearly:

If you go to the outside world and you start working with people, people just are not motivated in the same way [as they are on Wall Street]. It is just a pain in the ass to get anything done in the real world. People leave work at five, six p.m. People take one-hour lunch breaks, and people do this and that and whatever. [. . .] In a big corporation of in the academy, it is hard to get things done. (Ho 103).

Ho remarks on the general character of this sort of remark, telling us that investment bankers commonly noted, “occasionally with envy but usually with an edge of moral superiority, how inefficient corporate America is because people move so ‘slowly’” (104).

In contrast with corporate America, Wall Street bankers pride themselves on speed in all things, a speed that extends to the rate of turnover in investment firms. This tendency stems, in part, from the second consequence of elite recruiting practices. The continual purges of front-office personnel would seem to conflict with the prestige accorded to these bankers. The resolution to this apparent conflict rests on the permanence of the Ivy League (or Stanford, or U Chicago) brand:

while employees come and go, the elite schools where investment bankers are recruited (and the resultant cultural capital that is imparted to investment banks for continually attracting these highly pedigreed workers) have been unfailingly constant. In other words, investment banking identities cohere around their commitments to employees’ pedigrees and university affiliations, not individual employees. Not surprisingly, such a way of managing their identity not only contributes to job insecurity but also supports their values and strategy of swift and immediate change. Having a ‘Stanford’ or ‘Harvard’ as a continual ‘member’ of the group or department is the strategic commitment or identification, not relationships with particular employees.” (256)

The personal insecurity of Wall Street jobs, however, is not experienced as a downside to the job. Rather, it is worn as a badge of honor, as “job insecurity [lies] at the heart of Wall Street’s self-conception” (222). The nihilistic, arbitrary downsizing endemic to Wall Street has, in recent years, come to dominate corporate culture as well, “forcing the average worker to become more liquid” (245). This phenomenon, Ho insists, “is itself located and formed at the intersections of particular values, practices, and institutions” (238). This is to say that it is the recent, contingent exportation of these values and practices from Wall Street outwards that can best account for the financialization of everything under late capitalism.

There is much more to say about Ho’s book, but I’ll leave my comments at that. Or rather, I’ll leave them with the final words from Liquidated, which betray a cautious hope that I wish I could share.

In this era of Wall Street dominance, finance–intimately linked to, not decoupled from, the trajectories of corporations, the livelihoods of many, and the nature of work writ large–has produced a highly unequal, new world order. It remains to be seen whether or not the global financial crises of 2008 are seismic enough to radically change the power relations on Wall Street and beyond. (324)