Accidental Banksters

March 16, 2012
Posted by Jay Livingston

In a comment about the “Why I’m Leaving Goldman” op-ed, Peter Moskos wrote,
People working there have always been pricks. I mean, they were already pricks in college in the early 1990s.
Were they? 

In my early days in New York, I knew a gentle soul named Bruce. Whatever the opposite of macho is (mousy?), he was it.  Short, soft-spoken, reserved.  Bruce was in a clinical psych program and wanted to be a therapist.  No surprise there.  One evening in a group discussion, we briefly got on to the topic of taxis. Bruce  had worked as a cabby to pay for his tuition.  “If you drive a cab in New York,” he said, “you drive like an asshole.  You have to.”  It was clear that he was talking about himself, not just the other 30,000 cabbies in the city.

We usually think of motives and personality traits as residing within the individual person, as in Peter’s take on the folks at Goldman.  Some people are pricks, and they seek out settings like Goldman, where they can give free rein to their nasty motives and be rewarded handsomely for it.

But motive and character traits also reside in the larger system – in its structure and culture. In Bruce’s view, the aggression, risk, and rudeness of the guy behind the sliding plastic partition are like the dispatcher’s radio and the meter – a basic part of the cab, not the driver.

I’m sure that some of the people at Goldman were the Princeton pricks Peter knew in the 1990s.*  But for many graduates who signed on at Goldman, this quality (prickitude? prickiness?) was something they acquired on the job, probably without even realizing it. In a word, we’re looking at socialization.

A couple of years ago, Ezra Klein posted an interview with a Harvard grad who had spent some time at Goldman.  Reading the interview (here), it’s hard to see this guy or the others of his cohort as greedy cutthroats.
Investment banking was never something I thought I wanted to do. But the recruiting culture at Harvard is extremely powerful. In the midst of anxiety and trying to find a job at the end of college, the recruiters are really in your face, and they make it very easy . . . .  The idea is that once you pass the test at Goldman, you can do anything. . . . .  So it seems like a good way to launch your career.

Q:  The impression of the Ivy-to-Wall Street pipeline is that it’s all about the money. You’re saying that it’s actually more that Wall Street has constructed a very intelligent recruiting program that speaks to the anxieties of the students and makes them an offer that there’s almost no reason to refuse.

Exactly. . . .There are  certainly are people who want to be in finance, but a large portion are intrigued by these jobs for those reasons. I think that’s a majority, at least at Harvard. And the same goes for consulting jobs or even Teach for America . . . . And investment banking has the added advantage that you can make money very quickly and afford a great apartment in New York, which is very expensive.
The bankers don’t arrive on Wall Street with their motives fully formed.  Instead, much like Becker’s pot-smoking musicians of 70 years ago, they acquire their motivation on the job.  The motives – the reasons for doing what you do – also become the reasons for doing more of it. They (bankers, pot smokers) also learn a set of ideas that makes their questionable behavior legitimate and even virtuous.
There’s this notion of the accidental banker, people who get caught up in that world and get more and more pay and find it harder to justify leaving . . . . . A  lot of people decide to sacrifice much more time than they normally would because the money is so good, and then they believe they deserve extremely high pay because they’re giving up so much time. It’s not malicious. But there are a lot of unhappy people who end up in that situation.
This Harvard-Goldman grad winds up taking a much more sociological view of where the flaws are – not so much in the personalities of individuals as in the structural arrangements.
the malice towards the individuals at places like Goldman is misplaced. I get where it comes from, but just like it’s wrong for the banker to say they work harder than everyone else and deserve more, it’s also dangerous to paint bankers as evil. Lloyd Blankfein isn’t out to screw the world. Wall Street’s problems are more systemic.

* For an example, read this guy, though perhaps I should add a trigger warning.  He may make you rethink your position on the bailouts and TARP and maybe your position on summary execution.


PCM said...

Interesting post. I do think socialization in occupations is generally overrated vis-a-vis self-selection. Take policing. My PhD thesis was originally supposed to be on socialization in the police academy (a la Van Maanen). Except I didn't see enough socialization to make it noteworthy (and a became a police officer and I had opportunities for far more substantial research).

By and large, people in the academy had the same basic attitudes on day one of the academy that they had two years later on the street. And I have hard data to back this up. There were some changes, but mostly related to what they thought of the job. As far as I can surmise, these attitudes haven’t really changed after the following 11 years.

That said, there always are some more exceptions who may be much more susceptible, for good and bad, to assimilate and adopt an occupational culture, even accepting it as their core identity. Some of these people are late bloomers, still basically blank slates in their 20s. They were looking for a home and found it. Others may make a very conscious effort to abandon the culture traits of their upbringing. In various circles, this could be ghetto culture, working-class culture, or just a strong Boston accent.

I would assume these things happen similarly in finance. And even if this is minority of the workers, a change in occupational culture could come about where it would be easy to imagine a tipping point happening, even assuming (for the sake of argument) that a majority of the workers were pricks to begin with. (And a major event, like going from a private to public company could have an equally major impact on occupational culture.)

But the greater point I was making wasn't that everybody who worked in finance isn’t a jerk (though admittedly, I suspect a rather large percentage are), but rather I seriously doubt that the amount of jerks in finance have changed over time. I mean seemingly without fail at Princeton, all the sexist, classist, homophobic, non-studying, stupid, asshole students went from Tiger Inn and the hockey and lacrosse teams and into the world of finance (those labels being merely a product of stereotype and my humble ignorance, of course). I’m sure some nice people did as well. But a summer internship in finance? You don’t just stumble into that by accident. Many of us stayed far away from the recruiters because it wasn’t who we were and wasn’t who we wanted to be.

As to Bruce, what he is describing doesn’t seems typical of some drivers in general. Did you ever drive with Bruce when he was driving a private car? I bet he still drove like an asshole and it had nothing to do with being a cabbie and everything to do with how driving changes the personality of some drivers.

Jay Livingston said...

I recall reading that cops develop a kind of skepticism or even cynicism. Rather than accept a statement at face value, they’ll wonder what self-serving motives are behind it. I also recall a quote from a cop about “corruption.” He had started out insisitng on paying for his coffee and other stuff. But merchants would insist on giving it to him for free. After a while, he got so used to this arrangement that if a merchant demanded that he pay for something, he’d feel like the guy had some nerve, and he’d tell the guy so.

I also think that there’s a difference between long-run and short-run perspectives. The way we think about a job when we are choosing it is different from the way we think about it when we are in it and trying to get through the day.

As for driving, I agree with you that cars affect our perspective. That’s my basic point. Institutions carry their own motivational structures, motivations that get played out by the people who inhabit those institutions. As you guessed, when I’m on foot or on a bike, I’m much more patient than I am in a car. And I’m a more patient driver in Pittsburgh than I am in New York. But in the same way that driving is different from walking, driving a cab is different from driving a car. I suspect that if I were a cabby, I’d be swerving across lanes of traffic if I spotted a potential fare at the curb. Once I have a fare, the quicker I can get to the destination, the quicker I can get another fare, so I resent anything or anyone that slows me down. As it is, I get pissed off when I miss a light and have to wait for the next green, even though I have no idea why that 40 seconds is so important to me. Imagine how I’d feel if that time were eating into my income.

PCM said...

I'm not surprised that institutions dedicated to finance and profit both attract people geared toward this kind of work and also change people into acting more in the interest of profit. Peer pressure matters.

Absolutely institutions carry their own motivational structures. And while I agree this does change people's behavior. I'm not convinced it changes their soul.