Galvanized by an intellectual commitment to social and economic justice, Karen Ho seeks to understand the sea changes in U.S. business practices over the past three decades through extensive anthropological research into investment banks. In Liquidated: An Ethnography of Wall Street, she introduces us to the culture of smartness on Wall Street—its perpetuation, its sustainability, its corresponding effects on market formation, and its implications for the reshaping of corporate America. What emerges is a unique portrait of the industry that asks pertinent questions about constant change, job insecurity, and the banker’s identity.
Ho’s own academic and work history makes her ideally suited for the task. Bankers Trust New York Corporation recruited her in 1995, while she was completing graduate-level studies in social anthropology at Princeton University (she went on to earn a doctorate). After working for six months as an internal management consultant (“adviser of change”), she abruptly found herself a victim of downsizing, together with many of her potential informants. Ho states that “the moment appeared rife with ethnographic significance: Financiers, the instigators of mass corporate restructurings throughout the United States, were downsizing themselves.”
Her interest in the topic of restructuring was piqued by AT&T’s announcement in September 1995 that it would split into three companies—a corporate dismantling that remains one of the largest in U.S. history. As AT&T massively downsized, its stock price soared. Companies in other industries were impressed by this new, AT&T-type model of economic efficiency, and investment bankers saw a vast opportunity for restructuring their own business.
Ho’s fieldwork is extensive. She elicited university students’ opinions on recruiting by investment banks. In addition, she interviewed associates, analysts, and senior vice presidents during their tenures at investment banks (and in some cases, after they were downsized) for their views on corporate mission, shareholder value, global commitment, and perpetual job insecurity. Although Ho’s depth of research is impressive, the book would have benefited from a glimpse into the lives of corporate executives, the culture of building and running a business, and the ways in which financial transactions are conducted.
Ho elucidates social formation and the creation of identity in the investment banking community by examining the recruiting, training, and orientation practices of Wall Street. A handful of universities—including Harvard, Princeton, and Yale—regularly feed recruits to Wall Street. Princeton is perhaps the most important feeder school, given the astounding number of its graduates recruited into financial services in general and investment banking in particular. Such recruiting practices shut out bright graduates from other institutions. According to her own and other eyewitness accounts, recruiting begins on the first day of the academic year—in effect, kicking off a hunting season. Where you start determines where you end up. Upward mobility is limited for middle-management workers—those recruited from “less-prestigious” schools. For Ho, this culture of smartness is central to understanding Wall Street’s financial agency—that is, how investment bankers are personally and institutionally empowered to enact their worldviews, export their practices, and serve as models for far-reaching social change. Ho links this empowerment to the values of investment banks, the corresponding restructuring of U.S. corporations, and the construction of markets.
Liquidated: An Ethnography of Wall Street asks many questions that those who work in the investment field should ask themselves. Is constant change at investment banks wrong? Or is it an intelligent way of operating in a competitive, rapidly changing global business? Wall Street firms that succeed over the long run are adept at quickly shutting down business units that prove to be nonstrategic and starting new ones. As for job insecurity, it leads investment bankers to morph instantly into successful job hunters and mobile survivors. Although many in the financial industry will not agree with Ho’s hypotheses and conclusions, they will be challenged by the questions she raises and enthralled by the body of fieldwork she presents.
—J.J.M., W.A.H.