Goldman’s capitalistic monoculture
Instead, Smith is selling a warm, self-congratulatory glow to anyone who thinks that Wall Street used to be great. In some halcyon era, according to this view, Wall Streetâ€™s success was great news for employees, for customers and of course for the economy as a whole. And it was great because it was built of great things: â€śteamwork, integrity, a spirit of humility, and always doing right by our clients … It wasnâ€™t just about making money.â€ť
In Smithâ€™s moralistic telling, Goldmanâ€™s success was the result of its culture. And as TED has pointed out, thatâ€™s a vision of its business that has been sold for a long time, at least since the days of Sidney Weinberg.
There are many ways to describe what “culture” is at Goldman Sachs: a patina, a justification, a means, a way to turn bright, hardworking college grads into profit-generating managing directors. But the key is that this culture was always an ideal that Goldman actively sold to clients and pressed into employees. Having gone through a month of analyst orientation, I can tell you that it is effective and takes a while to wear off.
But when it does wear off, and for me it was sometime after my second year, you realize the extent to which these values are pushed on you — and who benefits from their sale. The culture of Goldman Sachs is sold for the reasons that anything else is sold. Itâ€™s the result, money, that makes any bank tick. Goldman Sachs is no exception.
Smith is far from the first Goldman employee to think that clients werenâ€™t valued. In 2006, a few days after Lloyd Blankfein was announced as the new CEO, I was getting a sandwich at a now-gone lunch spot near 85 Broad Street, then the firmâ€™s headquarters. Waiting in line, I overheard a conversation between two bankers talking about how, with a trader running the firm, the client franchise was doomed. It was not a new argument then, and I heard it repeated afterwards from other bankers. That was six years before Smith decided things were so bad that he couldnâ€™t look fresh-faced college kids in the eye while handing them his GS business card.
Smith never seems to have understood that the very powerful and very wealthy people he counted as colleagues might be less than what they said they were. Now, 12 years, three promotions, two recessions and one financial crisis later, Smith is devastated when he realizes that the place he used to work is nothing like what the “Human Capital Management” manual said it would be. It’s only now that he realizes that the three ways to become a leader at Goldman Sachs revolve around making money? That is not a tough conclusion to come to. And certainly not one that takes 12 years.
Not only did Greg Smith take every banality Goldman Sachs offered him at face value for far longer than he should be willing to admit but he also seems to believe that there actually is such a thing as a virtuous past lodged inside the history of banking.
When were these good times Smith wishes would return? Who were the gentlemen partners running investment banks by strictly adhering to the Latin mottos on their family crests? They never existed. Overly self-interested behavior by banks at the expense of their clients is as old as modern banking itself.
To believe that the culture of Goldman Sachs, or any other bank, is about â€śso much moreâ€ť than making money misses a point thatâ€™s right in front of you. Itâ€™s not about more than making money. Itâ€™s about making money, full stop.
The rhetoric about teamwork, integrity, humility and client focus? Those are the gauzy drapes that conceal and decorate the view.