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  • Liquidated: An Ethnography of Wall Street

    Author(s): Karen Ho
    Published: 2009
    Pages: 392
    Illustrations: 1 photograph, 2 tables, 2 maps
    Sales/Territorial Rights: World
    Series: a John Hope Franklin Center Book
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  • Acknowledgments ix

    Introduction: Anthropology Goes to Wall Street 1

    1. Biographies of Hegemony: The Culture of Smartness and the Recruitment and Construction of Investment Bankers 39

    2. Wall Street's Orientation: Exploitation, Empowerment, and the Politics of Hard Work 73

    3. Wall Street Historiographies and the Shareholder Value Revolution 122

    4. The Neoclassical Roots and Origin Narratives of Shareholder Value 169

    5. Downsizers Downsized: Job Insecurity and Investment Banking Corporate Culture 213

    6. Liquid Lives, Compensation Schemes, and the Making of (Unsustainable) Financial Markets 249

    7. Leveraging Dominance and Crises through the Global 294

    Notes 325

    References 353

    Index 369
  • Honorable Mention, 2009 Delmos Jones and Jagna Sharff Memorial Prize for the Critical Study of North America presented by the Society for the Anthropology of North America (SANA) Section of the American Anthropological Association

    Honorable Mention, 2010 Gregory Bateson Book Prize, presented by the Society for Cultural Anthropology

  • 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.” — Janet J. Mangano and Martin S. Fridson , CFA Institute

    Liquidated is a must-read book for anyone interested in how legions of recruits from Ivy League colleges come to espouse and enact the twisted bundle of class interests and market ideology that constitutes neoliberal capitalism.” — Kathryn Dudley, American Studies

    Liquidated is a powerful, important book. Ho gets to the heart of the market makers who have reconfigured the American economy with often disastrous consequences. This analysis, based on an extensive amount of rich and revealing interview data, will help anyone understand the current financial crisis (including the subprime mortgage debacle) and the staggering bonuses which continue unabated, even though intense negative light has been directed at them. Liquidated will be extremely useful to people teaching in and studying a variety of subfields, including corporations and society, management, finance, work and employment, economic sociology, culture, complex organizations, stratification, markets, and field research.” — Vicki Smith, Enterprise and Society

    Liquidated is an interesting description of many of the practices and orientations that exist in large investment banks, one that confirms what the reader may suspect: that these institutions are forcing-grounds for the sort of hubris and invulnerability that goes with the phrase ‘Masters of the Universe’, the incomprehensible money that sales staff receive, and the idea that they are ‘doing God’s work’. It also, however, indicates the reverse of the strength of the social studies of finance. Liquidated may help explain why those in investment banks think and operate in the ways that they do.” — James G. Carrier, Journal of the Royal Anthropological Institute

    Liquidated provides a richly detailed ethnography of Wall Street’s investment banks. . . . Liquidated is a valuable contribution as an ethnography. I have used excerpts in an undergraduate economic sociology course, and I have recommended it to an investment banker.” — Aaron Z. Pitluck, Work, Employment and Society

    “[A] unique portrait of the industry that asks pertinent questions about constant change, job insecurity, and the banker’s identity. . . . Liquidated: An Ethnography of Wall Street asks many questions that those who work in the investment field should ask themselves. . . . 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.” — Janet J. Mangano, Financial Analysts Journal

    “For an alternative perspective on last year’s events, I recommend Liquidated: An Ethnography of Wall Street. . . [T]he insights are highly pertinent to the events of 2008, since this ethnography provides a wider cultural context and analysis than most journalistic books.” — Gillian Tett, Management Today

    “Ho’s groundbreaking work succeeds in providing the reader with a convincing argument that the anthropology of capitalism is not impervious to small-scale ethnography which instead gives abstract capitalism a grounded dimension, showing its instantiation in daily practices, ideologies, and institutions. . . . This book is a milestone of an increasingly sophisticated and relevant anthropology of markets and it constitutes crucial reading for both undergraduate and post-graduate students.” — Giuseppe Caruso, Suomen Antropologi

    “Ho’s refreshing ethnography of the daily lives of Wall Street investment bankers . . . outlines a web of practices, beliefs and structures that may be vital to understanding what keeps the market system in place despite built-in instabilities.” — Publishers Weekly

    “Ho’s work is a thorough and devastating critique of the ‘industry’ at the center of the American (and world) political economy. It raises questions as to why a workforce with a basically pathological inability to understand the implications of its actions and a terrifying lack of empathy for those less privileged has been given free reign, and why even a ‘liberal’ president boasts of his friendship with the likes of Lloyd Blankfein.” — Steven Sherman, Left Eye on Books

    “Ho's study shows the intense competitiveness that is instilled in these primarily Ivy League recruits even before they are finished with their Bachelor's degrees. And she examines the myth that stockowners and companies are best served by maximizing shareholder profits. If anything, this book gives faces to the people who work in that abstract entity called Wall Street that seems to affect our world so much of late. I highly recommend it, especially if you have no idea how the world of high finance operates.” — James Franco, The Huffington Post

    “The book contains many wonderful insights, and is a veritable mine of quotations from Wall Street participants. . . . The book is, moreover, extremely well written throughout . . . . [A]n informed and informative text.” — Brett Christophers, Environment and Planning A

    “There is much to recommend about Liquidated to organizational scholars who study firm strategy, compensation, and discrimination. . . . The greatest benefits, though redound to scholars of financial markets and the institutions that make them in accounting, finance, and economics, who will find a thick , rich description of the context of investment banking. . . . Ho’s research provides a unique complement to exisiting organizational research and offers alternative, culture-based explanations for current research findings and promising ideas for future research.” — Henry L. Tosi and Jennifer M. Knippen, Administrative Science Quarterly

    “This ethnography of Wall Street investment banks by anthropologist Karen Ho is a successful attempt at puncturing the aura of Wall Street superiority, revealing its fragilities, contradictions and the often devastating impacts of their corporate cultures and collective actions not only on the financial workers and financial markets, but also the rest of corporate America. . . . Although it is listed under anthropology and business studies, it has a much wider appeal and will be of interest to those in geography, economics, sociology and anyone seeking to understand the interconnections between the cultures and practices of Wall Street investment banks and financial change.” — Karen Lai, Journal of Economic Geography

    “[E]ngaging and hard to put down. . . Karen Ho’s book is a must-read for anyone contemplating joining one of the major global banks. . . . Actually, even faculty of our elite schools are starting to question why so many of their graduates end up in finance. Karen Ho’s book should be required reading for students and faculty at these schools.” — Ben Lorica, Quant Network

    “After several decades when anthropologists at last overcame their inhibitions concerning the study of money, Karen Ho’s book . . . seems to mark a coming of age for the contemporary discipline. . . . The intelligence of its author shines through Liquidated. . . . I found it rewarding to read and reflect on, a landmark in the burgeoning anthropology of money.” — Keith Hart, American Ethnologist

    “Although written for a mostly academic audience, the book becomes easily digestible because of the summaries Ho adds in each section. She connects well the main theme throughout any areas of the book. Ho’s views should not be considered ‘anti-Wall Street’ but viewed as an analysis of Wall Street’s effect on the American community and the financial markets. This book should be read by Wall Street investment bankers and corporate managers to better understand the social values and responsibilities of corporations and the role that they play in the American community.” — Linda Kee-Koa, International Examiner

    “Karen Ho has picked an excellent time to publish her fascinating new study . . . of Wall Street banks. . . . As field-sites go, Wall Street is not classic anthropological territory: ethnographers typically work in remote, third-world societies. . . . Ho nevertheless embarked on her study in classic anthropological manner: by blending into the background, listening intently, in a non-judgmental way – and then trying to join up the dots to get a ‘holistic’ picture of how the culture works. That patient ethnographic analysis has produced a fascinating portrait that will be refreshingly novel to most bankers.” — Gillian Tett, Financial Times

    “Karen Ho is my hero. . . . Her ethnography of investment bankers in the late 1990s, Liquidated, depicts the bravado, callousness, and contradictions that are the hallmarks of investment banking culture.” — Mitchel Y. Abolafia, American Journal of Sociology

    “The book’s great strength lies in Ho’s careful observation of the means by which people succeed or fail on Wall Street, as she punctures many of the assumptions about how markets work.” — Keir Martin, Times Literary Supplement

    Awards

  • Honorable Mention, 2009 Delmos Jones and Jagna Sharff Memorial Prize for the Critical Study of North America presented by the Society for the Anthropology of North America (SANA) Section of the American Anthropological Association

    Honorable Mention, 2010 Gregory Bateson Book Prize, presented by the Society for Cultural Anthropology

  • Reviews

  • 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.” — Janet J. Mangano and Martin S. Fridson , CFA Institute

    Liquidated is a must-read book for anyone interested in how legions of recruits from Ivy League colleges come to espouse and enact the twisted bundle of class interests and market ideology that constitutes neoliberal capitalism.” — Kathryn Dudley, American Studies

    Liquidated is a powerful, important book. Ho gets to the heart of the market makers who have reconfigured the American economy with often disastrous consequences. This analysis, based on an extensive amount of rich and revealing interview data, will help anyone understand the current financial crisis (including the subprime mortgage debacle) and the staggering bonuses which continue unabated, even though intense negative light has been directed at them. Liquidated will be extremely useful to people teaching in and studying a variety of subfields, including corporations and society, management, finance, work and employment, economic sociology, culture, complex organizations, stratification, markets, and field research.” — Vicki Smith, Enterprise and Society

    Liquidated is an interesting description of many of the practices and orientations that exist in large investment banks, one that confirms what the reader may suspect: that these institutions are forcing-grounds for the sort of hubris and invulnerability that goes with the phrase ‘Masters of the Universe’, the incomprehensible money that sales staff receive, and the idea that they are ‘doing God’s work’. It also, however, indicates the reverse of the strength of the social studies of finance. Liquidated may help explain why those in investment banks think and operate in the ways that they do.” — James G. Carrier, Journal of the Royal Anthropological Institute

    Liquidated provides a richly detailed ethnography of Wall Street’s investment banks. . . . Liquidated is a valuable contribution as an ethnography. I have used excerpts in an undergraduate economic sociology course, and I have recommended it to an investment banker.” — Aaron Z. Pitluck, Work, Employment and Society

    “[A] unique portrait of the industry that asks pertinent questions about constant change, job insecurity, and the banker’s identity. . . . Liquidated: An Ethnography of Wall Street asks many questions that those who work in the investment field should ask themselves. . . . 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.” — Janet J. Mangano, Financial Analysts Journal

    “For an alternative perspective on last year’s events, I recommend Liquidated: An Ethnography of Wall Street. . . [T]he insights are highly pertinent to the events of 2008, since this ethnography provides a wider cultural context and analysis than most journalistic books.” — Gillian Tett, Management Today

    “Ho’s groundbreaking work succeeds in providing the reader with a convincing argument that the anthropology of capitalism is not impervious to small-scale ethnography which instead gives abstract capitalism a grounded dimension, showing its instantiation in daily practices, ideologies, and institutions. . . . This book is a milestone of an increasingly sophisticated and relevant anthropology of markets and it constitutes crucial reading for both undergraduate and post-graduate students.” — Giuseppe Caruso, Suomen Antropologi

    “Ho’s refreshing ethnography of the daily lives of Wall Street investment bankers . . . outlines a web of practices, beliefs and structures that may be vital to understanding what keeps the market system in place despite built-in instabilities.” — Publishers Weekly

    “Ho’s work is a thorough and devastating critique of the ‘industry’ at the center of the American (and world) political economy. It raises questions as to why a workforce with a basically pathological inability to understand the implications of its actions and a terrifying lack of empathy for those less privileged has been given free reign, and why even a ‘liberal’ president boasts of his friendship with the likes of Lloyd Blankfein.” — Steven Sherman, Left Eye on Books

    “Ho's study shows the intense competitiveness that is instilled in these primarily Ivy League recruits even before they are finished with their Bachelor's degrees. And she examines the myth that stockowners and companies are best served by maximizing shareholder profits. If anything, this book gives faces to the people who work in that abstract entity called Wall Street that seems to affect our world so much of late. I highly recommend it, especially if you have no idea how the world of high finance operates.” — James Franco, The Huffington Post

    “The book contains many wonderful insights, and is a veritable mine of quotations from Wall Street participants. . . . The book is, moreover, extremely well written throughout . . . . [A]n informed and informative text.” — Brett Christophers, Environment and Planning A

    “There is much to recommend about Liquidated to organizational scholars who study firm strategy, compensation, and discrimination. . . . The greatest benefits, though redound to scholars of financial markets and the institutions that make them in accounting, finance, and economics, who will find a thick , rich description of the context of investment banking. . . . Ho’s research provides a unique complement to exisiting organizational research and offers alternative, culture-based explanations for current research findings and promising ideas for future research.” — Henry L. Tosi and Jennifer M. Knippen, Administrative Science Quarterly

    “This ethnography of Wall Street investment banks by anthropologist Karen Ho is a successful attempt at puncturing the aura of Wall Street superiority, revealing its fragilities, contradictions and the often devastating impacts of their corporate cultures and collective actions not only on the financial workers and financial markets, but also the rest of corporate America. . . . Although it is listed under anthropology and business studies, it has a much wider appeal and will be of interest to those in geography, economics, sociology and anyone seeking to understand the interconnections between the cultures and practices of Wall Street investment banks and financial change.” — Karen Lai, Journal of Economic Geography

    “[E]ngaging and hard to put down. . . Karen Ho’s book is a must-read for anyone contemplating joining one of the major global banks. . . . Actually, even faculty of our elite schools are starting to question why so many of their graduates end up in finance. Karen Ho’s book should be required reading for students and faculty at these schools.” — Ben Lorica, Quant Network

    “After several decades when anthropologists at last overcame their inhibitions concerning the study of money, Karen Ho’s book . . . seems to mark a coming of age for the contemporary discipline. . . . The intelligence of its author shines through Liquidated. . . . I found it rewarding to read and reflect on, a landmark in the burgeoning anthropology of money.” — Keith Hart, American Ethnologist

    “Although written for a mostly academic audience, the book becomes easily digestible because of the summaries Ho adds in each section. She connects well the main theme throughout any areas of the book. Ho’s views should not be considered ‘anti-Wall Street’ but viewed as an analysis of Wall Street’s effect on the American community and the financial markets. This book should be read by Wall Street investment bankers and corporate managers to better understand the social values and responsibilities of corporations and the role that they play in the American community.” — Linda Kee-Koa, International Examiner

    “Karen Ho has picked an excellent time to publish her fascinating new study . . . of Wall Street banks. . . . As field-sites go, Wall Street is not classic anthropological territory: ethnographers typically work in remote, third-world societies. . . . Ho nevertheless embarked on her study in classic anthropological manner: by blending into the background, listening intently, in a non-judgmental way – and then trying to join up the dots to get a ‘holistic’ picture of how the culture works. That patient ethnographic analysis has produced a fascinating portrait that will be refreshingly novel to most bankers.” — Gillian Tett, Financial Times

    “Karen Ho is my hero. . . . Her ethnography of investment bankers in the late 1990s, Liquidated, depicts the bravado, callousness, and contradictions that are the hallmarks of investment banking culture.” — Mitchel Y. Abolafia, American Journal of Sociology

    “The book’s great strength lies in Ho’s careful observation of the means by which people succeed or fail on Wall Street, as she punctures many of the assumptions about how markets work.” — Keir Martin, Times Literary Supplement

  • Liquidated is what many of us have been waiting for: a serious ethnographic consideration of finance capital. Using the best kinds of cultural and social analysis, Karen Ho gets inside Wall Street assumptions, turning them around to upend each other.” — Anna Lowenhaupt Tsing, co-editor of, Word in Motion and author of Friction: An Ethnography of Global Connection

    “We’re pretty familiar with the economic rationale for the regime of cost-cutting and downsizing throughout corporate America in recent decades. But Karen Ho’s research greatly enriches our understanding of how Wall Street’s own peculiar culture of transient relationships and relentless competition has contributed to the shareholder revolution. And, along the way, her interviews and fieldwork offer a very revealing picture of the mind of Wall Street. A fascinating and important book.” — Doug Henwood, editor of the Left Business Observer and author of, Wall Street: How It Works and For Whom

    “What could be more timely than this fascinating and highly readable investigation of the culture of Wall Street? With Liquidated, Karen Ho takes us into the workaday world of investment banking before the crisis, showing us the roots of the risk-taking that drew lavish compensation packages and brought the world financial system to the brink of collapse. A significant contribution both to the anthropological and wider social scientific literature on financial markets and globalization, as well as to the urgent public debate over the power of financial institutions in contemporary American society.” — Bill Maurer, author of, Pious Property: Islamic Mortgages in the United States

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  • Description

    Financial collapses—whether of the junk bond market, the Internet bubble, or the highly leveraged housing market—are often explained as the inevitable result of market cycles: What goes up must come down. In Liquidated, Karen Ho punctures the aura of the abstract, all-powerful market to show how financial markets, and particularly booms and busts, are constructed. Through an in-depth investigation into the everyday experiences and ideologies of Wall Street investment bankers, Ho describes how a financially dominant but highly unstable market system is understood, justified, and produced through the restructuring of corporations and the larger economy.

    Ho, who worked at an investment bank herself, argues that bankers’ approaches to financial markets and corporate America are inseparable from the structures and strategies of their workplaces. Her ethnographic analysis of those workplaces is filled with the voices of stressed first-year associates, overworked and alienated analysts, undergraduates eager to be hired, and seasoned managing directors. Recruited from elite universities as “the best and the brightest,” investment bankers are socialized into a world of high risk and high reward. They are paid handsomely, with the understanding that they may be let go at any time. Their workplace culture and networks of privilege create the perception that job insecurity builds character, and employee liquidity results in smart, efficient business. Based on this culture of liquidity and compensation practices tied to profligate deal-making, Wall Street investment bankers reshape corporate America in their own image. Their mission is the creation of shareholder value, but Ho demonstrates that their practices and assumptions often produce crises instead. By connecting the values and actions of investment bankers to the construction of markets and the restructuring of U.S. corporations, Liquidated reveals the particular culture of Wall Street often obscured by triumphalist readings of capitalist globalization.

    About The Author(s)

    Karen Ho is Associate Professor of Anthropology, University of Minnesota.

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