The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for. It might sound surprising to a skeptical public, but culture was always a vital part of Goldman Sachs’s success. It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients.I can sympathise with him, of course. No doubt his colleagues are scum-sucking con-men bent on enriching themselves at the expense of clients (Smith seems to have no conception of a society beyond Goldman Sachs and their customers).
But amidst the general electronic rejoicing at the Prodigal Son's redemption, the liberals have missed the major point. Greg Smith's major assertion is that a culture of greed has damaged Goldman Sachs as a company. Bad people have wrecked a good system.
He's utterly wrong. A bad system has produced damaged, greedy, amoral people. Speculative capitalism isn't an honourable and sustainable enterprise occasionally besmirched by greedy individuals. Speculative capitalism assumes that individuals are driven by greed and self-interest and turns those characteristics into the engines of economic growth. By legitimising selfishness (such as destroying a company's value overnight to enrich Goldman Sachs through short-selling - deliberately engineering panic-selling of its shares), Goldman Sachs and similar companies deliberately turn human failings into structural features of the economy.
What's missing from Greg Smith's mea culpa is any understanding of economies and human society as a structure. To him, individual motivations and behaviours significantly affect structures. To us marxists, structures dictate human behaviour: culture is part of what Marx called the 'superstructure', while economics is part of the underlying structure. His disgusting colleagues aren't bad apples: they're behaving rationally and logically within the paradigm of speculative capitalism. It might offend Smith's personal code of conduct, but for 12 years he has enthusiastically participated in an economic activity which has impoverished massive swathes of the planet's population.
For more than a decade I recruited and mentored candidates through our grueling interview process. I was selected as one of 10 people (out of a firm of more than 30,000) to appear on our recruiting video, which is played on every college campus we visit around the world. In 2006 I managed the summer intern program in sales and trading in New York for the 80 college students who made the cut, out of the thousands who applied.He neither comprehends nor regrets this. Instead, he's shifted attention to the attitudes and sharp practices of a few individuals within an inevitably corrupting system. Smith's a cog in a machine, and he has no critique at all of the mechanism - he's merely personally offended by local difficulties.
When the history books are written about Goldman Sachs, they may reflect that the current chief executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm’s culture on their watch. I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival. Without clients you will not make money. In fact, you will not exist. Weed out the morally bankrupt people, no matter how much money they make for the firm. And get the culture right again, so people want to work here for the right reasons. People who care only about making money will not sustain this firm — or the trust of its clients — for very much longer.A careful reading reveals not a radical, but a conservative. He wants the system to survive. He wants Goldman Sachs, one of the most destructive and predatory corporations on the planet, to survive. He has no concept of speculative capitalism's destructive impact on the human condition.
Greg: yes, many of the trees are falling down, but you need to realise that the wood itself is rotten.
PS: there's a much funnier take on the piece here.
PS2: so what's my solution? Here's my naive and confused first steps.