the recruitment of human assets

I recently picked up Karen Ho’s Liquidated: An Ethnography of Wall Street. Reading about recruitment at elite universities brings back memories of investment banking and management consulting propaganda. Note their profligate use of words that suggest opportunity and elitism.

David Pyle, Managing Director of Fixed Income at Morgan Stanley at a Princeton recruiting event, 2000:

Our goal is to be the preeminent global firm, to be what we already are, the top. We want people coming into work every morning knowing that we’re at the top and always striving to be at the top. We are global; if you’re not global, you can’t win…. People are our single most important asset… Our people are the smartest in the world… There is no one in the world that we can’t reach and that’s middle of everything. We have huge reserves of capital and human assets, and we want to recruit the type of person that always wants more, who is not happy being second… Our theme is “network the world”.

From a Morgan Stanley Dean Witter 2001 recruitment ad:

Anything is possible. This is where the generation of new ideas lives. Because we’ve built a global network of people who see possibilities where others see confusion and risk—and who know how to turn those possibilities into realities. And by working at internet speed- propelling dozens of companies and millions of investors into the new economy. We are propelling careers all over the world.

These messages compelled confused and anxious undergraduates into hours of resume writing, recruitment presentations and interviews. For those of us who have spent a lifetime climbing the meritocracy ladder, investment banking and management consulting is a comforting next step compared to the prospect of actually figuring out how to live our lives. These careers promise prestige, excitement, learning, wealth and endless opportunity--- who could refuse? And it is only expected that we would be attracted to institutions that reproduce the elitism and selectivity of the colleges we attend. If the future is uncertain, we should strive to preserve the privilege of our Ivy League educations in the most secure way possible. *

And so, in 2010, even after the financial crisis of 2008, investment banking and management consulting recruitment remains attractive and competitive.


* Teach for America has taken advantage of this by being super selective in order to create an “elite cadre of teachers”…. For us organization kids, we need achievement paths.
** All recruitment excerpts taken from Karen Ho's Liquidated

work/life balance revisited*

In the nineteenth century, there was a prohibition in the United States on banks opening branches in communities other than the ones in which they originally operated. People had to trust the bank if they were to deposit their money in it, and bankers had to assess the character of borrowers before writing loans; it was generally believed that “the bankers’ interests and the interests of the larger community are one and the same,” as a historical sociologist of banking writes. We might imagine a banker sits down with a young couple and begins to form a judgment of their credit worthiness, that is, their character. This character is knowable because there is a community. Maybe the banker asks around at the grocery and the hardware store, and notes subtle cues in the tone of voice or body language of their proprietors as he mentions the name of the applicants and inquires after their record of credit. Satisfied, he vouchsafes their creditworthiness to his colleague bankers, who live in the same community, and a mortgage is secured. A thirty-year relationship is established between the bank and the couple. The banker feels he has done a good turn, helping virtue to its reward by the diligent application of his own powers of discerning observation, and his knowledge of the ways of men. He exercises prudence; his work calls on some of his best capacities…

Now consider the reality of the mortgage broker circa 2005, whose work takes on a very different character under absentee capitalism. Knowing the mortgage he secures will be sold by the originating bank (a branch of a nationwide bank) to some other entity, he needn’t concern himself with the creditworthiness of the applicant. The bank has no interest in the ongoing viability of the loan; its interest is limited to the fees it gets from originating the loan. The mortgages will be bundles on Wall Street then these bundles will themselves be transformed through securitization… The original encounter between mortgage broker and borrower as they sit across from one another is fraught with moral content- questions of trust- and both of the original parties no doubt experience it this way, in 2005 as ever. The mortgage broker gets a feeling in his gut. But this information is discarded through a process of depersonalization. The discarding is purposeful. Indeed the originating banks get frequent phone calls from Wall Street investment houses, urging them to invent new kinds of loans in which the borrower doesn’t even need to claim income or assets, much less prove their existence. This makes a certain kind of psychic demand on the mortgage broker who actually writes the loans: he must silence the voice of prudence, and suspend the action of his own judgment and perception.

Why would a system demand the stupidification of the mortgage professional? Again, imagine it is 2005. Unprecedented concentrations of capital have arisen, and these pools of money are competing with one another to find a home, and get a return. As a result, there is an insatiable worldwide appetite for mortgage-backed securities among investors. Further, the fees to be made from all the transactions between originator and investor are fueling a Wall Street boom. Therefore more loans must be written. So our mortgage broker writes loans that he knows to be bad, and makes a lot of money. Stripped of the kind of judgments that are at the very heart of the idea of “credit,” shot through with bad faith, his work is now predicated on irresponsibility, rooted in the absence of community. Whatever lingering fiduciary consciousness he may have has become a liability, given the rush to irresponsibility by his competitors. The work cannot sustain him as a human being. Rather, it damages the best part of him, and it becomes imperative to partition work off from the rest of life. So during his vacation he goes and climbs Mount Everest, and feels renewed. The next summer, he becomes an ecotourist in the Amazon rain forest. It is in this gated ghetto of his second life that he inhabits once again an intelligible moral order where feeling and action are linked, if only for a couple of weeks.

~ Matthew Crawford, Shop Class as Soulcraft: An Inquiry into the Value of Work

* The original work/life balance post can be found here.
** Wow, that quote took a very long time to type up. Please let me know if I made any typos.

when words change their meaning

In its original sense, a profession is an occupational grouping that has sole authority to recruit, train, and supervise its own members. Historically, only medicine, law and the academic disciplines have fit this description. Certainly flight attendants do not yet fit it. Like workers in many other occupations, they call themselves “professional” because they have mastered a body of knowledge and want respect for that. Companies also use “professional” to refer to this knowledge, but they refer to something else as well. For them a “professional” flight attendant is one who has completely accepted the rules of standardization.

~ Arlie Russell Hochschild in The Managed Heart: Commercialization of Human Feeling

Being professional once suggested integrity. True professionals governed themselves, establishing and holding themselves accountable to the standards of their field. Now being professional mostly means conforming to a set of outward behavioral standards. It has everything to do with the exterior and nothing to do with the interior.

charitable hypocrisy

I posted a link about a year ago referencing a satirical piece that highlighted the social context in which a nonprofit operates. The nonprofit provides job training and employment for ex-cons, “black or brown men”, who were mostly arrested for petty crimes such as drug possession. Ironically, the daughter of a rich board member of this nonprofit was also involved in drugs, but sits comfortably in rehab with “her needs met” and her “crimes mitigated”.

W.E.B. DuBois’s the Philadelphia Negro, a study of blacks in Philadelphia at the turn of the twentieth century, reminded me of this satirical piece. DuBois notes that while Philadelphians were unwilling to give blacks decent jobs, they supported charitable institutions that cared for the poor. He writes:

For thirty years and more Philadelphia has said to its black children: “Honesty, efficiency and talent have little to do with your success; if you work hard, spend little and are good you may earn your bread and butter at those sorts of work which we frankly confess we despise; if you are dishonest and lazy, the State will furnish your bread free.” Thus the class of Negroes which the prejudices of the city have distinctly encouraged is that of the criminal, the lazy and the shiftless; for them the city teems with institutions and charities; for them there is succor and sympathy; for them Philadelphians are thinking and planning; but for the educated and industrious young colored man who wants work and not platitudes, wages and not alms, just rewards and not sermons—for such colored men Philadelphia apparently has no use.

~ W.E.B DuBois in The Philadelphia Negro (1899)

While much has changed since DuBois’s time, similarities remain. Too many jobs do not pay a living wage. And in the current state and structure of the economy, I don’t believe there are sufficient living wage jobs for everyone in this country. We live in country that relies upon low-paid labor to sweep our floors, clean our toilets and wash our dishes. We live in a global system where we rely upon low-paid labor to sew our clothes and manufacture our toys. And so the poor must always be amongst us.

There is a place for charity. But sometimes we might spend too much time trying to figure out most effective educational and training and rehab programs, and not enough time addressing the social structures that may have led to this poverty in the first place. We spend so much time trying to move individual people up the “educational ladder”—college or proper vocational training—so they can get good jobs. But many have already noted that there are too many people overeducated for their jobs. And I’m not sure if the economy will grow out of this problem.

America also likes to romanticize the individual entrepreneur both locally (Joe the Plumber) and internationally (microfinance anyone?), but worker-owned companies or cooperatives are often more effective at achieving economies of scale and lifting more people out of poverty.

Without resorting to the failed model of state ownership, could there be better ways to organize and structure work? Could we get rid of the need for janitorial staff by creating a cleaning rotation amongst office-workers? It may be inefficient, but that doesn’t make it a less appropriate way to organize work. Or, what if workers owned their companies so that they can share in the profits that their sweat and blood created? So that they are no longer just a cost to be reduced in order to increase profits.

Maimonides, a 12th century Jewish philosopher, noted that the highest degrees of charity was a business partnership (shared ownership) with a poor person. The rich board member no longer sits on the board of his fancy schmancy nonprofit/bakery, giving his large contributions (large for the nonprofit but pitiful compared to his assets), but instead starts a bakery and makes the poor black man a co-owner.

a new species (2)

I would have just twittered this article, found via orgtheory.net, but it was too good to pass up for a quick late night quotes-only blog entry:

During arguments in a campaign-finance case, the court's majority conservatives seemed persuaded that corporations have broad First Amendment rights and that recent precedents upholding limits on corporate political spending should be overruled.

But Justice Sotomayor suggested the majority might have it all wrong -- and that instead the court should reconsider the 19th century rulings that first afforded corporations the same rights flesh-and-blood people have.

Judges "created corporations as persons, gave birth to corporations as persons," she said. "There could be an argument made that that was the court's error to start with...[imbuing] a creature of state law with human characteristics."

...

On today's court, the direction Justice Sotomayor suggested is unlikely to prevail. During arguments, the court's conservative justices seem to view corporate political spending as beneficial to the democratic process. "Corporations have lots of knowledge about environment, transportation issues, and you are silencing them during the election," Justice Anthony Kennedy said during arguments last week.

~ Jess Bravin

I'm sure it's a real hard guess as to who I agree with more. =)

fruits of my labour

In the case of the white-collar man, the alienation of the wage-worker from the products of his work is carried one step nearer to its Kafka-like completion. The salaried employee does not make anything, although he may handle much that he greatly desires but cannot have. No product of craftsmanship can be his to contemplate with pleasure as it is being created and after it is made. Being alienated from any product of his labor, and going year after year through the same paper routine, he turns his leisure all the more frenziedly to the ersatz diversion that is sold him, and partakes of the synthetic excitement that neither eases nor releases. He is bored at work and restless at play, and this terrible alternation wears him out.

~ C. Wright Mills, White Collar: The American Middle Classes

As white-collar worker in a nonprofit institution (which inevitably has its bureaucraucies), I understand my craving and my need for my manual creation. A desire to touch and hold the product of my labour—to contemplate it with pleasure. To partake in an activity that is not mere diversion, but creation that eases and releases. A comfort from the haunting sense that my work is disappearing into a labyrinth of papers, emails and electronic files and meetings.*

Finished product:
Collared Wrap from Sally Melville's the Knitting Experience Book 2: The Purl Stitch. Knit as a mother's day gift. I can't say I enjoyed four months of knitting with dull green worsted-weight acrylic wool. But I am so pleased with the final result that I am tempted to make the same item for myself...





Finished product:
Garter Rib socks from Charlene Schurch's Sensational Knitted Socks
Knit as a father's day gift. I am concerned that these socks are going to be too big for him.... but he will probably wear them anyways. Aren't fathers great?




* Though for the record, for the most part, I do believe my work is valuable. I just have occasional melodramatic days. :) Or perhaps, I posted this to have an excuse to present pictures of my knitting-- Why must the intangible justify the tangible? Actually, to be honest, I'm just crazy about C. Wright Mills. Everytime I read something by him, I end up highlighting every other sentence and resisting the urge to type up his entire book in a blog entry...

the inverse kingdom

Traditionally, creditors wielded more power than debtors. Creditors charged exorbitant interest, resorted to intimidation and violence, and seized land and possessions of their debtors.

Strangely enough, today in America, if you’re willing to take a loose definition of creditor and debtor, the debtors often wield more power than the creditors. This idea was suggested in Jacques Ellul’s Money and Power in application to the modern corporation: … the ancient reality of the superiority of the creditor. Obviously in our society, the debtor is often much more powerful than the creditor. The corporation cannot be compared with the hundreds of shareholders who compose it.

To further complicate matters, the corporation is not an individual and a corporation does not just consist of its shareholders or its board of directors or its employees. It takes on a life and a spirit of its own. And then we find ourselves faced with an unwieldly monster whose actions and decisions can have enormous impact on our lives.

The injustice of the debtors’ superiority is what angers us so much about the AIG bonuses as billions of taxpayer dollars trickle into the banking system.* I feel sympathy for Edward Liddy and those who received bonuses who were not directly responsible for credit default swap transactions that were the downfall of AIG.** Yet I am also outraged at the debtor’s entitlement—but it’s not Edward Liddy nor the bonus recipients who are the actual debtors to America, it’s AIG the corporation. And how do we understand how AIG’s employees are both part of and yet distinct from the corporation? And as a result, though they may have no personal wrongdoing related to the credit default swaps, they may have to uphold the moral responsibility of a powerful debtor before less powerful creditors.

So for better or for worse, the 90% tax may get passed and we may feel a little bit better.*** But the larger problems still remain unsolved…



* Compared to the total amount lent to AIG, the bonuses were a drop in a bucket. Dealing with large amounts of money can have two contrary psychological impacts—either you start penny pinching and counting every little cent or you figure since the debt is so large, little savings won’t make a big difference in the long run. Clearly in this case, the American public as the creditor feels the former. No creditor would like to see a debtor living the good life if there is no evidence of repayment.
** I’m sympathetic to the fact that many of them are the wrong target of the angry mob. That being said, I personally find large bonuses rather distasteful wherever, but that stems from a larger critique of American capitalism and compensation.
*** Has it been passed already? I don’t think I’ve been paying that close attention to the news in the last few days.