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Speaker 1: Hello, Odd Lots listeners, It's Joe Wisenthal. Now, before we

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Speaker 1: get to today's show, I wanted to tell you about

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Speaker 1: another one of our great podcasts here at Bloomberg, Bloomberg Surveillance,

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Speaker 1: So every day of the week, Tom Keene, Jonathan Farrell,

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Speaker 1: and Paul Sweeney deliver insight on market news of the

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Speaker 1: day with leaders in global finance, politics, and economics. In

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Speaker 1: a recent episode, they spoke with a brand strategy expert

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Speaker 1: on we works wild Ride, a global leader in foreign

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Speaker 1: affairs on Trump's Middle East policy, and the top fixed

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Speaker 1: income strategist on Europe's low interest rates. If you feel

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Speaker 1: like you need a daily podcast in your life, definitely

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Speaker 1: check out Bloomberg Surveillance. It'll be right up your alley

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Speaker 1: and you can find every new episode of Bloomberg Surveillance

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Speaker 1: weekday mornings. Subscribe to them on Apple Podcasts, Spotify, or

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Speaker 1: your favorite podcast out. Hello, and welcome to another episode

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Speaker 1: of the Odd Lots Podcast. I'm Tracy Alloway and I'm Joe.

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Speaker 1: Wasn't all Joe? Did you get retweeted by an culture today?

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Speaker 1: But you weren't? Made? You bring that up? Why? Why?

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Speaker 1: Why would you start an episode with that? Fact, but

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Speaker 1: yes I did. I was trying to think of an

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Speaker 1: intro um. So I'm just gonna say as uh, let's

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Speaker 1: just say, in an effort to wait, how did you

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Speaker 1: even notice that? Wait? Wait, wait a second, wait, wait,

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Speaker 1: wait a second wait, how did you even notice that?

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Speaker 1: I'm not going to tell you someone sent it to me,

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Speaker 1: so in an effort to even out the political scales

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Speaker 1: of your Twitter feed at the moment to we're going

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Speaker 1: to be talking about something that actually relates to Elizabeth

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Speaker 1: Warren's campaign platform. Okay, go on, Okay, I'm excited. No, no,

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Speaker 1: I'm I'm excited, also intrigued at the at this uh

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Speaker 1: elaborate intro that you're you're concocting here, But go on,

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Speaker 1: I'm trying to thread a bunch of different stuff together. Okay,

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Speaker 1: But I think it's fair to say that in the

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Speaker 1: upcoming presidential election, there is this undercurrent of anger at

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Speaker 1: the existing system of capitalism. People are upset about inequality.

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Speaker 1: They think that lots of money just a cruise to

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Speaker 1: the one percent, and so there are all these political

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Speaker 1: proposals on the table, including Elizabeth Warren's Accountable Capitalism Act,

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Speaker 1: to try to fix this problem, and The interesting thing

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Speaker 1: that's happened recently is that we've even seen some company executives,

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Speaker 1: including Jamie Diamond, the CEO of JP Morgan, also makes

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Speaker 1: some noises about right. I mean, there's a lot of

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Speaker 1: things going on. So absolutely, the sort of lingering anger

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Speaker 1: from the financial sector that we've seen over the last

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Speaker 1: ten years, it really does not seem like it's faded

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Speaker 1: very much. If anything, maybe it's spreads other sectors like tech,

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Speaker 1: but there still is that no one has really gotten

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Speaker 1: over the crisis from a political perspective. And you do see,

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Speaker 1: as you point out, more and more CEOs so in

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Speaker 1: some sense trying to pay lip service to this, saying

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Speaker 1: things like, oh, we're gonna do more than just focus

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Speaker 1: on shareholder returns. Usually it just seems like that rhetoric.

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Speaker 1: But you know, obviously it's they sort of see which

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Speaker 1: way the winds are blowing, right, So we can never

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Speaker 1: be that sure about how serious these CEOs and executives

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Speaker 1: are about changing this shareholder first paradigm, but they're definitely

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Speaker 1: making noises about it. And in fact, Jamie Diamond and

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Speaker 1: all these other companies wrote this big statement talking about

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Speaker 1: the idea of sort of embracing a new idea of value,

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Speaker 1: one that wasn't focused on short term earnings targets and

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Speaker 1: you know, shareholder returns, but one that presumably also cares

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Speaker 1: about employees and society and the overall national economy and

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Speaker 1: things like that. So yeah, that is well, no, I mean,

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Speaker 1: I think you're totally right. And one thing that I

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Speaker 1: do believe is genuine whether they're going to change their

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Speaker 1: longer short term focus or focus on constituencies beyond the

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Speaker 1: short term, is that I think people are really waking

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Speaker 1: up to the degree to which culture matters inside a corporation,

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Speaker 1: into which a college corporations culture can be its own

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Speaker 1: inertia and be extraordinarily hard to change. I think Wells

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Speaker 1: Fargo and the scandals that they've suffered in recent years

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Speaker 1: there's a really good example of that, where there's just

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Speaker 1: all these scandals that are essentially about you know, sort

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Speaker 1: of edits route, basically about short term operations and hitting

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Speaker 1: these arbitrary targets being extraordinarily difficult to tamp down and

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Speaker 1: to just get a handle on how how how far

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Speaker 1: they've spread internally. Right, So I'm glad you said culture

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Speaker 1: that is the uh the name of the game. Today,

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Speaker 1: we're going to be talking to an anthropologist who actually

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Speaker 1: did a field study of culture in the financial industry

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Speaker 1: on Wall Street and did an entire book talking about

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Speaker 1: how that culture or discussing how that culture actually feeds

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Speaker 1: into the way we think about corporations now and their purpose.

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Speaker 1: So why is it that lots of people seem to

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Speaker 1: think that a company's main, uh, you know, reason for

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Speaker 1: being raised on DETRA is to maximize shareholder value? Where

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Speaker 1: did that idea come from? And what is the link

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Speaker 1: to Wall Street culture? I can't wait? Okay, great, So

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Speaker 1: I'm really excited to say. Our guest for this episode

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Speaker 1: is Karen Ho. She is the author of Liquidated and

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Speaker 1: Ethnography of Wall Street, and she is now Associate professor

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Speaker 1: of anthropology at the University of Minnesota. Karen, thanks so

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Speaker 1: much for coming on. Thank you all for having me.

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Speaker 1: So I have to say I've read your book, uh

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Speaker 1: quite a few years ago, shortly after it came out,

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Speaker 1: which I think was after the financial crisis. But maybe

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Speaker 1: just to begin with, you could sort of set up

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Speaker 1: the time period that you were working in and what

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Speaker 1: exactly your field research entailed, because I think that's kind

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Speaker 1: of central to the discussion that we're about to have.

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Speaker 1: That's right. Sure. So I'm a social culture anthropologist and

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Speaker 1: from the late ninety nineties and into the millennium, I

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Speaker 1: actually did an ethnographic field study Wall Street, investment bankers

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Speaker 1: and banks. In order to do so, I actually took

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Speaker 1: a leave of absence from graduate school UM and entered

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Speaker 1: the Princeton University recruitment process. Now, because I'm an anthropologist

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Speaker 1: and an anthropology want the key tenants, especially given our

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Speaker 1: rise as a discipline UM in the sort of British

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Speaker 1: colonial period, UM, one of the sort of tenants of

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Speaker 1: our discipline is actually to um let our informants are. Friends,

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Speaker 1: are the people in which we're engaging in understand what

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Speaker 1: our larger UM, you know, project is. Our projects are.

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Speaker 1: So I took a leave of absence from graduate school

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Speaker 1: and actually got a job at a banker's trust which

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Speaker 1: is now Deutsche Bank and UM. And you know, for

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Speaker 1: a year I actually worked on Wall Street. But during

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Speaker 1: that year I was not doing field work. I call

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Speaker 1: it pre field work language study UM. But it's through

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Speaker 1: that experience that I helped while I started to learn

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Speaker 1: the language of finance. And from then I actually amasked

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Speaker 1: a web of contacts UM that I then actually UM

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Speaker 1: engaged in conversations, interviews what anthropologists called deep hanging out

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Speaker 1: UM in order to understand the sort of culture and

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Speaker 1: practices and more rays of Wall Street and it. Certainly

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Speaker 1: I did field work during the time of the longest

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Speaker 1: bowl market and UM continue to do field work until

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Speaker 1: around two thousand two. Then I actually got a position

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Speaker 1: at the University of Minnesota where I UH continue to

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Speaker 1: engage with Wall Street and write up the ethnography. So

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Speaker 1: does an anthropologist go into a scenario like this with

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Speaker 1: a specific question in mind? I mean, just as someone

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Speaker 1: who is not steeped or that familiar with academic anthropology,

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Speaker 1: what is the sort of when you start? Is it

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Speaker 1: just to hear things? Is it just to talk? Or

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Speaker 1: did you start by having a few specific goals in

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Speaker 1: mind of things you wanted to learn or specific patterns

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Speaker 1: you wanted to see if existed within the Wall Street realm?

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Speaker 1: I did, UM, and often afropologists go into a particular

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Speaker 1: field site with a burning question mind. And my burning

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Speaker 1: question actually stemmed from a socio economic observation. So in

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Speaker 1: a T and T, which is based in New Jersey,

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Speaker 1: actually announced one of the largest corporate restructurings and downsize

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Speaker 1: ngs UM in corporate history, and um, you know, close

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Speaker 1: to a hundred thousand employees were let go right size, downsized,

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Speaker 1: what have you. And in the New York Times business

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Speaker 1: pages the next day, you know, there are certainly articles

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Speaker 1: about um the social and economic dislocation of employees and communities, etcetera.

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Speaker 1: But this sort of large, larger journalistic context was that

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Speaker 1: Wall Street uh so a T and T stuff went

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Speaker 1: up to a fifty two week high UM in the

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Speaker 1: wake of that announcement, and the sort of larger coverage

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Speaker 1: around Wall Street investment banks was that Wall Street cheered

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Speaker 1: at this news. And immediately my anthropological ear um or

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Speaker 1: sort of you know, anthropological spidy sense, if you will,

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Speaker 1: begin to sort of uh tingle right, the idea of, well,

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Speaker 1: here's the sort of massive social dislocation. And at the

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Speaker 1: same time, why did they actually have to use the

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Speaker 1: word cheer? Why were there so much sort of um

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Speaker 1: odd celebration around this news. And part of what an

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Speaker 1: anthropological tenant is is that you want to get at

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Speaker 1: the natives point of view, so you don't want to

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Speaker 1: presume from the outside, oh, gosh, these folks are just masochistic,

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Speaker 1: that's why they're cheering. Um. But rather you want to

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Speaker 1: get at what why does it make sense for them?

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Speaker 1: What is it about the way investment bankers and investment

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Speaker 1: banks are being socialized, incentivized, um, etcetera, etcetera, such that

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Speaker 1: for them this is interpreted and understood as relatively good

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Speaker 1: news or actually great news. So it was it was

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Speaker 1: that question and that quandary right for me as an

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Speaker 1: anthropology graduate student, I thought of this as terrible news.

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Speaker 1: And yet there are people who were just you know,

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Speaker 1: fifty miles away from me who were cheering, and so

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Speaker 1: I wanted to understand from their perspective, from their social

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Speaker 1: and economic location, from the natives point of view, in

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Speaker 1: this case the native as being well street investment bankers, UM,

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Speaker 1: how they came to this ethos? What motivated and what

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Speaker 1: how did they sort of um come to this larger understanding.

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Speaker 1: So I love the contrast between those two different points

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Speaker 1: of view. So someone who studies societies for a living

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Speaker 1: basically wondering why people think a massive societal dislocation is

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Speaker 1: a good thing, and then people who are focused on money, uh,

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Speaker 1: basically thinking that it's great and sharing it on as

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Speaker 1: you put it. Nowadays, we kind of take for granted

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Speaker 1: that when a company announces cost cutting UH programs, which

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Speaker 1: are usually layoffs or salary reductions or things like that,

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Speaker 1: that it's a good thing for the bottom line. But

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Speaker 1: you point out in your work that that wasn't always

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Speaker 1: the case. In fact, that's sort of a recent development.

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Speaker 1: How did we get to that point where corporations maximizing

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Speaker 1: shareholder value became the sort of norm. Even the sort

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Speaker 1: of framing of corporations maximizing shareholder value is important to

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Speaker 1: critique because I think what many studies have shown is

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Speaker 1: that corporations maximizing shareholder value as a strategy actually shoots

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Speaker 1: long term shareholder value in the foot. And I think

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Speaker 1: this is UM many of the sort of critiques coming

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Speaker 1: in the wake of two thou eight. Right, So it's

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Speaker 1: like trying to run a marathon but telling UM the

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Speaker 1: corporation to do sprints every four hundred feet, Right, If

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Speaker 1: you do a sprint every four hundred feet, i e.

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Speaker 1: Maximized short term value, you're actually going to never finish

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Speaker 1: the marathon. And so the stract the strategy of short

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Speaker 1: term stock price spikes UM actually even shoots shareholder value

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Speaker 1: in the foot even for this sort of biggest adherents UM.

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Speaker 1: But what I found in my research is that that

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Speaker 1: UM the idea that corporations should simply be or primarily

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Speaker 1: be framed by stock price primacy was really emergent and

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Speaker 1: becoming dominant at that time, and it was highly contested.

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Speaker 1: There were a lot of folks who thought of corporations

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Speaker 1: as long term social institutions, right institutions that where that

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Speaker 1: were sort of stewards, community stewards that were one of

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Speaker 1: the sort of key promises was that of employment, uh,

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Speaker 1: long term productivity, right benefits. So there's actually quite a

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Speaker 1: contested thing when I actually went to do research, was

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Speaker 1: the sort of a fight between corporations as a long

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Speaker 1: term social institution and corporations as a stock price And

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Speaker 1: I think unfortunately corporations access stock price one out in

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Speaker 1: large part because of Wall Street UM financial advocacy. So

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Speaker 1: that that sort of anticipates where I was going. What

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Speaker 1: I was going to ask next is what was going on?

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Speaker 1: And I take it this is sort of why you

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Speaker 1: focused your anthropological work from the perspective of the banks,

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Speaker 1: But why do you start to tell us what was

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Speaker 1: going on inside the banks and their own internal requirements

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Speaker 1: and their own internal expectations, and their own internal culture

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Speaker 1: and goals that then bled through to this UH, this

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Speaker 1: new expectation on on I guess non bank corporations. So

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Speaker 1: what was going on inside Wall Street investment banks was

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Speaker 1: what I call in my research a so called culture

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Speaker 1: of smartnes and investment banks in Wall Streets at the

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Speaker 1: time had really Germany the strategy in the lightteen eighties

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Speaker 1: and nineteen nineties of only recruiting UM front office employees

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Speaker 1: from the most elite universities in the US. UM this

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Speaker 1: sort of two greatest feeder schools were Harvard University in

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Speaker 1: Princeton University, and so part of the work that that

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Speaker 1: did was what I call this halo effect. Right, so

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Speaker 1: Wall Street, by recruiting from universities that we're already branded

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Speaker 1: by the larger society is the best in the brightest,

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Speaker 1: got conferred onto them that yes, Wall Street, you could

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Speaker 1: trust Wall Street with financial advice, and you could trust

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Speaker 1: Wall Street models UH as a model for how you

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Speaker 1: should run your business because they are populated by the

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Speaker 1: smartest in the world. Now, there are a few things

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Speaker 1: that actually happened after this that smartness gets oddly catalyzed

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Speaker 1: by what I call a culture of over work. So

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Speaker 1: you have these Wall Street investment bankers that are in

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Speaker 1: many ways working their butts off, right hundred plus our weeks.

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Speaker 1: This sort of overwork, for those who actually continue on

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Speaker 1: often gets read by them as evidence of their superiority

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Speaker 1: in many ways as um, you know, better than or

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Speaker 1: the best of or better than the average worker, right,

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Speaker 1: And it's often sort of framed and start contradistinction to

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Speaker 1: those sort of regular workers who only work nine to five. Now. Also,

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Speaker 1: in addition to this, you have the larger Wall Street

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Speaker 1: institutional culture, where there's a continual revolving door. Right. Another

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Speaker 1: piece of Wall Street self identity and representation is that

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Speaker 1: they are real time with the market. Right. So when

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Speaker 1: people think of the market, they think of Wall Street. Right,

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Speaker 1: So there's this sort of market simultaneity. What's going on

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Speaker 1: to Wall Street should be we should actually emulate what

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Speaker 1: we think is going on with the stock market. Now, Historically,

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Speaker 1: the stock market was actually separate from the domain of

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Speaker 1: most corporations. The whole point of having a large organization

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Speaker 1: was that you could ameliorate, you could um at any weight.

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Speaker 1: Some of the madness going on with the short termism

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Speaker 1: in the stock market. The two were not conflated. Now.

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Speaker 1: What happened during the nineteen eighties and nineties was that

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Speaker 1: the culture and the time and the models of what

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Speaker 1: we're going on in the financial markets came to sub

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Speaker 1: in for and become a model for what should actually

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Speaker 1: happened within organizations. And this was where Wall Street was

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Speaker 1: taking the lead. Right, So their understanding of being real

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Speaker 1: time with the market made it so that they continually

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Speaker 1: had to close desks, open new desk, closed departments just

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Speaker 1: so that they could showcase right that they were sort

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Speaker 1: of real time with the market. In the crisis. They

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Speaker 1: often called this um I b G y BG, I'll

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Speaker 1: be gone, You'll be gone, right, So I'm not here

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Speaker 1: to actually um fix the mistakes that I helped to

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Speaker 1: rot write the unsustainability because I'm not going to be here.

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Speaker 1: And then the final piece to this is that Wellstreet

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Speaker 1: investment bankers are paid and compensated by the number of

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Speaker 1: deals they're able to push through, right, So their bonuses

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Speaker 1: are actually based on the number of transactions, not the

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Speaker 1: wonderfulness of the advice, right, oh, nor their sustainability, nor

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Speaker 1: their ability to actually create long term productivity. And so

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Speaker 1: sort of think about this sort of crazy cocktail. You

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Speaker 1: have people who think of themselves as smartest in the world,

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Speaker 1: who think of themselves as superior workers, or themselves not

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Speaker 1: going to be at their job for a very long time.

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Speaker 1: There's a continual expiration date revolving door to their jobs

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Speaker 1: I b G, y b G. They're compensated by the

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Speaker 1: number of deals they can push through, not their efficacy

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Speaker 1: or their long termism. And surely this is recipe for crisis, right,

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Speaker 1: Unsustainable deals UM that push the market up UM that

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Speaker 1: then also then set the stage for the for the crash. Right.

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Speaker 1: So this is also where the liquidated in the title

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Speaker 1: of the book comes from. This idea that even though

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Speaker 1: you're supposed to be one of the smartest people in

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Speaker 1: the world, and you're working one weeks uh, and the

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Speaker 1: company is supposed to be valuing your work, and by

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Speaker 1: company I mean the Wall Street firm that you're working at,

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Speaker 1: yet you're really really disposable, Yes, yes, absolutely, And what

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Speaker 1: cushions your disposability is the fact that you're so highly compensated, right,

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Speaker 1: is your bonus And so oftentimes the sort of um,

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Speaker 1: the irony of this is that the the tempt, the

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Speaker 1: short term temporal nous, the disposability of high level Wall

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Speaker 1: Street UH financiers and employees that experience of being downsized

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Speaker 1: and yet landing on their feet or having the cushion

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Speaker 1: to land on their feet, often makes them less sympathetic

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Speaker 1: to the plight of the average worker, for whom being

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Speaker 1: downsize often leads to massive social economic procurity and down

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Speaker 1: red mobility, and so their experience a procurity gets often

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Speaker 1: read back to them as creating men of metal, right,

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Speaker 1: people who can withstand procurity, when in fact their structural

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Speaker 1: position is quite different. Karen, I'd love to hear you

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Speaker 1: talk a little bit more about that year you spent

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Speaker 1: at Bankers Trust. What did you do? What was your

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Speaker 1: job that year? And I'm curious what your mental mental

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Speaker 1: state Isn't exactly the word I'm looking for, but sort

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Speaker 1: of going in as an academic and sort of knowing

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Speaker 1: that these ideas, this pre field work, as you're talking about,

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Speaker 1: it was percolating. What was it like to do a

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Speaker 1: job day to day, but also know that it was

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Speaker 1: laying the groundwork for a sort of longer academic study

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Speaker 1: in Bankers Trust. Um I was a analyst, and the

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Speaker 1: position I had was an analyst as part of an

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Speaker 1: internal management consulting group. And part of the role of

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Speaker 1: an internal management consulting analyst was to actually rotate around

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Speaker 1: the bank or within the bank, i should say, and

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Speaker 1: understand different departments. And anthropologically speaking, it was actually a

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Speaker 1: great position because I could learn um this sort of

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Speaker 1: more raise and the understandings and sort of how the

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Speaker 1: larger bank worked in relation to Wall Street, larger financial services, etcetera. Now,

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Speaker 1: in terms of the kinds of um bifurcations that I

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Speaker 1: would constantly have to navigate because I wanted to sort

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Speaker 1: of leave Wall Street after you know, a year or

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Speaker 1: so and actually come back and apply for grants and

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Speaker 1: do field work. It was actually very very stressful and

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Speaker 1: I struggled quite a bit with it. Now, UM my

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Speaker 1: sort of coworkers and um people who I reported to

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Speaker 1: all knew that I was an anthropology graduate student that

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Speaker 1: I would want to come back and actually study Wall

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Speaker 1: Street culture, etcetera, etcetera. So I feel fine about that

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Speaker 1: because the what I did not want to do is

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Speaker 1: to be framed as somebody who was doing covert research. Right,

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Speaker 1: I was not doing covert research I was working. I

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Speaker 1: was an employee for a year. People knew my sort

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Speaker 1: of larger goals and hopes and I would come back

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Speaker 1: in the future, and yet how to actually operationalize that

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Speaker 1: created quite a bit of anxiety. However, Wall Street, in

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Speaker 1: ironically to the rescue, our entire department, our entire management

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Speaker 1: consulting group within Bankers Trust, actually got downsized. And it

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Speaker 1: was actually the very first time that I recognized the

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Speaker 1: people with my coworkers again sort of this is the

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Speaker 1: you know, coming back to the conversation we were having,

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Speaker 1: that my coworkers were actually dealing with constant insecurity themselves.

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Speaker 1: And previously, before this experience, I had imagined Wall Street

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Speaker 1: financiers as in some sort of um oblique sense, downsize

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Speaker 1: or's right and rank and fall employees in corporate America

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Speaker 1: as those people being downsized. And what I came to

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Speaker 1: see was, oh, my gosh, Wall Street was actually using

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Speaker 1: its models on itself, right. Wall Street financiers were, again

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Speaker 1: this idea of real time, were constantly being subject to

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Speaker 1: their own dominant models, right, so they're sort of drinking

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Speaker 1: the the collective kool aid of maximizing shareholder value as well. UM, right,

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Speaker 1: I have one more field work question and then I

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Speaker 1: want to sort of fast forward into today's discussion about

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Speaker 1: capitalism and the roles of companies. But as an anthropologist,

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Speaker 1: did you ever regret not, uh, not doing field work

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Speaker 1: on I guess a more traditional subject like most people

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Speaker 1: think of anthropologists going off into the jungle or to

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Speaker 1: pap a new guinea or something to live with remote tribes.

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Speaker 1: And you were on Wall Street drawing you know, field

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Speaker 1: maps of downtown Manhattan. Uh didn't you ever regret um,

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Speaker 1: not going elsewhere? And what did your colleagues say about

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Speaker 1: your your choice of field work? Yes? No, Admittedly, in

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Speaker 1: the late ninety nineties, choosing to study Wall Street financiers

378
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Speaker 1: was incredibly odd and um, certainly there was pushback. But

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Speaker 1: you know, I hope I made the case, which is

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Speaker 1: that part of the UM, the critical eye of anthropology

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Speaker 1: that often gets honed through long term immersion and engagement

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Speaker 1: UM in the ideas and values and practices of UM

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Speaker 1: people's communities, ideologies. We want to understand and apprehend. That

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Speaker 1: kind of engagement was often missing from larger social scientific

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Speaker 1: studies of the powerful, and part of what I wanted

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Speaker 1: to do was to use the tools of anthropology and

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Speaker 1: getting at the ethos and the ethics and the values

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Speaker 1: and how they come to be structurally reproduced and instantiated

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Speaker 1: by individuals in a larger cultural web. I wanted to

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Speaker 1: use the tools of anthropology to see and to understand

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Speaker 1: how this is happening for the powerful. Oftentimes, the powerful

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Speaker 1: have a cloak of invisibility, right what sort of a

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Speaker 1: social scientists called the black box. And part of what

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Speaker 1: that cloak of invisibility does is that it shields them

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Speaker 1: from critique, from rendering specific the historical contingency and the

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Speaker 1: cultural specificity of their practices, and from engaging with the

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Speaker 1: values that then make up this big behemoth called finance.

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Speaker 1: And one of the sort of points is in order

399
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Speaker 1: to actually engage and unpack and critique and maybe reform

400
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Speaker 1: and maybe restructure and maybe undo some of the kinds

401
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Speaker 1: of um sort of bad cultural practices or the practices

402
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Speaker 1: that lead to larger social economic inequalities, we actually have

403
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Speaker 1: to understand how to get made in the first place.

404
00:26:18,840 --> 00:26:21,119
Speaker 1: And so it was training the sort of eyes of

405
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Speaker 1: anthropology to the corridors of power. I want to ask

406
00:26:24,359 --> 00:26:27,280
Speaker 1: a question that's sort of specific to what got you

407
00:26:27,400 --> 00:26:29,879
Speaker 1: interested in this topic in the first place, And you

408
00:26:29,920 --> 00:26:33,119
Speaker 1: mentioned the A, T and T layoffs and how they

409
00:26:33,119 --> 00:26:36,200
Speaker 1: were cheered on Wall Street. And something that you notice,

410
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Speaker 1: whether you hear about a country in distress or a

411
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Speaker 1: company in distress, is you over hear what the cult

412
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Speaker 1: of what I would call like the tough choices, Like

413
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Speaker 1: this government is going to have to make some tough

414
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Speaker 1: choices about where they're going to cut social spending, or

415
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Speaker 1: this company is going to have to make tough choices

416
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Speaker 1: about layoffs, things like that. And I often wonder if

417
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Speaker 1: when you here an example of Wall Street quote unquote

418
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Speaker 1: cheering at layoffs, and of course you still hear that

419
00:27:05,359 --> 00:27:09,040
Speaker 1: over uh twenty years later, how much is it about

420
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Speaker 1: the actual presumed increased profit that the company will demonstrate

421
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Speaker 1: by having fewer employees on its pay rolls and theoretically

422
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Speaker 1: becomes a leader more efficient operation, versus the signaling that

423
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Speaker 1: a CEO sends that they're willing to make a tough

424
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Speaker 1: choice and the message that that sends to the people

425
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Speaker 1: who themselves are dealing with the grueling lifestyle of Wall Street,

426
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Speaker 1: so that it is less so about the increase to

427
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Speaker 1: the bottom line per se, but the signal that it

428
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Speaker 1: sends to the bankers that yes, we are willing to

429
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Speaker 1: make the tough choice. We are willing to do something

430
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Speaker 1: painful that nobody likes to do as a demonstration of

431
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Speaker 1: our sort of willingness to be good stewards of capital.

432
00:27:54,880 --> 00:27:58,359
Speaker 1: I guess what I would say to that is, oftentimes CEOs,

433
00:27:59,160 --> 00:28:03,720
Speaker 1: who are often buys by Wall Street financiers, often get

434
00:28:03,880 --> 00:28:06,960
Speaker 1: a a sort of false choice in their head, right,

435
00:28:07,240 --> 00:28:10,399
Speaker 1: the idea that we need to do this in order

436
00:28:10,520 --> 00:28:14,639
Speaker 1: to UM save jobs in the end, and that hasn't

437
00:28:14,640 --> 00:28:17,679
Speaker 1: actually panned out. What often happens is the kind of

438
00:28:17,720 --> 00:28:22,200
Speaker 1: restructuring UM, whether it's mergers and acquisitions or financial restructuring

439
00:28:22,280 --> 00:28:25,800
Speaker 1: or taking on debt or downsizing or merging or acquiring.

440
00:28:26,480 --> 00:28:30,080
Speaker 1: What that often does is actually sort of create these

441
00:28:30,119 --> 00:28:35,480
Speaker 1: transactions that downsizes pieces of the institution and takes those

442
00:28:35,480 --> 00:28:39,360
Speaker 1: so called savings and reinvested up top right, So the

443
00:28:39,440 --> 00:28:44,200
Speaker 1: sort of restructuring that often happens is recaptured and UM

444
00:28:44,240 --> 00:28:47,440
Speaker 1: sort of used to sort of fuel UM investor wealth.

445
00:28:47,960 --> 00:28:51,120
Speaker 1: And I actually would frame that as much more of

446
00:28:51,160 --> 00:28:55,000
Speaker 1: an extractive model that's not so much about getting the

447
00:28:55,000 --> 00:28:59,520
Speaker 1: corporation in shape and actually fixing the longstanding problems, but

448
00:28:59,640 --> 00:29:03,960
Speaker 1: rev are doing a relatively quick extraction for short term

449
00:29:03,960 --> 00:29:10,120
Speaker 1: shareholder or investor gain, and oftentimes folks get sort of socialized.

450
00:29:10,160 --> 00:29:13,400
Speaker 1: I would say, as understanding, well, it doesn't matter because

451
00:29:13,400 --> 00:29:16,840
Speaker 1: as long as shareholder gains, the owner's gain. And so

452
00:29:17,000 --> 00:29:20,240
Speaker 1: there's another sort of false choice here, and that is

453
00:29:20,280 --> 00:29:23,680
Speaker 1: the assumption that historically and even into the present, that

454
00:29:23,720 --> 00:29:27,280
Speaker 1: shareholders actually own the company. I would actually say that

455
00:29:27,320 --> 00:29:30,840
Speaker 1: shareholders own shares of the company, but they don't necessarily

456
00:29:30,840 --> 00:29:33,240
Speaker 1: own the entirety of the corporation itself. And that sort

457
00:29:33,240 --> 00:29:37,160
Speaker 1: of um being sort of highly contested and um that

458
00:29:37,200 --> 00:29:39,360
Speaker 1: debates really sort of coming up in the in the

459
00:29:39,400 --> 00:29:44,800
Speaker 1: public realm discourse today. I have a sort of related question,

460
00:29:45,000 --> 00:29:49,560
Speaker 1: but how much responsibility do the company's bear here, because

461
00:29:49,600 --> 00:29:53,320
Speaker 1: it feels like even if Wall Street culture might be

462
00:29:53,920 --> 00:30:00,160
Speaker 1: a little um distorted under your observations, the role is

463
00:30:00,160 --> 00:30:04,200
Speaker 1: actually quite clear. Like Wall Street is selling a package

464
00:30:04,280 --> 00:30:07,959
Speaker 1: of services to corporate clients, whether it's M and A

465
00:30:07,960 --> 00:30:12,959
Speaker 1: advisory or fundraising and things like that, and the companies

466
00:30:13,000 --> 00:30:18,800
Speaker 1: that hire them don't necessarily have to accept those services,

467
00:30:18,840 --> 00:30:24,120
Speaker 1: and yet often they seem to. That's right, that's right. Um.

468
00:30:24,280 --> 00:30:27,040
Speaker 1: What I would also say is that in that throughout

469
00:30:27,080 --> 00:30:30,400
Speaker 1: the nineteen nineties, what happened was that Wall Street really

470
00:30:30,400 --> 00:30:36,240
Speaker 1: worked quite closely with top level corporate management to really

471
00:30:36,280 --> 00:30:40,800
Speaker 1: restructure the ways in which high level executives and managers

472
00:30:40,840 --> 00:30:44,479
Speaker 1: and most of the largest corporations actually got compensated. And

473
00:30:44,520 --> 00:30:47,680
Speaker 1: so the sort of shift to finance, the shift to

474
00:30:47,760 --> 00:30:52,400
Speaker 1: the financial markets for most um, sort of large corporations,

475
00:30:52,440 --> 00:30:55,640
Speaker 1: really happened in the nineteen eighties and nineteen nineties where

476
00:30:56,200 --> 00:30:59,560
Speaker 1: corporate executives actually came to be paid through their stock

477
00:30:59,600 --> 00:31:04,440
Speaker 1: options right, and in so doing, instead of actually relying

478
00:31:04,520 --> 00:31:08,320
Speaker 1: on a salary that's in a sense in a context

479
00:31:08,400 --> 00:31:11,440
Speaker 1: with the larger organizational culture in which they were embedded,

480
00:31:11,880 --> 00:31:17,080
Speaker 1: they were reoriented to Wall Street time frames and understandings

481
00:31:17,120 --> 00:31:21,560
Speaker 1: by actually being paid through stock and not through organizational salaries.

482
00:31:22,000 --> 00:31:25,920
Speaker 1: So what happened over that nineteen nineties time frame that

483
00:31:26,080 --> 00:31:30,920
Speaker 1: many executives actually came to see their roles as similar

484
00:31:30,960 --> 00:31:35,520
Speaker 1: to that of Wall Street. And also, not surprisingly, many

485
00:31:35,560 --> 00:31:39,320
Speaker 1: corporate executives were actually hired from finance, right. So this

486
00:31:39,400 --> 00:31:41,400
Speaker 1: sort of idea of sort of growing up within the

487
00:31:41,520 --> 00:31:45,920
Speaker 1: organization that pretty much ended UM in the nineteen eighties

488
00:31:45,920 --> 00:31:49,160
Speaker 1: and nineteen nineties, where many executives were then hired in

489
00:31:49,560 --> 00:31:54,960
Speaker 1: visa v finance or through finance programs after their NBA's

490
00:31:55,760 --> 00:31:59,360
Speaker 1: I'm curious, you know, obviously it's no it's no secret

491
00:31:59,560 --> 00:32:02,440
Speaker 1: or missed that within the halls of academia there are

492
00:32:02,440 --> 00:32:04,960
Speaker 1: a lot of people of a sort of the more

493
00:32:05,040 --> 00:32:07,800
Speaker 1: left persuasion who are going to be very critical of

494
00:32:07,880 --> 00:32:12,480
Speaker 1: Wall Street and uh, big business. I'm curious, though, from

495
00:32:12,520 --> 00:32:17,840
Speaker 1: your perspective, whether you think that other colleagues in your field,

496
00:32:18,120 --> 00:32:21,680
Speaker 1: whether they have any blind spots that because they haven't

497
00:32:21,720 --> 00:32:24,920
Speaker 1: actually gone in and done the work and actually been

498
00:32:24,960 --> 00:32:27,840
Speaker 1: involved in working in a bank, that causes them to

499
00:32:28,080 --> 00:32:33,080
Speaker 1: misunderstand aspects of how this all works. Academia certainly shares

500
00:32:33,120 --> 00:32:36,880
Speaker 1: a large part of the critique, and one of the

501
00:32:37,040 --> 00:32:40,480
Speaker 1: sort of key points, UM is that you know, certainly

502
00:32:40,520 --> 00:32:45,280
Speaker 1: there are many economists who really help to promote this

503
00:32:45,480 --> 00:32:50,040
Speaker 1: idea that shareholders are the sort of owners or of companies,

504
00:32:50,080 --> 00:32:52,640
Speaker 1: that the purpose of business is to create a profit

505
00:32:52,800 --> 00:32:55,840
Speaker 1: right sort of agency theory, that the whole role of

506
00:32:55,920 --> 00:33:01,560
Speaker 1: managers is actually to um fulfill their role as agents

507
00:33:01,600 --> 00:33:04,360
Speaker 1: to the principle which are the shareholders. These are all

508
00:33:04,480 --> 00:33:09,600
Speaker 1: constructed academic paradigms that are actually disconnected a little bit

509
00:33:09,680 --> 00:33:15,120
Speaker 1: from corporate history. Right, that then got promoted as the

510
00:33:15,240 --> 00:33:19,680
Speaker 1: truth that then god also taken up by Wall Street. Right.

511
00:33:19,760 --> 00:33:24,040
Speaker 1: So in many ways, academia actually helped hatch this idea

512
00:33:24,760 --> 00:33:28,680
Speaker 1: that financiers then ran with, right, the Milton Freakman's of

513
00:33:28,720 --> 00:33:32,240
Speaker 1: the world and the Michael Jensen's of the world, even

514
00:33:32,240 --> 00:33:37,880
Speaker 1: though he later critiques some of his viewpoints. Getting back

515
00:33:37,880 --> 00:33:42,520
Speaker 1: to my convoluted uh political intro, we are seeing more

516
00:33:42,520 --> 00:33:48,040
Speaker 1: and more politicians make noise about reforming the reasons that

517
00:33:48,200 --> 00:33:53,400
Speaker 1: companies exist. So Elizabeth Warren is talking about redistributing shareholder

518
00:33:53,520 --> 00:33:57,400
Speaker 1: value towards the middle class. Jamie Diamond is talking about

519
00:33:57,440 --> 00:34:02,160
Speaker 1: making companies less short term focused and you know, maybe

520
00:34:02,360 --> 00:34:06,240
Speaker 1: reorient them towards something that isn't just quarterly earnings. What

521
00:34:06,280 --> 00:34:10,319
Speaker 1: do you think of those types of movements, those proposals,

522
00:34:10,400 --> 00:34:14,640
Speaker 1: and how would one actually go about changing the culture

523
00:34:14,920 --> 00:34:19,760
Speaker 1: that gave rise to this existing system. You know, many

524
00:34:19,800 --> 00:34:24,319
Speaker 1: of these kinds of large scale reforms UM would be

525
00:34:24,360 --> 00:34:27,879
Speaker 1: important to actually think through and take on. And one

526
00:34:27,920 --> 00:34:31,480
Speaker 1: sort of example is UM I believe it is with Warren,

527
00:34:31,560 --> 00:34:34,319
Speaker 1: but many other folks are talking about what's happening with

528
00:34:34,320 --> 00:34:38,400
Speaker 1: the private equity industry, and oftentimes the private equity industry

529
00:34:38,400 --> 00:34:40,840
Speaker 1: will say, hey, look, we're sort of different than the

530
00:34:40,840 --> 00:34:44,239
Speaker 1: people who do short term shareholder value because instead of

531
00:34:44,280 --> 00:34:48,400
Speaker 1: actually doing the evil eye and quarter by quarter short

532
00:34:48,520 --> 00:34:50,840
Speaker 1: term returns on a public company, what we're doing is

533
00:34:50,840 --> 00:34:54,560
Speaker 1: we're actually taking companies private. But I would argue that

534
00:34:54,640 --> 00:34:59,800
Speaker 1: many of the same kinds of UM ideologies and values

535
00:35:00,080 --> 00:35:04,600
Speaker 1: of extraction right and paying oneself a dividend and loading

536
00:35:04,719 --> 00:35:08,560
Speaker 1: on dead onto companies in order to extract those dividends. UM,

537
00:35:08,600 --> 00:35:11,680
Speaker 1: it's a similar ideology that private equity firms have done,

538
00:35:12,000 --> 00:35:15,320
Speaker 1: and yet by and large they're not regulated. And so

539
00:35:15,560 --> 00:35:18,880
Speaker 1: one sort of iconic example is Toys r Us towards

540
00:35:18,880 --> 00:35:21,000
Speaker 1: are US. Oftentimes people will say, well, what's the reason

541
00:35:21,040 --> 00:35:22,879
Speaker 1: Toys r US want bankrupt? People will say, well, because

542
00:35:22,880 --> 00:35:27,000
Speaker 1: of Amazon. And yet what folks are often missing is

543
00:35:27,040 --> 00:35:29,960
Speaker 1: that Toys r Us wasn't doing wonderfully, but it actually

544
00:35:30,000 --> 00:35:33,959
Speaker 1: wasn't doing that badly right. Because private equity funds often

545
00:35:34,080 --> 00:35:37,400
Speaker 1: want to take over companies or buy companies that actually

546
00:35:37,400 --> 00:35:40,600
Speaker 1: have a really good cash flow So this idea that

547
00:35:40,640 --> 00:35:43,600
Speaker 1: these companies will have been bankrupt anyway or they're terribly

548
00:35:43,640 --> 00:35:47,799
Speaker 1: distressed again is a false choice. Is a sort of

549
00:35:48,480 --> 00:35:53,360
Speaker 1: problematic representation. Um that toys r US was doing okay,

550
00:35:53,360 --> 00:35:57,400
Speaker 1: not wonderfully. And yet what sort of the takeover or

551
00:35:57,440 --> 00:36:00,080
Speaker 1: the buying up of turning towards r US into you

552
00:36:00,160 --> 00:36:04,839
Speaker 1: a portfolio company, of being capital KKR and um, we're

553
00:36:04,920 --> 00:36:08,840
Speaker 1: not a realty trust? What that did? Was it engendered? Um,

554
00:36:08,880 --> 00:36:13,040
Speaker 1: it's been it's bankruptcy by loading on billions of dollars

555
00:36:13,040 --> 00:36:16,799
Speaker 1: of debt um so that they actually could not have

556
00:36:17,080 --> 00:36:21,080
Speaker 1: the bandwidth right or um, the capital to invest in

557
00:36:21,719 --> 00:36:24,279
Speaker 1: the kinds of online presence that they actually needed to do.

558
00:36:24,680 --> 00:36:28,319
Speaker 1: I'm curious, Uh, you know, I imagine that someone in

559
00:36:28,440 --> 00:36:33,640
Speaker 1: your position today who is thinking about uh doing a

560
00:36:33,719 --> 00:36:36,960
Speaker 1: sort of similar ethnography, might be tempted to go into

561
00:36:37,239 --> 00:36:39,880
Speaker 1: big tech these days and get a job at Facebook

562
00:36:39,960 --> 00:36:43,120
Speaker 1: or Google. Because we know that there's so much scrutiny

563
00:36:43,200 --> 00:36:46,480
Speaker 1: of these companies and arguably some of the anger that

564
00:36:46,560 --> 00:36:50,160
Speaker 1: was directed towards Wall Street has been redirected of late

565
00:36:50,280 --> 00:36:53,440
Speaker 1: towards them. What would you advise and what would be

566
00:36:53,480 --> 00:36:56,040
Speaker 1: the kind of questions that if you were, say, doing

567
00:36:56,080 --> 00:36:58,720
Speaker 1: the same thing, or you had a student who wanted

568
00:36:58,760 --> 00:37:01,200
Speaker 1: to do something similar but at a big tech company,

569
00:37:01,480 --> 00:37:04,640
Speaker 1: what would be the kind of questions you might encourage

570
00:37:04,719 --> 00:37:09,240
Speaker 1: them to look out for to start focusing their work. Wow,

571
00:37:09,360 --> 00:37:12,640
Speaker 1: so tech companies, Huh, Well, you know, the if I

572
00:37:12,640 --> 00:37:16,800
Speaker 1: can sort of take one piece of that question, and um,

573
00:37:16,840 --> 00:37:19,680
Speaker 1: that is that I think it would be really difficult

574
00:37:19,719 --> 00:37:21,520
Speaker 1: to do the kind of field work that I did

575
00:37:21,719 --> 00:37:25,960
Speaker 1: back then, um actually today. And when I was doing

576
00:37:26,000 --> 00:37:29,560
Speaker 1: the field work back then, it was before two and

577
00:37:29,880 --> 00:37:32,279
Speaker 1: I should also say it was before the ubiquity of

578
00:37:32,320 --> 00:37:36,480
Speaker 1: a smartphone, and so, and the idea of the smartphone

579
00:37:36,640 --> 00:37:39,720
Speaker 1: is that one's work, email, one's Gmail, one's phone numbers

580
00:37:39,760 --> 00:37:43,040
Speaker 1: are all sort of conflated together. And so the kind

581
00:37:43,040 --> 00:37:45,480
Speaker 1: of sort of immersive field work that I did for

582
00:37:45,760 --> 00:37:50,000
Speaker 1: three plus years with digital recordings and tape recordings that

583
00:37:50,520 --> 00:37:53,520
Speaker 1: would never have gone viral. Right of course, I'm under

584
00:37:53,520 --> 00:37:57,200
Speaker 1: an anthropological um pledged that these are all confidential and

585
00:37:57,200 --> 00:38:00,640
Speaker 1: that the data is destroyed, etcetera. But certainly given the

586
00:38:00,719 --> 00:38:05,600
Speaker 1: scrutiny of finance, and you know, check today post two

587
00:38:05,640 --> 00:38:08,440
Speaker 1: thousand and eight, I'm not sure I would have actually

588
00:38:08,440 --> 00:38:13,200
Speaker 1: gotten the kind of approval to do the same kind

589
00:38:13,239 --> 00:38:16,680
Speaker 1: of field work UM. And even though many of the

590
00:38:16,840 --> 00:38:22,080
Speaker 1: sort of UM executives, etcetera. Are still you know, quite powerful,

591
00:38:22,160 --> 00:38:24,400
Speaker 1: if not as powerful or if not more powerful than

592
00:38:24,440 --> 00:38:28,759
Speaker 1: they were, they also feel much more scrutinized. And that's

593
00:38:28,800 --> 00:38:31,440
Speaker 1: a that's a tough cocktail, right to be to think

594
00:38:31,520 --> 00:38:34,799
Speaker 1: of oneself as under scrutiny and perhaps a victim, but

595
00:38:34,840 --> 00:38:38,319
Speaker 1: also be very powerful. That that's a that's not a

596
00:38:38,320 --> 00:38:43,440
Speaker 1: good combination to have. Well, Karen, I found that conversation

597
00:38:43,719 --> 00:38:48,160
Speaker 1: really really fascinating. Just the idea of an anthropologist going

598
00:38:48,239 --> 00:38:52,360
Speaker 1: to Wall Street and conducting their field work is absolutely amazing,

599
00:38:52,400 --> 00:38:54,799
Speaker 1: and the book is great. So thank you so much

600
00:38:54,840 --> 00:38:56,920
Speaker 1: for being with us today. Thank you so much for

601
00:38:56,960 --> 00:38:59,120
Speaker 1: having me. Yeah, thank you, Karen. That was great. I

602
00:38:59,160 --> 00:39:17,960
Speaker 1: love that, so Joe. I found that conversation really fascinating.

603
00:39:18,080 --> 00:39:21,759
Speaker 1: And part of what's great about Karen's work is just

604
00:39:21,840 --> 00:39:26,320
Speaker 1: the dedication of going and actually working this really intense,

605
00:39:26,600 --> 00:39:30,399
Speaker 1: you know, work schedule in order to to long term

606
00:39:30,480 --> 00:39:33,919
Speaker 1: field research on on Wall Street. I think that's really great.

607
00:39:34,200 --> 00:39:36,480
Speaker 1: I thought that was really fascinating too, And you know,

608
00:39:36,520 --> 00:39:39,960
Speaker 1: it's funny. So, like our last several episodes, we've been

609
00:39:40,000 --> 00:39:44,240
Speaker 1: doing a lot about things relating to UH balance sheets

610
00:39:44,280 --> 00:39:48,279
Speaker 1: and the sort of demands of balance sheet and accounting requirements,

611
00:39:48,719 --> 00:39:51,719
Speaker 1: UM and how they affect the economy, and this kind

612
00:39:51,719 --> 00:39:54,000
Speaker 1: of seemed like a break, But I actually think it's

613
00:39:54,000 --> 00:40:00,040
Speaker 1: pretty connected because ultimately what ultimately these sort of of

614
00:40:00,360 --> 00:40:05,000
Speaker 1: the constraints imposed on companies by Wall Street, by the

615
00:40:05,040 --> 00:40:07,880
Speaker 1: people who can go out and fundraise, is going to

616
00:40:07,960 --> 00:40:13,200
Speaker 1: have a very real effect on how corporations behave and

617
00:40:13,280 --> 00:40:17,520
Speaker 1: whether financial conditions are loose, whether they're available to whom

618
00:40:17,560 --> 00:40:21,880
Speaker 1: they're available, Who gets to decide who they're available to,

619
00:40:22,120 --> 00:40:24,719
Speaker 1: what are the conditions of those people. I do think

620
00:40:24,760 --> 00:40:28,319
Speaker 1: it's actually very much connected, in a sort of more

621
00:40:28,360 --> 00:40:31,160
Speaker 1: theoretical sense, or a sort of more personal sense, to

622
00:40:31,239 --> 00:40:34,720
Speaker 1: a lot of the themes we've actually already been discussing lately.

623
00:40:34,760 --> 00:40:38,840
Speaker 1: So I really enjoyed that. Oh, I totally agree, except

624
00:40:38,920 --> 00:40:41,719
Speaker 1: I would sort of flip it and say that, you know,

625
00:40:41,840 --> 00:40:44,640
Speaker 1: in the past ten years or so, we've had extremely

626
00:40:44,719 --> 00:40:48,799
Speaker 1: loose financial conditions by virtue of very very low interest rates,

627
00:40:48,840 --> 00:40:53,600
Speaker 1: and in that environment, the only constraint on corporate behavior

628
00:40:54,360 --> 00:40:58,720
Speaker 1: is basically cultural. Right. It's like the extent to which

629
00:40:58,840 --> 00:41:02,920
Speaker 1: you are willing to undertake a number of transactions, whether

630
00:41:03,000 --> 00:41:06,360
Speaker 1: it's depth financing or m and a back activity or

631
00:41:06,440 --> 00:41:09,640
Speaker 1: buy backs, the constraint there is cultural. And so I

632
00:41:09,640 --> 00:41:12,959
Speaker 1: think the conversation we just had about this idea that

633
00:41:13,440 --> 00:41:17,319
Speaker 1: doing something has sort of become embedded in the Wall

634
00:41:17,360 --> 00:41:20,560
Speaker 1: Street ethos, I think it's really important. Now. I I

635
00:41:21,280 --> 00:41:23,759
Speaker 1: totally agree with you the other thing, and I didn't

636
00:41:23,800 --> 00:41:29,040
Speaker 1: get to mention it, but Karen alluded to it several times.

637
00:41:29,320 --> 00:41:34,000
Speaker 1: It's interesting to think about an era of corporations that

638
00:41:34,160 --> 00:41:38,440
Speaker 1: actually existed before the view that the corporation's goal was

639
00:41:38,520 --> 00:41:40,480
Speaker 1: to just get the stock price up. And if you

640
00:41:40,680 --> 00:41:44,919
Speaker 1: read a book like uh, John Galbraith's New Industrial State,

641
00:41:45,120 --> 00:41:48,120
Speaker 1: he talks about all this stuff about corporations viewing itself

642
00:41:48,520 --> 00:41:52,600
Speaker 1: not as a profit maximization entity per se, but more

643
00:41:52,680 --> 00:41:56,120
Speaker 1: from the perspective of insurance and having the ability to

644
00:41:56,360 --> 00:42:00,239
Speaker 1: create an entity that would weather different economic site holes

645
00:42:00,239 --> 00:42:04,640
Speaker 1: in different idiosyncratic risks and so forth. It's really hard,

646
00:42:04,680 --> 00:42:08,839
Speaker 1: I think, in to imagine that corporations ever had a

647
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Speaker 1: different purpose besides just um uh, besides just getting the

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Speaker 1: stock price up, but it actually is is uh. I

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Speaker 1: think I really appreciate hearing her talk about how it's

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Speaker 1: kind of a modern idea. Oh yeah, So in Karen's work,

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Speaker 1: it's quite clear that this is something that only really

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Speaker 1: started to happen in the nineteen eighties, so quite a

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Speaker 1: recent shift. Um, and it's it's weird again to think

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Speaker 1: about how embedded it is in our modern notions of

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Speaker 1: finance and the economy. This is how the financial system

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Speaker 1: is supposed to work. Of course, capitalism is about making money,

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Speaker 1: and therefore companies are trying to maximize their profits for shareholders.

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Speaker 1: But just two or three decades ago, or I should say,

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Speaker 1: I always forget what what is just three or four

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Speaker 1: decades ago that wasn't necessarily the case totally. Alright, Well,

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Speaker 1: this has been another episode of the All Thoughts podcast.

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Speaker 1: I'm Tracy Allaway. You can follow me on Twitter at

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Speaker 1: Tracy Alloway, and I'm Joe wisn'tal. You can follow me

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Speaker 1: on Twitter at the Stalwart, and you should follow our

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Speaker 1: producer on Twitter, Laura Carlson. She's at Laura M. Carlson.

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Speaker 1: And check out all of Bloomberg's podcasts on Twitter at podcasts.

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Speaker 1: Thanks for listening,