Dear Valued Supporters,
We live in a time marked by dangerous levels of political cynicism. And yet, there is a palpable yearning to rise above partisanship, a will to articulate and pursue public goods. We saw this in the support for whistleblowers like Edward Snowden and also in the popularity of Rand Paul's filibuster opposing the government's targeted killing of American citizens. We feel it in our disappointment at anemic voter turnout and in our disgust at the corruption of American democracy. And we witnessed it at our seventh annual conference "The Unmaking of Americans: Are There Still American Values Worth Fighting for," where speakers from Charles Murray to George Packer, from Lawrence Lessig to Kendall Thomas, came together to think about those ideals that still inspire and unite Americans to sacrifice for a common dream.
“Having said this, I must deal immediately and at some length with the question of violence.”
“Sometimes ‘violence is the only way of ensuring a hearing for moderation.’”
—Hannah Arendt citing Conor Cruise O’Brien, On Violence
Nelson Mandela gave one of the great speeches of 20th century at his trial before the South African Supreme Court in Pretoria in 1964. Mandela’s speech is best remembered for the ringing conclusion in which he articulates the ideals of free and democratic life as that “ideal for which I am prepared to die.” Six months after Martin Luther King Jr. delivered his “I have a dream speech” from the Mall in Washington, DC, Mandela ended his own speech before being sentenced to life imprisonment with these words:
During my lifetime I have dedicated myself to this struggle of the African people. I have fought against white domination, and I have fought against black domination. I have cherished the ideal of a democratic and free society in which all persons live together in harmony and with equal opportunities. It is an ideal which I hope to live for and to achieve. But if needs be, it is an ideal for which I am prepared to die.
Mandela died yesterday and he will be rightly remembered for both his vision and his courage.
I want to focus on another aspect of his legacy, however, the question of violence. Often forgotten by those who quote only the final paragraph of Mandela’s speech, much of his speech is an exploration of the need for and proper revolutionary use of violence. Indeed, after a brief introduction in which Mandela reminds the Court that he holds a bachelor’s degree, that he is a lawyer, and that he was raised to revere his tribal forebears who fought in defense of their fatherland, he comes to the question of violence. “Having said this,” he says, “I must deal immediately and at some length with the question of violence.”
What follows is one of the most thoughtful and subtle reflections on the strategic and moral complications of violence we have. It is worth citing at length, and even this summary barely does Mandela justice. But here is Mandela’s argument for a limited campaign of violence in response to the violence of the South African state:
I do not, however, deny that I planned sabotage. I did not plan it in a spirit of recklessness, nor because I have any love of violence. I planned it as a result of a calm and sober assessment of the political situation that had arisen after many years of tyranny, exploitation, and oppression of my people by the whites.
I admit immediately that I was one of the persons who helped to form Umkhonto we Sizwe, and that I played a prominent role in its affairs until I was arrested in August 1962….
In order to explain these matters properly, I will have to explain what Umkhonto set out to achieve; what methods it prescribed for the achievement of these objects, and why these methods were chosen. I will also have to explain how I became involved in the activities of these organisations.
I deny that Umkhonto was responsible for a number of acts which clearly fell outside the policy of the organisation, and which have been charged in the indictment against us. I do not know what justification there was for these acts, but to demonstrate that they could not have been authorised by Umkhonto, I want to refer briefly to the roots and policy of the organisation.
I have already mentioned that I was one of the persons who helped to form Umkhonto. I, and the others who started the organisation, did so for two reasons. Firstly, we believed that as a result of Government policy, violence by the African people had become inevitable, and that unless responsible leadership was given to canalise and control the feelings of our people, there would be outbreaks of terrorism which would produce an intensity of bitterness and hostility between the various races of this country which is not produced even by war. Secondly, we felt that without violence there would be no way open to the African people to succeed in their struggle against the principle of white supremacy. All lawful modes of expressing opposition to this principle had been closed by legislation, and we were placed in a position in which we had either to accept a permanent state of inferiority, or to defy the government. We chose to defy the law. We first broke the law in a way which avoided any recourse to violence; when this form was legislated against, and then the government resorted to a show of force to crush opposition to its policies, only then did we decide to answer violence with violence.
But the violence which we chose to adopt was not terrorism…..
I must return to June 1961. What were we, the leaders of our people, to do? Were we to give in to the show of force and the implied threat against future action, or were we to fight it and, if so, how?
We had no doubt that we had to continue the fight. Anything else would have been abject surrender. Our problem was not whether to fight, but was how to continue the fight. We of the ANC had always stood for a non-racial democracy, and we shrank from any action which might drive the races further apart than they already were. But the hard facts were that fifty years of non-violence had brought the African people nothing but more and more repressive legislation, and fewer and fewer rights. It may not be easy for this court to understand, but it is a fact that for a long time the people had been talking of violence - of the day when they would fight the white man and win back their country - and we, the leaders of the ANC, had nevertheless always prevailed upon them to avoid violence and to pursue peaceful methods. When some of us discussed this in May and June of 1961, it could not be denied that our policy to achieve a non-racial state by non-violence had achieved nothing, and that our followers were beginning to lose confidence in this policy and were developing disturbing ideas of terrorism.
It must not be forgotten that by this time violence had, in fact, become a feature of the South African political scene. There had been violence in 1957 when the women of Zeerust were ordered to carry passes; there was violence in 1958 with the enforcement of cattle culling in Sekhukhuniland; there was violence in 1959 when the people of Cato Manor protested against pass raids; there was violence in 1960 when the government attempted to impose Bantu authorities in Pondoland. Thirty-nine Africans died in these disturbances. In 1961 there had been riots in Warmbaths, and all this time the Transkei had been a seething mass of unrest. Each disturbance pointed clearly to the inevitable growth among Africans of the belief that violence was the only way out - it showed that a government which uses force to maintain its rule teaches the oppressed to use force to oppose it. Already small groups had arisen in the urban areas and were spontaneously making plans for violent forms of political struggle. There now arose a danger that these groups would adopt terrorism against Africans, as well as whites, if not properly directed. Particularly disturbing was the type of violence engendered in places such as Zeerust, Sekhukhuniland, and Pondoland amongst Africans. It was increasingly taking the form, not of struggle against the government - though this is what prompted it - but of civil strife amongst themselves, conducted in such a way that it could not hope to achieve anything other than a loss of life and bitterness.
At the beginning of June 1961, after a long and anxious assessment of the South African situation, I, and some colleagues, came to the conclusion that as violence in this country was inevitable, it would be unrealistic and wrong for African leaders to continue preaching peace and non-violence at a time when the government met our peaceful demands with force.
This conclusion was not easily arrived at. It was only when all else had failed, when all channels of peaceful protest had been barred to us, that the decision was made to embark on violent forms of political struggle, and to form Umkhonto we Sizwe. We did so not because we desired such a course, but solely because the government had left us with no other choice. In the Manifesto of Umkhonto published on 16 December 1961, which is exhibit AD, we said:
"The time comes in the life of any nation when there remain only two choices - submit or fight. That time has now come to South Africa. We shall not submit and we have no choice but to hit back by all means in our power in defence of our people, our future, and our freedom."
This was our feeling in June of 1961 when we decided to press for a change in the policy of the National Liberation Movement. I can only say that I felt morally obliged to do what I did….
Four forms of violence were possible. There is sabotage, there is, there is terrorism, and there is open revolution. We chose to adopt the first method and to exhaust it before taking any other decision.
In the light of our political background the choice was a logical one. Sabotage did not involve loss of life, and it offered the best hope for future race relations. Bitterness would be kept to a minimum and, if the policy bore fruit, democratic government could become a reality. This is what we felt at the time, and this is what we said in our manifesto (exhibit AD):
"We of Umkhonto we Sizwe have always sought to achieve liberation without bloodshed and civil clash. We hope, even at this late hour, that our first actions will awaken everyone to a realisation of the disastrous situation to which the nationalist policy is leading. We hope that we will bring the government and its supporters to their senses before it is too late, so that both the government and its policies can be changed before matters reach the desperate state of civil war."
The initial plan was based on a careful analysis of the political and economic situation of our country. We believed that South Africa depended to a large extent on foreign capital and foreign trade. We felt that planned destruction of power plants, and interference with rail and telephone communications, would tend to scare away capital from the country, make it more difficult for goods from the industrial areas to reach the seaports on schedule, and would in the long run be a heavy drain on the economic life of the country, thus compelling the voters of the country to reconsider their position.
Attacks on the economic life-lines of the country were to be linked with sabotage on government buildings and other symbols of apartheid. These attacks would serve as a source of inspiration to our people. In addition, they would provide an outlet for those people who were urging the adoption of violent methods and would enable us to give concrete proof to our followers that we had adopted a stronger line and were fighting back against government violence.
In addition, if mass action were successfully organised, and mass reprisals taken, we felt that sympathy for our cause would be roused in other countries, and that greater pressure would be brought to bear on the South African government.
This then was the plan. Umkhonto was to perform sabotage, and strict instructions were given to its members right from the start, that on no account were they to injure or kill people in planning or carrying out operations.
It is strange today to hear politicians of all stripes praising Mandela for his statesmanship when they, for years, condemned his embrace of violence and arrested those in the U.S. who—following Mandela’s own tactics—chained themselves to fences to oppose the U.S. government’s support of the apartheid regime in South Africa. It is true that Mandela lived numerous lives. As a young man, he was part of a royal tribal household. As a young adult, he was a lawyer. Later he was a non-violent leader. Still later, he turned to limited and rationalized use of violence. For 27 years he paid for his crimes in prison and then emerged a statesman, one committed to reconciliation, freedom, and multicultural democracy. Finally, when he stepped down from the Presidency after one term he helped assure South Africa’s democratic future and became an elder statesman in the truest sense of the word.
To understand the complexities of Mandela’s limited turn to sabotage (as opposed to terrorism in his words), it is helpful to consider Hannah Arendt’s essay On Violence, originally published in the New York Review of Books in 1969. Violence, writes Arendt, is at root instrumental. It is a means to an end. And sometimes, violence can yield positive and even moderate results, Arendt claims, citing Conor Cruise O’Brien: “Sometimes ‘violence is the only way of ensuring a hearing for moderation.’”
As did Mandela, Arendt well understood that violence can be a useful and important means in struggles for justice. She points to numerous of examples where violence has worked to promote justice: “France would not have received the most radical bill since Napoleon to change its antiquated education system if the French students had not rioted; if it had not been for the riots of the spring term, no one at Columbia University would have dreamed of accepting reforms; and it is probably quite true that in West Germany the existence of ‘dissenting minorities is not even noticed unless they engage in provocation.’” Violence can, and often does, make injustice visible to a citizenry that is blind to it. Because violence can “serve to dramatize grievances and bring them to public attention,” violence can serve the cause of reform and also of justice.
We must take Arendt and Mandela’s point seriously. Violence is a means to an end. Violence can work. “No doubt, ‘violence pays.’” Violence can yield results.
But Arendt is not an advocate for violence. Violence can pay, she writes, but “the trouble is that it pays indiscriminately.” And this is where the use of violence becomes dangerous.
The danger in using violence as a means is that when “applied to human affairs,” violence as a means has a tendency to overwhelm whatever good ends towards which it aims. Too often, violence will lead those in power to respond with sham reforms designed to end violence. They will seek the path of least resistance, instituting reforms that are often the wrong reforms. Arendt offers the example of the way that the student university protests of the 60s led to new courses in Swahili and “admitting students without the necessary qualifications” instead of real reform of the entire educational system.
What is more, violence—precisely because it is effective—has a tendency to promote more violence in response. If violence in the name of justice doesn’t achieve its ends quickly, the likely result is not justice, but more violence: “The practice of violence, like all action, changes the world, but the most probable change is to a more violent world.”
To read Mandela’s speech from 1964 is to encounter someone who thought through the promise and danger of violence in precisely the rational way that Arendt call for. The question we should ask is whether the turn to violence by the ANC in South Africa—even the limited, rational, and property-oriented violence Mandela embraced—promoted or retarded the cause for reform? Was it the ANC’s violence that led, 30 years later, to the reform of South Africa? Or was it Mandela’s dignity in prison and his emergence as a force for peace and reconciliation? Let’s celebrate Mandela as a hero this week. But let’s also ask: Was he right about violence?
One of my favorite images in Arendt's writings comes not from Arendt herself, but her citation of the poem "Magic" by Rainer Maria Rilke. Rilke's poem reads (in an approximate translation):
From indescribable transformation originate
Amazing shapes. Feel! Trust!
We suffer often: To ashes turn our flames;
Yet art can set on fire the dust.
Magic is here. In the realm of enchantment
The ordinary word appears elevated
But sounds as real as if the dove called
To seek its invisible mate.
Arendt cites Rilke's poem in the final section of the chapter of the Human Condition on Work. It is part of her discussion of art and her claim that "the immediate source of the art work is the human capacity for thought."
Art, Arendt writes, has its foundation in thinking. Works of art, she writes, are "thought things." They are thingifications of thoughts, or to use a word that is so often abused, they are reifications of thoughts—The making of thoughts into things. It is this process of transformation and transfiguration that Rilke captures in "Magic": To "set fire to the dust" and bring beauty and truth to the real world. That is what art does.
My mind turned to Rilke's poem as I watched the great South African artist William Kentridge deliver the first of his 2012 Norton Lectures at Harvard University.
Kentridge spoke in praise of shadows, and situated his talk within a reading of Plato's allegory of the Cave in Book VII of the Republic. The story of the cave begins with prisoners shackled and unmovable who see shadows along a wall projected by a fire. First one sets himself free and climbs out into the light of the sun and, slowly, painfully, comes to recognize in the light of the sun that the shadows were indeed shadows, untrue. The parable illustrates the error of sensible things and is one part of Plato's illustration of his theory of ideas. The ideas, supersensible truths of reason and logic, do not deceive and change like the shadowy things of the world. Only what lasts eternally is true; all that is sensible and fleeting is false.
Kentridge tells the story of Plato's cave to explain why he sees art, and especially his art, in opposition to the Platonic idea of truth. If Plato celebrates the primacy of the eternally true over the shadows, Kentridge argues that art elevates the image above the truth. For this reason, at least in part, Kentridge's art works with shadows. Shadow figures and shadow puppets.
Kentridge lauds shadows. In the very limitations of the shadows, in the gaps, in the gaps that inspire in us leaps to complete an image, that is where we think and learn. The leanness of the illusion pushes us to complete the recognition. It is in shadows that we find our agency in apprehending the world.
Shadow art is, for Kentridge, political. Plato's politics depends on a truth known and understood by the few and then imposed on the many. In this sense philosophy is, in Arendt's words, opposed to politics, and the philosopher either must seek merely to be left alone by the people (which is difficult because philosophers are dangerous), or they will always seek to dominate and tyrannize the polity with their reason. Arendt's lifelong battle is to free politics from the certainty of rational and philosophical truth, to open us to a politics of opinion and openness.
Knowledge is power and there is, in Kentridge's words, a relation between knowledge and violence. Kentridge embraces shadows and silhouettes to oppose the philosophical and Platonic tyranny of reason. He writes elsewhere:
I am interested in a political art, that is to say an art of ambiguity, contradiction, uncompleted gestures and uncertain ending - an art (and a politics) in which optimism is kept in check, and nihilism at bay.
Optimism must be kept in check since any certainty about the destination can underwrite the need for violence to bring others to that end. For Kentridge, "There is no destination. all destinations, all bright lights, arouse our mistrust."
Kentridge offers us an image of the artist. He speaks from the studio and from his notebook to emphasize the source of artistic truth in the thought image rather than the logical word. An artist thinks. He sees. He makes art. He makes things that reflect not truth and certainty but gaps, misgivings, and questions. Kentridge gives reality to the questionability of the world in his shadow art. In this way his art reminds us of the magic of Rilke's fire that transfigures dust into flame.
Few modern artists work magic like William Kentridge. His Norton Lectures are a great introduction to his art and the thinking behind his art. If you are not graduating this weekend, take the time to hear and look at what Kentridge says and makes.
You can view Kentridge's First Norton Lecture here. Consider it your visual weekend read.
Cultural memory is a concept – albeit in vogue always in periods of amnesia – that is deeply intertwined with identity. The link between the two is something as simple as what Agnes Heller observed in 2001: “Without shared cultural memory there is no identity”.
She says elsewhere in “Cultural Memory, Identity and Civil Society”: “Cultural memory is rather embodied in objectivations which store meanings in a concentrated manner, meanings shared by a group of people who take them for granted.”
Heller makes the argument that civil society has no cultural memory. The explanation is plausible and clear: Civil society is a heterogeneous mosaic of sometimes conflicting cultural memories and activities or institutions that are in no need of cultural memory.
Civil society – unlike the old community – can smoothly operate through clashes of interest and cooperation limited to short term future and without utopia. The question of identity then is nowhere raised with more rigor than when the cultural memory is challenged.
The Lebanese Civil War (1975-1990) remains a textbook case of this challenge. My contention is that the preoccupation with the actual content of the Lebanese identity arose only when the shared cultural memory – once taken for the granted – was eroded through the war.
Of course many would challenge this view arguing that the ground was fertile for the war since the 1860’s under Ottoman rule and that only intensified in the years leading into the war. But in the realm of history, as moderns know well, theory is but a realm of consolations.
Every postwar society is faced with the enormous challenge of re-writing its own history and this is particularly difficult in the case of civil wars in which different cultural memories, often hostile to teach other share a legacy that came to them without a testament.
Over twenty years after the end of the Lebanese Civil War – in which neighboring countries, Western powers and Israel were at some point involved – the actual challenge of the memory in general remains a tense battleground of ideological and political conflict.
It is precisely this challenge that the interactive exhibition “Another Memory” has come to tackle: An open archive of Lebanese memory throughout the war years that aimed to confront the public with narratives about the war other than their own.
A number of key dates of the civil war were selected and front pages of the newspapers An-Nahar and As-Safir reprinted and juxtaposed in large displays. The public was encouraged to interact with the exhibit by adding their own footnotes to the articles in post-it notes.
An interesting article published in NOW Lebanon has pointed out how the exhibit – organized by Lebanon’s Tajaddod (Democratic Renewal Movement) Youth in partnership with Danish Rakidal Ungden (Social Liberal Youth) – has gone where few others have:
While plenty of noise is made by Lebanese civil society groups and NGOs about the need for national post-civil war reconciliation, the issue is rarely tackled in concrete initiatives by political parties themselves.
The question of post-war reconciliation brings up a number of issues that were addressed in a dialogue between Hannah Arendt and Jacques Derrida established by Cláudia Perrone-Moisés in her “Forgiveness and Crimes Against Humanity: A Dialogue between Hannah Arendt & Jacques Derrida”, providing us with a framework to understand why initiatives like “Another Memory” are issues of the first order of relevance for Lebanon and any post-war society.
Derrida’s argument on forgiveness is that in the “globalized” market of human suffering that emerged after the horrors of the world wars, it is institutions and governments who are asking for forgiveness.
In this sense the spectacle of forgiveness is nothing but a simulacrum and he brings up the example of a South African woman whose husband had been imprisoned and tortured, who, before the Commission for Truth and Reconciliation, said: “A commission or a government cannot forgive. Perhaps only I could do it. But I am not ready to forgive.”
Derrida and Arendt agree that forgiveness has the power to interrupt the flow of events and to create new beginnings – a paradox of cultural memory: how to begin anew with and in spite of the past?
But they differ in that what for Derrida is an essentially divine gesture, for Arendt remains a purely human experience.
Yet to forgive the unforgivable (and here we are dealing with war crimes and crimes against humanity) it seems, is something that remains outside the limits of the law, and this is what the poet W.H. Auden articulates in a letter to Arendt: “The law cannot forgive, for the law has not been wronged; only broken; only persons can be wronged. The law can pardon, but it can only pardon what it has the power to punish”.
Arendt replies to Auden saying that he’s right (and she was wrong) in that punishment is only an alternative to judicial pardon, but that accordingly, not everything is punishable. Derrida stays here at the level of forgiveness merely in the service of noble or spiritual ends.
Hannah Arendt goes further to establish a critical difference between forgiveness and reconciliation: In her journal entries from June 1950 – at a time when she was probably still working on “The Origins of Totalitarianism” – she writes that “forgiveness and revenge are a unity of opposites that correspond to each other”.
According to her, forgiving takes place only among those who are “infinitely unequal” and that the mere act of forgiveness actually destroys the human relationship:
“Forgiveness, or what is normally understood as such, is in reality only an apparent success; in it one takes a higher ground and the other demands something that men cannot grant each other… Reconciliation instead has its origin in being averted with the mission that has been given to us.”
Reconciliation – beyond forgiveness and judicial pardon – isn’t based on the understanding that I could have done this as well, a quintessentially religious mistrust of human nature, but on the acute realization that “this should have never happened”.
Forgiveness breaks the relationship in its adamant refusal to share the burden for what has happened and rather prefers to “look the other way”. Arendt better articulated this several years later:
This vicarious responsibility for things we have not done, this taking upon ourselves the consequences for things we are entirely innocent of, is the price we pay for the fact that we live our lives not by ourselves but among our fellow men, and that the faculty of action, which, after all, is the political faculty per excellence, can be actualized only in one of the many and manifold forms of human community.
What “Another Memory” tried to do – even though it was open only from May 12th to 14th and with a rather limited attendance – was to open the vaults of memory not in order to sit in judgment but the afford the possibility of the antinomies in cultural memories; those probably are not to be overcome but rather accepted and understood. It is a facing up and resisting of reality.
Its enormous success in rehabilitating the public sphere isn’t necessarily something quantitative but the sheer quality of opening a space in which the past isn’t closed off – as the many postwar courts and tribunals often assume in many countries the world over.
It was a space of hope without promise since promises can only be delivered between one man and another; the living proof of what Lebanese painter Mouna Bassili Sehnaoui remarked to me in a conversation:
For me the Middle East is life: Vibrant and pulsating, stupid and loving, cunning and wise, kind and cruel, simple and mysterious. A place where cold mathematics could be proved wrong, a place where God and the Gods have chosen to appear. Life has the power to overcome when coupled with love.
(*) Hannah Arendt’s “Denktagebuch” is not translated into English. Excerpts above I translated from the original German. Any mistakes in the translation are entirely my own. For an essay on Arendt's idea of reconciliation as opposed to revenge and forgiveness, click here.
This week, Greg Smith announced his resignation as an executive from Goldman Sachs in a highly publicized Op-Ed piece for the New York Times, aptly titled “Why I am Leaving Goldman Sachs.” The letter describes a transformation in the “culture” of the giant investment firm that has gone from a business with integrity to one which is now “as toxic and destructive” as Smith has ever seen it during his twelve year tenure. “To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money.”
Such behavior being tied to a Wall Street firm is not exactly surprising. And in Goldman's case, one wonders where Mr. Smith has been. In the last few years, a number of Goldman's clients have sued the bank, including ACA Financial Guaranty, Basis Capital, an Australian hedge fund, and ABP, a Dutch pension fund. Each argues that Goldman materially harmed them by selling them bad products. And Goldman already paid out $500 Million dollars to settle the Abacus case, in which Goldman was accused of illegally profiting by deceptively selling worthless paper to its customers.
There is a sense in which one looks at Mr. Smith's holier than thou revelation that Goldman was not the noble corporation he once thought it was and asks: really? Haven't you read anything Michael Lewis has written over the last 10 years? Not to mention Matt Taibi—the author of a take down of the mythic Goldman Sachs culture that was published two years ago.
Smith derides his former employer for focusing on profit above the well-being of the client. He puts this is stark business terms. He writes:
It astounds me how little senior management gets a basic truth: If clients don’t trust you they will eventually stop doing business with you. It doesn’t matter how smart you are.
What Smith takes as a simple truth, is anything but. Trust is in short supply, and yet people work with Goldman and others because they believe that Goldman will make them money. As long as they think that Goldman will make them money, they don't really care that Goldman will make more money or that Goldman is looking out for itself. Clients continue to flock to Goldman because making money is what everyone cares about, not trust. One client of Goldman Sachs was even quoted as calling Smith “naïve” for believing that the business he is in was ever about anything but profit.
Frank Portnoy, writing in the Financial Times, argues that what is really at stake here is the definition of a client. Goldman is now a huge public firm with a few big clients it serves as advisors, and then thousands if not millions of smaller clients who simply buy its products. Goldman needs to have the trust of its major clients, but not is smaller ones. Just as Coca-Cola has an obligation to make sure that what it is selling is actually Coca-Cola, Goldman has a responsibility to sell you what it tells you it is selling you. But neither Coca-Cola nor Goldman are obligated to tell you that their products aren't healthy for your body or your wallet.
The Goldman myth is just that, at least today. After Goldman went public it transformed from a small investment bank with $1.4 billion in investments in 1998 to a huge corporation with investments of $13.96 billion in 2008, using a leverage ration of 26 percent. Does anyone really think that such a company is not driven by the bottom line?
Reconciling ourselves to reality—telling ourselves the truth—is one of the first demands of ethical life.
One such truth is that business today is very different than it used to be. One needs to confront and comprehend such a truth, especially if you want to resist it. And that is the problem with too many of the responses to Greg Smith's letter.
Yes, Smith seems naive and snarky. And why did he give us his resume at the end of his letter? He clearly has some issues. But the basic point he raises—that business should be conducted with some basic ethical standards beyond that of minimally following the letter of the law—is one worth discussing. There are some clients who want to work with bankers that treat them both kindly and respectfully, and they should know to avoid swimming with the sharks. And there is a real question whether pension funds and other institutions are sophisticated enough to swim in the waters with the likes of Goldman. And finally there is the worry that so many of our brightest young people want to work for firms at which the unmitigated search for profit—restrained only by the letter of the law—is the cultural demand. We need more discussions of such questions. So, as distasteful as I found Smith's letter, I must admit I am happy he published it.
A better airing of many of these same issues happened at the Hannah Arendt Center's 2009 Conference, The Intellectual Origins of the Financial Crisis. A number of our panelists touched precisely on this question of the cultural change in business and Wall Street in particular. The book of essays based on that conference will be published this year.
In the book is included an interview with Vincent Mai, at the time the Chairman and Partner of AEA Investors. In this interview, Mai offers an insiders' perspective on the cultural changes that the financial world has undergone. With more eloquence and also more awareness than Greg Smith, Mai offers an account of an inverted world, one in which trust, reputation, and respect have been replaced by a whole new set of values.
I don’t mean that everybody was a saint and today they’re all sinners. Far from it. But there was a set of ground rules that governed the way you did business which imposed a discipline which was central to the way Wall Street worked. It was the same in all the firms. And I’ve watched with a combination of fascination and horror at the way the world has changed, turned upside down.
Mai's story of the way the world of Wall St. has been turned upside down is fascinating reading, and worth more of your time than another 10 commentaries on Greg Smith. The book with Mai's interview won't be out for a few months still, but for now you can read it here. I recommend you do so for your weekend read.