Goldman Sachs: a toxic culture or just capitalism at work?

It was interesting to read that Greg Smith has just resigned, very publicly, from Goldman Sachs, citing a ‘toxic’ and ‘bankrupt’ culture.   Up until Wednesday Smith was an executive director at Goldman Sachs in London and was head of the firm’s US equity derivatives business in Europe, the Middle East and Africa.  I only mention this because there already seems to be a concerted effort, and not only by his ex-employer, to downplay Smith’s significance in the company.  Even Robert Peston of the BBC was quick to point out that there are about 2000 people in the company who were more senior than him.  I’m not quite sure what this has to do with the truth value of his letter.

In his open letter to the New York Times Smith describes how he went from someone who loved to work for the company, and who indeed was involved in recruiting and mentoring new recruits, to someone who is now totally disillusioned with a culture that is only interested in making money and has no interest or respect for its clients.

Of course a cynic (and judging by some of the comments following this story in the (English) Times, there are quite a few of these) might wonder why it took Smith nearly 12 years to ‘discover’ what Goldman Sachs was really like:  after all, it does have some form on this.  Maybe he did finally make enough money to retire without having to worry about who would hire him after spilling the beans (apparently, according to at least one commentator, he is now toast as far as any re-employment goes).   Maybe he was just passed over for promotion (another theory).  On the other hand, maybe he was just telling it like it is.

Although ‘hard’ evidence, i.e. based on a systematic study of City culture, is hard to come by, there is certainly a growing body of ‘softer’ and more anecdotal evidence to suggest that Smith is onto something.  On this blog I have cited some of this evidence in a number of postings and also referred to it in my recent Therapy Today article.

However, and without wishing to defend Goldman Sachs or any other City company for one moment, there is perhaps something rather peculiar and even naive about Smith’s sudden epiphany.  This is what finance capitalism is, this is what it does.  It’s about surplus value, stupid.  Maybe Smith should try reading Capital – it’s all in there.  Maybe now he’s got time on his hands he will (Greg, they say if you can get past chapter 3 you are doing all right).

The point I’m getting at here is not that Smith is wrong in his analysis: on the contrary, from what I already know about City culture he is probably spot on.  Rather, I am wondering why it took him nearly 12 years to discover what anyone with GCSE Marxism would have known straight away: the City is there to make money and, yes, it makes money out of the people it does business with – although, of course, most of the time the people it does business with are also in the business of making money out of someone else, and so it goes on.

And yes, in this culture, human beings come a long way behind money: in fact, as many Marxists have pointed out (and this goes right back to Capital), under capitalism, social relations are relations between things, not human subjects.  Money is a social relationship, but only in the sense that under capitalism, social relations take the form of money.  But this is to anticipate a future posting……..