Goldman Sachs Swearing Ban Will Hurt Profits
Goldman Sachs' swearing ban strips the firm's employees of one of their most important tools—and will only hasten the exodus of the firm's best talent.
The Goldman Sachs Group, long one of America’s most successful and prestigious financial institutions, recently decided to commit suicide. But rather than do the job quickly, with a clean gunshot wound to the head, Goldman has decided to go the long, painful route.
From now on, Goldman employees will no longer be able to salt their emails with profanities. This sounds like a simple courtesy, or perhaps an effort to spare the firm political embarrassment as sketchy emails of the future are inevitably read by brow-furrowing regulators and outraged congressmen. Yet it is better understood as an assault on the dignity of labor.
One of the central reasons entrepreneurial capitalism works well is that humans are a prideful species. A number of studies have found that the typical entrepreneur earns less than a comparable employee employed by an established firm. Yet entrepreneurship generates large psychic returns, particularly for independent-minded people who bristle at the thought of following orders or rigidly defined rules. And, of course, it is independent-minded people, with large and diverse networks of friends and acquaintances, who tend to be the most gifted innovators. Entrepreneurs do a better job of creating truly innovative goods than established firms because they will work longer and harder than an employee, convinced that their efforts will yield prestige and, at some point in the future, a vast fortune. As we all know, those fortunes tend not to materialize, and when they do they are often consumed by the next risk-taking endeavor. But it is this irrational hunger for recognition that drives capitalism forward.
In contrast, the employees at Goldman Sachs Group are best described as gilded proletarians, the vast majority of whom have no ownership stake in their place of business, no meaningful workplace representation, and very little aside from generous compensation to feel like interesting and important human beings. In Bobos in Paradise, David Brooks described the phenomenon of “status-income disequilibrium,” in which some people with high-status jobs receive relatively low salaries while others with low-status jobs receive relatively high salaries.
The ban on profanities in emails is better understood as an assault on the dignity of labor.
An impecunious bohemian can rest assured that his modest income has no bearing on his status, as he never set out to make money in the first place. Rather, he seeks recognition for his luxuriant beard and colorful costumes, and perhaps for his romantic success. But had the same young man chosen to work for Goldman, he’d have essentially declared to the world that money-making was his central ambition. There is thus a painfully clear metric by which to judge his success: everyone who makes more than he does—and he will encounter many such people every day—is his superior. It is hardly surprising that many Goldman employees will claim, and often mean, that public service is their true ambition, and that a short stint of money-chasing is just a means to an end. This helps blur the hierarchy. Viewed from this perspective, the women and men who populate the middle ranks of the financial sector are not unsympathetic. They work long hours for little psychic satisfaction. And in the wake of the financial crisis, they find themselves members of a suspect class. Physicians are healers, who take pleasure and pride in caring for others. Entrepreneurs see themselves as in charge of their own destiny, and as women and men of action who drive the economy forward. Traders, in contrast, don’t have much of a narrative. What they do have—or what they did have—is camaraderie.
Swear words in the workplace might sound like a fairly juvenile way to build a sense of solidarity, yet they are essential. The pleasure of using a forbidden word can be pretty powerful. And when that pleasure is shared, it is more thrilling still. One feels like a renegade 13-year-old, armed with an illusion of competence and power. You might be a cog at a trading desk, compensated with nothing but money. But you can drop all the f-bombs you’d like. Until now, that is. Now your emails will be scanned and filtered by sophisticated software, heightening the sense that you are monitored and very much subject to discipline. A sense of powerlessness is the inevitable result.
How much is the freedom to describe a deal as “shitty” or to tell some to “fuck off” worth? That will, of course, vary from person to person. But for some people who command a high wage on the open market, it will undoubtedly be worth many hundreds of thousands of dollars. Expect the slow-motion exodus from the big banks to accelerate as they increasingly resemble ultra-cautious public utilities. The workers who break free deserve our praise. They might be obnoxious and unpleasant, as evidenced by their profanity-laced emails, yet they’ve managed to retain an admirable independence of mind.
Those who remain, in contrast, might very well feel spayed and neutered, fattened like baby calves with generous compensation, yet denied any voice or personality or agency. Don’t envy them.
Reihan Salam is a policy advisor at e21 and a fellow at the New America Foundation.