Culture shock

Sometimes it takes a bold statement to make people realize a change is needed.

The New York Times published a controversial op-ed March 14 titled “Why I am Leaving Goldman Sachs.” The piece brought concerns about the ethics of the financial services industry back into the public sphere. The piece—written as a public letter of resignation by Greg Smith, former executive director and head of Goldman’s United States equity derivatives business in Europe, the Middle East and Africa—highlighted frustrations with the internal shift in culture that had occurred over the employee’s 12-year career at the firm. In frank and powerful language, the author described his frustration and regret that a company he once passionately worked for had reduced itself to snatching at profits instead of building value for clients.

In the past, we have argued that financial services jobs, compared to other careers, are unlikely to provide students with a reliable means to generate social value and that these same jobs may only be fulfilling for a very slim margin of students. But Smith raises an independent concern—that firm culture can frustrate a well-intentioned employee’s aim of building value or seeking personal fulfillment. Smith’s column is not an empirical assessment of firm culture in the financial services industry, or even at Goldman Sachs. But it raises an obvious concern that extends beyond the financial industry.

The concern is this: On the ground realities of the places we find ourselves working can frustrate the very reasons we decided to work there. To put some flesh on it: We may join a financial services firm because we believe coordinating resources in the economy is very important or join the government because we believe crafting regulatory policy is crucial to the functioning of a democratic society. But greedy firm culture may prevent us from realizing value for our clients; lackadaisical government culture can prevent us from making a real difference. These factors tend not to figure into our broad ethical reasoning, but they are often the factors on which our ethical success turns.

College students face the same concerns Smith raises every summer, when we apply for internships and after graduation, when we look to build careers. We take for granted that college students, and people generally, have moral obligations to pursue ethical careers, at least insofar as they have the opportunity to do so. Given the concerns Smith raises, we suggest a natural corollary to this obligation—that we have significant duties to understand the firm culture of the specific places we want to work, independent of the supposed social function of general industries. This puts us in a sort of double-bind: Naïvely jumping into a firm makes us ethically culpable, but so does ignoring facts about what we will actually be able to achieve there. The only way out is due diligence.

Opportunities for ethical careers are not unlimited: We do not think culpability extends to cases where students simply cannot get the job offer, or when they need to pursue financial gain to support their families, for example. Some students will enter careers they do not endorse and take the opportunity to build skills and credibility, and it may be reasonable to accept it in the ethical short term if the long-term effects can justify it. What Smith teaches us is that these ethical considerations are more complex than we often realize.