You have to understand,” says Cath, the heroine of Kate Jennings’s new novel of Wall Street excess, Moral Hazard (HarperCollins, Fourth Estate, 2002), “that Mike and I worked in the modern-day equivalent of the court of Louis XVI. All around us, impossible sums of money were heaped upon people who were no more deserving of it than any other kind of professional. Sure, they put in long hours in a Darwinian environment, but the same could be said of New York City public school teachers.”
In this semi-autobiographical novel set in the 1990s, Cath, a feminist writer, finds herself forced into the epicenter of macho business culture when she accepts a job as a speechwriter for a big New York investment bank in order to pay for medical care for her husband, Bailey, who is suffering from Alzheimer’s disease.
Cath not only confronts her own moral dilemmas in working within a culture that is utterly alien to her personal values, she observes firsthand how the tenuous links between capitalism and ethical behavior sometimes snap under the pressure to make more and more money fast.
Through much of the 1990s, companies talked plenty about good governance and corporate social responsibility. Hanny, Cath’s boss, sees himself as the repository of the firm’s values, or “touchstones,” because “the apex of his career had been to give voice to them.” The values — words such as “respect” and “integrity” — appear “engraved on brass plates attached to walls, chiseled into marble floors, pressed into Lucite paperweights.” Gradually, Cath realizes how many lawyers are employed to defend the firm against charges resulting from lapses in these ubiquitously displayed values. Her boss tries to explain, “The touchstones are aspirational. In any company, there are peaks and there are troughs. It’s our job to describe the peaks.”
But how do we get rid of the troughs? It is hard not to conclude from Kate Jennings’s work of fiction, along with a new crop of business books examining the latest corporate scandals, excesses of the dot-com boom, and the struggle to preserve a moral balance in a moneyed world, that the relentless drive for a quick buck was largely responsible for the lapses and hubris of the 1990s — and for today’s dour business conditions. For all the talk about wealth creation for the many and the long term, what financial markets mainly care about is extracting as much as possible, as quickly as possible, for today’s shareholders. No wonder corporate bosses, faced with such pressures, give way to impatience and poor ethical judgment. In the current climate of censure and contrition, these books are valuable reminders of the ethical fragility of the capitalist system, so often invisible when times are good.
So did the hot years of the 1990s, like the reign of Louis XVI, really presage bloody revolution? Or is this one of the brief bouts of self-doubt that so often accompany economic downturns?
Look along the business bookshelves, and there are early signs that some authors have spotted a new bandwagon and are leaping aboard. Corporate adulation is out; repentance and rebuke are in.
With How Companies Lie: Why Enron Is Just the Tip of the Iceberg (Crown Business, 2002), A. Larry Elliott and Richard J. Schroth certainly have the title of the moment. Their book, finished in January 2002 and on the shelves in July, has that Methodist-preacher tone that President George Bush adopted in his speech to American business leaders in July, and which chimes with the times. “The financial manipulations that have emerged over the years are no longer tolerable,” the authors thunder. “Indeed, the damage caused by trading manipulations and accounting fraud … could be the seeds of serious calamity in the future.”