An Occupational Hazard: How Cocaine embodies what’s wrong with the culture of High Finance

Ho remembers how one banker told her, “I might not be at my job next year so I’m going to make sure to get the biggest bonus possible.” As is the case with obscene bonuses, the use and abuse of alcohol and coke is something the workers feel entitled to. They believe they earned the right to do so.

Another factor that is reflected in both trading and cocaine is the emphasis on the workers’ energy levels. “Some of the banks’ embodied controls focused on managing employees’ energy and included providing free caffeine and “energy slumps,” hiring young people, focusing on energy as the main hiring criterion, and firing low performers because of their energy drain,” writes business professor Alexandra Michel.

A former banker herself, Michel writes of how the 24/7 administrative support provided by banks  erased the distinctions between work and play. Leisure at work is encouraged along with the provision of free amenities such as childcare, valets and free meals. This makes it all the more helpful to drown yourself into an amorphous blob of energy, to keep working at whatever cost.

So why does the drug habit of filthy rich traders matter? It matters because the practice and beliefs of high finance trickles down to other service sector jobs. In any knowledge-based industry with long hours, hard work, constant deadlines and critical thinking, the burst of energy cocaine provides goes perfectly well with a risk taking culture. The bosses turn a blind eye to the employees’ drug habits as long as you rake in the deals. They encourage you to be a gambler and a risk taker, pushing a short-term view on both trading and living.

Culture is something that feeds on itself. By emulating the never sleeping, win-at-all-costs business titan enshrined Fortune or Forbes magazine, various industries end up mimicking the beliefs and behaviors of Wall Street culture. This is especially true with the promotional process of a company. As the practices of a company become a routine, those who are more compatible with the established culture climb up the ranks.

Hard work itself becomes a fetish where job stability is next to nonexistent. The focus on instant action and performance makes it harder for the company to take a step back and think of the consequences of its actions.  Speaking of Titanic, it’s important to keep in mind that the iceberg is always closer than you think.

About a year before the financial crisis, Citigroup’s CEO Chuck Prince was quoted in the Financial Times thusly, “but as long as the music is playing, you’ve got to get up and dance. We’re still dancing”. While the quote refers to the buy-out boom at the time, it is useful because it captures the psychological aspects of a culture that thrives on risk taking. Where traders and bankers were doing the dancing, the beat they were dancing to was the inflated subprime bubble. The employees who warned of the risk to come were labeled as naysayers and fired faster than you can say Dance Dance Revolution. For once George Bush had a point in saying that, “Wall Street got drunk.”

Dancing itself evokes a form of emotional expression. The excitement of dancing to the beat of wealth made it even harder for them to slow down or stop. This dynamic is best explained by the congressional testimony of MIT economics professor Andrew Lo. After referring to the scientific evidence of how making money and cocaine have the same neurological effect he testified, “that prolonged periods of economic growth and prosperity can induce a collective sense of euphoria and complacency among the investors that is not unlike the drug-induced stupor of a cocaine addict.” It’s amazing to think that this testament came years before the Rob Ford saga had even begun.

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