Excerpt: Songs of Profit, Songs of Loss

The following is an excerpt from Songs of Profit, Songs of Loss: Private Equity, Wealth, and Inequality by Daniel Scott Souleles. It is the newest book in the Anthropology of Contemporary North America series, which aims to publish teachable, empirically rich, and conceptually innovative books that contribute to the comparative anthropology of North America.

I find questions about inequality unavoidable. I entered graduate school in the fall of 2010, having finished an undergraduate degree a few years earlier. As college ended, I watched investment bankers and their convoluted credit instruments cast millions of Americans out of their homes and into destitution. I sought my first job in the shadow of the worst financial crisis since the Great Depression. In that job I worked as a paralegal, and one of my duties was suing people who had gone into debt to their medical plans, people who were often out of work and consequently could no longer pay their bills. Joseph Stiglitz (2013, 1) observed five years after 2007–08, at the start of this book’s writing, that many Americans were still hard up: one out of six who wanted a full-time job couldn’t find one, and eight million families had been foreclosed on or evicted from their homes.

Having fled work as a paralegal, where it seemed I was simply harassing the victims of this great recession, it was surprising to find evidence of the crisis in my first stretch of anthropological fieldwork. In the summer of 2011 I did research for a master’s degree at a Catholic hermit monastery in the United States. There I lived behind a cloister wall with fourteen monks in my own cinder-block hermit cell. This particular order of monks had been around for about a thousand years. I was curious how, between long stretches of silence, regular devotional prayer, and one daily communal meal, these monks knew what God wanted them to do. This was as classic an anthropological question as you could imagine—gods, rituals, hermits. What more could a young graduate student want?

Nonetheless, it was not the escape I had expected. If the last half century of anthropological thinking has taught us anything, it is that people do not exist separately from one another. Cultural isolates are fictions. And as cut off as this thousand-year-old order of hermit monks seemed, they were having money problems. As opposed to other more active Catholic religious orders, such as priests that run a hospital or nuns that run a college, these hermits had a limited ability to make or solicit money. They ran a modest guesthouse, the toilets of which I became intimately familiar with as I found myself a regular place on the work rotation, doing cleaning and janitorial shifts. They also ran a gift shop and made some baked goods. However, the majority of their operating budget came from a stream of donations and an endowment that investment bankers had devastated—the collateral damage of 2007–08. Moreover, these monks had just spent a considerable amount of their wealth building an infirmary on their grounds so that old monks might convalesce and die where they had lived. At the time I didn’t appreciate the irony, given real estate’s role in the 2007–08 crisis, of a new housing project accelerating these monks’ financial distress.

Toward the end of my stay, my friends at the monastery asked me to speak on their behalf and explain to an organizational consultant what was important around the monastery. The leader of the order had decided that accountants needed to audit his and his brother’s finances and that an organizational consultant needed to understand his order’s way of life. This was all so that the leader might form an advisory board of rich donors who might understand his monastery as a good charitable investment. Hermit monks don’t like to talk much. And perhaps getting an anthropologist to do the talking for them can be seen as simply an extension of their larger lifestyle choices. In this instance, I suspect things were different. In order to continue living their lives, these monks found themselves having to submit to the scrutiny and suggestions of business experts. So, while I did learn a lot about a life of celibate, ascetic, prayerful devotion, ultimately I sought god and found money.

Upon returning to New York City, pondering what advisory boards have to do with being a hermit, something else happened. In the early fall of 2011, riding on the momentum of the Arab Spring, a group of activists and their allies occupied Zucotti Park in Lower Manhattan, the heart of the financial district. Though they issued no demands and embraced a multiplicity of projects, ideals, and dreams, demonstrating, as they said, what a direct democracy might look like, they did rally around their dissatisfaction with the “one percent.” Their analysis of economic life in the United States was that people in and around finance, the managers of all of our money, had claimed for themselves an outsized portion of America’s and the world’s riches. These malefactors of great wealth, to Occupy’s mind, had rigged social life in such a way that everyone else, “the 99 percent,” could not help but enrich financiers. Whether via mortgages or student debt, it seemed as if the great majority of people had been consigned to simply being one more revenue stream in one or another collateralized debt obligation (see further Graeber 2013b).

While Occupy Wall Street was raising America’s debt-based class consciousness and searing the idea of the one percent into all of our brains, two facts became the grounding for common knowledge as an American election was taking shape: from 2002 to 2007, the top 1 percent of earners seized more than 65 percent of the gain in total national income (Stiglitz 2013, 3), and the average annual compensation for CEOs was 243 times that of their lowest paid employee (4). Mitt Romney, a former private equity (pe) executive and management consultant, was on his way to becoming the Republican Party’s nominee for the presidency of the United States. I hadn’t heard of private equity then but quickly learned that private equity firms use other people’s and borrowed money and buy a controlling stake in other companies, hoping to sell them at a profit. Whereas public equities, stocks, or shares in companies that are traded on publicly accessible exchanges are regulated by the Securities and Exchange Commission, private equity is just that—privately held ownership stakes in companies that face no federally required reporting requirements, scrutiny, or management standards aside from whatever the incorporation statutes of their own states might demand.

I found myself in a curious position. I was writing up a master’s thesis about God and hermits, yet so much of what was materially and institutionally structuring the hermitic brothers’ lives had to do with financial markets and techniques of business management. At the same time that the monastery was struggling to stay afloat by seeking the aid of investors and consultants, Mitt Romney was in the news promising to run his presidency like a business and call McKinsey consultants into the Oval Office if elected (Carney 2007).3 Reading up on his candidacy began to show me how a study of private equity would be a good entry point into answering questions about  businesses, wealth, and work, and their interaction in America. Romney’s story, and its route through private equity, made for an interesting case.

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