The Goldman Sachs "Briefings" email newsletter has an interview with the outgoing Goldman Sachs chairman, Lloyd Blankfein, that includes this passage:
Next year, Goldman Sachs will turn 150 years old. Very few institutions make it that long, let alone under the same name. Why do you think Goldman Sachs has maintained itself as a successful firm over that period across so many different generations and circumstances?
LCB: The keys to the firm's longevity are the qualities that make Goldman Sachs the kind of place where the best people will want to work. The question then becomes what we are offering to incentivize the best people to want to work here. For example, we offer a culture where our leaders have an obligation to train people and make them better than they would otherwise be. We have an important network of relationships that will last a lifetime. We have values that are consistent with their values. Look at what many of our people do when they leave Goldman Sachs. Many go into philanthropy or government, which is attractive to people who want to work at an organization that can prepare them for such work later in life. We're a firm that's influential and the work that we do is important. So people come here because they want to be influential in their lives and, if they're going to work hard, they may as well work hard on important things. And if you keep getting smart people to work here, it's easier to attract other smart people. So, if we can continue to get a higher proportion than others of ambitious, capable and smart people to want to have their careers at Goldman Sachs, then we will endure.
I'm generally an admirer of both Goldman and Blankfein, and I've got nothing against either government or philanthropy, but as a case for "come work for Goldman Sachs," the fact that you can "go into philanthropy or government" afterward seems like not exactly necessarily the most strong case? I mean, if your real end goal is philanthropy or government, why not just do philanthropy or government right now, rather than spending 20 or 30 years as an investment banker first? I'm all for deferred gratification, but there's a risk that some of these investment bankers could die at their desks or on their way to work before they get to that promised land of philanthropy or government. It's also not clear that what prepares people to go into philanthropy or government post-Goldman is the skills and network they got at Goldman, or the money they made there, or some combination. If it's just the money, then the question is why is Goldman a better route to money than other potential routes.
It'd be great to see someone at Goldman — if not Blankfein, someone else — making the case that what the firm does has social value on its own, inherently, outside the chance that it could prepare someone for a future career in government or philanthropy. That person might argue that the profit motive, and capitalism, actually do a better job of allocating scarce resources, creating wealth, and lifting people out of poverty than do either government or philanthropy, and that firms such as Goldman are essential to that. I think Blankfein understands that case — as when he told the Times of London in 2009 that banks are "doing God's work," explaining, "We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It's a virtuous cycle." Unfortunately, that "God's work" comment, while on the money in my view, was so widely mocked that Blankfein in his waning days at the firm seems to have retreated to the weaker preparing people for government or philanthropy argument.
