Wall Street: Brush Up Your Melville

The "monomaniac" pursuit of profit, taken to "demoniac" extremes (two words Melville uses repeatedly) is a killing pursuit that can take every last thing -- even the ship itself (read: the nation) -- down.
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If only Jon Corzine had read Moby-Dick.....

Like Captain Ahab, Corzine sacrificed his ship, MF Global, on an all-or-nothing bet. Ahab searched the globe in his "monomaniac" drive to revenge himself on the Great White Whale who'd "dismasted" him of a leg. Corzine, in chasing Goldman Sachs where he'd once been a senior executive, hedged all on European sovereign debt, betting that the European Union would not allow any member state to fail.

It went catastrophically for both: Ahab lost everything -- his crew, his ship, his own life, with one crewman surviving -- when Moby Dick smashed not only the Pequod's whaling boats but the Pequod itself, reducing it to mere "chips" swirling in "a vortex." Corzine lost everything too -- more chips, more vortex -- when Greece faltered under its crushing debt load and the E.U. faltered in coming to its aid (see here and here).

Because risk is still not understood in its full lethality -- either by Wall Street or the media -- the visionary American author Herman Melville, with his vivid language and cautionary tale, can still instruct.

Such instruction is vital because, unlike in Moby-Dick where the destruction is confined to one ship absorbed in one wide, wide ocean, further lethal risk-taking on Wall Street, whose "too-big-to-fail" institutions even after a government bailout and a blizzard of reform are even bigger and possibly now too big to save, could take down -- destroy -- not only the Street but the nation itself and its economy.

Melville speaks in language to calculate by. In assessing risk in the whaling trade, he memorably describes miscalculation as "fatal to the last degree of fatality." Whaling, he claims, is more dangerous than combat. As to exposure, whalers are the most exposed of vessels, "hence, the spare boats, spare spars, and spare lines and harpoons, and spare everythings [sic], almost, but a spare Captain and duplicate ship." When the narrator, a newcomer, comprehends why oarsmen "pull back-foremost into death's jaws," he thinks, "I might as well go below and make a rough draft of my will."

Pursuit of Moby Dick, largest of the leviathans, entails the stark risk of being "torn into a quick eternity" -- "I tell you, the Sperm Whale will stand no nonsense." The White Whale comes with his own mythology: Melville relates instances when, "swimming before his exulting pursuers," Moby Dick would turn round suddenly and "either stave their boats to splinters" or drive them back to their ship "in consternation." Talk about foretelling.

All this fatality Melville puts in its broadest context, the unforgiving sea: "However baby man may brag of his science and skill... yet for ever and for ever, to the crack of doom, the sea will insult and murder him, and pulverize the stateliest, stiffest frigate he can make."

By contrast, scan the current risk statements of the major Wall Street firms -- bearing in mind they reflect a post-crash stance -- and you will find nothing but calm seas, no sense of fatality, with perhaps only a passing reference to "volatility" in the market (and no mention of the role the firm may have played in causing that volatility).

Management of such fatal risk, continues Melville, must therefore be "very heedful." Humility is required: First mate Starbuck, in selecting his oarsmen, says, "I will have no man in my boat... who is not afraid of a whale." Cooperation is paramount -- a "community of interest prevailing among a company," depending upon "their common luck, together with their common vigilance, intrepidity, and hard work."

Individual agency in this collective enterprise is severely impinged, something the narrator realizes when tied to a crewman over the side standing atop a dead whale: "I seemed distinctly to perceive that my own individuality was now merged in a joint stock company of two; that my free will had received a mortal wound; and that another's mistake or misfortune might plunge innocent me into unmerited disaster and death."

In other words, we're all in the same boat together. It's at this juncture that Melville writes, as if speaking directly to us post-crash: "If your banker breaks, you snap."

Everything depends, then, on command judgment. Here the novelist trumps the journalist, for Melville can examine the "springs and motives" of character. For as Ahab knows, "with little external to constrain us, the innermost necessities of our being, these still drive us."

Driven by "innermost necessity" for revenge, Ahab knows "my means are sane, my motive and my object mad." Thus he dissembles both to the crew, blandishing them with gold ("Cash -- aye, cash") and to the ship's owners, though once at sea he's dismissive ("Let the owners stand on Nantucket beach and outyell the Typhoons. What cares Ahab?"). Ahab knows he can be cited for "usurpation": the crew could refuse to obey and "even violently wrest from him the command." Yet he persists: The first question he shouts at passing ships is, "Hast seen the White Whale?"

The one counter to Ahab is Starbuck. But while the first mate opposes Ahab's motive ("I came here to hunt whales, not my commander's vengeance") and constantly challenges him ("Beware of thyself, old man!") he always retreats, never organizing a rebellion: He can't abide the idea of Ahab sailing home "a caged tiger." From first retreat Ahab knows "Starbuck is mine; cannot oppose me now, without rebellion."

Thus the die is cast: With Starbuck hoist on his "soft humanity," the mad Ahab carries all past prudent risk management and onto Fate's "handspike" -- to calamity.

In connecting Melville's epic to our perilous financial state today, this is not to say that the titans of Wall Street, or Jon Corzine, are mad or evil, as Ahab clearly is. But it is to say, emphatically: The "monomaniac" pursuit of profit, taken to "demoniac" extremes (two words Melville uses repeatedly) is a killing pursuit that can take every last thing -- even the ship itself (read: the nation) -- down. (Corzine, a former U.S. Senator and state governor, notionally knew the impact on the public sphere of his demoniac risk-taking.)

On this point, many on Main Street worry that the hidden derivatives market, now valued at $600 trillion, could turn round, like Moby Dick did on his "exulting pursuers," and smash them, Wall Street's exulting traders -- and the rest of us and our $14 trillion economy -- reducing all to chips in the vortex. Call us anxious, very anxious.

So, Wall Street: Hear ye Melville's fatal lessons for "baby man" -- of prudence, humility, cooperation. Of the need for the Ahabs to expand their frame of reference from the firm only to nation and the world. Of the need for the Starbucks of the Street to muscle up their "soft humanity" and, knowing the "springs and motives" of their captain, get in his/her face if necessary ("Beware!"). Of the need for external constraints (regulation) on "innermost necessities." Of the need for Wall Street to understand that if it breaks, we on Main Street snap -- which explains in part the emergence of the Occupy Wall Street protest: We've been snapped enough.

Hast seen this new wisdom on Wall Street.....?

Carla Seaquist is author of "Manufacturing Hope: Post-9/11 Notes on Politics, Culture, Torture, and the American Character." Also a playwright, she is author of "Who Cares?: The Washington-Sarajevo Talks," included in the forthcoming volume "Two Plays of Life and Death," and is working on a play titled "Prodigal." This post is based on an essay, "Risk Management, According to 'Moby-Dick," which was posted originally at The Daily Kos (www.carlaseaquist.com).

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