Cities of money
From Griffith REVIEW Edition 22: MoneySexPower
© Copyright Griffith University & the author.
Written by Stuart Glover
Download the complete article PDF
Stuart Glover's biography and other articles by this writer
Sydney 2008: To make it to the offices of a project team at Macquarie Capital in Sydney's Martin Place, you must pass a security desk and swipe through a couple of card checks. The security gives rise to expectations about what you might find within, on the ‘shopfloor' of Australia's ‘millionaires factory'. The offices of Mallesons, Minter Ellison or of any of the city's big legal firms feature corpulent displays of wealth – with million-dollar views and million-dollar fixtures – but here the surprise is the mundanity. Beyond the foyer, a featureless room with neither offices or partitions, just desks and monitors, is home – sometimes fifteen hours a day – to a team of forty or so men and women running the figures on takeover targets. The air is serious but convivial, as though one has stumbled upon guild artisans engaged in a purposeful yet enjoyable craft. The ‘cube farm' ennui of Gervais and Merchant's The Office and Mike Judge's Office Space is unknown here.
The money, at least, makes it easier: it is hard to feel too disaffected as the zeroes are added to your pay cheque. In the 1980s, jailed inside trader Ivan Boesky (read Gordon Gecko) gave the finance industry its much-reproduced credo: ‘I think greed is healthy. You can be greedy and still feel good about yourself'; however, something else seems to be happening at Macquarie Group Ltd and at other financial institutions. Although the money is good, and prospectively better, no one in this room is earning the $33 million that group boss Allan Moss pocketed in 2007. Instead, those who make up the mostly young team (the majority are under thirty-five) seem as much driven by a desire to do ‘well', even if that is not quite the same as the desire to do ‘good'. Everyone wants their projects and their firm to succeed. These people were among the best in their year at universities all over Australia; they outdid two thousand or more applicants for a hundred or so positions. In the same way the British civil service once hoovered up the best Oxbridge graduates to run the Empire, now our most promising graduates flock to finance. This is corporate meritocracy at work, bringing with it a nerdish, nebbish – but not quite geeky – cool and a commitment to hyper-competence. And, while Macquarie looks more vulnerable in the current credit squeeze than it has over the past decade of its massive expansion, our money – or their money – seems to be in sure hands.
Recruitment drives have long been a feature among legal firms, the big four accounting houses (in my day it was the big eight) and elsewhere in the corporate sector. Those attending can stare at the brochures or watch a PowerPoint presentation about making PowerPoint presentations for a living, and walk away with a pocket protector full of branded ballpoints. McKinsey Consulting has gone so far as to make a thing about hiring Rhodes scholars – although I am not sure how this exotic fact is made known to clients, or what it might be like to work there if you are not part of the Rhodes club. Yet the focus on topflight recruitment for corporate or merchant banking is new for Australia. Retail banking has long been a refuge for the low flying, and to an extent still is. A friend attending a Westpac recruitment day was told he would stand out because they did not get many good people. His ascent, he was assured, would be swift. Moreover, as I informed him, the Westpac uniform – still in its '80s palette of red and grey – had improved much in cut and fabric since then. He declined the bank's offer.
In merchant banking, the climb to the top is more of a struggle – the hatchlings are not likely to perish in the forty-metre dash from the egg to the surf, but Macquarie Bank demands nine to twelve or fifteen hours a day, plus perhaps a day on the weekend, and maybe an all-nighter now and then. And that is just to keep up rather than to get ahead. Unsurprisingly, the culture favours the young. Strangely, they have a low attrition rate: a sense of common purpose seems to bind people into the work and to the company culture. These folk toil and play together – sometimes in the office, sometimes on the harbour. And while Sydney is the head office, after a few years many will follow Macquarie's global tendrils to Dubai, Shanghai, Hong Kong, New York, London, or wherever.
These trajectories into and through finance were not always so obvious. Something happened to finance. While all the major Australian stock exchanges were founded in the latter half of the nineteenth century (Melbourne in 1861, Sydney in 1871, Hobart in 1882, Brisbane in 1884, Adelaide in 1887 and Perth in 1889), in many ways the Australian stock and securities market can be lumped together with the emerging markets of the 1980s. There are some obvious differences between the long-standing Australian markets and those that sprang up in Asia and Latin America with support of the World Bank after 1980. The disastrous Poseidon bubble of 1969-70 had forced a tighter regulatory regime on the Australian market, but many of the fifty or so new exchanges of the 1980s lacked securities regulation. Also, the Australian market had a very good – if conservative – banking regime, whereas domestic banking in many of these new centres suffered from poor oversight.
Despite these differences from the new exchanges, the Australian market grew as they did with the opening up of economies, reduced tariffs and trade barriers, privatisation of state industries and the inflow of foreign capital ($500 million into new exchanges in 1984 to more than $100 billion by the late 1990s). Global capitalism had made its greatest leap forward since the ‘Scramble for Africa' in the 1880s. In turn, growing capital markets are viewed as the key to growth in the real economy. Few question the ‘goodness' of finance.