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MBA Reading List: "Liquidated"

Posted in Test Prep on November 4, 2010 by

Welcome to the second installment of our “Business School Reading List” series: recommended reading for prospective MBAs. The books we cover are some of the essential texts for anyone interested in management and entrepreneurship — plus they provide some excellent GMAT-level reading practice!

This week’s pick: Liquidated: An Ethnography of Wall Street by Karen Ho

Why it’s worth your time

With its ability to pinpoint the origins of the world’s financial situation in the everyday practices and behaviors of individuals, Liquidated has been called timely and almost “literary” in its intellectual heft. It’s no wonder this book has been generating buzz among academics and bankers alike.

What you’ll learn

How Wall Street works. As an associate professor of anthropology and former business analyst, Ho brings an academic rigor as well as an insider’s familiarity to her assessment of Wall Street’s culture of expediency and liquidity. Drawing on 17 months of field work, nearly 100 interviews, and years of professional experience, Ho assesses the daily life of investment bankers and how their practices, habits and beliefs reflect and shape corporate America as a whole. More specifically, Ho dissects concepts like the “culture of smartness” and the emphasis on educational pedigree within finance that positions investment banking as a highly legitimate, if not the “only” legitimate career for Ivy league schools that send as many as 40% of their graduating seniors to Wall Street.

The secrets of “the street.” The bulk of the ethnography is devoted to topics such as the spending habits of Wall Streeters, the positive view of corporate downsizing, and the sense that intelligence is most accurately defined as worldliness, trendiness, and mental agility as opposed to thoughtfulness, creativity, and social consciousness. Ho also describes everything from the lavish recruiting rituals to the anti-climatically austere working conditions to the way in which banks foster relationships with elite institutions. She describes the clear segregation between “front office” and “back office,” the implications of wearing heels versus sneakers to work, and the difference between “brown-bagging” lunch versus buying food from outside. Several chapters are also devoted to the treatment of women and racial minorities within such institutions.

The emotional repercussions. Perhaps most significantly, Ho also assesses the emotional repercussions for individuals participating in a highly volatile industry in which a lack of job security translates into a lack of investment in long-term outcomes. At the book’s end, Ho discusses the meaning of “shareholder value,” the evolution of its importance over the last few decades, and the global consequences of promoting a culture which emphasizes short-term reward to an extreme degree.

Want to read more?

Check out Time Magazine’s interview with Karen Ho.

Happy Reading!