For Madoff, business was like a war. We know he thought this way because he stated this openly and explicitly. Listening to Bernie Madoff, given everything we now know about him, can we agree to jettison the business as war metaphor, once and for all? Can we agree that “taking the human being out of the equation” is literally a form of madness?
Meditating on Madoff
Moses L. Pava
Special to FailedMessiah.Com
There is a video of Bernie Madoff participating in a roundtable discussion on financial markets that took place on October 20th, 2007, about a year before Madoff’s empty pyramid finally collapsed upon all of us for good. There is a temptation now, of course, to distance ourselves from Madoff and all he stood for. We rationalize to ourselves that he was an anomaly, a community outlier. But viewing this video (posted above) of the flawlessly groomed Madoff, sitting so comfortably in his chair, perched in the middle of the room with smiling faces everywhere, perfectly mirroring the widening and narrowing of Bernie’s own smile, is a reminder of how much we all wanted to believe in his brand of capitalism back in October of 2007. In those days, we were dancing with Bernie, whether we were aware of this or not; he was leading and we were following.
Watch Bernie carefully as he is surrounded by fawning industry experts, bedazzled investors, loyal employees, and naïve and believing academics. He pontificates, slowly, methodically, and so quietly (you have to turn your ear to hear him) on his philosophy of business, exploiting his easy, casual, and perfectly-timed, self-deprecating humor. Note to yourself that you are watching a true genius, like the power-hitting Babe Ruth, still in his prime, wowing the crowd with homerun after homerun, in the old Yankee Stadium.
To the delight and excitement of the audience, Bernie notes casually, as an aside, business is “one big turf war.” But, not to worry, he assures us more boldly, “In today’s regulatory environment it is virtually impossible to violate rules…” Coyly, he adds, almost as an afterthought, “this is something the public doesn’t really understand.” He continues, perhaps trying to convince himself as much as us, that “when you look at the scope of the trading that goes on today on Wall Street, and when you look at the infractions, they are relatively small primarily because of all of the regulations…It is impossible…for a violation to go undetected…certainly not for a considerable period of time.” Although Alan Dershowitz is usually associated most strongly with the term chutzpah, perhaps viewing this roundtable discussion on youtube will convince you that Bernie Madoff is now the reigning world champion.
At one point in the conversation, Bernie jokes about his mistake in hiring math experts from MIT to work for him as traders, following advice from his wife (who knew how involved in the business his wife was?). Bernie notes that the problem with the academics from MIT was that “They spent too much time thinking…” And, right on cue, the audience knowingly laughs along with Bernie about how impractical it is to think and do business at the same time! As we imagine ourselves transported back to 2007, as we watch this video, we should ask ourselves, would we have challenged such blatant anti-intellectualism? Might we have caught an insincere and telling twitch of his eyes as he regaled us with his war stories?
Having worked with him in his capacity as Chairman of the Sy Syms School of Business, where I have taught for more than 20 years, and having personally heard him make similar assertions in different contexts, unfortunately I know that I would have missed the microscopic facial tics (recognizable to me only if you watch the video in slow motion) and would have remained silent and intimidated in his presence.
At the time, Madoff’s rhetoric and theatrical delivery were a soothing comfort. We might have been anxious, but Uncle Bernie surely must have known what he was talking about. Looking back with the aid of 20-20 hindsight, though, his was a chilling message to all of us. In his exact words worth meditating upon:
“Let’s take the human factor out of the equation.”
“The best thing for us to do was basically to take the human being out of the equation.”
“When you take the human being out of the equation you solve your regulation problems because the nature of any human being is the better deal you give the customer the worse deal it is for you.”
“As honest as you try to get people to be there’s this normal pull, you know, that you have to deal with. So by taking the human being out of the equation to a great extent and turning it over to a computer to make your decisions…by doing that you’re able to automate the process.”
“I guess you could also program the computer to violate regulations (big laughs from the audience) but we haven’t gotten there yet, you know, by taking the human being out of the function…”
At one point in his conversation, Madoff asks rhetorically “What do human beings contribute to the market place?” He offers no attempt at an answer.
In recent years, philosophers have begun to point out how our thinking is constrained by the “metaphors we live by.” Madoff was obsessed by a zero-sum mentality (“the nature of any human being is the better deal you give the customer the worse deal it is for you”). This most social of men, who could close a million dollar deal with a wink of an eye, was haunted by a pervasive misanthropy and lack of trust. Over and over again, he openly advised “to take the human being out of the equation.” We heard the words, but to our collective shame, we failed to discern the melody beneath the words.
For Madoff, business was like a war. We know he thought this way because he stated this openly and explicitly. Listening to Bernie Madoff, given everything we now know about him, can we agree to jettison the business as war metaphor, once and for all? Can we agree that “taking the human being out of the equation” is literally a form of madness? The very purpose of business is to serve and promote human needs. Why would anyone ever want to take the human being out of this equation? Business ethics, and Jewish business ethics, in particular, must turn Madoff’s philosophy on its head. The question is surely not how to take the human out of business, but how to put the human being back into business, the rest is commentary.
Jewish ethics is both a contemporary and an ancient project. As the Jewish sage Hillel famously asked, “If I am not for myself, who will be for me? And, being only for myself, what am I? And, if not now when?” These are still the questions, in whatever key they are formulated, which continue to both haunt and motivate us as both Jews and as citizens of the world.
Moses Pava is the Alvin Einbender Professor of Business Ethics at Yeshiva University. His most recent book is Jewish Ethics as Dialogue: Using Spiritual Language to Re-imagine a Better World.