I didn't write this. The author is a friend who emailed this article with a request that I post this on Daily Kos; I do so gladly. She's a noted playwright and a thought-provoking author, and her husband is Larry Seaquist, my Democratic state representative and interim party chair. I hope you enjoy this piece.
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Risk Management, According to Moby-Dick
Carla Seaquist
From Main Street the view is, in a word, frightening. We see the Wall Street firms that were bailed out in the ’08 crash because they were “too big to fail” are now, three years and a blizzard of reform later, grown even bigger---so big, says economist Simon Johnson, that when the next crash comes, they’d be “too big to save.” And the next crash? Increasingly we hear it’s a matter of when, not if, and that it will be worse than the cataclysm of ’08. Making it—what: Catalcysm Squared? The End?
Can we not manage better than this?
Apparently not. Risk management post-crash has not been confidence-building, either in Washington or on Wall Street itself. Disregard the P.R. fatuously trumpeting the “going forward” theme, check instead the risk management statements at the big Wall Street firms: Muzzy language continues to create an illusion of calm. Reference may be made there to market “volatility,” but none to the role that firm may have played in fomenting the volatility.
Crucially, in these risk statements the dog still not barking is…Main Street: Wall Street continues to assess risk only as it bears on itself---and not on the larger economy or on the nation. Meanwhile, lurking, lurking is the hidden derivatives market, estimated value now at 600 trillion dollars. Why is there so little discussion of this perilous risk: because its impact on our 14 trillion dollar economy is too awful to consider? Call me anxious, very anxious.
Which is why we need…Herman Melville. In his masterpiece Moby-Dick, or The White Whale, Melville speaks in vivid language of fatal things---things “fatal to the last degree of fatality”---words perfectly pitched to our present fraught state. While Moby-Dick remains in essence an epic tale of one man’s obsession and its killing costs, it also instructs on the risks of risk, as it were---and Wall Street needs to take these dead-serious lessons onboard. I will propose how in the closing. Readers will draw their own instruction in the following review without interference from me.
Melville speaks in language to calculate by. Assessing, he states flatly that whalers of all vessels are “the most exposed” to destruction, “hence, the spare boats, spare spars, and spare lines and harpoons, and spare everythings [sic], almost, but a spare Captain and duplicate ship.” Whaling is more dangerous than battle, he asserts: “Many a veteran…would quickly recoil at the apparition of the Sperm Whale’s vast tail, fanning into eddies the air over his head.” When the narrator Ishmael fully 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.” That done, “Here goes for a cool, collected dive at death and destruction, and the devil fetch the hindmost.”
It’s in pursuing the Sperm Whale, largest of the leviathans, that miscalculation may prove “fatal to the last degree of fatality”---in short, “I tell you, the Sperm Whale will stand no nonsense.” Such were the myths attaching to Moby Dick specifically that to “chase and point lance” at him “would be inevitably to be torn into a quick eternity.” To illustrate the White Whale’s “unexampled, intelligent malignity,” Melville relates several accounts of Moby Dick’s “braining feats”: “When swimming before his exulting pursuers…he had several times been known to turn round suddenly, and bearing down upon them, either stave their boats to splinters, or drive them back in consternation to their ship.” The novel is strewn with “the chips of chewed boats, and the sinking limbs of torn comrades.”
Lastly, Melville assesses the sea itself, the context: “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.”
Management of this vast peril, then, must be “very heedful.” Humility is required: First mate Starbuck says, in selecting his oarsmen, “I will have no man in my boat…who is not afraid of a whale,” meaning: “an utterly fearless man is a far more dangerous comrade than a coward.” Paramount in a long voyage is the need for cooperation: a “community of interest prevailing among a company, all of whom, high or low, depend on their profits, not upon fixed wages, but upon their common luck, together with their common vigilance, intrepidity, and hard work.”
But management of risk, and one’s own agency in it, gets tricky, as Melville describes in a technical chapter on the “monkey-rope,” the line attaching a crewman onboard with one over the side. Attached to Queequeg standing atop a whale killed and brought alongside, Ishmael realizes that if Queequeg slips, he too would go down:
“So strongly and metaphysically did I conceive of my situation then, that…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.”
Then, Melville speaks directly to us today, “whelmed” as we are by a leviathanic Wall Street and treading water amid the chips of our personal finances: “If your banker breaks, you snap.” About this vital monkey-rope, Ishmael concludes, “Nor could I possibly forget that, do what I would, I only had the management of one end of it.”
Yet it is the (mis)management of another monkey-rope---of power and command---that more than the elements destroys the ship Pequod. And here is where the novelist excels: Melville examines the “springs and motives” of character, notably those of Captain Ahab and Starbuck. For as Ahab knows, “with little external to constrain us, the innermost necessities of our being, these still drive us.”
Ahab is, to quote another Great Author, “a piece of work”: In his quest to avenge himself on the whale that “dismasted” him of a leg, he is “monomaniacal,” a term
Melville applies often. Of every passing ship, Ahab first asks, “Hast seen the White Whale?” Ahab knows he is mad (“I am demoniac, I am madness maddened”), yet he enjoys the “thousand fold more potency” that madness endows. Knowing “my means are sane, my motive and my object mad,” he must dissemble to the crew, blandishing them with grog and a Spanish gold ounce (“Cash---aye, cash”). Ahab knows full well he can be cited for “usurpation” and that “with perfect impunity, both moral and legal, his crew if so disposed, and to that end competent, could refuse all further obedience to him, and even violently wrest from him the command.”
The one person who could oppose Ahab and press the charge of usurpation, and who is “to that end competent” and could take the crew with him, is his first mate, the “humane” Starbuck. From the start Starbuck suspects Ahab’s “impious motive” and says so in ship’s company: “I came here to hunt whales, not my commander’s
vengeance.” Driven by right purpose and care for the ship’s welfare, Starbuck in a series of dramatic set-pieces continues to go up against Ahab, even to the point of issuing a personal challenge: “Beware of thyself, old man!” Yet his tragedy---and the ship’s---is that he always, always backs down. From first challenge and, importantly, first retreat, Ahab knows “Starbuck…is mine; cannot oppose me now, without rebellion.”
Though Starbuck asks himself, Should Ahab “be tamely suffered to drag a whole ship’s company down with him,” he decides against organizing a rebellion: He can’t abide the idea of Ahab sailing home chained, “a caged tiger,” disrupting “all comfort, sleep itself, inestimable reason.” Fatal mistake! Thus Ahab, while he tips his hat (“Thou art but too good a fellow, Starbuck”), dismisses him for “the incompetence of mere unaided virtue and right-mindedness.”
For that matter, Ahab doesn’t think any more highly of the ship’s owners (whom Starbuck invokes): “Let the owners stand on Nantucket beach and outyell the Typhoons. What cares Ahab?”
At the end of the day (and there really is such day for Melville), the captain’s unchecked ego---“I drive the sea!”---carries ship and crew beyond prudent risk management and onto Fate’s “handspike.” When Moby Dick is finally sighted, Starbuck makes a final plea (“All good angels mobbing thee with warnings”), but Ahab is unmoved: “This whole act’s immutably decreed.” By now, ego is blind to humanity: “Be the front of thy face to me as the palm of this hand---a lipless, unfeatured blank.” As foretold, Moby Dick turns on and smashes all (all but Ishmael), leaving only a swirling vortex carrying “the smallest chip of the Pequod out of sight.”
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In connecting Melville’s epic to our perilous financial state today, this is not to say that the titans of Walls Street are mad or evil, as Ahab clearly is. But it is to say, emphatically: Their “monomaniacal” pursuit of profit is a killing pursuit that can take every last thing---crew, captain, even the ship itself (read: the nation)---down.
On behalf of Main Street, I could exhort Wall Street to heed Melville’s fatal lessons---that we really are all members of one grand “joint stock company”---but, with record
profits now being posted, “baby man” wouldn’t likely hear a cautionary note sounded from the outside. For its part, Main Street gets it that “If your banker breaks, you snap” (ditto for investment houses and insurers). As for the all-binding “monkey-rope,” Main Street doesn’t control even a fiber, much less one end of it. We get all this---and we think it is rotten, and wrong. To avert the predicted next crash---Cataclysm Squared---we need help, now, we need an ally on Wall Street itself….
We need….Starbuck. Starbuck is the chief “external constraint” on titanic ego, gross error, fatality, doom. But: We need Starbuck freed from the trap Melville himself consigned him. While Starbuck constantly went up against his mad captain, in the end Melville left him passively standing at the ship’s railing, wondering “Is my journey’s end coming?”
Melville, like many a Great Author, was a tragedian, and he cast Starbuck as tragic hero: that is, the hero might fight gallantly, but ultimately human agency is futile. But I wonder if Melville got caught in his own trap---of tragic plot---and sandbagged Starbuck. After all, a first mate who can say to his captain’s face, “Beware of thyself, old man!” is, as chain-of-command decorum goes, quite nervy. Truly, would this Starbuck cave at organizing a rebellion, simply because he could not abide Ahab as “caged tiger,” a prospect destroying “all comfort, sleep itself, inestimable reason?”
More to the point, Melville trapped Starbuck in his virtue, his “soft” humanity. Ahab’s measure of Starbuck---“the incompetence of mere unaided virtue and right-mindedness,” moral qualities he deemed “enfeeblement”---is a withering (and rich, coming from amoral Ahab) assessment---which, however, Melville seems to share. Indeed, in today’s world as well as Melville’s, “mere virtue” usually does go unaided. Melville signals this reality early on, in Father Mapple’s pre-voyage sermon: “In this world, shipmates, sin that pays its way can travel freely, and without a passport; whereas Virtue, if a pauper, is stopped at all frontiers.”
So, the whole point becomes: to aid virtue. Or far better yet: see virtue aid itself. (Let’s aid virtue here with a name change, to less-mocked “conscience.”) Since many of today’s problems---including, if properly understood, risk management---are moral or ethical in nature, those best fitted to right things are the conscientious Starbucks, who, using their unleashed sword arm, transform moral “enfeeblement” to empowerment. Unlike Melville’s Starbuck, whose continuous agonizing “burned up” his courage, our Starbuck, once he/she has drawn the moral point, would minimize the agonizing and act.
Hast seen this Starbuck the Bold? On Main Street, they are thick on the ground. In my post-9/11 voyage into commentary, away from the tragic models of Literature and Drama, meeting these men and women, conscientious and tough, has been the biggest and best of surprises. Thus this FYI to Wall Street: Should your risk-taking swamp Main Street yet again, these Starbucks, unlike Melville’s, will lead a rebellion against you. And---not a problem---they could abide Ahab “caged.”
On Wall Street, odds are these Starbucks exist too. (I’m not saying they’re thick on the ground; I’m just talking odds.) They need now to step up their game and, capitalizing on their position, prevent the Street from crashing us again: by reining in the “exulting pursuers” of “demoniac” risk, which like Moby Dick can turn on and annihilate us all. By expanding the frame of reference: from the firm to the larger economy, the nation, and, yes, to Main Street. By getting in the face of the “monomaniac” ego (“Beware of thyself”), whose “springs and motives” the in-house Starbuck is well-placed to understand.
Crucially, this Starbuck must help redefine risk management as a moral matter. In its capacity to destroy millions of souls who never partake of Wall Street’s bonanzas yet who must bail out the Street when it goes bust, risk management enters deep into the realm of right and wrong. Over and over in this great American experiment, a balancing act between Capitalism and Democracy, profit trumps---and trashes---the demos. But: If Starbuck were to paint in the “lipless, unfeatured blank” of the demos as human beings…..
To be sure, this Starbuck risks getting fired or called a scourge---but he also risks becoming the Savior of Wall Street. In his prudence and humanity, this Starbuck would bring the ship home---intact and without a rebellion. Which would make him (surprise, surprise) a risk manager par excellence.
Hast seen this bold Starbuck on Wall Street…..?
Carla Seaquist writes commentary for The Christian Science Monitor and The Huffington Post. Her book of commentary is titled “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,” to be included in a forthcoming volume, “Two Plays of Life and Death.” She is at work on a play titled “Prodigal” (www.carlaseaquist.com).
