Taking the Floor: Models, Morals, and Management in a Wall Street Trading Room

The first Research Seminar of Michalemas Term 2019 will be given by Dr Daniel Beunza.

Faced with the limitations of the financial reforms enacted in the past decade, central bankers have recently turned to culture and values to instill restraint on Wall Street. How to characterize morality in markets mediated by economic models? Existing studies in economic sociology have not fully considered the interplay between models and morals: while Zelizer’s cultural approach to markets overlooks the effect of economic models, Callon’s material approach has not explicitly considered moral norms. This gap is addressed in my recent book, "Taking the Floor: Models, Morals and Management in a Wall Street Trading Room.” The book presents the case of a Wall Street manager in the late 1990s who sought to remedy the ethical shortcomings he encountered in his sector by reorganizing his trading floor. The study then revisits the same manager and his trading floor in the late 2000s following the global financial crisis of 2008. Based on my ethnographic revisit, I propose the concept of model-based moral disengagement to designate the ways in which economic models contribute to predatory lending and systemically risky trading. I outline an approach to organization that can address such disengagement, which I call proximate control, and offer proposals for policy reform on Wall Street. I conclude by considering the theoretical implications of my analysis for economic sociology. 

Daniel Beunza is Associate Professor of Management at Cass Business School and a member of the Centre on Charity Effectiveness.

His research explores the ways in which social relations and technology shape financial value and has recently expanded into morality in finance and socially responsible investment. His award-winning study of a derivatives trading room on a Wall Street bank traces the roots of extraordinary returns to the use of space and internal organization. Beunza obtained his PhD from New York University, and has taught at Columbia University and the London School of Economics, among others. His research has been published in Organization Science, Organization Studies and Economy and Society, and has been profiled in The Wall Street Journal. Beunza has served as Chair of the academic network of the Principles of Responsible Investment, as well as consultant to the UK Banking Standards Board.

View the Michaelmas Termline up for the Research Seminar Series here.