Greg Smith And The Case For Moral Courage


Could Greg Smith, the Goldman Sachs executive who set off a firestorm last week by publishing a scathing resignation letter on the Op-Ed page of The New York Times, have been motivated to speak out against his former employer because of his Jewish heritage? So suggested Paul Berger on the website of The Forward.  “What if Smith, a South African Jew, was simply continuing a South African Jewish tradition of speaking truth to power?” Berger mused. 

It’s certainly possible that Smith, who grew up in a Jewish household in Johannesburg, drew inspiration from the small but vocal minority of Jews in South Africa who courageously denounced apartheid. But if speaking truth to power is indeed what drove him, it’s curious that Smith spent a dozen years working at what is arguably the most powerful investment bank in the world. A graduate of Stanford who went straight into finance, nothing in his background suggests a political consciousness anything like that of radical South African Jews who supported Nelson Mandela decades ago, or for that matter American Jews who identify with Occupy Wall Street today.

A more persuasive explanation for Smith’s act lies not in his Jewish background but in something else that outspoken insiders like him often share: a fierce identification with the ideals that the institutions they work for, or serve in, claim to uphold. “It might sound surprising to a skeptical public, but culture was always a vital part of Goldman Sachs’ success,” wrote Smith in his Op-Ed.  “It wasn’t just about making money. … It had something to do with pride and belief in the organization.”

Critics promptly took Smith to task for his romantic view of Wall Street.  Selling derivatives “is not charity work,” sneered the editors of Bloomberg in an editorial mockingly titled, “Yes, Mr. Smith, Goldman Sachs Is All About Making Money.” As dubious as their own motives may have been for ridiculing Smith (one of Goldman’s most powerful supporters is Michael Bloomberg, who happens to have made a fortune doing business with Wall Street), they had a point. 

But while it may have been misguided, there is good reason to think that Smith’s belief in Goldman’s claims to integrity and treating clients well was sincere — and that this “old-fashioned” view, as he put it in his resignation letter, played no small role in impelling him to come forward when his disillusionment set in. As the scholars Myron Peretz Glazer and Penina Migdal Glazer have documented, whistleblowers like Smith tend to be old-fashioned in this respect.  Most are not rebels but loyal, by-the-book idealists who cannot comprehend “how their superiors could risk the good name of their company” by cutting ethical corners. 

So it was with Leyla Wydler, a broker from Houston who, back in 2002, was pressured to sell a financial instrument she suspected was being misleadingly advertised. Wydler refused, in large part because, like Smith, she believed the interests of clients should take precedence over increasing the firm’s profits (and her own salary). Her suspicions turned out to be well founded: her employer at the time was Stanford Financial, which was eventually shut down for running a $7 billion Ponzi scheme.

In my new book, “Beautiful Souls,” I tell Wydler’s story and that of several other individuals who feel the flicker of conscience when thrust into morally compromising situations. One of them is a Swiss police captain who, in 1938, allowed hundreds of Jewish refugees to enter Switzerland illegally, in part because he was a patriot who believed his nation ought to serve as a safe haven for the persecuted, as Swiss tradition affirmed. Another is Avner Wishnitzer, a soldier from an elite unit of the Israel Defense Forces who refused to serve in the occupied territories — not because he didn’t believe the IDF’s vaunted claim to being “the most moral army in the world” — but because he did. 

The Hebrew term for such soldiers is yafeh nefesh, which means “beautiful souls” and which, in Israel, connotes being naïve. To take the stated principles of any government or large institution at face value is a bit naïve, one could argue. But the true believers who take these principles seriously turn out to be the ones most likely to speak out when they see them being tarnished. For this they deserve not sneering mockery but gratitude and respect.         

Eyal Press is a frequent contributor to The New York Review of Books, The Nation and other publications. His new book, “Beautiful Souls: Saying No, Breaking Ranks, and Heeding the Voice of Conscience in Dark Times,” has just been published by Farrar, Straus and Giroux.