On March 14, 2012, Goldman Sachs executive director Greg Smith announced his resignation on the New York Times op-ed page. His departure was not spoken softly in the usual terms of following opportunities or spending time with family. Instead he penned a public broadside against the decline of Goldman’s corporate culture. The attack ignited a media firestorm decrying Wall Street’s moral corruption.

Smith’s most provocative passage denounces not only the disparaging treatment of the firm’s clients but also the debasement of aspiring youth and the degradation of civic missions beyond Goldman’s walls:

You don’t have to be a rocket scientist to figure out that the junior analyst sitting quietly in the corner of the room hearing about “muppets,” “ripping eyeballs out” and “getting paid” doesn’t exactly turn into a model citizen.

Of course, the terms that Smith chose were not the actual invectives. The unprintable abuses that can be heard on trading floors would only draw more anger.

What accounts for this kind of attitude and behavior? Some culturally available explanations have become standard:

Arrogance. A belief on Wall Street, and particularly at Goldman, that they should be able to pursue profit at others’ expense. They are, after all, the deserving winners in a Darwinian economy. Goldman’s PR department displays such a superior stance when their spokespeople call critics ignorant or dim.

Greed. A sinful excess in pursuit of wealth and power. No image has captured this explanation better than Matt Taibi’s description of Goldman Sachs as a “Great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”

Public protests have used both accusations to great effect. These are useful rallying points, especially since each charge holds finance to a morality beyond the pursuit of profit. Yet there is a lot that such explanations obscure. Finance needs anthropology to examine what lies beyond the eternal infractions of greed and arrogance, the ethics of Wall Street.

Explaining these ethics requires squaring what can seem paradoxical: Wall Streeters want to do well, but they also believe themselves to be good. How can we understand Wall Street actions as accountable to a set of responsibilities, ones that professionals can fulfill? In this light, financial ethics represent a critical mechanism for reproducing both the practices and the attitudes that Greg Smith and so many others have railed against.

Commercial Ethics vs. Trader Ethics

Smith’s story paints a picture of an executive-led moral decline. In earlier years, Goldman possessed an exemplary culture built around “teamwork, integrity, a spirit of humility, and always doing right by our clients.” At the firm today, he asserts, “the interests of the client continue to be sidelined in the way the firm operates and thinks about making money.” This seems like an understatement as he enumerates the practices of dumping bad investments on clients and of profiting through suspect trading schemes. He is resigning, he says, because he can not “in good conscience” say that he identifies with what Goldman now “stands for.”

But what does Goldman now stand for? And how does this distasteful ethic reveal and propagate itself? Making money is the short answer, and an explanation based in greed would end the discussion here. Examining finance as an ethical field can yield deeper understanding. Both in firms’ strategies and in the everyday situations that confront salespeople and traders, financial ethics help answer a critical question: how to make a profit, from whom, and how much.

A contest between two sets of ethics defines the financial industry today, a clash between what I’ll call commercial ethics and trader ethics. Smith clearly believes that trader ethics have won the day. However, each can be analyzed as organized around categories of persons and the obligations and duties among them.

The commercial ethic centers on the relation between clients and providers of a service. The service providers are bound to recognize and aid the interests of the clients. The ability to serve is predicated on trust and built around practices that allow the customers to reveal their true positions as they understand them. Treating unsophisticated clients as “muppets” exploits the trusting relation of the commercial ethic and makes provider and customer into a rival one.

The trader ethic centers on making profits by bringing together buyer and seller. Responsible action enhances the operation of the market, but the obligation does not end there. These ethics press traders actually to be the market, a duty that can illuminate some ultra-aggressive behavior; individuals perform the competitiveness and ruthlessness seen as characteristics of the market itself. Profit, then, comes through orchestrating opposing positions (some of which may be for the bank’s own accounts) and exploiting competitors. The contemporary Goldman culture that Smith describes can, then, ultimately be understood as an orientation to a singular responsibility: facilitating interactions between dealers positioned on opposite sides of a trade. These are responsibilities, in other words, to win gains, but also to make markets.

Indeed, this was the Goldman defense in the 2010 congressional hearings where bank executives were forced to justify their taking short positions against products they were selling to clients. Goldman representatives accounted for themselves in the hearing not as advisors to clients, but as “market makers;” essentially as traders among traders. When the market is placed at the center of commercial life, the critical categories of persons emerge from its competition-based arrangements. In turn, this generates a moral apparatus, sets of responsibilities, and ideas of virtuous action.

Investigating market ethics can expose the logics and justifications for actions considered to be beyond the pale. These accounts should be taken seriously. We need to understand the market as an ethical landscape if we want to build a financial system that presses bankers into a different set of bonds and obligations.