Felix Salmon

After a Gerhard Richter painting owned by Eric Clapton sold for an astonishing $34 million last week, Bloomberg’s Scott Reyburn called around for some expert reaction.

“People are still ready to pay top prices for great paintings,” Christophe Van de Weghe, a New York dealer, said in an interview. “While the market is selective, the Clapton provenance made a difference. It could have added as much as 20 percent to the price.”

The first part of the quote is something which should be banned from all reporting on the art market; it says nothing at all, in a market where the quality of a painting is determined, first and foremost, by how much money it sells for.

The second part of the quote, by contrast, just sets up the obvious “who’s the idiot?” question. It’s conceivable that the buyer is an idiot, for paying an extra $5 million just because the painting used to be owned by a rockstar. It’s also conceivable that Christophe Van de Weghe is an idiot, for thinking that Clapton provenance could be worth anything like that much. It couldn’t: the absolute maximum that Clapton provenance can be worth is $959,500 — the value, also set at auction, of his “Blackie” guitar. “This painting once hung on Eric Clapton’s wall” is never going to be worth more than “This guitar was played with every guitar great, at legendary concerts, and on multiple timeless albums.”

But taken as a whole, the quote is actually quite revealing — not of any particular idiocy, but rather of the incredibly strong human drive to turn any event, or sequence of events, into a narrative. Any time something surprising happens, the first question we ask is “why?” — and the way we try to answer that question is by telling stories. Stories are the way we make sense of the world, the lens through which we see it. And so if “Abstraktes Bild (809-4)” sold for more than Christophe Van de Weghe thought it was worth, then Christophe Van de Weghe is likely to come up with some kind of ex-post explanation of why that might be the case. Eventually, if he tells that story often enough, and builds a whole world-view around it, then it will become incredibly difficult to disabuse him of his notion.

Which brings me, naturally enough, to Greg Smith, and whether he’s a con man. Bill Cohan says that he is:

He conned the Times into thinking he was resigning from Goldman Sachs on principle, when he was really nothing more than a disgruntled and ambitious former employee who wanted a bigger bonus and a bigger title and got, and merited, neither.

Cohan says that Grand Central Publishing was conned, too, along with CBS’s “60 Minutes”. And Andrew Ross Sorkin agrees.

The question is not a new one — the day that the op-ed appeared, I said that “it’s much easier to see the disgruntled ex-employee here, quitting in a huff, than it is to see someone genuinely trying to do his part to reconstitute the Goldman Sachs of Gus Levy and John Whitehead.” But the accusation of conning the NYT is a serious one, and implies more than mere disgruntlement — it implies bad faith on the part of Smith. We now know that Smith was angling for a huge bonus and was underperforming at Goldman; his days there were numbered in any case, and it seems pretty obvious that his attack of the ethics was in large part Smith coming up with a way of feeling good about himself as he tore up his golden ticket.

Smith’s op-ed didn’t come out of thin air: it was the culmination of months of writing, “on airplanes, in airport lounges, in hotel rooms, and in my flat late at night”. Smith was literally constructing a narrative, in these writing sessions: he was building a new, non-squidian way of looking at the world, in large part because he surely knew that, one way or another, his days at Goldman were numbered. (He was already, at that point, the lowest-paid employee of the VPs in his training class.)

After Smith’s op-ed appeared and went viral, Smith was forced to own the narrative he had been constructing for a while; naturally, given a $1.5 million offer from Grand Central, he then turned that narrative into a book. Goldman is doing a good job of presenting a counter-narrative, and now those of us on the outside are being asked, essentially, to choose between two very different stories.

The con-man accusation, however, goes one further. It doesn’t just accept Goldman’s narrative and reject Smith’s; it says that even Smith believes the Goldman narrative, and is presenting himself as some kind of natural occupant of the moral high ground, despite the fact that he knows full well that in reality he’s little more than an underperforming money-grubber who never got the seven-figure bonus he desired.

I have very little time for Smith’s tale of being shocked that the equity derivatives desk was selling equity derivatives to clients, regardless of what the in-house view on European banks might be, or whether Goldman was advising European sovereigns at the time. Smith was part of the problem much more than he is part of any possible solution. But I don’t think he’s a con man, either. When you’ve devoted your entire career to Goldman Sachs and then you suddenly leave in a blaze of publicity, you tend to be carried along by events much more than you are controlling them.

Accusing Smith of being a con man gives him too much credit: it implies that he cynically orchestrated this whole thing, rather than simply striking a lucky chord on the NYT op-ed page one day. Smith wasn’t very good as a Goldman banker, and he didn’t suddenly find some secret reserve of Machiavellian cunning upon his departure from the bank. He’s just a human, like the rest of us, constructing a narrative lens through which he can view the world, and his career, in a non-self-loathing manner. That’s a perfectly natural thing to do, from his perspective — and it’s so normal and boring that there’s really no reason for the rest of us to read his book. Sorkin says it’s boring; I believe him on that front. I just don’t think it’s a con.