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Highly Discriminating: Why the City Isn’t Fair and Diversity Doesn’t Work
Written by a leading expert, this book examines equality issues in the City of London, arguing that social hiring practices in the City favour affluent applicants, and calls for a policy shift at the organisational and governmental levels.
310 pages, Paperback
Published September 2, 2022
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October 20, 2022
My core argument is that diversity and inclusion does not drive meaningful change because it is not designed or indeed intended to do so. In fact, diversity and inclusion works more obviously to protect the interests of existing elites as it legitimates and sustains the current status quo.
"Highly Discriminating: Why the City Isn't Fair and Diversity Doesn't Work" by Louise Ashley, which focuses primarily but not exclusively on social mobility, is as hard-hitting as its title suggests.
Her scope is the upper echelons of the City - magic circle law firms, big 4 accountants and, particularly (and of most interest to me as a former banker), the bulge bracket investment banks, and indeed even within the latter category functions such as sales and M&A advisory rather than middle or back offices, or even (well-remunerated) trading desks: In areas such as trading, as in other more technical areas, high levels of remuneration can be relatively detached from the social class identity of the practitioners (though other social identities especially sex may continue to matter a great deal).
And this focus on the 'elite' of the City is crucial to Ashley's case. The Paul's law equivalent of Godwin's law is normally that the first person to talk about 'elites' in an argument automatically loses, and here Ashley uses the term 235 times in the book. But a key part of Louise Ashley's argument is that these elites are actually self-appointed as such in order to justify their status, freedom of operation and, particularly, their pay:
It is well known in sociological literature that occupational and other elites require legitimacy as they seek to convince a range of audiences that their financial and symbolic rewards are justified. These audiences or stakeholders can be quite diverse and might include for example society at large, politicians and regulators, as well as clients, competitors, and current or potential colleagues. While these groups are likely to have various expectations of elites, securing the legitimacy of the latter is important as a means to protect their authority, and provide autonomy and freedom from external interference and control. I will show that for City elites, legitimacy rests on both reputation and status at once, notions which sometimes combine and at other times conflict.
And following other authors she takes firm aim at the concept of meritocracy:
In his 2020 book, The Tyranny of Merit, Michael Sandel argues that this vision has come true to the extent that politicians in both the UK and US, such as Obama, Clinton, Blair and Brown, cemented the idea that the money we make reflects both our value and our social contribution, while pay is a measure of any job’s contribution to the public good.
...
As we will see, the merit principle has been deployed in this context [of the City] to similarly problematic effect, to legitimate exceptional rewards and justify a system of financialized capitalism which helps drive the very inequalities that make social mobility more difficult to realize.
As an example, she cites professions (2nd confession here: I'm an actuary), in an interesting counterpoint to books such as The Future of the Professions: How Technology Will Transform the Work of Human Experts, explaining their historic success is more pejorative terms (emphasis mine):
First, they should establish a formal base of knowledge, in which their members are expert. Second, new professional members should require formal educational credentials whose supply can therefore be restricted and controlled. Third, they should seek state support in relation to regulation and official licensing to establish and police the borders of the profession. If professions could achieve all three, they could manufacture an artificial illusion of scarcity in the relevant knowledge which would secure status and worth (and justify the highest remuneration and fees).
Which is an important and interesting challenge, particularly as social mobility into and within professions has historically been poor.
The book uses a combination of academic theories and anecdote, but, and in contrast to The Class Ceiling: Why it Pays to be Privileged which I read recently, little, at least within its pages, by way of statistics or objective evidence. Which makes it hard not to struggle at times as to whether the anecdotes have been chosen to support the theory - for example the attached where the first anecdote is dismissed because it doesn't, and the second, which is actually reported 2nd hand, presented as confirmation:
In 2016, I interviewed private banker, Naomi, who worked at a large investment bank. Consistent with the themes of this book, I was of course interested in who was appointed to the ‘top jobs’ at her bank and how they got in. She gave a straightforward response: “We are strictly performance based, so if you are intelligent, if you are smart you will get through to the interviews, it is as simple as that.” Naomi reflects the popular view in the City that hiring and promotion take place on neutral and objective grounds.
However, around the same time I also talked to Mohinder, a trainee lawyer at a leading City law firm. She told me about a peer of hers, also a law firm trainee, who had completed their training contract but was not offered a permanent job: “I had a friend who was very good and she was coming up to qualification and some partner sat her down and said: ‘We think you’re fantastic and everything, the only area you’re lacking is that you’re not an arrogant little shit’.”
As I read the anecdotal side of experience of various people from diverse backgrounds in the City, I noted to myself that in this review I'd recommend a more powerful, if fictional, treatment from Natasha Brown's brilliant novel Assembly. So it was great to discover on page 230 this from Ashley:
Given my overall focus on legitimacy, I borrow more heavily from institutional theory once again, this time using a growing stream of literature which has explored how individuals (rather than organizations) respond to pressures to conform. This focus on legitimacy as a means of survival has some interesting parallels with ex-financial service worker Natasha Brown’s novel Assembly published in 2021, where the protagonist seeks to transcend her gender, ethnicity and class through her City job, but finding this impossible, in the end reclaims a sense of agency another way.
The litany of condemnation in the book is a useful guard against complacency, but does mean it rather lacks in any particular recommendations for action. Indeed overall Ashley seems to feel that societal rather than industry change is key (and in that she comes from a fairly left-wing perspective, e.g. citing Marx at the beginning and end of the book, as well as authors such as Picketty with policies such as wealth taxes, narrow and social banking etc):
While organizational practice and policy can make a small contribution toward opening the City’s ‘top jobs’ to a wider demographic, more significant progress is heavily dependent on greater equality of condition in society at large, which could facilitate social fluidity (while helping to ensure that those who do not move ‘up’ and indeed those who move down can still enjoy dignity and respect).
Indeed she actually rejects what she believes is a false reliance on justification for social mobility, and other dimensions of diversity, in firms on economic grounds, i.e. that it leads to better outcomes, instead arguing this is more a moral imperative.
She does point towards bodies such as the Social Mobility Foundation, the work done by the City of London Corporation (although here she points out this is a self-appointed group likely to justify rather than fundamentally change the status quo) and the resulting body Progress Together (which my firm is in the process of joining) and researchers such as Sam Friedman, author of the aforementioned The Class Ceiling.
Overall - a challenging book but. as mentioned, for powerful anecdotes read Assembly and for practical actions read The Class Ceiling.
"Highly Discriminating: Why the City Isn't Fair and Diversity Doesn't Work" by Louise Ashley, which focuses primarily but not exclusively on social mobility, is as hard-hitting as its title suggests.
Her scope is the upper echelons of the City - magic circle law firms, big 4 accountants and, particularly (and of most interest to me as a former banker), the bulge bracket investment banks, and indeed even within the latter category functions such as sales and M&A advisory rather than middle or back offices, or even (well-remunerated) trading desks: In areas such as trading, as in other more technical areas, high levels of remuneration can be relatively detached from the social class identity of the practitioners (though other social identities especially sex may continue to matter a great deal).
And this focus on the 'elite' of the City is crucial to Ashley's case. The Paul's law equivalent of Godwin's law is normally that the first person to talk about 'elites' in an argument automatically loses, and here Ashley uses the term 235 times in the book. But a key part of Louise Ashley's argument is that these elites are actually self-appointed as such in order to justify their status, freedom of operation and, particularly, their pay:
It is well known in sociological literature that occupational and other elites require legitimacy as they seek to convince a range of audiences that their financial and symbolic rewards are justified. These audiences or stakeholders can be quite diverse and might include for example society at large, politicians and regulators, as well as clients, competitors, and current or potential colleagues. While these groups are likely to have various expectations of elites, securing the legitimacy of the latter is important as a means to protect their authority, and provide autonomy and freedom from external interference and control. I will show that for City elites, legitimacy rests on both reputation and status at once, notions which sometimes combine and at other times conflict.
And following other authors she takes firm aim at the concept of meritocracy:
In his 2020 book, The Tyranny of Merit, Michael Sandel argues that this vision has come true to the extent that politicians in both the UK and US, such as Obama, Clinton, Blair and Brown, cemented the idea that the money we make reflects both our value and our social contribution, while pay is a measure of any job’s contribution to the public good.
...
As we will see, the merit principle has been deployed in this context [of the City] to similarly problematic effect, to legitimate exceptional rewards and justify a system of financialized capitalism which helps drive the very inequalities that make social mobility more difficult to realize.
As an example, she cites professions (2nd confession here: I'm an actuary), in an interesting counterpoint to books such as The Future of the Professions: How Technology Will Transform the Work of Human Experts, explaining their historic success is more pejorative terms (emphasis mine):
First, they should establish a formal base of knowledge, in which their members are expert. Second, new professional members should require formal educational credentials whose supply can therefore be restricted and controlled. Third, they should seek state support in relation to regulation and official licensing to establish and police the borders of the profession. If professions could achieve all three, they could manufacture an artificial illusion of scarcity in the relevant knowledge which would secure status and worth (and justify the highest remuneration and fees).
Which is an important and interesting challenge, particularly as social mobility into and within professions has historically been poor.
The book uses a combination of academic theories and anecdote, but, and in contrast to The Class Ceiling: Why it Pays to be Privileged which I read recently, little, at least within its pages, by way of statistics or objective evidence. Which makes it hard not to struggle at times as to whether the anecdotes have been chosen to support the theory - for example the attached where the first anecdote is dismissed because it doesn't, and the second, which is actually reported 2nd hand, presented as confirmation:
In 2016, I interviewed private banker, Naomi, who worked at a large investment bank. Consistent with the themes of this book, I was of course interested in who was appointed to the ‘top jobs’ at her bank and how they got in. She gave a straightforward response: “We are strictly performance based, so if you are intelligent, if you are smart you will get through to the interviews, it is as simple as that.” Naomi reflects the popular view in the City that hiring and promotion take place on neutral and objective grounds.
However, around the same time I also talked to Mohinder, a trainee lawyer at a leading City law firm. She told me about a peer of hers, also a law firm trainee, who had completed their training contract but was not offered a permanent job: “I had a friend who was very good and she was coming up to qualification and some partner sat her down and said: ‘We think you’re fantastic and everything, the only area you’re lacking is that you’re not an arrogant little shit’.”
As I read the anecdotal side of experience of various people from diverse backgrounds in the City, I noted to myself that in this review I'd recommend a more powerful, if fictional, treatment from Natasha Brown's brilliant novel Assembly. So it was great to discover on page 230 this from Ashley:
Given my overall focus on legitimacy, I borrow more heavily from institutional theory once again, this time using a growing stream of literature which has explored how individuals (rather than organizations) respond to pressures to conform. This focus on legitimacy as a means of survival has some interesting parallels with ex-financial service worker Natasha Brown’s novel Assembly published in 2021, where the protagonist seeks to transcend her gender, ethnicity and class through her City job, but finding this impossible, in the end reclaims a sense of agency another way.
The litany of condemnation in the book is a useful guard against complacency, but does mean it rather lacks in any particular recommendations for action. Indeed overall Ashley seems to feel that societal rather than industry change is key (and in that she comes from a fairly left-wing perspective, e.g. citing Marx at the beginning and end of the book, as well as authors such as Picketty with policies such as wealth taxes, narrow and social banking etc):
While organizational practice and policy can make a small contribution toward opening the City’s ‘top jobs’ to a wider demographic, more significant progress is heavily dependent on greater equality of condition in society at large, which could facilitate social fluidity (while helping to ensure that those who do not move ‘up’ and indeed those who move down can still enjoy dignity and respect).
Indeed she actually rejects what she believes is a false reliance on justification for social mobility, and other dimensions of diversity, in firms on economic grounds, i.e. that it leads to better outcomes, instead arguing this is more a moral imperative.
She does point towards bodies such as the Social Mobility Foundation, the work done by the City of London Corporation (although here she points out this is a self-appointed group likely to justify rather than fundamentally change the status quo) and the resulting body Progress Together (which my firm is in the process of joining) and researchers such as Sam Friedman, author of the aforementioned The Class Ceiling.
Overall - a challenging book but. as mentioned, for powerful anecdotes read Assembly and for practical actions read The Class Ceiling.
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