Theatrical wealth lasts, at most, three generations
The Lehman Trilogy on Broadway
This is the part we know already: in 2008, the venerable investment bank Lehman Brothers declared bankruptcy and collapsed, bringing down a sizable portion of the world economy with it. It had taken too many risks, it was over-leveraged on sketchy derivatives based on questionably-valued real estate debt, and though other banks had put themselves into similarly precarious positions, Lehman was the first to get hit by the proverbial distributions of shit flung by the fan. The government, though it was shortly after to bail out the other banks, refrained from bailing out Lehman, and so it died an ignoble — albeit world-historical — death.
Last week I had the enormous pleasure of seeing The Lehman Trilogy, a three-act play (not, in fact, three plays) currently in a limited run on Broadway and featuring three superb actors: Simon Russell Beale, Adam Godley, and Adrian Lester. Though its broad subject matter is American capitalism, neither the writer nor the director nor the actors are American. Perhaps it’s for this reason that the play miraculously (mostly) avoids polemic. The play is about the history of the Lehman Brothers, as a family and as an enterprise, starting with Henry Lehman (née Hayum Lehmann) stepping off the boat from Germany and ending with the company’s 21st century collapse. Adding to this ambitious scope are the massive demands on the three actors, who play not only the brothers L. but every other character in the story, from shady railroad developers to prospective brides to thumb-sucking children (and, in a memorable moment, radio static). Also ambitious and unusual is the fact that the whole play is narrated in the third person, like an epic poem. Believe me that it all works beautifully. When it comes to the play — the subject matter, the actors, the conceit — the appropriate word is aplomb.
I have an “I was there” story about Lehman Brothers, which I love to talk about with people who care about that sort of thing, but which is only a secondhand wisp of a story. Today in the big biography of Napoleon Bonaparte I’m reading (audiobooking while walking the dog), I reached a passage about the philosopher Hegel, who one day looked out the window of his study and spotted l’empereur going by on horseback, freshly victorious from conquering Prussia. Hegel was impressed enough to write to his friend about the thrill it gave him to see the great man, but when it comes down to it it’s not much of a story — only history, passing briefly in front of his view. This is my I-saw-Napoleon-go-by-my-window story.
Back in the mid-aughts I worked as a programmer-for-hire at an agency who primarily loaned us out to write tools for investment banks, and Lehman was their biggest client — nearly 80% of their billing at the time I started. I worked for a different bank, not for Lehman, but I did work for the credit derivatives division. These were the people who were pooling risky mortgages in an attempt to transubstantiate them into good hearty bread, safe enough for the likes of pension funds and university endowments to consume. The agency put me and the other techies into tutored courses so we would learn how these instruments worked. There were a bunch of metaphors to explain the derivatives: they were like layer cakes with the icing on top, they were like a potluck where some people have dibs on the best dishes, they were like a racing team that might do well even if there are a few slow players. Someone circulated a PDF of a prize-winning academic paper, written by one of the quants we worked with, about how to calculate the true risk of these instruments — I remember vaguely that its metaphor was about the likelihood of both halves of a married couple dying at the same time.
That spring and summer of 2007, there were rumblings of trouble. One of the sketchier mortgage brokers was going under. A couple of Bear Stearns funds, previously rated as safe, had been re-evaluated and deemed to have “little to no value.” At the bank a project manager, shielding me from the traders, told me in low tones: they’re losing money upstairs; if they’re cranky at you don’t take it personally. I only once met the trader who was supposed to use our program; when we demoed it to him he was not cranky even though there was an obvious bug involving date formats. He ran the script and the name of the sketchy mortgage broker, right then in the process of failing, popped into a bunch of cells in his big Excel sheet. He thanked us for the assistance, and seemed quiet and very tired. After the demo, the project manager commented on how much weight the man had lost.
By the time fall 2008 came and the metaphors I’d learned the year before about layer cakes were being repeated frantically in the news, I wasn’t working for banks anymore. I saw it all on the news and remembered. Hey, who’s that man who just went by the window?
Lehman Brothers, as a business, started out in Alabama as a seller of fabrics and suits made from the cotton of the nearby slave plantations (more on this later). The Lehman Trilogy conceives of their trajectory over the next century and a half as one of increasing, alarming, abstraction: they go from selling fabrics and suits to transacting in raw cotton, from there to brokering cotton, then to being a broker in general, then to banking and the stock exchange and eventually, presumably, the layer-cake stuff. In one excellent scene we see an elder Lehman, accustomed to transacting in tangible goods, thinking with alarm that at the stock exchange where seemingly everything can be bought and sold — iron, coal, wood, copper — not a single one of these precious substances is visible anywhere. Fortunately his fast-talking son, who has a killer instinct, is entirely comfortable with dealing in paper.
I understand the instinct to link these abstractions to the ills of modern capitalism — the complex fictions of modernity have taken us too far from the realities of the material world is an argument both old and endlessly compelling — but I have always thought it was rather reductive. It’s not just that you can wind up sounding like a Gold Standard crank, but that it’s easy to look at the abstractions in themselves without thinking about how they come about and what they do. I see them as a representation of the profound trust necessary in each other to live in society — the same trust that if you swallow a pill in a bottle marked Advil that you bought at the store, that it will relieve your pain rather than kill you. I think that anxieties about complex financial instruments are fundamentally not about complexity but a reflection of (often justified!) doubt that others will uphold the social contract, and deeply tied up with our ideas about trustworthiness, virtue, and morality.
The Lehman Trilogy recognizes this: it’s steeped in the language of virtue, trust, and sin. I didn’t know before seeing the play that Lehman’s original wealth came, quite literally, from selling the products of slave labour, acting as the middlemen between the Alabama plantations and cotton buyers in New York. Early in the play one character, a financier who buys all Lehman’s cotton to resell up north, is given the name Perfect Hands because he’s proud of his, which are unsullied by manual labour. We are meant to feel a little uncomfortable with Perfect Hands, who profits from the cotton without touching it, who never has to see the plantations. Opposing him is another character, a Rabbi, who tells the Lehmans after the Civil War nearly destroys their business (paraphrasing): It was built on a crime. You should have known it couldn’t last. When Lehman collapsed, I read hundreds of articles about credit default swaps but I don’t remember a single one of them mentioning the slave cotton at all. Perhaps it would be different today.
The play swiftly moves along, but never quite loses sight of the original sin. The 1929 stock market crash is described as a Flood like the one in the Old Testament, washing away the excesses of the stock exchange. Bobby Lehman is in the role of Noah, perhaps a bit of a reach; the play is not quite shameless enough to describe the 2008 Lehman as the son of the Market, dying for our sins, but it certainly occurred to me. The story is also never far from death and its rituals, the deaths of the Lehmans themselves and their works. Each Lehman has troubling apocalyptic dreams (usually dramatized using cardboard bankers boxes). Again, it’s near-miraculous that it never seems polemical.
It’s now a commonplace that generational wealth typically lasts at most three generations before dissipating — the patriarch who builds, the child who extends and consolidates, and the grandchild who wastes it all. We have three acts and three generations of House Lehman, so perhaps it’s not a surprise that it loses the thread somewhat in the third act. The Lehman grandchild, Bobby, himself isn’t a wastrel; despite a taste for thoroughbred racehorses, fine art, and louche divorcées, he’s not depicted as having run the company into the ground. However, the play itself, like the wastrel grandchild, can’t quite sustain what came before as its interest in the business flags — there’s some handwaving about credit-driven consumerism, the birth of the computer age, and the boorish norms of high frequency trading desks that isn’t nearly as compelling as the rest of the play. But it does, like a wastrel grandchild, give the audience a few moments of pure fun: yes, there is a dance party. And thankfully, the play never tries to explain credit default swaps or mortgage-backed securities to the audience, or really anything about the ultimate collapse; The Big Short was quite enough of that, and by that time all the Lehmans themselves were either dead or working as documentary filmmakers and one-named graffiti artists.
The Lehman Trilogy barrels through its story with the velocity and precision of a steam-powered locomotive, and is riveting start-to-finish (with my caveats above). Through much of the three-hour running time I could feel my heart beating hard with the pleasure of seeing something really great. It seduced me enough to make me believe that a particular character — a tightrope walker named Solomon Paprinsky who balances on a wire each day tied to lampposts in front of the stock exchange — was actually a real person, such that I had to be corrected by another audience member about it (Paprinsky is in fact a metaphor — in retrospect, very on-the-nose). To completely trust in stylized abstractions bearing only a tenuous relationship to reality: the bane of modernity, the consolation of theater.