My Life as a Quant (16 page)

After thinking about their offer, I decided to go back and learn more. So, in the late summer of 1980 I again drove down the New Jersey turnpike and turned west on the Route 22. Harley was a Department Head at Murray Hill in the Business Analysis Systems Center, a group of genuine ex-rocket scientists and engineers who had converted themselves into business analysts in order to extend their careers when the space program funding at Bell Labs had died out. He had broad interests and liked working there; it gave you the chance, Harley told me, to delve into all sorts of things you could never have studied otherwise. Personally, I wasn't sure I was interested in learning for the sake of learning; I was still ambitious for achievement.

Though they offered me much more money than the University of Colorado, I still yearned for physics, and asked Harley if I could work three days per week, pro rata, and continue to do physics at Rockefeller the remaining two days. He declined, sensibly explaining that it was an arrangement that wouldn't really work for them. In the end, I accepted the job with the deepest misgivings and guilt. I was committing treason.

When I told a South African physicist friend that I was going to work for AT&T's Bell Laboratories, he uncharitably reminded me that eleven years earlier, at the annual Washington, D.C., meeting of the American Physical Society in 1969, we had marched to protest the antiballistic missile system being built by AT&T. Now, he pointed out, I was going to work for them.

I wrote a letter to the chairman of the physics department in Boulder to apologize for my decision not to return. A few weeks later, at the very end of summer, Eva, Joshua, and I flew out to Boulder to pack up all my belongings. Eva, perhaps fearful that I would hold her responsible for my situation, spoke to the senior professor in the particle theory group, who encouraged me to change my mind and stay on. But I was too far gone, and could no longer even imagine preparing to teach particle physics that fall. We took a brief, tense holiday in Steamboat Springs, where we watched a real rodeo to Joshua's great delight, and then returned to New York. I took Josh to visit my family in Cape Town in October, and returned to start work at the Labs at the start of November.

The world of industry—working for money rather than love

The Business Analysis Systems Center at Bell Labs

A small part of a giant hierarchy

Creating software is beautiful

Every morning I had to be at my desk at 9:00 A.M. Now, after seventeen years on Wall Street, this sounds comfortably late; it seemed remarkably early then. I woke up around 7 A.M., if Josh hadn't woken me earlier. I ate breakfast, skimmed the
New York Times
, took my car out of the garage beneath our Rockefeller University apartment building, drove crosstown to the Lincoln Tunnel, shot down the New Jersey Turnpike, turned west on Route 24 at Newark, and headed for Murray Hill. It was a reverse commute, and took about an hour. Coming back, even against the evening traffic, required anywhere between one and two hours. The first morning, uncertain of how long it would take to drive there, I arrived early and stopped at the local McDonald's for an Egg McMuffin, feeling romantically proletarian in a Hopperish sort of way.

I had never commuted to work before. I had always worked at what I wanted to work at. Now, I was like almost everyone else, doing what my
boss
wanted me to do, for money. This was the real world.

For the first few weeks, as I drove down the turnpike, I nursed my sad thoughts like a late-night whisky, taking small slow sips, trying to savor the taste of my plight, seeking some perspective. At first, I attempted to treat the entire commute as a meditative exercise. Then, after a few weeks, I gave that up entirely and instead listened to news and music. What I liked most was talk radio, then still in its infancy in 1980s New York. My favorite driving station was WBAI, 1960s-style alternative radio that teemed with opinionated underdog people who spoke for an hour about anything that bothered them. I listened to Mike Feder, an Upper West sider who, once a week, in Spalding Gray-style monologues, spoke ceaselessly and amusingly about the more harrowing episodes in his life, and also about his occasional epiphanic moments of happiness. Years later he worked at the Shakespeare and Co. bookstore on West 81st and Broadway, now long since squeezed to death by superstores and the Internet. I listened to Margot Adler talk about women's issues, and about her life as a Wiccan before it became fashionable. A gay guy ran an hour of sentimental show music where I first heard Karen Akers sing German-style cabaret. Sometimes, I listened to classic novels as “Books on Tape.” But talk shows suited me best, particularly talk by unhappy, oppressed people. I also enjoyed self-help shows, especially Toni Grant on WABC in the late afternoon when I drove home, who, with her beautifully enunciated liquid American accent, told callers with problems to begin by taking “baby steps.” Those five years at Bell Labs were the only period during which I ever listened to the radio for longer than a few minutes.

People who had always worked to make a living told me that Bell Labs was an ivory tower. To me, it was working for money. I had earned about $18,000 dollars at Boulder. I started at $42,000 at the Labs, moving up to $49,000 within half a year. But it felt like much less in New York, and the extra pay did little to relieve my loss of direction in the world, though I tried to pretend otherwise.

Ever worried and compulsive, I took AT&T's manifold rules much more seriously than they did. I was supposed to be there each morning by 9 A.M. One day a faulty gas pump caused my car to falter en route, and I could see I was going to be at least ten or fifteen minutes late. Panicked, I stopped at a public phone near the highway at 8:45 A.M. and called my boss's secretary to warn her of my delayed arrival. When I got there only half an hour later, she scathingly told me I was insane to think anyone cared. But I had been paid to pipe, so I felt I must play every note of the tune they called. I resented this so pathologically that I paid more attention to the letter than the spirit of their rules. Once, I needed a morning off to go to Joshua's nursery school and tried to explain it to Harley. He was kind enough to tell me that he didn't even want to know about this sort of stuff. But I was too literal and immature to take advantage of these sensible freedoms. Years later, after I left, I realized that I could have done whatever I liked there, and for a very long time too, before anyone would even have noticed. My friend Mark Koenigsberg, shortly before he left for Salomon Brothers in late 1986, spent a good part of his time studying books on options theory, trying to find a closed-form solution for the value of the American put. I doubt anyone fully knew what he was doing. While it would have been a great discovery, it would have brought no direct commercial value to the Business Analysis Systems Center. But then, what would have?

The Business Analysis Systems Center. Or was it the Business Systems Analysis Center? I truly cannot remember. It consisted of about a hundred people in Building 5, all of us ex-scientists of various kinds, now thinly retreaded to provide internal consultation on various AT&T business problems that might be amenable to mathematics. We were ruled over by our director, Jim Downs, a former applied mathematician in his late forties who had by some latter-day miracle of loaves and fish come to lead this fiefdom.

Everyone was disproportionately fearful of Downs. He seemed to regard social intercourse as a competitive Olympic event, perfecting his own jiu-jitsu style of conversation that aimed to quickly unbalance his opponent. He accomplished this by making aggressively oracular and cryptic statements on whatever topic was under discussion. To my chagrin, his senior employees evangelized about his mysterious wisdom. I recently heard Roger Lowenstein, a reporter for the
Wall Street Journal
and author of
When Genius Failed
, comment that John Meriwether “never played unless he had an edge.” Downs believed he had an edge everywhere. He had to dominate every exchange. Any fact you knew, any interest you had, was a glove slap that required him to retaliate and outduel you. If Mark Koenigsberg made a remark about solving a boundary-value problem in heat conduction, Downs responded with a Southern drawl about something clever (but unrelated) he claimed to have done with Fourier analysis twenty years earlier. When he saw a group of us preparing to depart on a lunchtime long-distance run, he joined us at once, despite having just completed his lunch. He pushed ahead at a furious pace, determined to subdue every young or empty-stomached one of us, until he faded out with cramps. I felt uncomfortable around him and kept my distance, but once, when we got involved in a pretentious conversation about meditation as a route to achieving selflessness and humility, he more or less insisted that he was more humble than the rest of us. The irony in this argument almost escaped me, and certainly ran far ahead of him. I suppose that all he really suffered from was an exaggerated form of the insecure competitiveness that afflicts many scientists and academics, but it made him a disquieting manager.

My assigned supervisor was Ron Sherman, one of four supervisors beneath Department Head Harley. Ron was a rotundly genial PhD in Engineering who had coauthored an important Lab study on EMP (Electro-Magnetic Pulse), the sudden surge of Faraday electrical currents and heat that would occur in the wires of the national telephone network as a result of the intense magnetic fields induced by nuclear explosions. A nuclear attack might therefore melt and destroy the network, even if it left people unharmed. Ron was one of the gentler people in our center, good-humored and kind despite an earlier family tragedy that left him a single parent of two young sons, one of whom was already writing well-received plays. Ron seemed to me to lead an enviably charmed life at the Labs, setting his own arrival and departure schedule imperturbably. He had broad interests, and year by year accumulated more degrees: first a PhD in Engineering, then an Executive MBA, and finally, I think, a law degree. Clerical and secretarial help were sparse at the Labs, and Ron seemed to take some small amount of glee in occasionally giving me long documents to xerox for everyone in our group, late in the day when I was preparing to leave. Sometimes he asked me to take minutes at group meetings, complimenting me on my handwriting; sad to say, it succeeded in making me feel simultaneously important and infantile.

Ron and I were but two nodes in a very large hierarchy that contained not only the whole Labs, but also AT&T, Western Electric, and God-knows-what-else that belonged to the Bell System in those predivestiture days. There were roughly four MTS (Members of Technical Staff, like me) under each supervisor; there were four or five supervisors (like Ron) under each department head like Harley, and four Harleys under each Jim Downs. From there the tree branched upwards to higher and higher levels, eventually encompassing the whole company. If they extended the organization by only four more levels, I used to think, they could employ every adult in the United States.

Every new employee grew to be instinctively aware of these reporting levels. When you first joined the organization, someone quickly explained to you that the Bell Labs level structure was shifted up by half a level from the more or less parallel structure at AT&T, and that, therefore, we lowly MTS at the bottom of the Labs totem pole were actually
almost supervisors on the AT&T scale
! Often, in the five years I spent there, I heard someone proudly say “I just came back from a four-level meeting!” I never found out whether this meant that the meeting was important enough to have been graced by the presence of someone from exalted Level 4, or whether it meant that the meeting was so diverse that there had been people from four different levels there simultaneously. Levels with low numbers were more auspicious, and you trembled at their mysterious splendor. Jim Downs used to say that you could never comprehend the activities of someone more than one level above you; the activities of someone two levels higher were destined to be forever a mystery, unless you got promoted. It sounded very Kafkaesque. What especially impressed me about Wall Street in general and Goldman Sachs in particular, when I came to work there five years later, was the absence of reverential fear. At Goldman, at that time, it was relatively easy to approach important (and wealthy) people if the business seemed to require it. As an example, I spoke to Bob Rubin a couple of times in my first years at Goldman, when he was head of Fixed Income.

The Bell System was a massive bureaucracy of about one million workers, linesmen to lawyers. It had its own enormous encyclopedia of rules and regulations. I once watched one of my supervisors search through the book of appropriate practice to find out what to do about my call to New York City jury duty. Like the army, Bell stripped you of all external trappings of merit, status or honor, and then imposed its own—Supervisor, Department Head, Director, and so on. Somehow, one understood that business cards could carry no external academic credentials; Andy Salthouse, an ex-physicist and passionate amateur astronomer and asteroid hunter who joined the Labs a little before me, explained that this was necessary in order to avoid the tension that might otherwise occurs when an MTS with a PhD reported to a supervisor with only a master's degree.
1

In physical space, the Business Analysis Systems Center was located in prefabricated barracks at the upper edge of the prestigious Murray Hill campus, the most interesting and academic part of the Labs. In logical space, we were part of Area 90, Network Systems. Area 10, the lowest number, was the crown jewel, a pure research center where first-rate scientists and engineers carried out advanced research without the burden of having to seek government funding. As a regulated monopoly in those precompetitive days, AT&T could charge its consumers whatever it needed to pay the bills.