1. I fear you're mistaking the intra-partnership honor for a more general one. General partners [managers or Venetian sea captains] having high trust with the

1. I fear you're mistaking the intra-partnership honor for a more general one. General partners [managers or Venetian sea captains] having high trust with the limited partners [investors, Venetian or otherwise] is key to making a commenda, or limited partnership, work. However, that partnership may be formed to pursue transactions adversarial with the rest of the world. If you and I form successive spice-merchant commendas/partnerships over the years, then you and I must continue to trust one another a lot. But we may both be incentivized to repeatedly buy low-end spices, ship them to, say, England, and laugh when they overpay for the bland herbs. 2. Regarding "entities like GS," it's hardly useful to think of them as monoliths, much less as broken partnerships. First, GS is now a public company but used to be a partnership. However, it wasn't like a limited partnership / commenda, in the sense that it had very passive limited partners and active general partners. It was a partnership among people who worked there and the capital involved was largely their own. This is also how a lot of accounting / consulting / law practices have been structured historically. Not a good parallel to the commenda. Second, GS is several businesses. There is a business which helps companies go public, but even that is two businesses: part is advising the company, and part is selling the shares to institutions / syndicate. Who is the customer to whom GS owes the loyalty / honesty in your mind? Let's say company X is "worth" $10 a share in the "honest" mind of the GS corp fin team. Let's further say that the GS sales team has hugely oversubscribed interest at the top of the $8-12 range, and many more institutions want to buy at $12 or higher than are allocated shares. What would you have them do? (Yes, there are a great many potential conflicts and corner cases here. But the idea that GS doing normal IPO flotation work is somehow intrinsically dishonest is baffling.) (There is a decent case, in my mind, to be made for totally disentangling corp fin advisory from sales and trading, meaning not even a Chinese Wall but actual different adversarial firms working on it. But, how many more layers of middleman do you want in our financial system soaking up the fat?)