6 ms·

The Capitalist Manifesto: Greed Is Good (To a point)

23 points by swombat 17y ago

gaius 17y ago
What Gordon Gekko actually said: The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA.
- quizbiz 17y ago
  They are making a sequel.
- bwd 17y ago
  And remember that Gordon Gekko was Oliver Stone's foil for Carl Fox (the father of the main character) who was meant to embody the evil of the 80s takeover era. This speech was based on a University of California speech given by Ivan Boesky, in which he said: "Greed is all right, by the way. I want you to know that. I think greed is healthy. You can be greedy and still feel good about yourself."
  - gaius 17y ago
    Gekko was the embodiment of capitalism itself and therefore amoral, not evil. The new law of evolution in corporate America seems to be survival of the unfittest. Well, in my book you either do it right or you get eliminated. In the last seven deals that I've been involved with, there were 2.5 million stockholders who have made a pretax profit of 12 billion dollars. Thank you. I am not a destroyer of companies. I am a liberator of them!
    - bwd 17y ago
      I disagree. There is a huge difference between insider trading and buying a company to sell off pieces of it and make the remainder more efficient through reorganization, even if the reorganization includes layoffs. In the former case, you are abusing your access to information that others do not have in order to make a profit at their expense, and this is why it is illegal. In the latter case, you are making a positive contribution to the wealth of the stockholders of a company, even though this might cause hardship to some of the employees who will have salary/benefits cut or even lose their jobs. Gekko embodies both of these behaviors (as did some of the participants in 80s takeovers), but I don't believe that insider trading properly represents capitalism.
lionhearted 17y ago
A good piece. I have a serious question for people smarter than me about the following: -- "Then there was the 1997 East Asian crisis, during the depths of which Paul Krugman wrote in a Fortune cover essay, "Never in the course of economic events—not even in the early years of the Depression—has so large a part of the world economy experienced so devastating a fall from grace." He went on to argue that if Asian countries did not adopt his radical strategy—currency controls—"we could be looking at the kind of slump that 60 years ago devastated societies, destabilized governments, and eventually led to war." Only one Asian country instituted currency controls, and partial ones at that. All rebounded within two years." -- How'd Krugman ever get accepted as an economist? He seems to be a massive doomcrier who is consistently wrong, and uses a lot of anecdotes and very few hard numbers. Which works great for Gladwell, but not so good for economics (heck, I dropped economics as my major because I didn't want to deal with econometrics - but I still have a healthy respect for it). There's some tremendously intelligent economists that I disagree with their overall message, but very much respect their contributions. If you take the time to read and decipher Marx, Gramasci, and Keynes, they said some really brilliant things. Very, very smart people. But Krugman? The guy seems totally bankrupt. And I've tried to read his stuff, and I keep seeing anecdotes, doomcrying, and him just being provably wrong often without being verifiably correct ever. Can someone point me to some smart reading material of his, not babysitter scrip anecdote nonsense? I'd like to learn from the guy if he has made some good contributions, or get to the bottom of why he gets respect if not. Always been curious about this one.
- nazgulnarsil 17y ago
  there is a selection effect going on in the higher levels of economic analysis whereby those who tell politicians the narratives they need to justify power grabbing are the ones promoted into the public sphere. most economists will decry such shameless behavior (but who is to say how much of this is jealousy). the other economists you mention are guilty of the same thing. Keynes in particular just bases entire chapters of his General Theory on trivially fallacious theses. Marx isn't even wrong, he's just exploring a world that isn't related to reality (there is no working model of the labor theory of value that makes predictions).
nazgulnarsil 17y ago
us free marketers have already lost...capitalism, greed, these are terms invented by anti-free market ideologues. the free market existed before the term capitalism was coined by Marx, what is greed but self-interest? those who pretend to be concerned with something other than their own welfare are in denial at best, and manipulative liars at worst. If we only ever debate on their terms we can not hope to avoid the stupid Randian take on liberty and markets that dominates most people's thoughts about capitalism.
- rw 17y ago
  What do we want to achieve? Markets, with all of their permutations, are just a few tools in our toolbox. I completely agree with you that the debate needs to be made much less ideological and much more precise, but we cannot pretend these discussions are happening in a vacuum. I am a fan of Rawls' "veil of ignorance" line of reasoning. This is probably because I want to embrace "luck" not as an excuse for domination, but as something orthogonal to control and subjugation: diversity necessary for us to successfully traverse the fitness landscape, hopefully enabling us, collectively, to move towards the stars and friendly posthuman intelligences.
  - nazgulnarsil 17y ago
    markets are not really a thing. they are just what happens in the absence of people shoving guns in other peoples faces. in the absence of force the only way to get what you want is to offer other people things that they want in exchange. this is civilization, the alternatives are barbarism.
    - sgibat 17y ago
      that isn't entirely true. small groups behave more like communes. think of small tribes or family units. everyone has to pull their weight, but much is done simply for the good of others or for the good of the group as a whole. the domination of the market only emerges when a group grows to a certain size. i would suggest that civilization requires both communes and markets to function properly -- basically, communes interacting with other communes and individuals in a market. markets may get you what you want, but to get things done, groups must behave like communes, all working together -- you do not barter over what you will get out of individual tasks. true, tasks are done in exchange for a continued wage, and the establishment of a job is done in a market. but once you are within a group, what is most effective? doing every task because you are paid to do so, or because you want the product to be as good as possible? I think that ties into one of the reasons that startups are so much more effective than large corporations; if I can try to put my finger on it, pride for the product and group cohesiveness. i don't know what the answer is, but I just want you to consider that markets are not only not the only tool humans have used to cultivate civilization, but they are not even the first tool. and when technology progresses to the point where we can give every individual a chance at a healthy and productive life at no cost to society, they will certainly not be the last.
Ardit20 17y ago
We are self-interested creatures. We are selfish. Evolutionary psychology will go as far as to say that altruism is selfish. The question is, assuming that each for his own self is a natural state of being, is it a good thing? If we all act for our own interest, then there is competition and I suppose the more adapted will win, which as it happens is the foundation of evolution. So to speak of checking our own moral compass is empty rhetorics because morality as such does not even exist. Only jusgments as to what is right to do for my own interest and what consequences there are. Therefore, supposing that morality does not exist, the only way to enforce this "moral compass" is by legislation or culture. The culture in such places is greed and perhaps rightly so as if someone makes money, that money will go somewhere surely, hence making more money, etcetera. If the culture is greed therefore, the only way is imposing a code of conduct supervised by some governing body and or imposing legislation and or, there are ups and downs in life, why should we expect the economy to be up always and never go down. I think the system is fine, I would have liked to see the banks fail to be honest. If they did not do their job properly they should be out of a job. Otherwise we are just feeding an artificial creature which does not adhere to the laws of evolution and by association competition, perhaps to the detriment of us all.
rue 17y ago
As Marx summarised it, capitalism is characterised by a pattern of cyclical booms and crashes, generally crashing deeper each time. He was not, actually, positing that it would eventually collapse but that it may survive its cycles so long as there are enough "willing" people to take the brunt of the crashes and least of the booms at the bottom rungs of society. Of course, he probably had less of an idea about the resource problems we will be facing in the near- to mid future, complicating capitalism's crash-recovery. Personally, I think it will take at least two more of these before there is anywhere near enough support for abandoning capitalism.
known 17y ago
I think Greed seeds and stimulates Passion to some extent.
bokonist 17y ago
Any exchange between two actors can be in one of four categories: 1) voluntary in-kind exchange ( Christmas presents, buying each other rounds of drinks) 2) coercive in-kind exchange ( corvee, slavery, conscription, bound serfdom) 3) voluntary monetary exchange ( buying food at the super market ) 4) coercive monetary exchange ( taxes ) #1 is great, but unfortunately is does not scale. It works very well among family, friends, and small communities, but it quickly breaks down in larger economies. Of the remainder, #3 seems obviously the superior way to engage in transactions. And #3 is free market capitalism. Capitalism is not good because greed is good. Capitalism is good because it forces greedy people to actual produce something of value and exchange it, rather than just taking it from others. The financial crisis is not an example of #3 but of #4. The "too big too fail" and "lender of last resort" policies have been in place for decades. They allowed banks to take huge risk, and then when the risks failed, the government uses its coercive powers to tax the public and bail out the financial system, thus encouraging even more risk taking.
viggity 17y ago
"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest." - Adam Smith
johnnybgoode 17y ago
There's a big problem here. When people like this use the word "capitalism" to mean the massive, ultra-financialized, state corporatist economy we have today, they confuse many into thinking this has something to do with free markets based on voluntary exchange. So people who are understandably annoyed that Wall Streeters make millions without contributing very much, if anything, are unnecessarily encouraged to support state socialist policies. In reality, it is the lack of free markets which caused such problems in the first place.

23 points by swombat 17y ago

gaius 17y ago

What Gordon Gekko actually said: The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA.

quizbiz 17y ago
They are making a sequel.
bwd 17y ago
And remember that Gordon Gekko was Oliver Stone's foil for Carl Fox (the father of the main character) who was meant to embody the evil of the 80s takeover era. This speech was based on a University of California speech given by Ivan Boesky, in which he said: "Greed is all right, by the way. I want you to know that. I think greed is healthy. You can be greedy and still feel good about yourself."
- gaius 17y ago
  Gekko was the embodiment of capitalism itself and therefore amoral, not evil. The new law of evolution in corporate America seems to be survival of the unfittest. Well, in my book you either do it right or you get eliminated. In the last seven deals that I've been involved with, there were 2.5 million stockholders who have made a pretax profit of 12 billion dollars. Thank you. I am not a destroyer of companies. I am a liberator of them!
  - bwd 17y ago
    I disagree. There is a huge difference between insider trading and buying a company to sell off pieces of it and make the remainder more efficient through reorganization, even if the reorganization includes layoffs. In the former case, you are abusing your access to information that others do not have in order to make a profit at their expense, and this is why it is illegal. In the latter case, you are making a positive contribution to the wealth of the stockholders of a company, even though this might cause hardship to some of the employees who will have salary/benefits cut or even lose their jobs. Gekko embodies both of these behaviors (as did some of the participants in 80s takeovers), but I don't believe that insider trading properly represents capitalism.

lionhearted 17y ago

A good piece. I have a serious question for people smarter than me about the following: -- "Then there was the 1997 East Asian crisis, during the depths of which Paul Krugman wrote in a Fortune cover essay, "Never in the course of economic events—not even in the early years of the Depression—has so large a part of the world economy experienced so devastating a fall from grace." He went on to argue that if Asian countries did not adopt his radical strategy—currency controls—"we could be looking at the kind of slump that 60 years ago devastated societies, destabilized governments, and eventually led to war." Only one Asian country instituted currency controls, and partial ones at that. All rebounded within two years." -- How'd Krugman ever get accepted as an economist? He seems to be a massive doomcrier who is consistently wrong, and uses a lot of anecdotes and very few hard numbers. Which works great for Gladwell, but not so good for economics (heck, I dropped economics as my major because I didn't want to deal with econometrics - but I still have a healthy respect for it). There's some tremendously intelligent economists that I disagree with their overall message, but very much respect their contributions. If you take the time to read and decipher Marx, Gramasci, and Keynes, they said some really brilliant things. Very, very smart people. But Krugman? The guy seems totally bankrupt. And I've tried to read his stuff, and I keep seeing anecdotes, doomcrying, and him just being provably wrong often without being verifiably correct ever. Can someone point me to some smart reading material of his, not babysitter scrip anecdote nonsense? I'd like to learn from the guy if he has made some good contributions, or get to the bottom of why he gets respect if not. Always been curious about this one.

nazgulnarsil 17y ago
there is a selection effect going on in the higher levels of economic analysis whereby those who tell politicians the narratives they need to justify power grabbing are the ones promoted into the public sphere. most economists will decry such shameless behavior (but who is to say how much of this is jealousy). the other economists you mention are guilty of the same thing. Keynes in particular just bases entire chapters of his General Theory on trivially fallacious theses. Marx isn't even wrong, he's just exploring a world that isn't related to reality (there is no working model of the labor theory of value that makes predictions).

nazgulnarsil 17y ago

us free marketers have already lost...capitalism, greed, these are terms invented by anti-free market ideologues. the free market existed before the term capitalism was coined by Marx, what is greed but self-interest? those who pretend to be concerned with something other than their own welfare are in denial at best, and manipulative liars at worst. If we only ever debate on their terms we can not hope to avoid the stupid Randian take on liberty and markets that dominates most people's thoughts about capitalism.

rw 17y ago
What do we want to achieve? Markets, with all of their permutations, are just a few tools in our toolbox. I completely agree with you that the debate needs to be made much less ideological and much more precise, but we cannot pretend these discussions are happening in a vacuum. I am a fan of Rawls' "veil of ignorance" line of reasoning. This is probably because I want to embrace "luck" not as an excuse for domination, but as something orthogonal to control and subjugation: diversity necessary for us to successfully traverse the fitness landscape, hopefully enabling us, collectively, to move towards the stars and friendly posthuman intelligences.
- nazgulnarsil 17y ago
  markets are not really a thing. they are just what happens in the absence of people shoving guns in other peoples faces. in the absence of force the only way to get what you want is to offer other people things that they want in exchange. this is civilization, the alternatives are barbarism.
  - sgibat 17y ago
    that isn't entirely true. small groups behave more like communes. think of small tribes or family units. everyone has to pull their weight, but much is done simply for the good of others or for the good of the group as a whole. the domination of the market only emerges when a group grows to a certain size. i would suggest that civilization requires both communes and markets to function properly -- basically, communes interacting with other communes and individuals in a market. markets may get you what you want, but to get things done, groups must behave like communes, all working together -- you do not barter over what you will get out of individual tasks. true, tasks are done in exchange for a continued wage, and the establishment of a job is done in a market. but once you are within a group, what is most effective? doing every task because you are paid to do so, or because you want the product to be as good as possible? I think that ties into one of the reasons that startups are so much more effective than large corporations; if I can try to put my finger on it, pride for the product and group cohesiveness. i don't know what the answer is, but I just want you to consider that markets are not only not the only tool humans have used to cultivate civilization, but they are not even the first tool. and when technology progresses to the point where we can give every individual a chance at a healthy and productive life at no cost to society, they will certainly not be the last.

Ardit20 17y ago

We are self-interested creatures. We are selfish. Evolutionary psychology will go as far as to say that altruism is selfish. The question is, assuming that each for his own self is a natural state of being, is it a good thing? If we all act for our own interest, then there is competition and I suppose the more adapted will win, which as it happens is the foundation of evolution. So to speak of checking our own moral compass is empty rhetorics because morality as such does not even exist. Only jusgments as to what is right to do for my own interest and what consequences there are. Therefore, supposing that morality does not exist, the only way to enforce this "moral compass" is by legislation or culture. The culture in such places is greed and perhaps rightly so as if someone makes money, that money will go somewhere surely, hence making more money, etcetera. If the culture is greed therefore, the only way is imposing a code of conduct supervised by some governing body and or imposing legislation and or, there are ups and downs in life, why should we expect the economy to be up always and never go down. I think the system is fine, I would have liked to see the banks fail to be honest. If they did not do their job properly they should be out of a job. Otherwise we are just feeding an artificial creature which does not adhere to the laws of evolution and by association competition, perhaps to the detriment of us all.

rue 17y ago

As Marx summarised it, capitalism is characterised by a pattern of cyclical booms and crashes, generally crashing deeper each time. He was not, actually, positing that it would eventually collapse but that it may survive its cycles so long as there are enough "willing" people to take the brunt of the crashes and least of the booms at the bottom rungs of society. Of course, he probably had less of an idea about the resource problems we will be facing in the near- to mid future, complicating capitalism's crash-recovery. Personally, I think it will take at least two more of these before there is anywhere near enough support for abandoning capitalism.

known 17y ago

I think Greed seeds and stimulates Passion to some extent.

bokonist 17y ago

Any exchange between two actors can be in one of four categories: 1) voluntary in-kind exchange ( Christmas presents, buying each other rounds of drinks) 2) coercive in-kind exchange ( corvee, slavery, conscription, bound serfdom) 3) voluntary monetary exchange ( buying food at the super market ) 4) coercive monetary exchange ( taxes ) #1 is great, but unfortunately is does not scale. It works very well among family, friends, and small communities, but it quickly breaks down in larger economies. Of the remainder, #3 seems obviously the superior way to engage in transactions. And #3 is free market capitalism. Capitalism is not good because greed is good. Capitalism is good because it forces greedy people to actual produce something of value and exchange it, rather than just taking it from others. The financial crisis is not an example of #3 but of #4. The "too big too fail" and "lender of last resort" policies have been in place for decades. They allowed banks to take huge risk, and then when the risks failed, the government uses its coercive powers to tax the public and bail out the financial system, thus encouraging even more risk taking.

viggity 17y ago

"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest." - Adam Smith

johnnybgoode 17y ago

There's a big problem here. When people like this use the word "capitalism" to mean the massive, ultra-financialized, state corporatist economy we have today, they confuse many into thinking this has something to do with free markets based on voluntary exchange. So people who are understandably annoyed that Wall Streeters make millions without contributing very much, if anything, are unnecessarily encouraged to support state socialist policies. In reality, it is the lack of free markets which caused such problems in the first place.