In 1987, Michael Douglas starred in a film entitled WALL STREET in which he played an unscrupulous investor named Gordon Gekko. He won an Academy Award for his performance. The most memorable part of the film to many was when he made a speech to shareholders of a company that he was “raiding.” To refresh your memories, the most quoted part of the speech was when Gekko said, “The point is, ladies and gentlemen, 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.”
Most of us were taught either by our parents or religious instruction that greed was anything but good. In Christianity it was looked on as one of the seven deadly sins. It is often defined as the disordered desire for more than is appropriate or deserved.
The media tells stories of the greed of corporate executives or investors and question why there is so much inequality in the U.S as well as other nations. They have a point.
To me, the question that I always ask is: How much is enough? When does your desire to live in comfort (not unreasonable) graduate into greed?
As I write, the net worth of three Americans—Elon Musk, Jeff Bezos, and Larry Ellison is equal to the total wealth of the bottom 50% of American citizens. Even a staunch free market fan such as I have to shake my head and wonder. This is like the later part of the 19th century when the Vanderbilts, Rockefellers, and Carnegie had a dominant part of US wealth.
A question that I always ask myself is who determines what the lid on wealth should be? Congress? Many members talk about fairness but then more loopholes are put into our Swiss cheese of a tax code and the rich only become richer.
Most of us, if we are honest, realize that we are a mix of Scrooge and Robin Hood. Greed becomes a sickness if we devote all our waking hours to capital accumulation at the expense of real wealth—personal relationships.
In the 1980’s “trickle-down economics” received a bit of traction. The theory was that the affluent and the rich do not spend all their income so part of that surplus in invested in new businesses that create jobs and generate new tax revenue. True, but as one old friend has told me, the trickle down is not spread out very evenly across the population.
Two economic giants have weighed in saying that greed is an integral part of a capitalist system. Milton Friedman, a Nobel laureate, wrote that the “world runs on individuals pursuing their separate interests.
My hero, Adam Smith, the father of economics put it this way back in 1776: “It is not from the benevolence of the butcher, the brewer, and the baker that we expect our dinner, but from their regard to their own interest.” Call it self-interest or even greed but it clearly drives the bus in a free market society. Greed motivates competition and we need competition for market growth.
Analysts who look at inequality across the globe have often recommended income taxes as high as 70% would smooth things out. Few pay that much as an army of tax accountants and attorneys help the super-rich to sidestep some of the taxes or move assets offshore to more friendly venues.
A few years ago, French economist Thomas Pikettywrote a best seller called CAPITAL IN THE 21ST CENTURY. I read it and found he went even further than the people calling for a 50-70% tax rate. He called for a wealth tax on top of the confiscatory income tax. With massive wealth tucked away in high end art and collectibles plus global real estate, it would require a large bureaucracy to enforce, and the wealthy and their slick advisers would likely find a way to diminish the bite significantly.
Technological innovation has improved our lives tremendously in the last two decades. And, it has made some innovators mega-billions.
Charities are receiving some of this newfound wealth. I hope that it increases in the years to come. As the great Greek poet Hesiod wrote: “Observe due measure: moderation is best in all things.”
Even, I might add, in wealth accumulation.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a message on the blog.
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