In the movie Wall Street, the director sought to present to viewers a modern-day parable illustrating the harmful effects of greed. By portraying the protagonist, Gordon Gekko, in what he regarded as an unfavourable light, and the fact that Gekko and his young protégé go to jail for insider trading, he probably believed that the movie would serve as a moral lesson about the dangers of excessive corporate greed and arrogance. The only problem is that, contrary to the best-laid plans of mice and Hollywood directors, it has had precisely the opposite effect on many viewers. In an example of life imitating art, Gekko’s infamous speech containing the phrase “greed is good” has been widely quoted to justify selfish corporate behaviour and the excesses of free-market capitalism. Moreover, the depiction of his opulent, materialistic, and hedonistic lifestyle has inspired many viewers of the movie to want to emulate it.

In seeking to portray evil or wrongdoing, there is the danger that, like the opening of Pandora’s Box, one will unintentionally release into the world a force that can cause harm or wreak havoc, in this case by presenting a bad model of behaviour that corrupts its viewers. Art can and sometimes does influence life, and therefore those who create art must be careful in what they show and how they show it in order to prevent or minimize its potentially harmful effects.

Wall Street was released in 1987, during the decade of deregulation and privatization that was unleashed in the United States by the administration of Ronald Reagan. In my opinion, Reagan was a disciple of Ayn Rand’s philosophy of Objectivism, which preached, among other things, individual liberty, government non-interference, and the virtues of selfishness as inviolable moral principles that should guide the actions of all human beings all the time, and in all aspects of their lives. Reagan’s administration embodied all of these Randian principles. What is more, like Rand, Reagan exhibited a contempt for the poor, whom he vilified as parasitic “welfare cheats,” a false categorization that ignored what they really are – people who need help to get out of the cycle of poverty in which many of them are trapped, just like their parents before them. Prior to Reagan, although other Republican candidates, notably Barry Goldwater in 1964, had advocated for smaller governments and greater individual liberty, they had not expressed animosity towards the poor, whom they sought to help by their proposed changes, rather than simply dismissing them, as Reagan did, as lazy and unimportant members of society for whom the government, and hence, society, was not responsible.

Reagan’s administration also radically shifted the balance of power between ordinary citizens and the super-citizens known as corporations, which originally was due to the extremely foolish U.S. Supreme Court ruling in 1886 that corporations are persons that are entitled to all the protections contained in the U.S. Constitution, including the Bill of Rights. The effect of this bizarre ruling was to liberate corporations from government control, and hence, to liberate them from any effective democratic oversight.[1] Whereas before, going all the way back to the country’s founding, those who administered government in the United States regarded government as a necessary bulwark against the potential harms, biases, machinations, and depredations of narrow business interests, by declaring that the federal government would henceforth wash its hands of this vital function – thereby abandoning individual citizens to the dictates of the free market, whose outcomes are largely determined by those who have the most money, and hence, the most power – the United States government has allowed the mighty corporations to determine and influence more and more of the political, social, and economic agenda in the U.S. and elsewhere. In this case, Ronald Reagan very clearly showed that he was on the side of the mighty corporate Goliaths, and not on the side of the many weak and defenceless Davids, namely, the hundreds of millions of ordinary individual citizens.

Corporations are highly organized entities that pursue a very narrow goal – profit maximization – to the exclusion of almost everything else. Moreover, the largest corporations have many thousands of employees who loyally and obediently do their bidding, as determined by their rulers, as well as vast sums of money with which to accomplish their objectives. The belief, therefore, that giving these highly specialized and narrowly focused entities free rein to do as they please, in the erroneous belief that this will produce the ideal society, or even the best economic outcome for the greatest number of people, is clearly nonsensical. And yet, starting with the administrations of Ronald Reagan in the U.S. and Margaret Thatcher in the U.K., this is essentially what has happened in the United States and elsewhere, in places and institutions, such as the IMF, World Bank, and the WTO, that are run by people who adhere to the false ideology that narrow business interests, and corporations in particular, know what is best for all people in the world. Privatization – the belief that transferring as many government functions as possible to privately-owned companies is the best way to improve the services they provide, and also people’s lives – is one of the pillars of free-market capitalism.

In this case, as is true of many other real-life situations, not acting does not absolve one of guilt, for it does not allow all the participants in the game of life equal opportunities to advance, be heard, improve their situation, and accomplish the things they want to accomplish. The cowardly and highly irresponsible retreat of government in the United States and elsewhere has left the powerless, who comprise the majority of people in the world, increasingly at the mercy of the powerful, as measured in terms of how much money they possess and how many things they own and therefore control. In other words, in this case, a decision not to act on the part of government is clearly a decision in favour of corporations and the wealthy, and therefore it does not make everyone more free, as the advocates of laissez-faire mistakenly believe.

Except in places and situations where there exists a well-established model of relinquishing power at the end of their term, those who have power, whether this power is military, political, or economic, rarely give it up voluntarily. Furthermore, they will often do whatever is necessary to maintain or expand their power, regardless of the harmful effects that this course has on others. This is one of the principle functions of government – to protect the weak and defenceless from the abuses of power by those who possess it – for it cannot simply be assumed, as the ideologically-blinded advocates of deregulation, privatization, and smaller and less intrusive government assume, that those who have power, including economic or corporate power, will exercise it in a benign, unselfish, principled, generous, and considerate manner.[2]

In the financial world, it is increasingly the case that unbridled greed is employing the vast sums of money at its disposal in ways that are not economically productive – in the sense of helping new businesses to grow while creating needed well-paying jobs – while it buys and sells risky financial instruments, in the hope of earning higher and higher returns, that can cause financial crises. In fact, this is the chief cause of unemployment in today’s world of globalization. A financial and economic system based on greed as the primary motive of people’s actions will necessarily beget dishonesty, tax evasion, illegal or immoral practices, and speculative bubbles. And the greater the greed, the greater is the risk that these undesirable behaviours will become dominant and widespread. Moreover, it produces market inefficiencies where a great deal of money is used solely for speculative purposes, which does little or nothing to simulate economic activity except in the financial sector, while it contributes to increasing inequality. All of these undesirable effects are clearly visible in the recent economic history of the United States, as the deluded dogma of deregulation has gained greater and greater sway over the populace.

There is a very important, but often overlooked, difference between greed – the desire to make as much money as possible – and the desire to excel at something. That these two things are not at all the same is shown by the fact that, throughout history, the vast majority of the greatest creative geniuses did not become rich from their creations or discoveries. To give just one example, Mozart, one of the greatest of musical geniuses whose works are still performed in many places around the world, died a pauper and was continually beset with monetary worries throughout his short adult life. Neither he, nor any of the many other geniuses whose discoveries and artistic creations form the pillars of global human culture, viewed monetary gain as the principle goal of their endeavours.

It is only in recent times that the false belief that large monetary incentives are necessary, or even sufficient, to motivate people to do their best and act in a responsible manner has become widely accepted as a basic principle of human nature. This false belief is due primarily to the fact that many people dislike working, which in turn is due to the faulty system of education that has become widely adopted, in which children are forced to spend their time in school, where they do not observe people working, as they did throughout human history before this artificial model of education, which is due to the harmful influence of Plato’s Republic, became widely adopted in the course of the past few centuries. Hence, since so much of modern work is unpleasant or unsatisfying, it is believed that the only way to motivate people to perform it is by offering them large monetary incentives.

There is another source of the false belief that human selfishness is benevolent and that, if it is only allowed to work its alchemical magic, it will make everyone better off in the long run. Adam Smith used the metaphor of the “invisible hand” to describe the ordered and seemingly directed economic activity of a large number of individuals in a free-market society. Moreover, he declared that these individuals, in seeking to advance only their personal or familial interests, also unintentionally advanced the interests of those with whom they dealt, by providing them with the things they need and want, and hence, they also advanced the interests of the society in which they lived.

Just as Marcel Proust’s madeleine has been evoked far too many times as a metaphor for the process of recollection by sensory association, to the point that it has become stale, Adam Smith’s metaphor of the invisible hand has likewise been evoked far too many times as a justification for selfish behaviour, to the point that what was formerly a striking metaphor has now become a lie – the brazen and outrageous lie that all people should seek only their own narrow personal gain, in the mistaken belief that this will make everyone better off. Had Smith known how much would have been made of his metaphor and how it would have been exaggerated, he would have been astonished to discover that what he had intended as merely a striking illustration of how, in certain limited circumstances, human selfishness can also produce societal good for others, was later generalized into a wide-ranging economic and philosophical principle that whatever is done selfishly, while aiming at no more than one’s narrow personal benefit or profit, must necessarily be good for others and for society in general.

The belief that a selfish concern only with oneself and the very small number of people one cares about, or that allowing and encouraging all people to pursue their narrow self-interest will produce the best possible society is a view that is so absurd that it is hard to understand how grown men and women could have convinced themselves of its truth. And it is made even more incredible when the advocates of laissez-faire argue that this selfishness should not be restrained or impeded by any restrictions or regulations whatsoever. This example only shows how gullible and prone to error we humans are, especially when we are set on believing something dogmatically, to the exclusion of everything else.

It is time to put Smith’s metaphor of the “invisible hand” to rest, while at the same time discrediting the completely mistaken free-market dogma that unbridled human selfishness will produce the best of all possible human societies, or at least the best of all possible economic outcomes. We have seen where the blind adherence to this dogma leads – to extreme material inequality and indifference to the plight of the less fortunate, to financial crimes and misdemeanours on an ever-increasing scale, to increasingly risky financial “investments” that threaten the stability of economies around the world, to the incessant pursuit of immediate hedonistic pleasure as the highest end in life, to the mechanical accumulation of wealth without purpose, or principally for the sake of vanity, to show that one is richer than everyone else, and to a vapid and never-ending consumerism that has many harmful effects on consumers and others, while it degrades, pollutes, and destroys the natural environment on which we selfish and stupid human beings depend for our existence and the long-term survival of our species.

 

[1] Originally, and even today, corporations had to seek government approval in order to be established as legal entities. Hence, their act of incorporation could also be revoked by the government that allowed it, in cases where it failed to fulfill its corporate charter or it repeatedly violated the law. But clearly, in today’s corporate-dominated world, this is unlikely to happen in the case of large, powerful corporations that employ a large number of people and have considerable financial resources with which they can pay politicians, which they do by contributing to their political campaigns and thereby help them win elections, and others such as lawyers to do their bidding.

[2] There is a naive economic theory that has gained considerable influence over people’s beliefs that, just as with Montesquieu’s theory of the balance of political power, where it is believed that a multiplicity of powers – legislative, executive, and judicial – will balance and prevent the abuse of power by any one of them, a similar effect ensues in a perfectly free competitive market, where no single entity is able to dominate the market to its advantage. But what these naive theorists fail to understand is that unbridled competition leads inevitably to consolidation and hence, to larger and larger corporate entities, as the unceasing struggle for corporate survival spurs the largest corporations constantly to seek to grow even bigger in order to stay ahead of, or become more dominant than, their rivals. In other words, even in a perfectly free market, competition leads almost inevitably to oligopoly, just as in some games and other human contests, competitors are gradually eliminated until there is only one winner at the end.