Story and illustrations by Geoff Olson

“I am not a destroyer of companies. I am a liberator of them. 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. 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. Thank you very much.”
- Gordon Gecko in Oliver Stone’s Wall Street

Greed is good - and until recently, greed was very nice to former Enron chairman Ken Lay, who presided over the biggest bankruptcy in history when his company collapsed in a confusion of cooked books. Finally charged with criminal offences this July, “Kenny boy,” as George W. Bush affectionately called him, could have been a character out of Tom Wolfe’s 1988 novel Bonfire of the Vanities, or a warm prop in Oliver Stone’s 1987 film Wall Street.
Both Wolfe’s novel and Stone’s film were conceived as epitaphs for the “decade of greed” - the eighties era of junk bonds, megamergers, insider trading, and Wolfe’s “masters of the universe.” In Bret Easton Ellis’ 1991 novel American Psycho, the central character is a broker by day and killer by night. From the messages of pop culture at the time, it seemed greed was on its way out - or at the very least, in for a good drubbing in pop-culture morality tales. In retrospect, the wave goodbye to greed was obviously premature.
Cut to 2004. There’s talk that the same accounting shell-game that bankrupted Enron was (and is) the norm for many Fortune 500 companies, and even some banks like JP Morgan, which await fiscal reckonings of their own. Greed is the guest who never left, who continued to party on through the nineties and into the new millennium, doing deals under the pseudonyms “irrational exuberance,” and “self-interested utility maximization.”

The heartfelt wish that Gecko was right all along still lingers among some pundits. Greed Is Good, But Only Later, declared a 2002 editorial in The New York Times, trying to find a shaft of light in a rubble of tech stock. Gecko’s thesis is given an interesting twist in the editorial: the payoff for the consumers from the greed of others comes later, after initial dislocations in the market. Writes Charles Morris: “Sure, it (Enron) may have phonied its books, possibly bilked California ratepayers out of billions of dollars, wiped out employees’ life savings to manage its stock price, misdirected millions of shareholders’ dollars into senior executives’ pockets. Though capitalism’s apologists hate to admit it, historically that’s the way raw markets work.”
No argument there. The author goes on to cite the deregulation of the telecommunications market and the drop of mortgage rates in the banking industry. He suggests US capitalism in the eighties, with its boiler room hustling of stocks and currencies, was simply the orchestra tuning up for the grand symphony of consumer good in the nineties.
“The same applies to Michael Milken’s decade of greed. Waste and abuse there was aplenty, but the junk bonds and the raiders they financed helped blow away a corporate old boy network that had proved unable to cope with competitive challenges from Asia and Europe. Without the violent brush-clearing of the 1980s, it is hard to imagine how America could have become the lean, mean, competitive machine that dominated the industrial world of the 1990s.”
There is, in Morris’ assessment of greed’s promise, no ethical issue to address. Robber barons simply do what nature has designed them to do, like sharks or hawks. And by culling the herd, the predators spur the survivors among us to move a little faster. Why then pay any regard to any moral dimension involving the astronomical wages, perks and parachutes paid out to corporate CEOs, the carnage to workers from nineties downsizing, or the bankruptcies suffered by small players from deliberately misleading brokerage advice? After all, the “masters of the universe” are not immoral - they are amoral. With their briefcases and Palm Pilots, they’ve ascended to a Nietzchean summit beyond good and evil. Morris has no problems with that, and by implication, neither should the rest of us once we understand how markets work.
It looks like Pope Gregory’s deadly sin of avarice - greed - has been spun into one of the Deadly Spins.
Greed may still be reckoned as a force for good by the elite, but the backlash from below means bankers and brokers still have to practise some caution, lest they create perception problems for their class. One story that perfectly illustrates the danger of being a bit too obvious dates back to July of 2001, when a group of investment bankers from Barclay’s Capital in the United Kingdom were fired for lavishing £44,000 - about $100,000 Canadian - on a celebratory meal at Pétrus, a trendy London restaurant. The six bankers polished off three exceedingly rare and costly bottles of Château Pétrus Bordeaux. They added at least one more label to the list, and topped off their tippling with a $13,100 dessert wine.The restaurant did not even charge the party for the several hundred dollars worth of food it consumed. According to the Guinness Book of World Records, it was the most expensive meal per capita, ever.
It’s easy to imagine the six Barclay’s boys laughing at their crazy, cavalier ways with a drinks menu. “Let’s do that again!” you can hear one saying in a plummy Oxbridge accent, while knocking back a glass worth more than a flight to Ibiza. Perhaps Charles Morris would have us believe the Barclay bankers’ madcap moment was no more than momentary period of market chaos, preceding a future for all Brits of affordable meals in four-star restaurants.
Economist Adam Smith called the beneficent force of the free market, so much wiser than its individual players, the “invisible hand.” But in the late nineties, the invisible hand curled up its fingers and become the invisible fist, smacking down currency markets across the globe, from Thailand to Russia to Latin America. We were, and are, assured these kind of dislocations are temporary aberrations, as electronic capital races around the globe in search of safe berths. Who would have known that the situation would have become even more rapacious in the new millennium? Now that the Republic of Halliburton has opened Iraq to risky business for US multinationals, we are seeing greed in its latest incarnation. Paper-thin justifications for war are being used for the evisceration of the public infrastructure and services of entire nations, with crony capitalism arriving to enslave the day.
When the masters of the universe address the peons who have failed to be born into wealth or invest properly, the concept of greed vanishes in the dry, dusty talk of the dismal science of economics. Sociologist Max Weber argued that from the Puritan era on, the pursuit of profit no longer had anything to do with the so-called sin of avarice - the individual’s greed for gain. Weber believed this had been replaced by a corporate greed that enslaved the individual working within its sphere. The personal sin had been sublimated, valorized and officially-sanctioned.
Karl Marx saw it somewhat differently. In his idea of “false consciousness” he saw capitalism distorting human desires, accentuating the worst among them. Greed became unfettered and pathological under capitalism, in his view.
“My power is as great as the power of money,” Marx wrote. “The properties of money are my properties and faculties. Thus, what I am and what I am capable of is by no means determined by my individuality. I am ugly, but I can buy myself the most beautiful women. Consequently, I am not ugly, for the effect of ugliness, its power of repulsion, is annulled by money... I am a wicked, dishonest man without conscience or intellect, but money is honoured and so also is its possessor. Money is the highest good. Money relieves me of the trouble of being dishonest.”
Marx was something of a preacher in his writings, regarding money as a false God that inevitably corrupts. He believed the sin of avarice would foment a revolution that would end capitalism for good. Marx was far better as a social historian than a prophet, however, and it’s Max Weber’s thesis that has stood the test of time.
We can go back further than Weber and Marx, and find the old parables of the pre-Christian era still have something to tell us about greed - perhaps now more than ever. Harper’s editor Lewis Lapham, scion of a wealthy California oil family, once noted the similarity of some in his social circle to King Midas, who is cursed with getting his wish granted that everything he touches turns to gold. “People who suffer from the pathology of avarice tend to shrivel, almost turn themselves into stone or ice. I mean, they become so cold, so closed to other people, to the possibility of the warmth of human experience and feeling that they transform themselves into objects.”
This magical transformation isn’t done like any other deal, over an insanely expensive lunch. The Geckos of the world shrivel and harden in increments, without leaving a paper trail.

Next month Part 2 of Greed: the Deadly Spin.