Greed is not good
Thirty years ago, in the iconic scene from the film Wall Street, the antagonist Gordon Gekko declares that “Greed, for lack of a better word, is good”. The film and the line in particular, not the larger morality play central to the movie, justified and inspired wall street players of today like no other. While Ayn Rand came before, and provides a sense of philosophical underpinnings that say the same thing-the central philosophy of Randism can be summarized by that one iconic line.
Rand, Rockwell, Rothbard, Hayek, Friedman-they all establish this central principle. But every single attempt to explain the notion of libertarianism is presented as if the greed expressed is for the aggrieved worker, suffering nobly only to have the fruit of his labors clawed away by self-interested bureaucrats too lazy to work for themselves or incompetent do-gooders, foolishly giving away to the undeserving. Libertarian belief is a wonderful, noble celebration of the hard workers who through elbow grease, suffering and moxie make their living.
But, when the little dog pulls the curtain away, all libertarian policy ends up boiling down to greed. Not greed in the sense of keeping what you’ve earned, but keeping everything that everyone else has earned as well. This belief has been so ensconced in our system that we codify it into the basics of our economic language.
The biggest and most glaring of these is the term “investment”. The classical term meant a personal investment of time, wealth and passion. Can any investor say they put their passion into their investments? Can you even name the companies or commodities your investments serve?
I tried to find this out with my 401k, which is the only stock I own, provided by Vanguard. I spent a day searching what I was allowed to see about my portfolio, but there was not a single mention of any company or stock. I could see my bonds, certainly, but the stocks are opaque to me. I couldn’t even tell you what companies I am nominally invested in.
Now, there is nothing saying I can’t invest my money directly in a publicly traded company that I believe in or work for. I could take all of my salary and, instead of doing things like pay rent or eat-just invest in Apple. (I could also buy an iPhone instead of paying rent or eating, but that’s neither here nor there). That would be investment. That would be taking my time and my money and presumably my passion making the investment. But that’s not what I’m talking about.
Most wealth in the world is made through investment of money. Not investment of time or passion. Stock portfolios are smatterings of many publicly traded companies in large sectors, shuffling about in various ways that are mostly opaque to their owners. The owners of said portfolios, like myself with my little 401k, are largely uninterested in the particulars of what companies, so long as it’s working and returning money.
In other words, as an investor, I am not interested in the success of companies or people outside of myself. I am not invested in anything except for my own naked self interest. Like the fleas on a dog, investors care about the dog’s health only inasmuch as they care about how they benefit directly from stealing the health of the dog for myself. If the dog were to die, it is of no consequence, so long as another healthy host is nearby.
As a simple example, let’s take the game of monopoly. If you were to add an investment layer to the game, a prudent investor would wisely invest in any property that has a monopoly built over one that does not. The structural advantage is huge. This would then facilitate the building of houses and eventually hotels. The owner of the properties makes money and the investor makes money.
But in our modern investment scheme, the savvy investor doesn’t invest in any particular player, but merely a portfolio of properties that are already in a good position. Let’s say that’s three different property sets. Each one gets money to build their hotels, but the first one to take a bad hit and have to sell those hotels or in some way loses the monopoly is dropped to help buttress the other investments. The “investor” doesn’t care about anything except their own profits, and the previously invested in monopoly is no longer a good host for the parasite, so it moves on.
Investing in the modern context is greedy and parasitic, and the investor class is clear about this, as displayed by actions (and sometimes words). On February 19, 2015 Walmart announced a massive investment in it’s employee workforce-creating more jobs and increasing pay. The immediate result was a 3.2% drop in share price. April 26, 2017 American Airlines announced pay raises for flight crew across the board. The predictable reaction from wall street: “Frustrating. Labor is being paid first again. Shareholders get leftovers.” AA’s share priced dropped over 8%. Again, who cares about the health of the host so long as the fleas are fed?
But let’s be clear-there still exists, as mentioned above, the investment of time, money and passion. These forms of investment are ultimately for long term success, and ought to be rewarded. But, this form of investment is a miniscule fraction of the overall picture of what we consider investing.
And this is why the language needs to change. We should no longer conflate opportunists, parasites and gamblers with investors. There’s a mythology idealized corporate parasites as benign job creators, providing the support and nurturing that grants the laborer the ability to create his or her own fortune. The laborer needs only realize that the investor is not interested in the success of any plurality, but only in their own private success, and the moment the laborer is of no use to the parasite class, the parasites move on.
The parasite class finds refuge in Gekko/Rand philosophy, because it whitewashes their greed as a form of social good. It is a comforting lie, but it is ultimately a lie. The conservative boogiemen of lazy, undeserving, uncontributing members of society living off the efforts of the hardworking laborers do exist. The problem is, those same people are the ones rightwing economic policy always benefits.