Capitalism Sucks

The 1987 film Wall Street, directed by Oliver Stone, is one of my favorite movies but widely misunderstood (kind of like Martin Scorsese’s 2013 hit film Wolf of Wall Street). In its most famous scene, Michael Douglas’ character Gordon Gekko gives his “greed is good” monologue. Gekko is cast as the fictional archetypal hustler — the big-time stock trader/finance speculator/corporate bigwig — of the hypercapitalist 1980s. Michael Douglas even went on to win the Oscar award for Best Actor for his iconic performance.

Oliver Stone’s intention with Wall Street was to condemn greed and show capitalism’s excesses and callousness but it ended up becoming a recruitment video for a lot of young, ambitious investment bankers and wannabe stockbrokers. Gordon Gekko’s character was meant to be seen as a repulsive villain but ended up being glorified for the exact same behavior it set out to condemn. In September 2009, former Harvard Business School graduate, Philip Delves Broughton, now a writer for the London Evening Standard, observed, “Gekko’s ‘greed is good ‘ speech is still shown to MBA students at business schools. It is intended as a morality lesson, but ends up feeling more like a pep talk.”

In the film, Gekko is a ruthless businessman who is willing to do anything it takes to make money — dismantle companies, lay off thousands of workers, ruin families, and screw over other investors by spreading false rumors and trading stolen insider information.

In fact, Gekko’s “greed is good” philosophy became THE mantra that was woven into our modern culture, economy, and politics.

There is an eighteenth century Scottish philosopher named Adam Smith who is considered to be the patron saint of an economic ideology based on self-interest, rational expectations and efficient markets. This economic ideology was later embraced by Wall Street financiers and the business community so that they would have an intellectual justification for their greed and exploitation. They hijacked Smith’s ideology to argue for lower taxes on the wealthy, less regulation and more free trade, hostile corporate takeovers, astronomical corporate executive salaries and bonuses, and the dramatic rewriting of the social contract between business and society.

Adam Smith’s economic ideology came from the belief that self-interest had allowed millions of farmers, artisans and labor workers to escape abject poverty. In other words, as each of us goes about selfishly enhancing our own wealth, we unintentionally enhance the wealth of everyone else. This was a philosophy shared by many Enlightenment thinkers who rejected the traditional Catholic notion that wealth could only be acquired through evil and exploitation. To be fair, they were reacting to centuries of war driven by religious zealots. Unfortunately, these are the same guys that wrote about the civilizing effects of wealth in essays that celebrated luxury. (Steven Pearlstein, Can American Capitalism Survive?)

But the self-interest Smith wrote about had less to do with materialism, individualism, wasteful consumption and the misallocation of scarce resources than it did with seeking happiness through the respect of others. He wrote about self-interest while still considering a natural instinct to share the wealth gained from communal labor. Smith was an insightful philosopher with a subtle and nuanced appreciation of individual motivation and collective behavior. For Smith, man was never the self-regarding individualist conjured up by today’s free market advocates, but a social animal whose motivations are complex and whose wealth and happiness depend on the wealth and happiness of others. This is the part that Wall Street willingly ignores. (Steven Pearlstein, Can American Capitalism Survive?)

Over the past thirty years, Wall Street has succeeded in using its vast resources to corrupt government and media and deepen the divide between the 1% and the rest of America.

There may be no more more pernicious example of the way the ethic of “greed is good” has been woven into the fabric of modern society than the widespread acceptance of the idea that companies need to put shareholder values above all others. This is where American capitalism has completely failed. (Steven Pearlstein, Can American Capitalism Survive?)

If you’re looking for a modern day Gordon Gekko, look no further than Martin Shkreli.

Shkreli is most famous for purchasing the license of a generic drug that was used to treat AIDS patients then raising the price from $13.50 a pill to $750. When the controversy exploded, he said, “No one wants to say it, no one’s proud of it, but this is a capitalist society, a capitalist system and capitalist rules. And my investors expect me to maximize profits, not to minimize them.” (Robert Reich, The Common Good).

Not a single business organization or leader stepped forward to defend Shkreli. Not on any moral grounds though. They were all just as guilty of doing what he’d done.

What Shkreli did was despicable but he didn’t lie. This is indeed how American capitalism works. He was demonized because he exposed the complete moral bankruptcy that is that the heart of American capitalism. Our free market is run by selfish, untrustworthy sociopaths. Corruption has become the norm. In the last 30 years, our checks and balances have been badly eroded. And it was only 25 years ago that the world celebrated the “triumph” of American capitalism. Is this a coincidence? No.

A decade ago, 80% of Americans agreed with the statement that a free market economy was the best system. Today, it is down to 60% and even lower depending on the age group you are polling. One recent poll found that only 42% of millennials supported capitalism. In another, majority of millennials said they would rather live in a socialist country than a capitalist one. One reason is because the American economic system has been unable to continue to deliver a steadily rising standard of living to the average household, as it had for the previous half century. Another is that capitalism tends to lead to more inequality. But another part of our disquiet reflects a nagging suspicion that our economic system has become completely immoral, poisoning our politics and rewarding values that easily degenerate into greed and indifference. (Steven Pearlstein, Can American Capitalism Survive?)

We need a radical transformation of capitalism into a more social economy where everyone can prosper, not just a few.

Just admit it. You hate capitalism too.

For more reading:

“What Capitalism Is and How it Affects People” (Teen Vogue)

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